Shri Mohammed Siddique Ismail Juneja, Bhuj V. The Assistant Commissioner of Income Tax, Central Circle-2, RAJKOT-GUJARAT

ITA 273/RJT/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94067 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: MJ RANPURA
• Section: 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ./ ITA NO.273 AND 274/RJT/2012 / ASSTT. YEAR: 2007-08 AND 2008-09 MOHAMMED SIDDIQUE ISMAL JUNEJA UNNATI SALES O/S.SAROT GATE BHUJ, KUTCH. VS ACIT, CENT.CIR.2 RAJKOPT. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M.J. RANPURA, CA REVENUE BY : SHRI AVINASH KUMAR, AR / DATE OF HEARING : 18/05/2015 / DATE OF PRONOUNCEMENT: 22/05/2015 / O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST CONSOLIDATED ORDER OF THE CIT(A)-IV, AHMEDABAD DATED 22.3.2012 FOR THE ASSTT.YEARS 2007- 08 AND 20-08- 09. 2. THE SOLE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY UNDE R SECTION 271(1)(C) OF THE ACT OF RS.4,500/- IN THE ASSTT.YEAR 2007-08 AND RS.3,000/- IN THE ASSTT.YEAR 2008-09 ON INCOME ADMITTED ON AD HOC BASIS OF RS.1,44,650/- AND RS.1,37,450/- IN THE ASSTT.YEAR 2 008-09. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE UNDER SECTION 132 OF THE INCOME TAX ACT 1961 ON 1592008 . NO RETURN OF INCOME WAS FILED BY THE ASSESSEE BEFORE THE DATE OF SUCH. THEREAFTER THE ASSESSEE FILED ITS RETURN OF INCOME IN PURSUANC E TO THE NOTICE ISSUED ITA NO.273/RJT/2012 (2 APPEALS) 2 UNDER SECTION 153A OF THE ACT AND DISCLOSED INCOME OF RS.1,44,650/-IN THE ASSESSMENT YEAR 200708 AND RS.1,37,450/-IN THE ASSESSMENT YEAR 200809. THE ASSESSMENT WAS MADE UNDER SECTION 153A ON 30-3-2010 AT THE RETURNED INCOME. THEREAFTER, THE ASSESSING O FFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE GROUND TH AT SUCH LEVY OF PENALTY IS MANDATORY IN VIEW OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT. 4. ON APPEAL THE CIT(A) CONFIRMED THE PENALTY IMPOS ED BY THE AO FOR BOTH THE ASSESSMENT YEARS UNDER APPEALS. 5. BEFORE US, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FULLY AND TRULY DIS CLOSED HIS INCOME IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UN DER SECTION 153A OF THE ACT. THE INCOME SHOWN IN THE RETURN WAS FOUND C ORRECT ON ASSESSMENT AND NO INCOME WAS ASSESSED ON THE BASIS OF ANY SEIZED MATERIAL. ON THE ABOVE FACTS, HE SUBMITTED THAT PEN ALTY UNDER SECTION 271(1)(C) WAS NOT AUTOMATIC OR MANDATORY AND IN SUP PORT OF THE SAME HE RELIED ON THE DECISION OF THE CHENNAI BENCH OF T HE TRIBUNAL IN THE CASE OF SHRI A. V. ELANGO VS. ITO IN ITA NOS. 1768 TO 1770(MDS) 2012 ORDER DATED 26-11-2012 WHEREIN IT WAS HELD AS UNDER : 4. WE HEARD BOTH SIDES ON THIS ISSUE. THE ASSESSEE ARGUED THAT EXPLANATION 5 TO SECTION 271(1)(C) ALONE WILL APPLY TO HIS CASE, WHEREAS THE REVENUE TOOK THE STAND THAT EXPLA NATION 5A WOULD APPLY. AS FAR AS THE APPLICABILITY OF THE EXP LANATION IS CONCERNED, WE AGREE WITH THE REVENUE THAT EXPLANATI ON 5A TO SECTION 271(1)(C) IS TO BE RELIED ON IN THESE CASES , IF NECESSITY SO ARISES. WE FIND THAT WHILE DISCUSSING THE DISPUTE A S TO WHETHER EXPLANATION 5 WOULD APPLY OR EXPLANATION 5A WOULD A PPLY, THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS NOT GONE IN TO THE MERITS OF THE CASE. EVEN, EXPLANATION 5A HAS NO MAN DATE TO BE APPLIED AUTOMATICALLY. PENALTY UNDER SECTION 271 (1 )(C) ALWAYS ARISES OUT OF CONCEALMENT OF INCOME OR OF FURNISHIN G OF INACCURATE PARTICULARS RELATING TO THE INCOME. IT IS IN ORDER TO EXPLAIN THE POSITION OF LAW THAT EXPLANATION 5A HAS BEEN PROVID ED UNDER SECTION 271(1)(C). BUT THAT EXPLANATION BY ITSELF D OES NOT MAKE OUT AN AUTOMATIC CASE OF CONCEALMENT OR FURNISHING OF INACCURATE ITA NO.273/RJT/2012 (2 APPEALS) 3 PARTICULARS. EXPLANATION 5A CASTS A DUTY ON THE ASS ESSEE TO RECONCILE THE DIFFERENCE BETWEEN THE FIRST RETURN A ND THE SUBSEQUENT RETURN. 5. IN THE PRESENT CASE THE DIFFERENTIAL AMOUNT OF INCOME DECLARED IN THE SUBSEQUENT RETURN WAS WORKED OUT ON THE BASIS OF CASH FLOW STATEMENT FILED BY THE ASSESSEE. THE DIFF ERENCE CANNOT BE ATTRIBUTED TO ANY SINGLE ITEM. THEREFORE, A CASE OF CONCEALMENT IS NOT DISCERNIBLE FROM THE RECORDS. IT IS EQUALLY TRUE TO SAY THAT ALL THE PARTICULARS HAVE BEEN FURNISHED BY THE ASSESSEE , WHICH IS ALSO DISCERNIBLE FROM THE RECORDS. IN THE FACTS AND CIRC UMSTANCES OF THE CASE WE FIND THAT THE LOWER AUTHORITIES HAVE NOT MA DE OUT A FACTUAL CASE TO APPLY EXPLANATION 5A AS PROVIDED UN DER SECTION 271(1)(C). IN THESE CIRCUMSTANCES THERE IS NO JUSTI FICATION TO LEVY PENALTY UNDER SECTION 271(1)(C). THE PENALTIES IMPO SED UNDER SECTION 271(1)(C) FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08 ARE HEREBY DELETED. 6. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE OR DERS OF THE LOWER AUTHORITIES. 7. WE FIND THAT THE DR COULD NOT POINT OUT AS TO WH Y THE PENALTY LEVIED OF RS.4500 IN THE ASSESSMENT YEAR 2007-08 AN D RS.3000 IN THE ASSESSMENT YEAR 2008-09 SHOULD NOT BE DELETED IN VI EW OF THE ABOVE DECISION OF THE CHENNAI BENCH OF THE TRIBUNAL. 8. WE ALSO FIND THAT THE HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO.1181 OF 2010 WITH TAX APPEAL NO.1182 OF 2010 TO TAX APPEAL NO.1183 OF 2010 IN THE CASE OF KIRIT DAHYABHAI PATE L VS. ASSTT. COMMISSIONER OF INCOME-TAX, VIDE ORDER DATED 03/12/ 2014 HELD AS UNDER:- 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE DECISIONS RELIEF UPON BY LEARNED SE NIOR ADVOCATE FOR THE APPELLANT, WE ARE OF THE CONSIDERED OPINION THAT TH E VIEW TAKEN BY THE TRIBUNAL IS ERRONEOUS. THE CIT(A) RIGHTLY HELD THAT IT IS NOT RELEVANT WHETHER ANY RETURN OF INCOME WAS FILED BY THE ASSESSEE PRIO R TO THE DATE OF SEARCH AND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETU RN OF INCOME. IN VIEW OF SPECIFIC PROVISION OF SECTION 153A OF THE I.T. A CT, THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153(A) OF THE I.T. ACT IS TO BE CONSIDERED AS RETURN FILED UNDER SECTION 139 OF THE ACT, AS THE ASSESSING OFFICER HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, THE RETURN IS TO BE CONSIDERED FOR THE PURPOSE OF PENALTY UNDER S ECTION 271(1)(C) OF THE ITA NO.273/RJT/2012 (2 APPEALS) 4 I.T. ACT AND THE PENALTY IS TO BE LEVIED ON THE INC OME ASSESSED OVER AND ABOVE THE INCOME RETURNED UNDER SECTION 153A IF ANY . 9. WE, THEREFORE, FOLLOWING THE ABOVE DECISIONS, DE LETE THE LEVY OF PENALTY OF RS.4500 IN THE ASSESSMENT YEAR 2007-08 A ND RS.3000 IN THE ASSESSMENT YEAR 2008-09 LEVIED UNDER SECTION 271 (1 )(C) OF THE ACT AND ALLOW THE APPEALS OF THE ASSESSEE FOR BOTH THE YEAR S UNDER CONSIDERATION. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 22 ND MAY, 2015 AT RAJKOT. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 22/5/2015