M/S SAGAR BUILDERS, Yavatmal V. A,C.I.T CENT CIR. 1(2), Nagpur

ITA 243/NAG/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2222 (ITAT-NAGPUR)
• Duration Of Justice: 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 07-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D RAVI KUMAR
• Section: 132

Judgement Text

1 ITA NO. 243/NAG/2016 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO.24 3 /NAG/2016. ASSESSMENT YEAR : 200 5 - 06 . M/S SAGAR BUILDERS, ASSTT. COMMISSIONER OF INCOME - TAX, YAVATMAL. VS. CENTRAL CIRCLE - 1(2), NAGPUR. PAN ABBFS5458C. APPELLANT. RESPONDENT. APPELLANT BY : SHRI UMANG AGRAWAL. RESP ONDENT BY : SHRI D. RAVI KUMAR. DATE OF HEARING : 10 - 05 - 2016 DATE OF PRONOUNCEMENT : 10 TH MAY, 2016 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - 3, NAGPUR DATED 10 - 02 - 2016 PERTA INING TO ASSESSMENT YEAR 200 5 - 06 . 2. THE ISSUE RAISED IS THAT THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF I.T. ACT AMOUNTING TO RS.1, 65,476 / - . 3. IN THIS CASE THE AO NOTED THAT PURSUANT TO SEARCH U/S 132 VARIOUS DOCUMENTS WERE SEIZED. AFTER GOING THROUGH THE DOCUMENTS, NOTICE U/S 153C WAS ISSUED. IN RESPONSE TO THE SAID NOTICE THE ASSESSEE FILED A RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 4,52,210 / - . THEREAFTER THE AO HELD AS UNDER : IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153C, THE ASSESSEE DECLARED INCOME OF RS. 452210 / - WHICH WAS NOT DECLARED IN THE 2 ITA NO. 243/NAG/2016 ORIGINAL RETURN OF INCOME FILED U/S 139. HENCE THE ASSESSEE CONCEALED ITS INCOME. PENALTY PROCEEDINGS U/S 271(1)(C) HAS BEEN INITIATED SEPARATELY. SUBSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED AND REFERRING TO EXPLANATION 5A OF SECTION 271(1) PENALTY WAS LEVIED AMOUNTING TO RS.1, 65,476 / - . THE SAID PENALTY WAS CONFIRMED BY THE LEARNED CIT(APPEALS). 4. AGAINST THE ABOVE ORDER, THE ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE IS NO CONCEALMENT OR FURNISHING OF FALSE PARTICULARS IN THIS CASE. THE AO HAS COMPLETED THE ASSESSMENT ON T HE INCOME RETURNED. HE SUBMITTED THAT THERE IS NOT EVEN A WHISPER OF ANY INCRIMINATING MATERIAL FOUND DURING SEARCH. THERE IS NO MENTION WHATSOEVER OF THE NATURE OF CONCEALMENT, IF ANY, DETECTED DURING THE SEARCH. HENCE LEARNED COUNSEL SUBMITTED THAT RELIA NCE UPON EXPLANATION 5A OF SECTION 271(1) BY THE REVENUE IS TOTALLY NOT APPLICABLE. HENCE LEARNED COUNSEL PLEADED THAT PENALTY U/S 271(1)(C) IS NOT AT ALL LEVIABLE IN THIS CASE. 6. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. H E VEHEMENTLY ARGUED THAT IN VIEW OF THE EXPLANATION 5A INSERTED IN SECTION 271(1) PENALTY IS LEVIABLE IN THIS CASE. 7. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. I FIND THAT IN THIS CASE THERE WAS A SEARCH U/S 132. THE AO IN HIS A SSESSMENT ORDER HAS MENTIONED THAT CERTAIN DOCUMENTS WERE FOUND IN THE SEARCH. HE HAS NOT EVEN MENTIONED THAT THE DOCUMENTS WERE INCRIMINATING IN NATURE. NO REFERENCE WHATSOEVER HAS BEEN MADE TO THE CONCEALMENT DETECTED. THE AO HAS SIMPLY LEVIED THE PENALT Y STATING THAT THERE IS A DIFFERENCE BETWEEN THE INCOME RETURNED ORIGINALLY AND THAT PURSUANT TO SEARCH. IN MY CONSIDERED OPINION THE ABOVE CANNOT BE A REASON TO LEVY THE PENALTY U/S 271(1)(C), DEHORSE ANY FINDING OF CONCEALMENT OR FURNISHING OF INACCURAT E PARTICULARS. THERE IS NO SATISFACTION 3 ITA NO. 243/NAG/2016 WHATSOEVER BY THE AO OF ANY CONCEALMENT OR FURNISHING OF ANY INACCURATE PARTICULARS BY THE ASSESSEE IN THIS CASE. EVEN IN THE PENALTY ORDER NOTHING HAS BEEN BROUGHT OUT AS TO WHAT WAS CONCEALED AND WHAT WAS DETECTED IN THE SEARCH. IT IS SETTLED LAW THAT SECTION 271(1)(C) POSTULATES LEVY OF PENALTY FOR CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS. EXPLANATION 5A INSERTED IN SECTION 271(1), BY NO STRETCH OF IMAGINATION DILUTE S THIS POSITION. IN SUCH CIRCUMSTAN CES IN MY CONSIDERED OPINION, DEHORSE ANY FINDING OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS, LEVY OF PENALTY U/S 271(1)(C) CANNOT BE SUSTAINED. ACCORDINGLY I REVERSE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE PENALTY. 7. IN THE RESULT , THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF MAY,2016. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 10 TH MAY, 2016. 4 ITA NO. 243/NAG/2016 COPY FORWARDED TO : 1. M/S SAGAR BUILDERS, BAJORIA PLAZA, LIC CHOWK, YAVATMAL. 2. A.C.I.T., CENTRAL CIRCLE - 1(2), NAGPUR. 3. C.I.T. , NAGPUR. 4. CIT(APPEALS), - 3, NAGPUR. 5. D.R., ITAT, RAIPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.