Shri Hanubhai Virjibhai Patel, Surat V. The ACIT.,Cent.Circle-3, Surat

ITA 2528/AHD/2009

• Counselvise Citation: 252820514 RSA 2009
• Duration Of Justice: 2 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-05-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 03-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI D.K.TYAGI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NOS. 2528,2529,2530 & 2531/AHD/2009 ASSESSMENT YEAR :2000-01, 2001-02, 2002-03 & 2003-04 HANUBHAI V. PATEL V/S . ACIT, CENT. CIR.-3, SURAT PAN NO. A DGPP3511N (APPELLANT) .. (RESPONDENT) BY APPELLANT WRITTEN SUBMISSION /BY RESPONDENT SHRI K. MADHUSUDAN, SR. D.R. /DATE OF HEARING 1 7 .0 5 .2012 /DATE OF PRONOUNCEMENT 25.05.2012 O R D E R PER : D.K.TYAGI, JUDICIAL MEMBER THESE FOUR APPEALS HAVE BEEN FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF LD. CIT (A)- II, AHMEDABAD, DATED 20.0 7.2009 FOR ASSESSMENT YEAR 2008-09. 2. SINCE, THE ISSUE IN ALL THE APPEALS IS IDENTICAL , ALL THE APPEALS ARE DECIDED BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.2528,2529,2530 & 2531/AHD/2009 A.Y.2000-01 TO 2003-04 PAGE 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE SEARCH AND SEIZURE ACTION IN THIS CASE, WAS CONDUCTED ON 21.10.2005. THE ASSESSEE DI SCLOSED RS. 1,55,00,000/- ADDITIONAL INCOME IN THE STATEMENT UN DER SECTION 132(4) OF THE ACT. THE BIFURCATION OF THE SAME IN THE RETURN OF INCOME FOR THE BLOCK PERIOD IS AS UNDER:- ASSESSMENT YEARS UNDISCLOSED INCOME 2000-01 1,00,000 2001-02 1,00,000 2002-03 1,00,000 2003-04 1,00,000 2004-05 23,00,000 2005-06 23,00,000 2006-07 1,05,00,000 1,55,00,000 THUS, THE ASSESSEE HAD DECLARED RS. 1 LAC EACH FOR THE ASSESSMENT YEARS UNDER APPEAL DURING THE COURSE OF SEARCH SEIZURE AN D INCLUDED THIS SUM OF INCOME OF THE ASSESSEE WHILE FILING OF RETURN OF IN COME. THE ASSESSING OFFICER RELYING UPON THE DECISIONS OF VARIOUS COURTS AND BY REFERRING TO EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT, WAS OF THE VIEW TH AT THE ASSESSEE HAS FAILED TO GIVE ANY JUSTIFICATION OR SATISFACTORY EXPLANATION FOR CHARGE OF CONCEALMENT. IT WAS FURTHER OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS WILLFULLY FURNISHED NO RETURN OF INCOME DURING THE RELEVANT A SSESSMENT YEAR AND AVOIDE PAYING DUE TAXES WITHIN DUE DATE TO EVADE TAXES. A PPLYING THE RATIO AS LAID DOWN IN THE CASE OF NATIONAL TEXTILES VS. CIT., [249 ITR 125], OF JURISDICTIONAL HIGH COURT, THE ASSESSING OFFICER HELD THAT THERE W AS ELEMENT OF CONCEALMENT OF INCOME BY WAY OF FURNISHING INACCURATE PARTICULA RS OF INCOME AND ACCORDINGLY LEVIED PENALTY OF RS. 24,313/-, RS. 23, 513/-, RS. 24,212/- & ITA NOS.2528,2529,2530 & 2531/AHD/2009 A.Y.2000-01 TO 2003-04 PAGE 3 25,227/- FOR ASSESSMENT YEARS 2000-01, 2001-02, 200 2-03 & 2003-04 RESPECTIVELY UNDER SECTION 271(1)(C) OF THE ACT. T HIS ACTION OF THE ASSESSING OFFICER WAS CONFIRMED BY LD. CIT(A). FURTHER AGGRI EVED, NOW THE ASSESSEE IS, IN APPEAL, BEFORE US. AT THE TIME OF HEARING, AT T HE OUTSET, LEARNED COUNSEL FOR ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED REGARDIN G LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS COVERED IN FAVOUR O F ASSESSEE VIDE ITA NO. 631/AHD/2009 FOR ASSESSMENT YEAR 2006-07, DATED 31. 12.2011 AND IT (SS) NO. 10 & 11/AHD/2012 ASSESSMENT YEARS 2004-05 & 200 5-06 IN ASSESSEES OWN CASE. LD. A.R. DID NOT OBJECT TO THIS SUBMISSI ON OF THE ASSESSEE. 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORDS, WE FIND THAT IN ITA NO. 631/AHD/2009 FOR ASSESSMENT YEAR 2006-07 IN ASSESSEES OWN CASE. HONBLE THE TRIBUNAL ON IDENTICAL FACTS EXCEPTING T HAT ASSESSEE DECLARED A SUM OF RS. 1,55,000/- AT THE TIME OF SEARCH UNDER S ECTION 132(4) OF THE ACT HAS HELD AS UNDER:- WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E FACTS OF THE CASE. THE ARGUMENTS MADE BY LEARNED COUNSEL FOR THE ASSES SEE APPEARS TO BE CONVINCING AND THEREFORE IN THE PRESENT CIRCUMST ANCES AND THE FACTS OF THE CASE AND THE DECISION OF HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF MAHENDRA C SHAH (SUPRA) APPLIES TO THE PRES ENT FACTS AND CIRCUMSTANCES. THE RELEVANT PARA-12 & 13 OF THE DE CISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAHENDRA C SHAH (SUPRA) IS REPRODUCED FOR THE SAKE OF CLARITY AS UNDER:- 12. THE CONTENTIONS RAISED ON BEHALF OF THE REVENU E ARE NOT REQUIRED TO BE ACCEPTED FOR THE SIMPLE REASON THAT IN THE FIRST INSTANCE, THERE IS NO PRESCRIPTION TO THE POINT OF TIME WHEN THE TAX HAS TO BE PAID QUA THE AMOUNT OF INCOME DECLARED IN THE STATEMENT MADE UNDER SECTION 132(4) OF THE ACT. TH E TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THERE WOULD BE SUFFIC IENT COMPLIANCE OF THE PROVISIONS IF TAX IS SHOWN TO HAVE BEEN PAID BEFORE THE ASSESSMENT WAS COMPLETED. THE REASONING WHICH HAS WEIGHED WITH THE TRIBUNAL IS THAT THE SEARCH PROCEEDINGS WE RE CONDUCTED ON 3 RD JULY, 1987 WHEN THE STATEMENT U/S. 132(4) OF THE A CT WAS ITA NOS.2528,2529,2530 & 2531/AHD/2009 A.Y.2000-01 TO 2003-04 PAGE 4 MADE. THE LAST DATE FOR PAYMENT OF ADVANCE AX QUA THE LAST INSTALMENT OF ADVANCE TAX WAS 15 TH DEC. 1987 IN SUCH A CASE, ACCORDING TO THE TRIBUNAL, AND IN THE EVENT, THE AS SESSEE DID NO PAY TAX QUA THE INCOME DECLARED IN THE STATEMENT MA DE U/S 132(4) OF THE ACT, THE ASSESSEE BECAME LIABLE TO PA Y INTEREST IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF THE ACT BECAUSE EXCEPTION NO.2 ITSELF SPECIFIES PAYMENT OF TAX, TOG ETHER WITH INTEREST, IF ANY, INDICATING THAT LEGISLATURE DID N OT STIPULATE ANY SPECIFIED TIME LIMIT FOR PAYMENT OF TAX. THERE IS NO INFIRMITY IN THIS REASONING. 13. HOWEVER, THE OUTER LIMIT HAS TO BE THE POINT OF TIME WHEN THE ASSESSMENT PROCEEDINGS ARE UNDERTAKEN BY THE A. O. BECAUSE THE OPENING POSITION OF SECTION 271(1)(C) OF THE AC T REQUIRES THE A.O TO RECORD SATISFACTION IN COURSE OF SUCH PROCEE DINGS, AND THE SATISFACTION HAS TO BE AS REGARDS THE CONCEALMENT O F PARTICULARS OF INCOME OF FURNISHING INACCURATE PARTICULAR OF INCOM E. IN OTHER WORDS, A SATISFACTION AS TO CONCEALMENT CAN BE ARRI VED AT THE EARLIEST POINT OF TIME ONLY IN THE COURSE OF ASSESS MENT PROCEEDINGS AND FOR THAT PURPOSE THE A.O. IS REQUIR ED TO VERIFY AND ASCERTAIN WHETHER THE INCOME HAS BEEN DECLARED AND TAX PAID THEREON. FOR THE PURPOSE OF EXPLN.5, WHICH CO MES INTO PLAY ONLY IN CASE OF SEARCH AND SEIZURE PROCEEDINGS, RET URN OF INCOME PER SE WOULD HAVE NO RELEVANCE IF ONE READS ENTIRE EXPLN.5, INCLUDING THE TWO EXCEPTIONS. THE EMPHASIS ON DISC LOSURE IN THE RETURN OF INCOME IS RELEVANT ONLY FOR THE PURPOSES OF AVOIDING THE DEEMING FICTION OF CONCEALMENT IN RELATION TO THE P REVIOUS YEAR WHICH HAS ALREADY ENDED BEFORE THE DATE OF SEARCH B UT RETURN OF INCOME FOR SUCH YEAR HAD NOT BEEN FURNISHED, OR WHE RE RETURN HAS BEEN FILED SUCH INCOME HAS NOT BEEN DISCLOSED. IN SO FAR AS A PREVIOUS YEAR WHICH IS TO END ON OR AFTER THE DATE OF SEARCH RETURN OF INCOME WOULD HAVE HARDLY ANY RELEVANCE BECAUSE T HE EXPLANATION ITSELF STIPULATES THAT REGARDLESS OF SU CH INCOME HAVING BEEN DECLARED IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH THE ASSESSEE WOULD BECOME LIABLE TO IMPOSITION OF PENALTY, THE ONLY EXCEPTION BEING A DECLARATION AT THE TIME OF SEARCH. AS TO WHAT THAT DECLARATION HAS TO BE ALRE ADY BEEN EXAMINED HEREINBEFORE AND IT IS NOT NECESSARY TO RE PEAT THE SAME. IN THE CIRCUMSTANCES AND FACTS OF THE PRESENT CASE WE ARE OF THE VIEW THAT FACTS IN THE CASE OF ASHOK GUPTA(SUPRA) ARE NO T APPLICABLE IN THE PRESENT CASE, SINCE THE ASSESSEE IN THE CASE OF ASH OK GUPTA (SUPRA) DID NOT PAY THE TAX AFTER FILING BELATED RETURN. T HEREFORE RELYING UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN T HE CASE OF MAHEDNRA C SHAH (SUPRA) MENTIONED HEREINABOVE, WE FIND NO INFI RMITY IN THE ORDER OF LD. CIT(A) WHO HAS RIGHTLY CANCELLED THE PENALTY LE VIED BY ASSESSING ITA NOS.2528,2529,2530 & 2531/AHD/2009 A.Y.2000-01 TO 2003-04 PAGE 5 OFFICER. THUS, GROUND NO.1 AND 2 OF THE REVENUES APPEAL ARE DISMISSED. AND SIMILARLY FOR THE ASSESSMENT YEAR 2004-05, IT ( SS) NO. 10 & 11/AHD/2012 FOR ASSESSMENT YEARS 2004-05 & 2005-06, ON IDENTICA L FACTS EXCEPTING THAT ASSESSEE DECLARED A SUM RS. 23 LACS EACH IN BOTH TH E YEARS UNDER SECTION 132(4) OF THE ACT, HONBLE TRIBUNAL, IN ASSESSEES OWN CASE, HAS HELD AS UNDER:- 8. IN THE PRESET CASE ALSO, THE SEARCH ACTION HAS TAKEN PLACE ON 21.10.2005 AND THE RELEVANT YEAR WHICH ARE BEFORE U S IN WHICH PENALTY HAS BEEN IMPOSED BY THE A.O. ARE ASSESSMENT YEARS 2004-05 & 2005- 06. THIS IS THE ADMITTED POSITION OF FACT IN THE P RESENT CASE THAT IN THE STATEMENT GIVEN BY THE ASSESSEE U/S 132(4), THE ADD ITIONAL INCOME WAS DISCLOSED BY THE ASSESSEE OF RS. 23 LACS IN EACH OF THESE TWO YEARS. THE PENALTY IN DISPUTE BEFORE US IN BOTH THE YEARS IS WITH REGARD TO THIS ADDITIONAL INCOME DISCLOSED IN THE STATEMENT U/S 13 2(4) FOR THESE TWO YEARS. THIS IS ALSO NOT AN ALLEGATION THAT THE TAX WAS NOT PAID BY THE ASSESSEE OR THAT THE MANNER OF EARNING INCOME WAS N OT SPECIFIED IN THE STATEMENT GIVEN U/S 132(4). HENCE, THE FACTS OF TH E PRESENT CASE ARE SIMILAR IF NOT IDENTICAL TO THE FACTS IN THE CASE O F SHYAM BIRI WORKS PVT. LTD. (SUPRA). WE THEREFORE, FIND NO REASON TO TAK E A CONTRARY VIEW IN THE PRESENT CASE BECAUSE NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR NOTICE BY THE LD. D.R. 9. THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT REN DERED IN THE CASE OF CIT VS. KANHAIYALAL (SUPRA) IS ALSO SUPPORT ING THE CASE OF THE ASSESSEE AND, THEREFORE, RESPECTFULLY FOLLOWING THE SE TWO JUDGMENTS, WE DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A) IN BOTH THESE YEARS. 5. FOLLOWING THE ABOVE ORDERS OF THE TRIBUNAL IN AS SESSEES OWN CASE, THE PENALTY LEVIED BY THE ASSESSING OFFICER AND SUSTAIN ED BY LD. CIT (A) FOR ALL THE FOUR YEARS IS HEREBY DELETED. 6. IN THE RESULT, THE ASSESSEES APPEALS ARE ALLOWE D. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. ITA NOS.2528,2529,2530 & 2531/AHD/2009 A.Y.2000-01 TO 2003-04 PAGE 6 SD/- SD/- (A. MOHAN ALANKAMONY) ( D.K. TYAGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA ! ! ! ! ' ' ' '! !! ! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ; STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 17.05.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 21.05.2012 4) DATE OF CORRECTION 22.05.2012 5) DATE OF FURTHER CORRECTION 22.05.2012 6) DATE OF INITIAL SIGN BY MEMBERS 25.05.2012 7) ORDER UPLOADED ON 25.05.2012 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE 25.05.2012 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 25.05.2012