Thakurdas Sukhdeo Malani, Amaravati V. ITO Ward-III, Amaravati

ITA 310/NAG/2012

• Counselvise Citation: 31023914 RSA 2012
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 12-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: ABHAY AGRAWAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT , JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 310 / NAG ./ 2012 ( ASSESSMENT YEAR : 20 06 - 0 7 ) THAKURDAS SUKHDEO MALANI SUKHSHRI APARTMENT BHIVAPURKAR N AGAR APMC, AMRAVATI APPELLANT V/S INCOME TAX OFFICER WARD - III, AMRAVATI .... RESPONDENT PERMANENT ACCOUNT NUMBER AGWPM8612N ASSESSEE BY : SHRI ABHAY AGRAWAL REVENUE BY : SHRI NARENDRA KANE / DATE OF HEARING 0 8 .04.2015 / DATE OF ORDER 16.04.2015 O R D E R PER MUKUL K. SHRAWAT , J .M. T HIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM THE ORDER DATED 16 TH JANUARY 2012, PASSED BY THE LEARNED COMMISSIONER (APPEALS) - II, NAGPUR, FOR THE ASS ESSMENT YEAR 2006 - 07. THE ONLY GROUND RAISED BY THE ASSESSEE IS IN RESPECT OF CONFIRMATION OF PENALTY OF ` 95,000, LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). THAKURDAS SUKHDEO MALANI 2 2. WE HAVE PERUSED THE CORRESPONDING ASSESSMENT ORDER DATED 2 4 TH DECEMBER 2008 , PASSED UNDER SECTION 143(3) AND THE PENALTY ORDER DATED 8 TH JUNE 2009, PASSED UNDER SECTION 271(1)(C). 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE REMUNERATION AND THE INTEREST FROM THE FIRM WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME. THE ASSESSING OFFICER HAS ENQUIRED FROM THE FIRM M/S. SHRIGOPAL ASSOIATES, IN WHICH, THE ASSESSEE IS A PARTNER AND THEREUPON FOUND THE ASSESSEES ACCOUNT WAS CREDITED BY INTEREST OF ` 3,10,341, AND REMUNERATION OF ` 4 ,373. THE ASSESSING OFFICER HAS ASSESSED THE SAID TWO AMOUNTS IN THE HANDS OF THE ASSESSEE. SINCE THE AFORESAID TWO AMOUNTS WERE NOT DISCLOSED BY T HE ASSESSEE AS PER THE RETURN OF INCOME, THEREFORE, THE CONCEALMENT PENALTY WAS INITIATED. WHILE LEVYING PENA LTY, IT WAS HELD BY THE ASSESSING OFFICER THAT INACCURATE PARTICULARS HAVE BEEN FURNISHED IN THE RETURN OF INCOME, THEREFORE, PENALTY OF ` 95,000 WAS LEVIED. 4. WITH THE ABOVE FACTUAL BACKGROUND, WE HAVE HEARD BOTH THE SIDES. WE FIND THAT IN PARA - 3.2 / PAGE - 2 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS MADE AN OBSERVATION, WHICH IS REPRODUCED AS UNDER: - 3.2 ON THE ABOVE DATA IT WAS AMPLY CLEAR THAT THOUGH THERE WAS NO BREACH OF ACCOUNTING PRINCIPLES STILL THERE WAS A SUBMISSION OF INACCURATE PARTICUL ARS OF INCOME FOR THE PURPOSE OF TAXATION. THE THAKURDAS SUKHDEO MALANI 3 REMUNERATION AND THE INTEREST FROM THE FIRM WERE NOT CONSIDERED WHILE COMPUTING THE TOTAL INCOME BY THE ASSESSEE . AN ANOTHER FACT HAS ALSO BEEN BROUGHT TO OUR NOTICE THAT THE ASSESSEE HAS DULY DISCLOSED CA PITAL ACCOUNT IN THE BOOKS OF ACCOUNT STANDING IN THE NAME OF THE SAID FIRM M/S. SHRIGOPAL ASSOCIATES. THEREFORE, THE ARGUMENT OF THE ASSESSEE IS THAT THERE WAS NO INTENTION TO CONCEAL THE FACT THAT THE ASSESSEE HAPPENED TO BE A PARTNER IN THE SAID FIRM. A N ARGUMENT HAS ALSO BEEN RAISED THAT THE REVENUE AUTHORITIES WERE NOT CORRECT IN PRESUMING THAT THE ASSESSEE HAPPENED TO BE A WORKING PARTNER IN M/S. SHRIGOPAL ASSOCIATES. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLEADED THAT ALTHOUGH THE COPY OF THE PARTN ERSHIP DEED WAS VERY MUCH BEFORE THE LEARNED COMMISSIONER (APPEALS) AND THIS ASPECT HAD ALSO BEEN ACKNOWLEDGED BY HIM IN THE IMPUGNED APPELLATE ORDER BUT STILL HE HAS PRESUMED THAT THE ASSESSEE BEING A WORKING PARTNER WAS AWARE ABOUT THE ACCOUNTS OF THE FI RM. ON THE CONTRARY, THE ASSESSEE WAS NOT AWARE ABOUT THE ACCOUNTS OF THE FIRM BECAUSE HE HIMSELF IS RUNNING THE PROPRIETARY CONCERN NAMELY M/S. T.S. MALANI. ON THESE FACTS, WE ARE OF THE VIEW THAT NO PENALTY UNDER SECTION 271(1)(C) IS REQUIRED TO BE EVALU ATED IN TERMS OF THE PROVISION OF EXPLANATION - 1 TO SECTION 271(1)(C). ACCORDING TO EXPLANATION - 1, THE ASSESSEE IS REQUIRED TO OFFER AN EXPLANATION AND IF THAT EXPLANATION IS FOUND TO BE BONAFIDE, THEN THERE IS NO REQUIREMENT TO LEVY THE CONCEALMENT PENALTY . BUT IN CASE IF THE EXPLANATION OF THE THAKURDAS SUKHDEO MALANI 4 ASSESSEE IS FOUND TO BE FALSE OR THE ASSESSEE OFFERS NO EXPLANATION, THEN THE PENALTY UNDER SECTION 271(1)(C) CAN BE IMPOSED. IN THE PRESENT CASE, THE ASSESSEE HAS OFFERED AN EXPLANATION THAT THE FACTS RELATING TO AN ACCOUNT MAINTAINED WITH THE SAID FIRM WAS DULY DISCLOSED. SINCE THE ASSESSEE WAS NOT AWARE ABOUT THE INTEREST AND REMUNERATION BEING CREDITED IN HIS ACCOUNT, THEREFORE, UNDER BONAFIDE IMPRESSION, HE HAS NOT ACCOUNTED FOR THE SAID TWO AMOUNTS IN HIS BOOKS OF ACCOUNT ALTHOUGH THE ACCOUNTS OF THE ASSESSEE WERE AUDITED UNDER SECTION 44AB OF THE ACT. RESPECTFULLY FOLLOWING THE DECISION OF THE THE HONBLE PUNJAB & HARYANA HIGH COURT IN CIT V/S SIDHARTHA ENTERPRISES, [2010] 322 ITR 80 (P&H) AND THE DECISION OF TH E HONBLE SUPREME COURT IN PRICEWATER HOUSE COOPERS PVT. LTD. V/S CIT & ANR., [2012] 348 ITR 306 (SC), WE HEREBY HOLD THAT THIS IS NOT A FIT CASE TO LEVY CONCEALMENT PENALTY ON THE ASSESSEE. WE DIRECT TO DELETE THE PENALTY. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 10 TH APRIL 2015 SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER NAGPUR , DATED : 10 TH APRIL 2015 THAKURDAS SUKHDEO MALANI 5 C OPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, NAGPUR CITY CONCERNED ; (5) THE DR, ITAT, NAGPUR ; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY A SS ISTANT REGISTRAR ITAT, NAGPUR