The ACIT-CC-1, Baroda V. M/s. G.S. Investment, Anand

ITA 2680/AHD/2009

• Counselvise Citation: 268020514 RSA 2009
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-01-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 29-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ASHEEM THAKKAR
• Keywords: Document seized; Reasonable cause; Onus to prove; Documents seized
• Section: 142(1); 148; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI D. K. TYAGI, JM AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO.2680/AHD/2009: A. Y.: 2000-01 THE A. C. I. T., CENTRAL CIRCLE-1, 6 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE CICLE, BARODA VS M/S. G. S. INVESTMENT, SARDARGUNJ BAZAR, ANAND PA NO. AABFG 9859 Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI VINOD TANWANI, SR. DR RESPONDENT BY SHRI ASHEEM THAKKAR, AR DATE OF HEARING: 12-01-2012 DATE OF PRONOUNCEMENT: 27-03-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER OF THE LEARNED CIT(A)- IV, A HMEDABAD DATED 18 TH MARCH, 2009 FOR ASSESSMENT YEAR 2000-01 IN APPEAL N O. CIT(A)- IV/23.B/CC-1/08-09, CHALLENGING THE DELETION OF PEN ALTY OF RS.2,91,585/- MADE BY THE AO U/S 271(1) (C) OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT A SEARCH ACTION U/S 132 OF THE IT ACT WAS CARRIED OUT IN THE J. K. SECURITIES GROU P OF CASES ON 19-01- 2006 WHEREIN CERTAIN DOCUMENTS/BOOKS RELATED TO THE ASSESSEE WERE FOUND. ACCORDINGLY NOTICE U/S 153C OF THE IT ACT WA S ISSUED ON 27-07- 2007 IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN ON 20-12-2007 DECLARING AN INCOME OF RS.7,57,360/-. NO ORIGINAL R ETURN WAS FILED U/S ITA NO.2680/AHD/2009 (AY 2000-01): ACIT, CC-1, BARO DA VS M/S. G. S. INVESTMENT 2 139 (1) OF THE IT ACT PRIOR TO SEARCH ACTION. THE A O ISSUED NOTICE U/S 143(2) OF THE IT ACT ON 20-12-2007 AND QUESTIONNAIR E AND NOTICE U/S 142(1) OF THE IT ACT WERE ISSUED IN RESPONSE TO WHI CH THE ASSESSEE FILED REPLY FROM TIME TO TIME. ON THE BASIS OF RETURN FIL ED, MATERIAL SEIZED AND REPLY OF THE ASSESSEE, ASSESSMENT WAS FINALIZED AT AN INCOME OF RS.7,57,360/-. THE LEARNED AO OPINED THAT THE CASE OF THE ASSESSEE IS DULY COVERED BY THE PROVISIONS OF EXPLANATION 5 (1) (I) AND EXPLANATION 3 OF SECTION 271 (1) ( C ) OF THE IT ACT AND THEREFOR E, LEVIED PENALTY OF RS.2,91,585/- VIDE A SEPARATE ORDER. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A) AND SUBMITTED THAT WHERE THE RETURNED INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S 153C OF THE IT ACT HAS BEEN AC CEPTED AND ASSESSED AS SUCH, NO PENALTY CAN BE IMPOSED CITING VARIOUS J UDGMENTS IN SUPPORT OF HIS CONTENTION FOR DELETION OF THE PENALTY IMPOS ED BY THE AO. 3.1 THE LEARNED CIT(A) CONSIDERING THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE, ASSESSMENT ORDER AS WELL AS PENALTY ORDER AND VARIOUS DECISIONS OF THE TRIBUNAL HELD THAT IN A CASE WHERE ALL THE NECESSARY PARTICULARS ARE DECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME IT CANNOT BE SAID THAT THE ASSESSEE HAS CONC EALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF ITS INCOME IN R ESPECT OF THE UNDISCLOSED INCOME AND THAT THE AO HAS NOT DISCHARG ED THE BURDEN TO PROVE THE CONCEALMENT OF INCOME ON WHICH PENALTY WA S LEVIED PURELY ON THE BASIS OF ADDITIONAL INCOME DISCLOSED IN THE RET URN FILED U/S 153C OF THE IT ACT BY THE ASSESSEE IN GOOD FAITH. THE LEARN ED CIT(A) FINALLY HELD AS FOLLOWS: 2.1 THE ADDITIONAL INCOME OFFERED BY ASSESSEE U/S 153 AFTER THE SEARCH HAVING BEEN ACCEPTED IN ITS ENTIRETY WITHOUT DETAILED DISCUSSION OF THE SEIZED DOCUMENTS. AN ASSESSEES S TATUTORY ITA NO.2680/AHD/2009 (AY 2000-01): ACIT, CC-1, BARO DA VS M/S. G. S. INVESTMENT 3 OBLIGATION U/S 139(1) IS TO GIVE CORRECT AND COMPLE TE INFORMATION WITH THE RETURN OF INCOME COMPLIED WITH, THEN THERE IS NO CONTRAVENTION WHICH CAN ATTRACT PENALTY. IN OTHER W ORDS, THE ASSESSEE CONCEALED THE INCOME COMES TO AN END WHEN THE CORRESPONDING AMOUNT WAS OFFERED FOR TAXATION WHEN ALL THE NECESSARY PARTICULARS ARE DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED U/S 153C. IN A CASE WHERE ALL THE NECE SSARY PARTICULARS ARE DECLARED BY THE ASSESSEE IN THE RET URN OF INCOME, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPE CT OF THE UNDISCLOSED INCOME. THE A. O. HAS NOT DISCHARGED TH E BURDEN TO PROVE THE CONCEALMENT OF INCOME, WHICH WAS LEVIED P URELY ON THE BASIS OF ADDITIONAL INCOME DISCLOSED IN THE RETURN FILED U/S 153C BY THE ASSESSEE IN GOOD FAITH. THEREFORE, THE APPEL LANT HAD MADE DISCLOSURE AFTER THE SEARCH CANNOT BE TREATED AS CO NCEALMENT. IT CANNOT BE SAID TO BE THE AMOUNT OF TAX SOUGHT TO BE EVADED BECAUSE THE UNDISCLOSED INCOME WAS DECLARED IN THE RETURN FILED U/S 153C ONLY. KEEPING IN VIEW OF ABOVE FACTS AND C IRCUMSTANCE OF THE CASE AS WELL AS THE CASES (SUPRA), THE PENALTY IMPOSED U/S 271(1) (C) IS HEREBY DELETED. HENCE, THE APPEAL IS ALLOWED. 4 BEING AGGRIEVED AND DISSATISFIED WITH THE ABOVE FINDINGS OF THE LEARNED CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE LEARNED BOTH THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIALS ON RECORD. DURING THE COURSE OF HEARING OF THE APPEAL THE LEARNED DR RELI ED UPON THE ORDER OF THE AO AND SUBMITTED THAT THE AO HAS RIGHTLY IMPOSE D PENALTY CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE . THE LEARNED DR ALSO REFERRED TO THE DECISION OF THE HONBLE GUJARA T HIGH COURT IN THE CASE OF LMP PRECISION ENGG. CO. LTD. VS DCIT, 183 T AXMAN 12 (GUJ) AND THE DECISION OF ITAT AHMEDABAD B BENCH IN THE CASE OF DCIT VS JAYANTILAL AMBALAL CHOKSHI REPORTED IN 13 TAXMAN.CO M36 (AHD) IN SUPPORT OF HIS SUBMISSION WHICH IS PLACED ON RECORD . ITA NO.2680/AHD/2009 (AY 2000-01): ACIT, CC-1, BARO DA VS M/S. G. S. INVESTMENT 4 5.1 ON THE OTHER HAND, THE LEARNED AR OF THE ASSESS EE SUBMITTED THAT THE YEAR UNDER CONSIDERATION WAS THE FIRST YEAR OF THE BUSINESS OF THE ASSESSEE AND THE RETURN REMAINED TO BE FILED BY INA DVERTENCE. HOWEVER, IN RESPONSE TO NOTICE U/S 153C OF THE IT ACT, THE A SSESSEE FILED ITS RETURN OF INCOME ALONG WITH ALL THE PARTICULARS AND PAID T HE DUE TAXES ALONG WITH INTEREST AS SELF ASSESSMENT TAX AND THAT THE SAID I NCOME WAS DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE E VEN BEFORE THE SEARCH AND THAT THE RETURN SO FILED WAS ACCEPTED BY THE REVENUE DEPARTMENT. IT WAS FURTHER SUBMITTED BY THE LEARNED AR THAT THE PROCEEDINGS ARISING OUT OF OMISSION TO FILE THE RET URN OF INCOME U/S 139(1) FOR ASSESSMENT YEAR UNDER APPEAL STOOD ABATE D WITH THE ISSUANCE OF THE NOTICE U/S. 153C DATED 27-02-2007 A ND THEREFORE, NON FILING OF RETURN U/S 139(1) DOES NOT CONSTITUTE A D EFAULT OF CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME PARTICULARLY WHEN THE ALLEGED CONCEALMENT OF INCOME IS NOT WITH REFER ENCE TO THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 139(1) OF TH E IT ACT. IT WAS FURTHER SUBMITTED THAT DURING THE COURSE OF SEARCH, THE ASS ESSEE HAS DISCLOSED VOLUNTARILY ADDITIONAL INCOME AS PER THE STATEMENT RECORDED U/S 132(4) ON 19-01-2006 AND THAT IN VIEW OF SECTION EXPLANATI ON 5 TO PROVISIONS OF SECTION 271 (1) (C) OF THE IT ACT, WHERE THE ASSESS EE DISCLOSED ADDITIONAL INCOME IN THE STATEMENT RECORDED U/S 132(4) OF THE IT ACT, PENALTY UNDER THAT SECTION CANNOT BE LEVIED. IN SUPPORT OF HIS CO NTENTION, THE LEARNED AR ALSO RELIED ON THE DECISION OF ITAT KOLKATA BENC H IN THE CASE OF DCIT VS AVINASH CH. GUPTA REPORTED IN 44 SOT 85 (KO L) (URO) AND THE DECISION OF ITAT RAJKOT BENCH IN THE CASE OF SHABBI R ALLAUDDIN LATIWALA VS DCIT REPORTED IN 16 TAXMANN.COM 177 (RAJKOT) AND PLEADED THAT THE PENALTY MAY BE CANCELLED. ITA NO.2680/AHD/2009 (AY 2000-01): ACIT, CC-1, BARO DA VS M/S. G. S. INVESTMENT 5 6. AT THIS STAGE WE FIND IT APPROPRIATE TO REPROD UCE EXPLANATION 3 TO SECTION 271 (1) OF THE ACT BASED ON WHICH THE LEARN ED AO LEVIED THE PENALTY: [EXPLANATION 3- WHERE ANY PERSON [*****] FAILS, WI THOUT REASONABLE CAUSE TO FURNISH WITHIN THE PERIOD SPECIFIED IN SUB -SECTION (1) OF SECTION 153 A RETURN OF HIS INCOME WHICH HE IS REQU IRED TO FURNISH UNDER SECTION 139 IN RESPECT OF ANY ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1 ST DAY OF APRIL, 1989, AND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BEEN ISSUED TO HIM UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142 OR SECTION 148 AN D THE ASSESSING OFFICER OR THE [****] COMMISSIONER (APPEALS) IS SAT ISFIED THAT IN RESPECT OF SUCH ASSESSMENT YEAR SUCH PERSON HAS TAX ABLE INCOME, THEN, SUCH PERSON SHALL, FOR THE PURPOSE OF CLAUSE (C ) OF THIS SUB- SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULAR S OF HIS INCOME IN RESPECT OF SUCH ASSESSMENT YEAR, NOTWITHS TANDING THAT SUCH PERSON FURNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY OF THE PERIOD AFORESAID IN PURSUANCE OF A NO TICE UNDER SECTION 148.] 6.1 IT IS APPARENT THAT THE ASSESSEE HAS NOT FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2000-01 WITHIN THE PRESCRIB ED TIME MENTIONED IN THE ACT AND ALSO WITHIN THE PERIOD PRESCRIBED IN SUB SECTION (1) OF SECTION 153 OF THE ACT. FURTHER, BUT FOR THE SEARCH CARRIED OUT IN THE PREMISES OF M/S. J. K. SECURITIES GROUP ON 19-01-20 06, THE ASSESSEES TAX LIABILITIES COULD NOT HAVE BEEN EXPOSED. SINCE, THE ASSESSE DID NOT FILE ITS RETURN OF INCOME WITHIN THE DUE DATE AND F URTHER WITHIN THE TIME LIMIT PRESCRIBED UNDER SUB SECTION 1 OF SECTION 153 OF THE ACT AND FINALLY FORCED TO FILE ITS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153C OF THE ACT DATED 27-07-2007 DUE TO CERTAIN MATERIALS UNEAR THED IN THE COURSE OF SEARCH IN THE PREMISES OF M/S. J. K. SECURITIES, IT IS OBVIOUS THAT THE ASSESSEES CASE FALLS UNDER EXPLANATION 3 TO SECTIO N 271 (1) OF THE ACT OF THE ACT AND IS SQUARELY APPLICABLE AS RIGHTLY HE LD BY THE LEARNED AO. THEREFORE, THE DECISIONS CITED BY THE LEARNED AR AR E NOT RELEVANT TO THE ITA NO.2680/AHD/2009 (AY 2000-01): ACIT, CC-1, BARO DA VS M/S. G. S. INVESTMENT 6 FACTS OF THIS CASE. ACCORDINGLY, WE HEREBY SUSTAIN THE PENALTY LEVIED BY THE LEARNED AO. IN THE RESULT, THE APPEAL OF THE RE VENUE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27TH DAY OF MARCH, 2012 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD