Shri Mehulkumar Bhikhabhai Patel, Gandhinagar V. The Income Tax Officer, Ward-3, Gandhinagar

ITA 2794/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9304 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 05-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Assessee Lawyers: M K PARMAR
• Section: 143(3)

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.2794/AHD/2015 / ASSTT. YEAR: 2008-2009 MEHULKUMAR BHIKHABHAI PATEL A/12, GOVERDHAN NAGAR SATI-NO-VADO, MANSA DIST. GANDHINAGAR PAN : APHPP 6065 N VS ITO, WARD - 3 GANDHINAGAR. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI M.K. PARMAR, AR REVENUE BY : SHRI NARENDRA SINGH, SR.DR / DATE OF HEARING : 02/03/2016 / DATE OF PRONOUNCEMENT: 03/03/2016 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF THE LD.CIT(A), GANDHINAGAR DATED 7.8.2015 PASSED FOR TH E ASSTT.YEAR 2008- 09. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.20,19,900/- IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 23.3.2010 DECLARING TOTAL INCOME AT RS.1, 03,380/-. THE ITA NO.2794/AHD/2015 2 ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) OF THE ACT ON 30.12.2010 DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS.21,50,880/- . THE LD.AO HAS MADE TWO ADDITIONS VIZ. (A) UNACCO UNTED CASH DEPOSIT OF RS.17,55,000/-, (B) UNEXPLAINED LOANS/ADVANCE OF RS.2,92,500/-, THUS, A TOTAL SUM OF RS.20,47,500/- WAS ADDED. TH E LD.AO INITIATED PENALTY PROCEEDINGS AGAINST THE ASSESSEE BY ISSUANC E OF A NOTICE UNDER SECTION 274 R.W.S 271(1)(C) OF THE ACT. THE AO HAS IMPOSED PENALTY OF RS.20,19,900/- VIDE ORDER DATED 14.3.2013. THIS P ENALTY WAS IMPOSED AT THE RATE OF 300% OF THE TAX SOUGHT TO BE EVADED. THE MINIMUM PENALTY IMPOSABLE UPON THE ASSESSEE WAS OF RS.6,73, 300/-. THE APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSES SEE. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE AT TH E VERY OUTSET CONTENDED THAT TRIBUNAL VIDE ITS ORDER IN ITA NO.34 39/AHD/2014 DATED 11.12.2015 HAS DELETED THE ADDITION, AND THEREFORE, PENALTY IS NOT SUSTAINABLE. HE PLACED ON RECORD COPY OF THE TRIBU NALS ORDER. THE LD.DR WAS UNABLE TO CONTROVERT THE CONTENTION OF TH E LD.COUNSEL FOR THE ASSESSEE. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. SECTION 271(1)(C)(III) OF THE A CT HAS A DIRECT BEARING ON THE CONTROVERSY, THEREFORE, WE TAKE NOTE RELEVAN T PROVISION, WHICH READS AS UNDER: '271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTIC ES, CONCEALMENT OF INCOME, ETC. (1) THE ASSESSING OFFICER OR THE C OMMISSIONER (APPEALS) OR THE CIT IN THE OF COURSE OF ANY PROCEE DINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) AND (B) ** ** ** ITA NO.2794/AHD/2015 3 (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HE MAY DIREC T THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY. (I)AND (INCOME-TAX OFFICER,)** ** ** (III) IN THE CASES REFERRED TO IN CLAUSE (C) OR CLA USE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL N OT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULA RS OF HIS INCOME OR FRINGE BENEFIT THE FURNISHING OF INAC CURATE PARTICULARS OF SUCH INCOME OR FRINGE BENEFITS: EXPLANATION 1- WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMM ISSIONER (APPEALS) OR THE CIT TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MAT ERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOT AL INCOME OR SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURP OSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INC OME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED.' 7. A PERUSAL OF SUB-CLAUSE (III) OF SECTION 271(1)( C) WOULD INDICATE THAT IN CASE AN ADDITION IS BEING MADE TO THE INCOM E OF AN ASSESSEE, AND IT IS ESTABLISHED THAT THE ASSESSEE HAS CONCEAL ED OR FURNISHED INACCURATE PARTICULARS QUA THAT ADDITION, THEN APART FROM TAX TO BE PAYABLE BY THE ASSESSEE, HE WOULD PAY AN AMOUNT EQU IVALENT TO THE TAX OR THREE TIMES OF THE TAX AS PENALTY UNDER SECTION 271(1)(C) OF THE ACT. MEANING THEREBY, THE PENALTY WOULD BE COMPUTED EQUI VALENT TO THE TAX OR THREE TIME OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE ON THE ADDITIONS MADE TO HIS INCOME FOR WHICH HE HAS HELD GUILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. IN THE PRESENT CASE, THE ADDITION ON WHICH PENALTY HAS BEEN IMPOSED BY THE AO HAS BEEN DELETED BY THE ITAT, AND THEREFORE, THE VERY ADDITION ITA NO.2794/AHD/2015 4 ON WHICH THE AMOUNT OF TAX SOUGHT TO BE EVADED WAS TO BE CALCULATED, HAS BEEN EXTINGUISHED. IN VIEW OF THE ABOVE DISCU SSION, PENALTY IS NOT IMPOSABLE UPON THE ASSESSEE, WHICH IS ACCORDINGLY D ELETED, AND THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 3 RD MARCH, 2016 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER