ACIT 27(3), NAVI MUMBAI V. SHRINIWAS REDDY PICHHI MUKKU, MUMBAI

ITA 2527/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3495 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MOHAN LD
• Keywords: Revised return
• Section: 143(3); 133A; 147; 148

Judgement Text

ITA NO. 2527/MUM/2017 SHRINIWAS REDDY PICHHI MUKKU ASSESSMENT YEAR-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.2527/MUM/2017 ( / ASSESSMENT YEAR: 2009-10) ASSISTANT COMMISSIONER OF INCOME TAX-27(3) 4 TH FLOOR, TOWER NO. 6 VASHI RAILWAY STATION COMPLEX VASHI, NAVI MUMBAI / VS. SHRINIWAS REDDY PICHHI MUKKU 220, BHARAT NAGAR NEAR HP COLONY CHEMBUR (E) MUMBAI 400 074 ./ ./PAN/GIR NO. ABTPR-2419-Q ( /APPELLANT ) : ( !' / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : A.MOHAN, LD. SR. DR / DATE OF HEARING : 21/08/2018 / DATE OF PRONOUNCEMENT : 21/08/2018 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [AY] 2009-10 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INCOME -TAX (APPEALS)-25 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-25/IT/486/14-15 DATED 23/01/2017 QUA DELETION OF PENALTY U/S 271(1)(C) FOR RS.27,98,525/ -. NONE HAS APPEARED FOR ASSESSEE AND NO VALID ADJOURNMENT APPL ICATION IS ON RECORD. LEFT WITH NO OPTION, WE PROCEED TO DISPOSE- OFF THE SAME ON THE ITA NO. 2527/MUM/2017 SHRINIWAS REDDY PICHHI MUKKU ASSESSMENT YEAR-2009-10 2 BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEA RING LD. DEPARTMENTAL REPRESENTATIVE, SHRI A.MOHAN. 2. THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSESSED U/S 143(3) READ WITH SECTION 147 ON 28/11/2013 WHEREIN THE RETURNED INCOME FILED BY THE ASSESSEE ON 30/03/2013 IN RESPONSE TO NOTICE U/S 148, WAS ACCEPTED. THE ASSESSEE WAS SUBJECTED TO SURVEY PROC EEDINGS U/S 133A ON 03/01/2013 WHEREIN THE ASSESSEE DECLARED AN ADDI TIONAL INCOME OF RS.84.57 LACS TO ACCOUNT FOR THE DISCREPANCIES NOTI CED DURING THE SURVEY PROCEEDINGS IN PURCHASE TRANSACTIONS CARRIED OUT BY THE ASSESSEE. THE ASSESSEE OFFERED THE ADDITIONAL INCOME IN THE RETUR N OF INCOME AND PAID DUE TAXES THEREUPON. CONSEQUENTLY, PENALTY PROCEEDI NGS U/S 271(1)(C) WERE INITIATED IN THE QUANTUM ASSESSMENT ORDER FOR CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. FIN ALLY, THE ASSESSEE HAS BEEN SADDLED WITH IMPUGNED PENALTY OF RS.27.98 LACS VIDE ORDER DATED 28/05/2014 AGAINST ADDITIONAL INCOME OF RS.84.57 LA CS OFFERED BY THE ASSESSEE CONSEQUENT TO SURVEY PROCEEDINGS. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 23/01/2017, WH EREIN LD. CIT(A) DELETED THE IMPUGNED PENALTY, INTER-ALIA, ON THE PREMISE THAT THE RETURNED INCOME HAS BEEN ACCEPTED AND THEREFORE, THE PENALTY WAS NOT LEVIABLE. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. THE LD. DR HAS SUPPORTED THE STAND TAKEN BY LD. AO AND SUBMITTED T HAT THE ADDITIONAL INCOME HAS BEEN OFFERED BY THE ASSESSEE ONLY DUE TO SURVEY ACTION AND THEREFORE, THE PENALTY WAS JUSTIFIED UNDER THE CIRC UMSTANCES. 4. WE HAVE CAREFULLY HEARD THE CONTENTION AND PERUS ED RELEVANT MATERIAL ON RECORD. THE UNDISPUTED FACT IS THAT THE ASSESSEE OFFERED ITA NO. 2527/MUM/2017 SHRINIWAS REDDY PICHHI MUKKU ASSESSMENT YEAR-2009-10 3 CERTAIN ADDITIONAL INCOME DURING SURVEY PROCEEDINGS U/S 133A SINCE IT FAILED TO SUBSTANTIATE CERTAIN PURCHASES STATED TO BE MADE FROM ALLEGED HAWALA DEALERS . HOWEVER, THE SALES TURNOVER ACHIEVED BY THE ASSES SEE WERE NOT DISPUTED BY THE REVENUE AND FURTHER, THERE WAS NO CONCLUSIVE EVIDENCE OR CORROBORATIVE MATERIAL ON RECORD TO DEM ONSTRATE THAT THE STATED PURCHASES WERE ENTIRELY BOGUS. THIS INCOME WAS OFFERED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 14 8 AND DUE TAXES WERE PAID THEREUPON. THIS RETURN HAS BEEN ACCEPTED BY TH E REVENUE AS SUCH WITHOUT MAKING ANY FURTHER ADDITIONS. UPON DUE CONS IDERATION OF FACTUAL MATRIX, WE ARE OF THE OPINION THAT THE CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME SHOULD BE IN THE R ETURN OF INCOME FILED BY THE ASSESSEE SO AS TO JUSTIFY IMPOSITION OF PENA LTY. FURTHER, IT IS TRITE LAW THAT STATEMENTS / ADMISSIONS MADE DURING SURVEY PROCEEDINGS DO NOT CARRY MUCH EVIDENTIARY VALUE UNLESS THESE ARE SUBST ANTIATED BY ANY CORROBORATIVE OR CIRCUMSTANTIAL EVIDENCES ON RECORD , WHICH ARE ABSENT IN THE PRESENT CASE BEFORE US. THE ASSESSEE, IN THE PR ESENT CASE, COULD NOT SUBSTANTIATE THE DISCREPANCIES TO THE SATISFACTION OF REVENUE AUTHORITIES AND CONSEQUENTLY, OFFERED THE ADDITIONAL INCOME SO AS TO MAKE UP FOR THOSE DISCREPANCIES. NEVERTHELESS, THE AFORESAID FA CT, IN OUR OPINION, DOES NOT ENTAIL IMPOSITION OF PENALTY ON THE ASSESS EE. OUR VIEW IS DULY SUPPORTED BY THE JUDGMENT OF HONBLE BOMBAY HIGH CO URT RENDERED IN ITO VS RAMSONS CASTINGS PVT. LTD. [85 TAXMANN.COM 9 0 20/07/2017] WHEREIN THE HONBLE COURT AFTER CONSIDERING THE JUD GMENT OF HONBLE APEX COURT RENDERED IN MAK DATA PVT. LTD. VS CIT [358 ITR 593] HAS CONCLUDED THE MATTER, UNDER SIMILAR CIRCUMSTANCES, AS UNDER:- ITA NO. 2527/MUM/2017 SHRINIWAS REDDY PICHHI MUKKU ASSESSMENT YEAR-2009-10 4 12. WE FIND THAT THE DECISION OF THE APEX COURT IN MAK DATA (P.) LTD. (SUPRA) WAS RENDERED ON 30TH OCTOBER, 2013 I.E. AFTER IMPUGNED ORDER OF THE TRIBUNAL DATED 30TH NOVEMBER, 2012. THUS, NORMAL COURSE WOULD HAVE BEEN TO RESTORE THE ISSUE TO THE TRIBUNAL TO PASS A DECISION KEEPING IN VIEW THE DEC ISION OF THE APEX COURT IN MAK DATA (P.) LTD. (SUPRA). HOWEVER, SUCH AN EXERCISE IS NOT CALLED FOR IN THIS CASE AS NEITHER OF THE TWO AUTHORITIES I.E. CIT (A) AND THE TRIBUNAL HAVE DELETED THE PENALTY ON ACCOUNT OF THE RESPONDENT-ASSESSEE DECLARING ADD ITIONAL INCOME TO BUY PEACE/AVOIDING LITIGATION. BOTH, THE CIT (A) AND TH E TRIBUNAL HAVE ON MERITS FOUND THAT THE CONDUCT OF THE RESPONDENT-ASSESSEE DID NOT JUSTIFY ANY PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THEREFORE, WE WOULD E XAMINE THE APPEAL OF THE REVENUE ON MERITS IN THE CONTEXT OF THE FINDINGS BY THE AUTHORITIES UNDER THE ACT. 13. IN THE MATTER OF IMPOSITION OF PENALTY WHERE TWO A UTHORITIES HAVE CONCURRENTLY COME TO FINDING THAT NO PENALTY IS IMPOSABLE, THIS COURT WOULD NORMALLY NOT INTERFERE, IN ABSENCE OF THE FINDING BEING PERVERSE. HOWEVER, IT IS SETTLED POSITION IN LAW THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO INDEPENDENT AND SEPARATE PROCEEDINGS. THEREFORE, MERE ADDITION TO T HE DECLARED INCOME DURING ASSESSMENT PROCEEDINGS WOULD NOT IPSO-FACTO LEAD TO AN IMPOSITION OF PENALTY UPON THE PARTY. THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN ONLY TAKE PLACE WHERE THERE HAS BEEN EITHER CONCEALMENT OF IN COME OR FILING OF INACCURATE PARTICULAR OF INCOME ON THE PART OF THE RESPONDENT AND THE EXPLANATION IS NOT FOUND SATISFACTORY. 14. IN THE PRESENT PROCEEDINGS, THE ASSESSING OFFICER ACCEPTED THE REVISED RETURN OF INCOME FILED BY THE RESPONDENT-ASSESSEE DECLARING A DDITIONAL INCOME OF RS. 1.40 CRORES. THE ASSESSING OFFICER DID NOT INDEPENDENTLY EITHER IN THE ASSESSMENT PROCEEDINGS OR EVEN IN THE PENALTY PROCEEDINGS EXAM INE THE CONTENTION OF THE RESPONDENT-ASSESSEE THAT THERE WAS NO EXCESS STOCK AS FOUND BY THE INCOME TAX OFFICER DURING THE SURVEY PROCEEDINGS. NEITHER ANY EXERCISE WAS DONE INDEPENDENTLY TO FIND OUT WHETHER THE EXCESS STOCK ALLEGED WAS SU PPORTED BY ANY OTHER EVIDENCE. THIS PARTICULARLY IN THE FACE OF THE RESPONDENT-ASS ESSEE ASSERTING THAT THE STOCK TAKING WAS NOT PROPERLY DONE. IN-FACT, AT THE VERY FIRST INSTANCE, THE RESPONDENT- ASSESSEE DID POINT OUT THAT NO EXERCISE WAS DONE TO WEIGH THE STOCK TO DETERMINE THE SHORTAGE IF ANY. IN-FACT, THE SHORTAGE WAS ARRI VED AT ON BASIS OF ESTIMATE AND THE RESPONDENT-ASSESSEE HAD ITSELF SURRENDERED ADDITION AL INCOME TO BUY PEACE OF MIND AND AVOID UNNECESSARY LITIGATION. IT DID NOT ACCEPT THAT ACTUAL STOCK WAS MORE THAN THAT RECORDED IN ITS BOOKS AND DURING THE PROCEEDIN GS ALSO SUBMITTED A CHART SHOWING NO EXCESS STOCK. 15. IT IS NOW A SETTLED POSITION OF LAW AFTER THE APEX COURT ORDER IN MAK DATA (SUPRA) THAT AN ASSESSEE IS NOT ABSOLVED OF PENALTY BECAUSE THE ADDITIONAL INCOME HAS BEEN DECLARED TO BUY PEACE. IT MUST FOLLOW THEREFOR E THAT THE ABOVE STRATEGY (BUY PEACE) BY ITSELF WILL NOT JUSTIFY IMPOSITION OF PEN ALTY, UNLESS THE REQUIREMENT OF THE SECTION UNDER WHICH THE PENALTY IS IMPOSED ARE SATI SFIED. 16. IT IS THE ABOVE CONTEXT THAT THE REVENUE PLACES ST RONG RELIANCE UPON PARAGRAPH 10 OF THE DECISION OF THE APEX COURT MAK DATA (P.) LTD. (SUPRA) TO CONTEND THAT FACTS ARE IDENTICAL, THEREFORE, PENALTY MUST FOLLOW. THE ASSESSEE IN THE ABOVE CASE HAD DURING SURVEY OPERATION MADE VOLUNTARY DISCLOSURE O F INCOME. SIMILAR TO THE PRESENT ITA NO. 2527/MUM/2017 SHRINIWAS REDDY PICHHI MUKKU ASSESSMENT YEAR-2009-10 5 CASE SUBMITS THE REVENUE. HOWEVER, THE DISTINCTION IN THIS CASE IS THAT THE RESPONDENT-ASSESSEE HAD AT THE FIRST OPPORTUNITY I. E. WHEN STATEMENT HAS BEEN RECORDED, CONTENDED THAT THE MANNER AND METHOD OF Q UANTIFICATION OF STOCK DONE DURING THE COURSE OF SURVEY PROCEEDING WAS NOT CORR ECT. IN-FACT, EVEN AFTER THAT IT WAS CONSISTENTLY WRITING TO THE AUTHORITIES THAT TH ERE IS NO EXCESS STOCK AND THE MANNER IN WHICH THE STOCK TAKING HAS BEEN DONE IS N OT CORRECT. THIS WAS NOT SO IN THE CASE OF MAK DATA (P.) LTD. (SUPRA). IN THE CASE OF MAK DATA (P.) LTD. (SUPRA), THE ASSESSEE DID NOT DISPUTE THE FACTS OF UNDISCLOSED I NCOME AT ANY TIME/STAGE. THEREFORE, PARAGRAPH 10 OF THE DECISION IN MAK DATA (SUPRA) WILL HAVE NO APPLICATION IN ABSENCE OF THE REVENUE BEING ABLE TO SHOW THAT T HERE HAS BEEN A CONDUCT WHICH WOULD WARRANT PENALTY UPON THE RESPONDENT-ASSESSEE NAMELY EITHER CONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOM E. IN THE PRESENT FACTS, THE RESPONDENT-ASSESSEE WAS CONSISTENTLY STATING THAT T HERE IS NO EXCESS STOCK IN HIS POSSESSION. THAT, IT WAS SUBJECT TO CENTRAL EXCISE CONTROL AND NO PROCEEDING FOR CLANDESTINE REMOVAL OF GOODS ETC. WERE INITIATED AG AINST THE RESPONDENT-ASSESSEE. FURTHER, IN THESE FACTS, THE RESPONDENT-ASSESSEE, T HE CIT (A) AND THE TRIBUNAL HAVE HELD THAT NO PENALTY IS IMPOSABLE, AS THE RESPONDEN T-ASSESSEE HEREIN HAS CONSISTENTLY CONTENDED THAT THERE IS NO EXCESS STOC K. THIS CONTENTION HAS NOT BEEN EXAMINED AND COMMENTED UPON THE REVENUE BEFORE IMPO SING OF PENALTY. THUS, THE IMPUGNED ORDER OF THE TRIBUNAL CALLS FOR NO INTERFE RENCE. 17. IN THE ABOVE VIEW, BOTH THE SUBSTANTIAL QUESTIONS OF LAW FOR OUR CONSIDERATION ARE ANSWERED IN THE AFFIRMATIVE I.E. IN FAVOUR OF THE R ESPONDENT-ASSESSEE AND AGAINST THE APPELLANT-REVENUE. WE FIND THE CIRCUMSTANCES OF THE ABOVE CASE ARE QUI TE SIMILAR TO CASE BEFORE US. THEREFORE, RESPECTFULLY FOLLOWING THE SA ME, WE CONFIRM THE STAND OF LD. FIRST APPELLATE AUTHORITY. 5. THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2018. SD/- SD/- (JOGINDER SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 21/08/2018 SR.PS:-THIRUMALESH ITA NO. 2527/MUM/2017 SHRINIWAS REDDY PICHHI MUKKU ASSESSMENT YEAR-2009-10 6 ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ) ( ) / THE CIT(A) 4. ) / CIT CONCERNED 5. * !$+ , + , / DR, ITAT, MUMBAI 6. ,-. / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI