The Dy. Commissioner of Income-tax, Jammu V. Shri Sahil Mahajan, Jammu

ITA 254/ASR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73319 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-03-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 31-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Revised return
• Section: 142(1); 133A; 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.254(ASR)/2012 ASSESSMENT YEAR:2006-07 PAN :AMRMP6161G DY.COMMR. OF INCOME TAX, VS. SH. SAHIL MAHAJAN, CIRCLE-1, JAMMU. S/O SH. SNEH GUPTA, 62, A/D GANDHI NAGAR, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.TARSEM LAL, DR RESPONDENT BY:SH.P.N.ARORA, ADV. DATE OF HEARING:24/03/2014 DATE OF PRONOUNCEMENT:26/03/2014 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF THE CIT(A), AMRITSAR DATED 16.03.2012 FOR THE ASSESSMENT YEAR 2006-07 .THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 WHEN THE REVISED RETURN FILED BY THE ASSE SSEE WAS BEYOND THE TIME LIMIT AS PROVIDED U/S 139(5) OF THE INCOME TAX ITA NO.254(ASR)/2012 2 ACT, 1961 AND THE SAME CANNOT UNDER ANY STRETCH OF IMAGINATION BE TREATED AS REVISED RETURN. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DELETING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 WHEN THE ASSESSEE HAS DELIBERATELY AVOIDE D TO CLAIM THE CREDIT OF TAX PAID ON 15.03.2006 IN THE ORIGINA L RETURN FILED BY THE ASSESSEE. 3. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN DELETING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 WHEN THE ASSESSEE HAS DELIBERATELY AVOIDE D TO DISCLOSE THE TRUE FACTS BEFORE THE AUDITORS WHO HAV E CARRIED OUT THE AUDIT OF THE ACCOUNTS OF THE ASSESSEE. 2. THE BRIEF FACTS OF THE CASE AS ARISING FROM AOS ORDER ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CO UNSEL OF THE ASSESSEE WAS ASKED TO EXPLAIN WHY THIS INCOME OF RS .9,00,000/- SURRENDERED DURING THE COURSE OF SURVEY HAS NOT BE EN REFLECTED IN HIS RETURN OF INCOME FILED ON 31.10.2006 THOUGH THE SUR VEY WAS CONDUCTED ON 02.12.2005. IT WAS EXPLAINED THAT DUE TO OVERSIG HT ALTHOUGH THE ASSESSEE HAD PAID TAX IN ADVANCE BUT HE HAS FAILED TO INCORPORATE THE SURRENDERED INCOME IN HIS COMPUTATION. HE FURTHER I NFORMED THAT WHEN THE ASSESSEE CAME TO KNOW THAT THE INCOME WAS EXCLUDED, HE FILE A REVISED COMPUTATION ALONGWITH RETURN ON 04.12.200 8. AFTER GOING THROUGH THE SUBMISSIONS MADE BY THE COU NSEL OF THE ASSESSEE AND ALSO THE FACT THAT ONLY WHEN IT WAS PO INTED OUT TO THE ASSESSEE THAT SURRENDERED INCOME HAS NOT BEEN INCOR PORATED IN THE COMPUTATION HE FILED REVISED COMPUTATION ALONGWITH THE RETURN AND ALSO DEPOSITED BALANCE TAX ON SELF ASSESSMENT ON 10 .11.2008- RS.1,78,970/- AND ON 30.11.2008 RS.74,950/-. THE REVISED RETURN BEING BEYOND THE TIME LIMIT, THEREFORE, SAME IS NOT ACCEPTED AND INCOME OF RS.9,00,000/- IS TREATED AS CONCEALED INC OME FOR WHICH INACCURATE PARTICULARS OF INCOME HAVE BEEN FURNISHE D. AS THE ASSESSEE HAS CONCEALED THE TRUE PARTICULARS OF ITS INCOME T O THE EXTENT OF ITA NO.254(ASR)/2012 3 INCOME SURRENDERED DURING THE COURSE OF SURVEY, PEN ALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT HAVE BEEN INITIATED SEPARA TELY. 3. THE A.O. LEVIED THE PENALTY @ 300% OF TAX SOUGHT TO BE EVADED BY HOLDING AS UNDER: I HAVE CONSIDERED THE SUBMISSION MADE ON BEHALF OF THE ASSESSEE AND AS FAR AS THE CASE ARE CONCERNED, THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 31.10.2006 ALONGWITH AUDITED BALANCE SHEE T BUT THERE IS NO MENTION IN THE BALANCE SHEET IN THE CURRENT ASSETS ABOUT THE PAYMENT OF ADVANCE TAX NOR ON THE LIABILITY SIDE AS THE DRA WINGS OF THE ASSESSEE HAVE BEEN SHOWN ONLY AT RS.60,000/-. IN THE COMPUTA TION OF INCOME FILED ALONGWITH THE RETURN OF INCOME, THE ASSESSEE HAS SHOWN TOTAL TAXABLE INCOME AT RS.6,17,537/- AND ON WHICH TAX H AS BEEN WORKED OUT AT RS.1,37,966/-. THE CLAIMED TDS OF RS.8,004/- AND ADVANCE TAX PAID ON 15.12.2005 AT RS.1,35,000/- AND THUS REFUND HAS BEEN WORKED OUT AT RS.5,038/-. THE CASE WAS PROCESSED U/S 143(1 ) AND AFTER ACCEPTING THE RETURNED INCOME, THE REFUND WAS WORKE D OUT AT RS.30/- ONLY AFTER ALLOWING THE CREDIT OF TAXES PAID. ON THE BASIS OF SURVEY REPORT RECEIVED BY THE ITO WARD 1(3), JAMMU FROM DY . DIRECTOR OF INCOME TAX (INV.) GURGAON VIDE HIS LETTER NO. DDIT (INV)/GGN/06- 07/1051 DATED 28.09.2006, THE SAID A.O ISSUED NOTIC E U/S 143(2) ON 1`9.10.2007 WHICH WAS DULY SERVED UPON THE COUNSEL OF THE ASSESSEE. BUT, THERE WAS NO RESPONSE FROM THE ASSESSEE TO THE SAID NOTICE AND EVEN THEN THE ASSESSEE COULD NOT POINT OUT THE FACT THAT HE HAD SURRENDERED AN INCOME OF RS.9,00,000/- BEFORE THE I NVESTIGATION WING AT GURGAON. IT WAS ONLY AT THE FAG END OF THE YEAR, WHEN THE ASSESSMENT WAS GETTING BARRED BY LIMITATION, THE AO TRANSFERRED THE RECORDS TO THIS OFFICE WHEN HE NOTICED THAT THE INC OME RETURNED IS MORE THAN RS.5,00,000/-, THE ASSESSEE FILED THE PUR PORTED REVISED RETURN ON 04.12.2008 ALONGWITH COMPUTATION OF INCO ME IN WHICH HE ADDED AN AMOUNT OF RS.9,00,000/- AS PER THE PROVISI ONS OF SECTION 139(5) OF THE ACT, IT HAS BEEN PROVIDED THAT IF AN Y PERSON, HAVING FURNISHED A RETURN UNDER SUB SECTION (1), OR IN PUR SUANCE OF A NOTICE ISSUED UNDER SUB SEC. (1) OF SEC. 142, DISCOVERS AN Y OMISSION OR ANY WRONG STATEMENT THEREIN, HE FURNISH A REVISED RETUR N AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE R ELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT, WH ICHEVER IS EARLIER. THUS, AS PER THESE PROVISIONS, THE ASSESSEE WAS REQ UIRED TO FILE THE ITA NO.254(ASR)/2012 4 REVISED RETURN ON OR BEFORE 31.03.2008 AND AS SUCH, THE RETURN FILED ON 04.12.2008 CANNOT UNDER ANY STRETCH OF IMAGINATI ON BE TREATED AS REVISED RETURN. THE FACTS NARRATED ABOVE CLEARLY SPEAKS THAT TILL T HE LAST MOMENT THE ASSESSEE TRIED TO CONCEAL THE FACT THAT HE HAD SURR ENDERED THE INCOME OF RS.9,00,000/- BEFORE THE INVESTIGATION WING OF THE DEPARTMENT, WHICH IS FURTHER SUBSTANTIATED BY THE FACT THAT HE NOT ONLY DELIBERATELY AVOIDED TO CLAIM THE CREDIT OF TAX PAID IN ADVANCE ON 15.03.2006 BUT ALSO FAILED TO DISCLOSURE THE TRUE FACTS BEFORE THE AUDITORS WHO HAVE CARRIED OUT THE AUDIT OF THE ACCOUNTS OF THE ASSESS EE. EVEN THE AUDITORS WHILE CARRYING OUT THE AUDIT DID NOT POINT OUT ON EXAMINATION OF BANK ACCOUNTS ABOUT THE PAYMENT OF A DVANCE TAX MADE BY THE ASSESSEE. THIS SHOWS THAT THEY ALSO DELIBER ATELY AND IN CONNIVANCE WITH THE ASSESSEE TRIED TO REMAIN MUM WI TH CLEAR INTENTION NOT TO DISCLOSE THE SAID AMOUNT OF SURRENDERED INCO ME IN THE RETURN OF INCOME. THE DICTIONARY MEANING OF THE WORDS CONCEA L OR CONCEALMENT CLEARLY POINT TO THE HUMAN ACT OF KE EPING SOMETHING, IN THE CONTEXT OF TAX ON INCOME, THE INCOME SO WRAPPED UP THAT IT MAY NOT BE POSSIBLE TO DISCOVER IT. IT IS IN THIS CONT EXT THAT MEANS REA ASSUMES SIGNIFICANT IMPORTANT. THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE HIS EXPLANATION AND MENS REA HAS BEEN ESTABLISHED BEYOND DOUBT THAT ASSESSEE HAS ACTED DELIBERATELY I N DEFIANCE OF LAW. IN THE LIGHT OF ALL THESE FACTS, I AM SATISFIED THA T THIS IS A FIT CASE FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. ACC ORDINGLY, PENALTY OF RS.9,56,397/- IS IMPOSED. 3. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SUBMISSION S, WHO DELETED THE PENALTY AND THE RELEVANT FINDINGS OF LD. CIT(A) ARE REPRODUCED FOR THE SAKE OF CONVENIENCE AS UNDER: I HAVE CAREFULLY CONSIDERED THE FACTUAL POSITION, THE WRITTEN SUBMISSION, ASSESSMENT ORDER, PENALTY ORDER AND ALS O THE CASE RECORDS AS CALLED FROM THE AO. IT IS NOT DISPUTED THAT DUR ING THE ACTION U/S 133A OF THE ACT AT BUSINESS PREMISES OF THE ASSESSE E, A SURRENDER OF ADDITIONAL INCOME WAS MADE OF RS.9,00,000/- BY THE ASSESSEE. I FIND FROM THE REPORT REGARDING THE SURVEY PREPARED BY TH E DDIT(INV), GURGAON THAT TO DISCHARGE THE TAX LIABILITY TWO POS T DATED CHEQUES FOR RS.1,35,000 AS ADVANCE TAX WERE ALSO TENDERED BY T HE ASSESSEE. THE ITA NO.254(ASR)/2012 5 ARGUMENT OF THE ASSESSEE FOR NOT INCLUDING THIS SUR RENDERED AMOUNT IN THE ORIGINAL RETURN FILED IS THAT DUE TO INADVERTEN CE THE SAME WAS LEFT TO BE INCLUDED AND IT WAS NOT DELIBERATE. IT IS FOU ND FROM THE ORIGINAL RETURN OF INCOME THAT NO CREDIT FOR ADVANCE TAX PAI D OF RS.2,70,000/- BY ASSESSEE ON 15.12.05 FOR RS.1,35,000 WAS ALSO C LAIMED BY THE ASSESSEE. FROM THE CASE RECORDS, I FIND THAT THE AC IT WHO HAD PASSED THE ASSESSMENT ORDER IS NOT CORRECT IN STATING THAT DURING THE ASSESSMENT PROCEEDINGS ONLY WHEN THE AO HAD POINTED OUT TO ASSESSEE THE FACT ONLY THAT SURRENDERED AMOUNT WAS NOT INCLU DED, THEN THE ASSESSEE CAME FORWARD FOR FILING REVISED RETURN. T HE FACTS AS COME OUT FROM THE CASE RECORDS THAT ONLY ON 05.12.08 THE ITO 1(3), JAMMU HAS FORWARDED THE SURVEY REPORT TO AO WHICH WAS REC EIVED BY HIM ONLY ON 07.12.08 AND THE REVISED RETURN WAS FILED ON 04.12.08 ITSELF. I ALSO FIND THAT THE ORDER SHEET MAINTAINED BY THE AO DOES NOT RECORD ANY SUCH FACT THAT THE AO HAD POINTED OUT TO THE AS SESSEE ABOUT THE OMISSION OF NOT INCLUDING THE SURRENDERED AMOUNT. T HE FACT THAT ALL ALONG THE FACT OF SUCH DISCLOSURE MADE OF RS.9,00,0 00/- WAS IN THE KNOWLEDGE OF THE DEPARTMENT. IT IS ALSO UNDISPUTED THAT THE ASSESSEE NEVER BACK TRACKED ON THE SURRENDERED SO MADE. FURT HER, THE DATES OF PAYMENT OF TAXES ARE AS UNDER: 15.12.05 RS.1,35,000 15.03.06 RS.1,35,000 10.11.08 RS.1,78,970 31.11.08 RS. 74,950 IF WE GO BY THE ORIGINAL RETURN, THE TAX PAYABLE WA S ONLY RS.1,37,966 AND IN THAT RETURN NO CREDIT FOR RS.1,35,000/- WAS TAKEN. IT IS ALSO NOT A CASE WHERE A REFUND OF THIS AMOUNT WAS CLAIMED. I T IS INCONCEIVABLE THAT ANY PERSON WOULD WILLINGLY FOREGO RS.1,35,000/ - AFTER PAYING AS TAXES WHEN THE DEPARTMENT WAS WELL AWARE THAT AN AM OUNT OF RS.9,00,000/- WAS SURRENDERED BY THE ASSESSEE. MORE OVER, FURTHER PAYMENTS ARE MADE ON 10.11.08 AND 31.11.08 MUCH PRI OR TO THE FILING OF REVISED RETURN ON 04.12.08 AND THERE IS NO EVIDE NCE FOUND ON RECORDS THAT IT WAS FILED AFTER DETECTION BY THE A O DISCLOSURE WHICH NEVER RETRACTED WAS ALWAYS A MATTER OF FACT. IN THE CASE OF SH.GURBAX LAL, THE HONBLE P & H HIG H COURT 256 ITR 133, WHERE A REVISED RETURNED WAS FILED AFTER THE C OMPLETION OF ASSESSMENT HAD CONFIRMED THE VIEW OF THE HONBLE IT AT THAT THERE ITA NO.254(ASR)/2012 6 WAS NO MOTIVE MUCH LESS ANY MALICIOUS CONDUCT WAS A TTRIBUTABLE TO ASSESSEE AND THE INFORMATION WAS VOLUNTEERED BY THE ASSESSEE. IN THE PRESENT CASE ALSO AS THE FACTS NARRATED ABOVE, THE RETURNED WAS REVISED BEFORE ANY DETECTION BY THE DEPARTMENT AND AS DISCUSSED, THE CONDUCT OF ASSESSEE HAS BEEN BONA FIDE HENCE IN TER MS OF SECTION 271(1)(C) OF THE ACT, NEITHER THE ASSESSEE IS SAID TO ADVANCE AN EXPLANATION WHICH WAS FALSE AND MALAFIDE. CONSIDERI NG THIS, I AM CONVINCED THAT NO PENALTY WAS LEVIABLE LOOKING TO T HE FACTS AND CIRCUMSTANCES OF THE CASE AND HEREBY DELETE THE PEN ALTY LEVIED U/S 271(1)(C) OF I.T. ACT. 4. THE LD. DR, MR. TARSEM LAL, AT THE OUTSET ARGUE D THAT THE RETURNED INCOME IN THE PRESENT CASE IN ORIGINAL RETURN WAS F ILED U/S 139(1) ON 31.10.2006 AND ACTION UNDER SECTION 133A OF THE ACT WAS CARRIED OUT ON 02.12.2005 BY THE INVESTIGATION WING OF THE DEPARTM ENT WHERE THE ASSESSEE MADE A SURRENDER OF RS.9,00,000/- WHICH WAS NOT DIS CLOSED IN THE ORIGINAL RETURN. THE RETURN WAS REVISED BY THE ASSESSEE ON 0 4.12.008 WHICH WAS NON EST RETURN, SINCE THE RETURN U/S 139(5) CAN BE REVI SED IF ANY PERSON, HAVING FURNISHED A RETURNED U/S 139(1) OR IN PURSUANCE OF A NOTICE ISSUED UNDER SECTION 142(1) , DISCOVERS ANY OMISSION OR ANY WRO NG STATEMENT THEREIN, HE MAY FURNISH A REVISED RETURN AT ANY TIME BEFORE T HE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE T HE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER. THE RELEVANT ASSE SSMENT YEAR IN THE PRESENT CASE IS 2006-07 AND THE RETURN SHOULD HAVE BEEN REV ISED UPTO 31.03.2008. THE ASSESSEE HAS NOT REVISED THE RETURN UPTO 31.03. 2008,THEREFORE, ANY RETURN FILED THEREAFTER IS NONEST RETURN AND CANNOT BE TAK EN COGNIZANCE UNDER ANY ITA NO.254(ASR)/2012 7 PROVISIONS OF LAW. THEREFORE, THE LD. CIT(A) IS NOT JUSTIFIED IN CANCELING THE PENALTY ON THE BASIS OF NON EST RETURN. 5. THE LD. COUNSEL FOR THE ASSESSEE, MR. P.N. ARORA , ADVOCATE ARGUED THAT THE ASSESSEE BY MISTAKE DID NOT INCLUDE THE SA ID SURRENDERED AMOUNT IN THE RETURN OF INCOME FILED IN ORIGINAL AND ALSO DID NOT CLAIM THE TAX SO PAID WHEN THE ASSESSEE OF HIS OWN REALIZED THE MISTAKE, THE SAME WAS REVISED. THE LD. COUNSEL, THEREFORE, PRAYED TO CONFIRM THE O RDER OF THE LD. CIT(A), WHICH IS A PERFECT ORDER. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE ARE CONVINCED THE ARGUMENTS MADE BY THE LD. DR, MR. TARSEM LAL, THAT ANY RETURN CAN BE REVISED U/S 139(5) OF THE ACT AN D UNDER NO OTHER PROVISIONS OF THE ACT. THERE IS NO DISPUTE TO THE F ACT THAT THE ASSESSEE HAS NOT FILED THE REVISED RETURN WITHIN TIME PRESCRIBED UND ER SECTION 139(5) OF THE ACT, THEREFORE, ANY RETURN FILED THEREAFTER WILL BE TREATED AS NON EST RETURN. THE RETURN IN ORIGINAL FILED U/S 139(5) OF THE ACT ON 31.10.2006 HAS NO MENTION OF SURRENDERED INCOME OF RS.9,00,000/- THOU GH TAXES HAVE BEEN PAID. THEREFORE, THE CASE RELIED UPON BY THE LD. CIT(A) IS NOT APPLICABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. TH E ASSESSEE HAS CONCEALED PARTICULARS OF INCOME U/S 271(1)(C) OF THE ACT AND THEREFORE, LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS ITA NO.254(ASR)/2012 8 REVERSED. HOWEVER, THE AO HAS LEVIED PENALTY @ 300% , WHICH IS EXCESSIVE AND THEREFORE, IN THE FACTS AND CIRCUMSTANCES, WE D IRECT THE AO TO LEVY PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED. THE APPEAL OF THE REVENUE IS PARTLY ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I N ITA NO.254(ASR)/2012 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26TH MARCH, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26TH MARCH, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.SAHIL MAHAJAN, JAMMU 2. THE DCIT, CIR.1, JAMMU 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR