LATHA C.MOHAN, CHENNAI V. ACIT NON CORPORATE CIRCLE 1, CHENNAI

ITA 3046/CHNY/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 6827 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 08-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P MUTHUSHANKAR
• Assessee Lawyers: K SENGUTTUVAN
• Keywords: Initiation of penalty proceedings; Revised return; Set aside
• Section: 271(1)(c); 274; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , , ' BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER /. I.T.A. NO. 3046/CHNY/2018 / ASSESSMENT YEAR : 2011-12 SMT. LATHA C MOHAN, 2 ND & 3 RD FLOOR, SABA HOUSE, NO.209/A, OPP: CROWN PLAZA HOTEL OUTER GATE, ST. MARYS ROAD, ALWARPET, CHENNAI 600 018. [PAN: AABPL 3991Q] VS. ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 1, CHENNAI. ( / APPELLANT) ( #$& /RESPONDENT ) & ' / APPELLANT BY : SHRI. K. SENGUTTUVAN, ADVOCATE #$& ' / RESPONDENT BY : SHRI. P. MUTHUSHANKAR, JCIT ' /DATE OF HEARING : 03.10.2019 ' /DATE OF PRONOUNCEMENT : 23.12.2019 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI IN ITA NO. 29/2017- 18/AY 2011-12/CIT(A)-2 DATED 20.08.2018 FOR ASSESSM ENT YEAR 2011- 12, WHEREIN THE LD. CIT(A) UPHELD THE PENALTY IMPOS ED BY THE AO U/S. 271(1)(C) OF THE ACT. :-2-: ITA NO.3046/CHNY/2018 2. SMT. LATHA C. MOHAN, THE ASSESSEE, IS THE PROPRI ETOREX OF KANYA BEAUTY SALON AND BOUNCE IN CHENNAI. SHE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 ON 30.09.2011. ON 10.0 5.2013, A SURVEY OPERATION WAS CARRIED OUT IN THE ASSESSEES BUSINE SS PREMISES WHICH RESULTED IN A FINDING THAT THE ASSESSEE UNDERSTATED HER TURNOVER AND CONCEALED HER INCOME. SUBSEQUENTLY, THE A O ISSUED NOTICE U/S. 148, THE ASSESSEE FILED A REVISED RETURN ADMITTING A TOT AL INCOME OF RS. 56,63,140/-, WHICH WAS SCRUTINISED AND ACCEPTED IN THE RE-ASSESSMENT, RESULTING AN ADDITIONAL DEMAND. WHILE COMPLETING T HE RE-ASSESSMENT, THE A O OBSERVED THAT THE ORIGINAL RETURN FILED BY THE ASSESSEE FAILED TO REFLECT TRUE STATE OF AFFAIRS, THERE WAS SUPPRESSIO N OF TURNOVER, THERE WAS CONCEALMENT ON THE PART OF THE ASSESSEE AND IN ACCURATE PARTICULARS WERE FURNISHED AT THE TIME OF FILING ORIGINAL RETUR N AND INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C). THE QUANTUM ADDITION A TTAINED FINALITY. 3. DURING THE PENALTY PROCEEDINGS, THE ASSESSEE SUB MITTED THAT THE DISCLOSURES WAS ONLY TO BUY PEACE WITH THE DEPARTM ENT AND TO AVOID PROTRACTED LITIGATION. HOWEVER, THE A O HELD THAT THE ASSESSEES ORIGINAL RETURN FAILED TO REFLECT THE TRUE STATE OF AFFAIRS , ASSESSEE UNDERSTATED THE TURNOVER AND CONCEALED HER INCOME. IT WAS ONLY THROUGH THE SURVEY, THIS CONCEALMENT WAS BROUGHT ON RECORD AN D WHEN THE NOTICE U/S. 148 WAS ISSUED, THE ASSESSEE FILED A REVISED RETURN ACCOMMODATING :-3-: ITA NO.3046/CHNY/2018 THE FINDINGS OF THE SURVEY. THEREFORE, THE AO LEVI ED THE PENALTY U/S. 271(1)(C). AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL. AGGRIEVED AG AINST THAT ORDER THE ASSESSEE FILED THIS APPEAL. 4. THE LD. AR PRIMARILY SUBMITTED THAT DURING SURVE Y, THE AUTHORITIES FOUND A HARD DISK WHICH HAD PROJECTED FINANCIALS. THE AUTHORITIES MISTOOK IT AS THE ACTUAL FINANCIALS. IN RESPONSE TO THE NOTICE U/S. 148, THE ASSESSEE FILED A REVISED RETURN WITH THE SOLE PURPOSE OF BUYING PEACE AND TO AVOID PROTRACTED LITIGATION. THE SUR VEY REPORT ALLEGED SUPPRESSION OF INCOME OF RS. 1.86 CRORES, HOWEVER, THE ASSESSEE RETURNED AN INCOME OF RS. 57,63,134/- IN ITS REVISE D RETURN, AN INCREASE OF ABOUT RS. 30 LAKHS MORE THAN THE ORIGINAL INCOME ADMITTED AT RS. 27,77,857/- BEFORE THE SURVEY. THE ASSESSEE DID NO T OFFER THE EXACT AMOUNT DISCOVERED DURING THE SURVEY IN THE REVISED RETURN. THE A O HAS ALSO BRUSHED AWAY THE ALLEGED SURVEY REPORT AND ACCEPTED REVISED RETURN. THUS, THE AO HAS PASSED THE ORDER WITHOUT DISPUTING THE ASSESSEES SUBMISSION AND REVISED RETURN. THEREFOR E, THE PENALTY SHOULD HAVE BEEN DROPPED ACCEPTING THE ASSESSEES S UBMISSION. THEREFORE, THE INITIATION OF PENALTY PROCEEDINGS AR E ILLEGAL AND BAD IN LAW. THERE IS NO EVIDENCE TO SUBSTANTIATE THE METR ICS AS REAL INCOME. THE ADDITION MADE PURELY WITHOUT RECORDING ANY INCR IMINATING MATERIAL AND SUBSTANTIAL EVIDENCE. THEREFORE, THE AO CANNOT INITIATE PENALTY U/S. :-4-: ITA NO.3046/CHNY/2018 271(1)(C). THEREAFTER, THE AR PLEADED THAT THE PEN ALTY INITIATED VIDE NOTICE U/S. 274 R.W.S. 271(1)(C) IS WITHOUT ANY SPE CIFIC CHARGE. THUS, THE LD. AR PLEADED TO SET ASIDE THE ORDER OF THE HO NBLE CIT(A), SET ASIDE THE ORDER OF THE LD. AO, STRIKE DOWN THE NOTI CE ISSUED U/S. 274 R.W.S. 271(1)(C) AND QUASHE THE PENALTY ORDER. PER CONTRA, THE LD. DR SUPPORTED THE ORDER OF THE LD. CIT(A). 5. WE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED TH EM CAREFULLY. THE ASSESSEE FILED HER ORIGINAL RETURN OF INCOME FO R ASSESSMENT YEAR 2011-12 ON 30.09.2011 ADMITTING A TOTAL INCOME OF R S. 27,77,857/-. ON 10.05.2013, A SURVEY OPERATION WAS CARRIED OUT IN T HE ASSESSEES BUSINESS PREMISES WHICH RESULTED IN A FINDING THAT THE ASSESSEE UNDERSTATED HER TURNOVER AND CONCEALED HER INCOME. SUBSEQUENTLY, THE A O ISSUED NOTICE U/S. 148, THE ASSESSEE FILED A RE VISED RETURN ADMITTING A TOTAL INCOME OF RS. 56,63,140/-, WHICH WAS SCRUTI NISED AND ACCEPTED IN THE RE-ASSESSMENT, RESULTING AN ADDITIONAL DEMAN D. WHILE COMPLETING THE RE-ASSESSMENT, THE A O RECORDED IN THE ASSESSME NT ORDER THAT THE ORIGINAL RETURN FILED BY THE ASSESSEE FAILED TO REF LECT TRUE STATE OF AFFAIRS, THERE WAS SUPPRESSION OF TURNOVER, THERE WAS CONCE ALMENT ON THE PART OF THE ASSESSEE AND INACCURATE PARTICULARS WERE FUR NISHED AT THE TIME OF FILING ORIGINAL RETURN AND INITIATED PENALTY PROCE EDINGS U/S. 271(1)(C), :-5-: ITA NO.3046/CHNY/2018 TOWARDS WHICH THE ASSESSEE SUBMITTED THAT THE ASSES SEE MADE DISCLOSURE ONLY TO BUY PEACE AND AVOID PROTRACTED L ITIGATION. THUS, THE AO HAS CLEARLY INDICATED THE CHARGE FOR THE PROPOSE D LEVY OF PENALTY U/S. 271(1)(C), THAT IS HOW THE ASSESSEE HAS UNDERSTOOD AND SUBMITTED HER EXPLANATION TOWARDS THE PENALTY NOTICE. THEREFORE, THE ASSESSEES PLEA THAT THE NOTICE ISSUED U/S. 274 R.W. 271(1)(C) IS W ITHOUT SPECIFIC CHARGE IS UNTENABLE. WE HAVE CONSIDERED THE ASSESSEES PL EA THAT THE HARD DISK FOUND BY THE AUTHORITIES HAS THE PROJECTED FINANCIA LS, THEY MISTOOK THEM AS THE ACTUAL FINANCIALS, BASED ON WHICH THE SURVE Y REPORT ALLEGED THAT THERE WAS SUPPRESSION OF INCOME AT RS. 1.86 CRORES. HOWEVER, THE INCOME ADMITTED BY THE ASSESSEE IN THE REVISED RETU RN IS ABOUT RS. 30 LAKHS MORE THAN THE ORIGINAL RETURN THAT TOO BY AN ESTIMATION ONLY, TO BUY PEACE AND AVOID PROTRACTED LITIGATION. THE ASS ESSEE HAS ABSOLUTELY NO INTENTION OF CONCEALING INCOME FROM THE INCOME T AX DEPARTMENT FOR THE ESCAPEMENT OF TAX ETC. THE FACTS REMAIN THAT T HE ASSESSING AUTHORITY ACCEPTED THE REVISED RETURN, CONCLUDED T HE ASSESSMENT WITH THE FINDING THAT THE ASSESSEE SUPRESSED ITS TURNOVE R, INCOME, THERE WAS CONCEALMENT ON THE PART OF THE ASSESSEE AND INACCU RATE PARTICULARS WERE FURNISHED AT THE TIME OF FILING OF ORIGINAL RE TURN. THE QUANTUM OF INCOME ADMITTED AFTER THE SURVEY IN THE REVISED RE TURN IS AT RS. 57,63,134/- , WHICH IS JUST MORE THAN DOUBLE OF T HE INCOME ADMITTED IN THE ORIGINAL INCOME AT RS. 27,77,857/-. THIS QU ANTUM DEFIES THE :-6-: ITA NO.3046/CHNY/2018 EXPLANATION OF THE ASSESSEE. THEREFORE, THE ASSESS EES EXPLANATION THAT THE QUANTUM ADMITTED IN THE REVISED RETURN IS AN ESTIMATE TO BUY PEACE WITH THE DEPARTMENT ETC IS UNTENABLE. THEREF ORE, WE FIND MERIT IN THE ORDER OF THE LD. CIT (A) BASED ON THE CASE L AWS RELIED ON BY HIM VIZ S.R. ARULPRAKSAM VS ITO 163 ITR 487(MAD) , RAVI & CO. VS ACIT 271 ITR 280(MAD) , CIT VS KRISHNA & CO., 120 ITR 144(MA D) ETC. ON THE ABOVE FACTS AND CIRCUMSTANCES, THE CASE LAWS RELIE D ON BY THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THIS CASE AN D HENCE, THE CORRESPONDING GROUNDS OF THE ASSESSEE FAIL. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED ON 23 RD DECEMBER, 2019 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED: 23 RD DECEMBER, 2019 JPV '#1232 /COPY TO: 1. & / APPELLANT 2. #$& /RESPONDENT 3. 4 ) ( /CIT(A) 4. 4 /CIT 5. 2# /DR 6. 7 /GF