Ajit Corrugation, Nani Daman V. Income Tax Officer, Ward-4, Daman

ITA 2603/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2115 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 22-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Revised return
• Section: 271(1)(c); 250; 274; 22

Judgement Text

M/S.AJIT CORRUGATION / IN ITA NOS 2602 & 2603 OF 2014 FOR A.Y. 207-08 & 08-09 PAGE 1 OF 6 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T. A NOS.2602 & 2603/AHD/2014/SRT / A.YS.: 2007-08 & 2008-09 M/S.AJIT CORRUGATION, 485-G, FURTADO COMPOUND, NEAR DABHEL CHECK POST, DABHEL, NANI DAMAN 396 210. PAN: AAEFA 1904F V S . INCOME TAX OFFICER, WARD 4, DAMAN. APPELLANT /RESPONDENT /ASSESSEE BY SHRI S.K.KABRA, CA /REVENUE BY SHRI J.K.CHANDNANI, SR.DR / DATE OF HEARING: 26 .04 .2018 /PRONOUNCEMENT ON 26 .04.2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THESE TWO APPEALS FILED BY THE ASSESSEE DIRECTED AGAINST THE TWO SEPARATE ORDERS OF LD.COMMISSIONER OF INCOME TAX(APPEALS)-VALSAD, VALSAD BOTH DATED 21.08.2014 FOR THE ASSESSMENT YEARS 2007-08 AND 2008-09 IN RESPECT OF ORDER PASSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), BY THE ASSESSING OFFICER. ITA NO.2603/AHD/2014/SRT FOR A.Y. 2008-09; (BY ASSESSEE): 2. THE SOLE GROUND OF THE APPEAL IN ITA NO.2602/AHD/2014 FOR A.Y. 2007-08 RELATES TO CONFIRMING PENALTY OF RS.36,420/-. M/S.AJIT CORRUGATION / IN ITA NOS 2602 & 2603 OF 2014 FOR A.Y. 207-08 & 08-09 PAGE 2 OF 6 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT WAS MADE U/S.143(3) ON 18.12.2009 ASSESSING TOTAL INCOME OF RS.1,42,410/-, THEREAFTER A SURVEY U/S.133A WAS CARRIED OUT, WHEREIN IT WAS NOTICED THAT THE ASSESSEE HAS NOT OFFERED ANY TAX ON UNEXPLAINED CASH SALES/WASTAGE SALE OF RS.6,54,150/- FOR THE A.Y. 2007-08, THEREFORE, NOTICE U/S.148 WAS ISSUED IN RESPONSE TO WHICH ASSESSEE HAS SHOWN WASTAGE AND CASH SALES AMOUNTING TO RS.99000/- WHICH WAS NOT DISCLOSED IN THE ORIGINAL RETURN OF INCOME. ACCORDINGLY, ADDITION OF RS.99000/- WAS MADE. SIMILARLY, AN ENTRY OF RS.7000/- WAS NOT SHOWN WHICH WAS ALSO ADDED, BESIDES A AMOUNT OF RS.2200/- WAS ALSO ADDED ON WHICH PENALTY PROCEEDINGS U/S.271(1)(C) WERE ALSO INITIATED. THE AO AFTER ISSUING SHOW CAUSE NOTICE FOR CONCEALMENT/FURNISHING INACCURATE PARTICULARS OF INCOME ON ACCOUNT OF UNEXPLAINED CASH SALE, WASTAGE SALE OF RS.99,000/- AND 9,200/- HAS LEVIED A PENALTY OF RS.36,420/-. 4. BEING AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE CIT(A) WHEREIN IT WAS CLAIMED THAT ASSESSEE HAS SHOWN TOTAL INCOME OF RS.2,10,890/- IN RESPONSE TO NOTICE U/S.148 OF THE ACT AS AGAINST THE RETURNED INCOME IN THE ORIGINAL RETURN OF INCOME AT RS.1,42,410/-. THEREFORE, THE ADDITIONAL INCOME WAS OFFERED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S.148 OF THE ACT. HENCE, THERE IS NO CONCEALMENT OF INCOME OF FURNISHING INACCURATE PARTICULARS INCOME IN THE REVISED RETURN FILED AFTER SURVEY. THEREFORE, PENALTY IS NOT LEVIABLE IN M/S.AJIT CORRUGATION / IN ITA NOS 2602 & 2603 OF 2014 FOR A.Y. 207-08 & 08-09 PAGE 3 OF 6 THE LIGHT OF DECISION IN THE CASE OF CIT VS. NARASHIMA PRASAD [2001] 250 ITR 852 (KARNATAKA HIGH COURT) AND CIT VS. SURESH CHANDR BANSAL [2009] 22 DTR 1 (CAL.) AND OTHER HAS MENTIONED BY THE CIT(A) IN THE SUBMISSION OF THE ASSESSEE IN HIS ORDER. HOWEVER CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AS THE DISCLOSURE BY THE ASSESSEE WAS NOT A VOLUNTARY, AS THIS INCOME HAS NOT BEEN DISCLOSED IN RETURN U/S.139(1) OF THE ACT. 5. BEING AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THIS TRIBUNAL. THE LD.COUNSEL SUBMITTED THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND ENGAGED IN THE BUSINESS OF MANUFACTURING OF COROGATE BOXES. THE ASSESSEE HAS FILED THE RETURN OF INCOME (ROI) DISCLOSING THE ADDITIONAL INCOME OF RS.99,000/- IN RESPONSE TO NOTICE U/S.148 OF THE ACT AND SAME WAS CONSIDERED FOR ADDITION BY THE AO. HOWEVER, SINCE THE ASSESSEE HAS SHOWN THE ADDITIONAL INCOME IN THE RETURN OF INCOME, THERE WAS NO CONCEALMENT OF INCOME IN THE ROI, THEREFORE, THE AO WAS NOT JUSTIFIED IN LEVYING THE PENALTY IN THE LIGHT OF JURISDICTIONAL PRONOUNCEMENTS IN THE CASES OF CIT VS. VS. NARASHIMA PRASAD, CIT VS. SURESH CHANDR BANSAL. 6. WE HAVE CONSIDERED THE FACTS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS SHOWN ADDITIONAL INCOME OF RS.99,000/- IN THE ROI FILED IN RESPONSE TO NOTICE U/S.148 OF THE ACT, BESIDES THIS, THE AO HAS ALSO MADE AN ADDITION OF RS.9200/- AND INITIATED THE PENALTY FOR CONCEALMENT OF INCOME AND FOR FURNISHING M/S.AJIT CORRUGATION / IN ITA NOS 2602 & 2603 OF 2014 FOR A.Y. 207-08 & 08-09 PAGE 4 OF 6 INACCURATE PARTICULARS OF INCOME U/S.271(1)(C) OF THE ACT. BUT THE AO LEVIED THE PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND NOT FOR CONCEALMENT OF INCOME. THEREFORE, THE LD.COUNSEL HAS FILED AN ADDITIONAL GROUND STATING THAT THE PENALTY WAS INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME, BUT IT WAS LEVIED FOR CONCEALMENT OF INCOME. FURTHER, THE LD.COUNSEL HAS ALSO BROUGHT TO OUR NOTICE THAT NOTICE U/S.271(1)(C) READ WITH SECTION 274 WAS WITHOUT STRIKING OUT THE TWO LIMBS I.E. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR WHICH ADDITIONAL GROUND OF APPEAL IS ALSO FILED. WE FIND THAT THE ASSESSEE HAS SHOWN THE ADDITIONAL INCOME IN THE ROI, THEREFORE, PENALTY IS NOT LEVIABLE IN THE LIGHT OF DECISION IN THE CASE OF JURISDICTIONAL HIGH COURT IN THE CASE OF SARABHAI CHEMICAL PVT. LTD. VS. CIT [2002] 257 ITR 355 (GUJ) WHEREIN IT WAS HELD THAT DEEMING FICTION CONTAINED IN EXPLANATION 1 TO SECTION 271(1)(C) OF THE INCOME TAX ACT WILL NOT APPLY IF THE ASSESSEE IN QUANTUM PROCEEDINGS HAS DISCLOSED ALL THE FACTS RELATING TO AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME. SIMILARLY, THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. V. NARASHIMA PRASAD [2001] 250 ITR 852 (KARNATAKA HC) HAS HELD THAT THE ASSESSEE HAS FILED REVISED RETURNS FOR RESPECTIVE ASSESSMENT YEARS DISCLOSING INCOME, ADDITIONAL INCOME. THE AO HELD THAT REVISED RETURN WAS FILED AFTER SURVEY AND THEREFORE THERE WAS CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. HOWEVER, THE TRIBUNAL HAS HELD THAT THERE WAS NO CONCEALMENT OF INCOME AND QUASHED THE ORDER OF LEVYING PENALTY. THE REVENUES APPEAL WAS ALSO M/S.AJIT CORRUGATION / IN ITA NOS 2602 & 2603 OF 2014 FOR A.Y. 207-08 & 08-09 PAGE 5 OF 6 DISMISSED BY THE HONBLE HIGH COURT. SIMILARLY, PENALTY WAS NOT FOUND LEVIABLE WHERE ADDITIONAL INCOME OFFERED BY THE ASSESSEE AFTER THE SEARCH HAVING BEEN ACCEPTED IN ENTIRETY AND FILED REVISED RETURN U/S.153A OF THE ACT AS HELD IN THE CASE OF CIT VS. SURESH CHANDR BANSAL [2009] 22 DTR 1 (CAL.). SINCE THE ASSESSMENT AND PENALTY PROCEEDINGS ARE DISTINCT, THEREFORE, IT IS TRITE LAW THAT LEVY OF PENALTY WOULD BE EXAMINED SEPARATELY. IN THE GIVEN CASE, SINCE THE ADDITIONAL INCOME WAS OFFERED IN THE ROI AND SAME WAS ADDED DURING THE ASSESSMENT PROCEEDINGS THERE WAS NO CONCEALMENT ON THE FACE OF RETURN OF INCOME. ACCORDINGLY, THE FOLLOWING RATIO AS LAID DOWN BY AFORESAID HON'BLE HIGH COURTS, WE ARE OF THE VIEW THAT PENALTY IS NOT SUSTAINABLE IN LAW, ACCORDINGLY THE SAME IS DELETED. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED. 7. THE ASSESSEE HAS FILED ADDITIONAL GROUND BY STATING THAT THE AO HAS ERRED IN NOT STRIKING OUT ONE SPECIFIC LIMB ON WHICH PENALTY IS INITIATED BY STRIKING OUT OF THE TWO LIMBS MENTIONED IN THE NOTICE U/S.271(1)(C) OF THE ACT. HOWEVER, THIS ADDITIONAL LEGAL GROUND IS NOT PRESSED BEFORE US AND HENCE SAME IS TREATED AS DISMISSED AS NOT PRESSED. ITA NO.2603/AHD/2014/SRT FOR A.Y. 2008-09; (BY ASSESSEE): 8. THIS GROUND IS RELATING TO CONFIRMING PENALTY OF RS.1,10,000/- U/S.271(1)(C) OF THE ACT. M/S.AJIT CORRUGATION / IN ITA NOS 2602 & 2603 OF 2014 FOR A.Y. 207-08 & 08-09 PAGE 6 OF 6 9. BRIEF FACTS ARE THAT THE AFTER SURVEY THE ASSESSEE HAS FILED THE RETURN OF INCOME (ROI) DISCLOSING INCOME OF RS.3,17,100/-. THE FACTS OF THIS YEAR ARE ALSO IDENTICAL TO THAT OF 2007-08. THE AO HAS LEVIED THE CONCEALMENT PENALTY OF RS.1,10,000/- FOR NOT DISCLOSING THE ADDITIONAL INCOME IN RETURN FILED U/S.139 OF THE ACT. SINCE THE FACTS OF THIS YEAR ARE ALSO IDENTICAL AS IN A.Y. 2007-08 EXCEPT THE FIGURE, THEREFORE, FOLLOWING THE FINDINGS GIVEN IN RESPECT OF A.Y. 2007-08 THE PENALTY CONFIRMED BY CIT(A) AT RS.1,10,000/- FOR A.Y. 2008-09 IS THEREFORE DELETED. SIMILARLY, THE ADDITIONAL GROUND FILED BY THE ASSESSEE IS ALSO NOT PRESSED AND THE SAME IS TREATED AS DISMISSED AS NOT PRESSED. 10. IN THE RESULT, APPEAL FOR THE A.Y. 2008-09 IS PARTLY ALLOWED. 11. FINALLY, APPEAL IN ITA NO.2602/AHD/2014 FOR A.Y. 2007-08 PARTLY ALLOWED AND APPEAL IN ITA NO.2603/AHD/2014 FOR A.Y. 2008- 09 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26-04-2018. SD/- SD/- ( . . /C.M. GARG) ( . . / O.P.MEENA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER / SURAT, DATED: 26 TH APRIL , 2018 S.GANGADHARA RAO COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / / / ASSISTANT REGISTRAR, SURAT