Appeal Details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 85736 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
6 year(s) 5 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-02-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
10-02-2015
Assessment Year
2005-2006
Appeal Filed On
02-09-2008
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER ITA NO S . 3118, 3119 &3127 /AHD/20 08 A. Y S . 200 5 - 0 6 THE DEPUTY COMMISSIONER OF INCOME TAX, SABARKANTHA CIRC LE, HIMATNAGAR. VS 1. REGENT GRANITO INDIA LTD., HAJIPUR, NR. SABAR DAIRY, N.H. - 8, HIMATNAGAR . 2. SONATA CERAMICS PVT. LTD., NR. SABAR DAIRY HIMATNAGAR. 3. M/S. CRYSTAL GLAZES, 1 ST FLOOR, AKASHGANGA COMPLEX, HIMATNAGAR. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI DINESH SINGH , SR. D.R. ASSESSEE(S) BY : SHRI S.N. DIVETIA, A.R. / DATE OF HEARING : 10 / 0 2 /201 5 / DATE OF PRONOUNCEMENT: 26 / 0 2 /201 5 / O R D E R PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER ALL THESE THREE APPEALS ARE CONNECTED APPEALS; HENCE CONSOLIDATED AND HEREBY DECIDED BY THIS COMMON ORDER. WE HAVE ALSO FOUND THAT IN THE CASE OF SONATA CERAMICS AND M/S. CRYSTAL GLAZES BOTH THE ORDERS OF LEARNED CIT(A ) - X, AHMEDABAD WERE DATED 18 TH JUNE, 2008. IN THE CASE OF REGENT GRANITO INDIA LIMITED THE ORDER OF LEARNED CIT(A) ORDER WAS DATED 30 TH OF JUNE, 2008, WHEREIN PENALTY LEVIED U/S.271(1)(C) RESPECTIVELY OF RS.4,95,592/ - ., RS.8,11,463/ - AND RS.8,69,672/ - WERE DELETED. THOSE ORDERS OF THE LEARNED CIT(A) WERE CHALLENGED BY THE REVENUE DEPARTMENT. ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 2 - 2. IN THE FIRST ROUND OF APPELLATE PROCEEDINGS THE ITAT A BENCH AHMEDABAD IN RESPECT OF THESE THREE CASES HAVE PASSED A CONSOLIDATED ORDER DATED 07.11.2008 (ITA NO.31 18, 3119 AND 3127/AHMEDABAD/2008) A.Y.2005 - 06 AND CONFIRMED THE ORDER OF LEARNED CIT(A) BY DISMISSING THE APPEALS OF THE REVENUE DEPARTMENT. THE TRIBUNAL HAS CONFIRMED THE DELETION OF PENALTY AFTER RECORDING THE FOLLOWING REASONS: 6. WE HAVE HEARD BOTH TH E PARTIES. IT IS TRUE THAT THE ASSESSEES HAD FILED REVISED RETURNS OF INCOME WITHOUT ANY DETECTION BY THE DEPARTMENT. THE DEPARTMENT HAD NOT ISSUED ANY NOTICE OF ENQUIRY OR ANY OF THE STATUTORY NOTICES U/S 142 OR 143 OF THE INCOME - TAX ACT TILL THE REVISED RETURNS WERE FILED. ON THE FACTS OF THE CASE, THE ORIGINAL RETURNS WILL STAND SUBSTITUTED BY THE REVISED RETURNS FOR ALL INTENT AND PURPOSE. THERE IS NO CONCEALMENT OF INCOME IN THE REVISED RETURNS. IN OUR VIEW, THE LEARNED CIT(A) HAS CORRECTL Y APPRECIATED THE FACTUAL AND LEGAL ASPECTS OF THE CASE. WE, THEREFORE, ENDORSE HIS ORDER. 2.1 THE AFORESAID FINDING OF THE TRIBUNAL WAS CHALLENGED BY THE REVENUE DEPARTMENT BEFORE THE HON BLE HIGH COURT IN TAX APPEAL NO.1309 OF 2009 AND TAX APPEAL NO.1310 OF 2009 AN D TAX APPEAL NO.1307 OF 2009 ALL ORDER DATED 28 TH JUNE, 2011. THE HON BLE GUJARAT HIGH COURT IN RESPECT OF THESE THREE CASES HAVE TAKEN AN IDENTICAL VIEW THAT THE AFORESAID FINDING OF THE TRIBUNAL COULD NOT BE SUSTAINED. THE TRIBUNAL S OBSERVATION THAT THE REVISED RETURN WAS FILED BEFORE ANY NOTICES U/S.142 AND 143 WAS FOUND TO BE NOT SUPPORTED FROM THE FACTS ON RECORD , AS PER HON BLE HIGH COURT. IT HAS ALSO BEEN OBSERVED THAT THE TRIBUNAL HAS PASSED A SHORT ORDER DELETING THE PENALTY WHICH WAS BASED SOLELY UPON THAT OBSERVATION WHICH WAS NOT APPROVED BY THE HON BLE COURT. THEREFORE, IT WAS DECIDED TO RESTORE THE ISSUE BACK TO THE TRIBUNAL TO EXAMINE OTHER ASPECTS AS IT WOULD BE APPROPRIATE TO DECIDE THE PENALTY MATTER. SINCE, THE PROCEEDINGS WERE REMANDED T O THE TRIBUNAL FOR FRESH ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 3 - CONSIDERATION WITH A DIRECTION TO DISPOSE OF IN ACCORDANCE WITH LAW THEREFORE WE ARE NOW AGAIN HEARING THE MATTER. 3. FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., MR. DINESH SINGH APPEARED AND PLACED ON RECORD A COMPILATION TO DEMONSTRATE THAT THE NOTICES WERE ISSUED PRIOR TO THE FILING OF THE REVISED RETURN BY THE ASSESSEE. FACTS OF THE CASE AS FOUND FROM THE FILE OF SONATA CERAMICS WERE THAT THE ASSESSEE HAD FILED A RETURN OF LOSS OF RS.19,62,259/ - ON OCTOBER, 2005. THEREAFTER A SEARCH OF CENTRAL EXCISE DEPARTMENT WAS CONDUCTED AT THE FACTORY PREMISES OF THE ASSESSEE AND THE STATEMENT OF ONE SRI MAHENDRA KUMAR GIRDHAR LAL PATEL WAS RECORDED ON 15.02.2005 . I N THE SAID STATEMENT HE HAS CONFIRMED THAT CORRUGATED BOXES 94553 IN NU MBER WERE RECEIVED WITHOUT BILL FROM M/S. CROMPTION INDUSTRIES. IT WAS ADMITTED THAT THE PURCHASE OF CORRUGATED BOXES WAS NOT ENTERED IN THE BOOKS OF ACCOUNTS. IT WAS ALSO ADMITTED THAT CERAMIC TILES WERE SOLD ILLICITLY IN THOSE BOXES . T HE VALUE OF THE GO ODS SO CLEARED WAS STATED TO BE AT RS.31,47,392/ - . O N THE SAID UNACCOUNTED SALE THE COMPANY HAS PAID CENTRAL EXCISE DUTY OF RS.2,56,827/ - . LIKEWISE IN THE CASE OF M/S. CROMPTION INDUSTRIES WHICH WAS ALSO SEARCHED BY CENTRAL EXCISE DEPARTMENT THEY HAVE ADMI TTED THAT THERE WAS ILLICIT SALE OF CORRUGATED BOXES TO THE ASSESSEE. IT WAS ADMITTED THAT THE SALES BILL W ERE NOT MADE AND SALES TO THE TUNE OF RS.31,47,392/ - WAS MADE BY DISPATCHING THOSE BOXES WITHOUT RECORDING IN THE BOOKS OF ACCOUNTS. LEARNED SR.D.R. HAS THEN DRAWN OUR ATTENTION ON ONE OF THE NOTICE DATED 10.08.2006 ISSUED U/S.142(1) R.W.S. 143(2) FOR A.Y.2005 - 06 WHEREIN AS PER ITEM NO.6 THE ASSESSEE WAS ASKED TO FURNISH INVENTOR IES OF EXCISE DUTY S SEARCH PREPARING FOR STOCK WITH COPY OF PANCHNAMA . LEARNED SR.D.R. HAS ALSO ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 4 - POINTED THAT THE ASSESSEE WAS ASKED TO FILE MONTH - WISE PRODUCTION DETAIL, THE DETAILS OF GOODS DISPATCHED THROUGH TRANSPORTER AND THE DETAILS OF PACKAGING MATERIAL PURCHASED. THE ARGUMENT OF LEARNED SR.D.R. IS THAT THE RETURN WAS REVISED BY THE ASSESSEE ON 30 TH OF OCTOBER , 2006, I.E., AFTER RECEIVING THIS NOTICE DECLARING AN ADDITION AL INCOME OF RS.9,18,409/ - AS GP ON UNACCOUNTED SALES OF RS.31,47,392/ - . ORIGINALLY THE LOSS DECLARED WAS THEREFORE REDUCE D TO RS.10,43,850/ - . LEARNED SR.D.R. HAS ALSO POINTED OUT THAT THEREAFTER AN ORDER U/S.143(3) WAS PASSED DATED 30 TH OF NOVEMBER, 2007 ACCORDING TO WHICH THERE WAS AN ADDITION OF COST OF UNACCOUNTED PURCHASES OF CORRUGATED BOXES OF RS.4,63,034/ - 4. WE HAVE NOTED THAT IN THE BACKGROUND OF ABOVE FACTS IN THE CASE OF SONATA CERAMIC A PENALTY U/S.271(1)(C) WAS IMPOSED VIDE AN ORDER DATED 29 TH OF APRIL, 2008 . A PENALTY OF RS.4,95,592/ - WAS IMPOSED IN RESPECT OF BOTH THE ADDITIONS, NAMELY, UNACCOUNTED PURCHASES AND GP ON UNACCOUNTED SALES . WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LEARNED CIT(A) HAS DELETED THE PENALTY PRIMARILY ON THE GROUND THAT THE RETURN WAS REVISED TO AVOID THE LITIGATION AND THE PEACE OF MIND. HE HAS ALSO GIVEN A FINDING THAT THE RETURN WAS R EVISED BEFORE THE DETECTION BY THE AO. ACCORDING TO LEARNED CIT(A), THERE WAS NO SPECIFIC DOCUMENT SHOWING UNACCOUNTED PURCHASES OF CORRUGATED BOXES OR UNACCOUNTED SALES WERE FOUND FROM THE POSSESSION OF THE ASSESSEE. THE ADDITION AL INCOME WAS OFFERED MERE LY ON THE BASIS OF A STATEMENT OF ONE OF THE PARTNER OF M/S. CROMPTON INDUSTRIES. 4.1 IN RESPECT OF M/S. CRYSTAL GLAZES A LOSS OF RS.1,54,31,588/ - WAS FILED ON 30 TH OCTOBER, 2005 WHICH WAS REVISED ON 19.10.2006 DECLARING A ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 5 - LOSS OF RS.1,34,12,966/ - . THE AO HAS PASSED AN ORDER U/S.143(3) ON 30 TH OF NOVEMBER, 2007 THEREIN THE LOSS AS DECLARED WAS NOT DISTURBED BUT A SUM OF RS.2,43,234/ - WAS TAXED DUE TO THE DETECTION OF UNACCOUNTED PURCHASES OF BOXES. THE IMPUGNED PENALTY OF RS.8,11,463/ - U/S.271(1)(C) WAS IM POSED VIDE AN ORDER DATED 29.04.2008 IN RESPECT OF G .P. OF UNACCOUNTED SALES AND UNACCOUNTED PURCHASES OF BOXES. BY RECORDING THOSE VERY REASONS AS ALREADY DISCUSSED ABOVE , LEARNED CIT(A) HAS DELETED THE PENALTY. 4.2 IN RESPECT OF REGENT GRANITO INDIA LTD . A RETURN OF INCOME WAS FILED ON 27.10.2005 DECLARING RS.28,28,850/ - WHICH WAS REVISED ON 30 TH OF OCTOBER, 2006 DECLARING AN INCOME OF RS.51,45,120/ - . THE ASSESSMENT WAS COMPLETED U/S.143 (3) ON 27.12.2005 ACCORDING TO WHICH THE INCOME AS PER THE REVISED RETU RN WAS NOT DISTURBED WHICH WAS ASSESSED AT RS.50,61,305/ - , HOWEVER AN ADDITION OF RS.60,376/ - WAS MADE PERTAINING TO UNACCOUNTED PURCHASES OF BOXES. 5. IN THE LIGHT OF THE ABOVE BACKGROUND, LEARNED SR.D.R., SHRI DINESH SINGH HAS PLEADED THAT THE RETURN W AS REVISED ONLY AFTER THE DETECTION OF CONCEALMENT BY THE CENTRAL EXCISE DEPARTMENT AS WELL AS AFTER ISSUANCE OF THE NOTICE DATED 10 TH AUGUST, 2006. LEARNED SR.D.R. HAS ALSO PLEADED THAT THE HON BLE HIGH COURT HAS ACCEPTED THE GROUND OF THE REVENUE THAT TH E TRIBUNAL WAS NOT CORRECT IN HOLDING THAT THE RETURN WAS REVISED BEFORE ANY NOTICE BY THE REVENUE DEPARTMENT. HE HAS THEREFORE ARGUED THAT D UE TO THE P RESENCE OF THE NOTICE ISSUED BY THE REVENUE DEPARTMENT ; THIS PLEA OF THE ASSESSEE OF SUO MOTU REVISION OF RETURN HAS NO FORCE AND THEREFORE DESERVES TO BE REJECTED. ON THE ISSUE THAT THERE WAS CONCEALMENT HENCE ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 6 - PENALTY IS REQUIRED TO BE CONFIRMED, DECISIONS WERE CITED, FEW OF THEM A RE LISTED BELOW: 1. MAK DAT A (P) LTD. VS. CIT, (2013 38 TAXMANN.COM 448 ( SC) 2 ACIT VS. RADHEY SHYAM, (1980) 123 ITR 125 (ALLAHABAD H.C.) 3. CIT VS. JKA SUBRAMANIA CHETTIAR, (1977) 110 ITR 602 (MADRAS HC) 4. SUNANDA RAM DEKA VS. CIT, (1994) 210 ITR 988 (G A UHATI HC) 5. DCIT V. GRAY CAST FOUNDRY WORKS, (2006) 99 ITD 515 (AHMEDAB AD ITAT) 6. RAVI & CO. V. ACIT, (2004) 271 ITR 286 (MADRAS HC) 7. PC JOSEPH & BROS V. CIT, (2000) 243 ITR 818 (KERALA HC) 6. FROM THE SIDE OF THE RESPONDENT - ASSESSEE, LEARNED AR, MR. S.N. DIVETIA APPEARED AND VEHEMENTLY SUPPORTED THE VIEW ALREADY TAKEN B Y THE TRIBUNAL IN THE PAST. THE FIRST ARGUMENT WAS THAT THE PENALTY LEVIED ON GP ADDITION SHOULD NOT BE SUSTAINED BECAUSE THE AMOUNT A S DISCLOSED IN THE REVISED RETURN WAS ACCEPTED IN THE ASSESSMENT ORDER , THEREFORE THERE WAS NO ELEMENT OF CONCEALMENT, VIS - - VIS, INCOME FURNISHED AS PER THE REVISED RETURN. HIS NEXT ARGUMENT WAS IN RESPECT OF PURCHASE OF CORRUGATED BOXES. HE HAS INFORMED THAT THERE WAS NO DETECTION OF ANY CONCEALMENT FROM THE FACTORY PREMISES OF THE ASSESSEE. THE IMPUGNED ADDITION WAS MADE M ERELY ON THE BASIS OF STATEMENT OF AN ANOTHER CONCERN, NAMELY, CROMPTON INDUSTRIES. LEARNED AR HAS THEN RAISED A LEGAL ARGUMENT THAT IN A SITUATION WHEN AN ASSESSMENT IS FINALIZED UNDER SECTION 115JB THEN THE PENALTY COULD NOT BE IMPOSED ON THE INCOME ASSE SSED UNDER THE NORMAL PROVISIONS OF THE ACT . F OR THIS LEGAL PROPOSITION HE HAS PLACED RELIANCE ON CIT VS. CITY TILES LTD., 370 ITR 127 (GUJ.). LEARNED AR HAS ALSO PLACED RELIANCE ON A DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NALWA SONS I NVESTMENT LTD. , 327 ITR 543 (DEL.). HE HAS ALSO INFORMED THAT THE SLP AGAINST THE JUDGMENT OF THE DELHI HIGH COURT WAS DISMISSED BY THE HON BLE SUPREME COURT AS PUBLISHED IN 21 TAXMANN.COM 184 (SC). ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 7 - 7. LEARNED AR HAS ALSO REPL IED THE CONTENTION OF THE R EVENUE DEPARTMENT THAT THE NOTICE AS STATED IN THE PAPER BOOK DATED 10 TH AUGUST, 2006 WAS NOTHING BUT A GENERAL NOTICE , BECAUSE NO SPECIFIC MENTION WAS MADE IN RESPECT OF THE CENTRAL EXCISE SEARCH. A GENERAL INQUIRY WAS MADE BY THE AO; HENCE THIS NOTICE WA S NOT A WARNING FOR CONCEALMENT OF INCOME. ALL T HE SE ASSESSEE S HA VE DECIDED TO FILE A REVISED RETURN O N THEIR OWN. THEREFORE, IT WAS RIGHTLY HELD IN THE PAST THAT THE RETURN BEING REVISED SUO MOTU PRIOR TO THE ISSUE OF ANY NOTICE OR ANY INTIMATION FROM THE REVENUE DEPARTMENT NO PENALTY FOR CONCEALMENT SHOULD BE LEVIED. LEARNED AR HAS ALSO INFORMED THAT THE CASE LAW S AS CITED FROM THE SIDE OF THE REVENUE W ERE DISTINGUISHABLE ON FACTS AS WELL AS ON LAW. FINALLY , HE HAS CONCLUDED THAT THE VIEW ALREADY TAKEN BY THE TRIBUNAL SHOULD BE REPEATED AND THE DELETION OF PENALTY DESERVES TO BE UPHELD. 8. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. IN RESPECT OF THESE THREE CASES WE HAVE ALSO NARRATED THE RELEVANT FACTS SEPARATELY. WE HAVE NOTED THAT ALMOST IN IDENTICAL MANNER RETURN S W ERE RESPECTIVELY REVISED BY ALL THE THREE ASSESSEES ; IN TWO CASES ON 19.10.2006 AND IN ONE CASE ON 30.10.2006. ONE MORE ASPECT IS COMMON IN ALL THESE THREE APPEALS WERE THAT THE AO HAS NOT DISTURBED THE QUANTUM OF REVISED RETURN. AS IS EVI DENT FROM THE ASSESSMENT ORDERS THE FINAL COMPUTATION OF ASSESSED INCOME HAD STARTED FROM THE FIGURE OF THE REVISED RETURN; THEREFORE, THIS FACT WAS NOT IN DISPUTE THAT THE GROSS PROFIT CALCULATE ON THE UNACCOUNTED SALES AS PER THE ASSESSEE WAS ACCEPTED BY THE AO. SINCE, THIS FACT WAS NOT UNDER DISPUTE; THEREFORE, A QUESTION CAN BE RAISED THAT IN A SITUATION WHEN THE QUANTUM OF INCOME AS DISCLOSED IN THE REVISED RETURN WAS ACCEPTED BY ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 8 - THE AO WITHOUT ANY ADDITION THEN WHETHER IT WAS JUSTIFIABLE ON THE PART O F THE AO TO IMPOSE CONCEALMENT PENALTY PERTAINING TO THAT AMOUNT. WE HAVE RAISED THIS QUESTION DURING THE HEARING IN THE LIGHT OF A RECENT DECISION OF HON BLE GUJARAT HIGH COURT PRONOUNCED IN THE CASE OF KIRITBHAI DAYABHAI PATEL VS. ACIT (TAX APPEAL NO.118 1 OF 2010 AND OTHER ORDERS DATED 03.12.2014) WHEREIN THE HON BLE HIGH COURT HAS GIVEN THE VERDICT AS UNDER: 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE DECISION RELIED UPON BY LEARNED SENIOR ADVOCATE FOR THE APPELLANT, WE ARE OF THE CONSIDERED OPINION THAT THE 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 PRIOR TO THE DATE OF SEARCH AND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETURN OF INCOME. IN. VIEW OF SPECIFIC PROVISION OF SECTION 153A OF THE I.T. ACT, THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE I.T, ACT IS TO BE CONSIDERED AS RETURN FILED UNDER SECTION 139 OF THE ACT, AS THE ASSESSING O FFICER HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, THE RETURN IS TO BE CONSIDERED FOR THE PURPOSE OF PENALTY UNDER SECTION 271(L)(C) OF THE I. T. ACT AND THE PENALTY IS TO BE LEVIED ON THE INCOME ASSESSED OVER AND ABOVE THE INCOME RETURNED UNDER SECTION 153A, IF ANY. 14. FURTHER, IN THE PRESENT CASE, IT APPEARS FROM THE RECORD THAT THE ASSESSEES HAD SATISFIED ALL THE CONDITIONS WHICH ARE REQUIRED FOR CLAIMING IMMUNITY FROM PAYMENT OF PENALTY UNDER SECTION 271(1) OF THE ACT. THE PROVISION DOES NOT SPECIFY ANY TIME LIMIT DURING WHICH THE AFORESAID AMOUNT I.E. THE AMOUNT OF PENALTY WITH INTEREST HAS TO BE PAID. ADMITTEDLY WHEN THE ASSESSEES HEREIN HAVE PAID THE ENTIRE AMOUNT WITH INTEREST, THE ASSESSING OFFICER OUGHT TO HAVE GRANTED THEM IMMUNITY AVA ILABLE UNDER SECTION 271(1 )(C) OF THE INCOME TAX ACT. 15. THE DECISION RELIED UPON BY LEARNED ADVOCATE FOR THE RESPONDENT WILL NOT APPLY TO THE FACTS OF THE PRESENT CASE. 16. IN VIEW OF THE AFORESAID FACTS OF THE CASE AND ALSO THE PRINCIPLE LAID DOWN IN THE DECISIONS RELIED UPON BY THE LEARNED SENIOR COUNSEL FOR THE APPELLANT MORE PARTICULARLY THE PRINCIPLE LAID DOWN IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. GEBILAL KANHAILAL (SUPRA) AND COMMISSIONER OF INCOME TAX VS. ABDUL RASHID (SUPRA), WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT CANNOT BE LEVIED ON THE INCOME SHOWN IN THE RETURN FILED UNDER SECTION 153 OF THE I. T. ACT.' ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 9 - 9. WE HAVE ALSO NOTED THAT LEARNED CIT(A) HAS TAKEN INTO ACCOUNT CERTAIN FACTS OF THESE APPEALS AND CAME TO CONCLUSION IN FAVOUR OF THE ASSESSEE BY FOLLOWING SURAJ B HAN, 294 ITR 481 ( P&H ) , SURESH CHANDRA MITTAL , (2001) 251 ITR 9 (SC) , CHEAP CYCLE STORE, 281 ITR 166 (ALLD.) AND DEEPAK CONSTRUCTION COMPANY, 293 ITR 285 ( GUJ.). RELEVANT PORTION OF THE ORDER OF CIT(A) REPRODUCED BELOW: 6. I HAVE CONSIDERED THE SUBMISSIONS OF THE A.R. CAREFULLY. THE A PPELLANT HAD RETURNED HUGE LOSS IN THE ORIGINAL RETURN OF INCOME. IN THE REVISED RETURN ALSO HUGE LOSS WAS DECLARED BECAUSE OF UNABSORBED DEPRECIATION. THE RETURN WAS SELECTED FOR SCRUTINY BECAUSE OF THE CRITERIA OF UNSECURED LOAN AND NOT AS A RESULT OF THE SEARCH CARRIED OUT BY THE CENTRAL EXCISE DEPARTMENT AT THE FACTORY PREMISES OF THE APPELLANT OR BECAUSE OF THE SEARCH AT THE PREMISES OF M/S.CROMPTON INDUSTRIES WHICH WAS SUPPLYING CORRUGATED BOXES TO THE A PPELLANT. EVEN AFTER ADDITIONS MADE BY THE A.O., THERE WAS HUGE LOSS, SO IT CANNOT BE SAID THAT THE APPELLANT HAD ANY INTENTION TO CONCEAL ANY INCOME. THE APPELLANT FILED THE REVISED RETURN TO BUY PEA C E CONSEQUENT TO SEARCH BY THE CENTRAL EXCISE DEPARTMENT IN THE PREMISES OF M/S.CROMPTON INDUSTRIES AND THEREAFTER THE PARTNER OF THE APPELLANT FIRM DISCLOSED ADDITIONAL INCOME IN THE REVISED RETURN DISCLOSING G.P. ON UNACCOUNTED SALES. IT IS THE CONTENTION OF THE A.R. THAT THE SAID ADDITION HAS BEEN MADE ON THE BASIS OF EVIDENCE COLLECTED FROM THIRD PARTY AND THE REVISED RETURN WAS FILED BEFORE ANY DETECTION BY THE INCOME - TAX DEPARTMENT. THE APPELLANT AGREED TO PAY EXCISE DUTY ON THE ADDITIONAL SALES TO AVOID LITIGATION WITH THE DEPARTMENT AND HARASSMENT TO ITS CUSTOMERS AS THE CENTRAL EXCISE DEPARTMENT CONTINUED INQUIRY FOR A PERIOD OF ABOUT SIX MONTHS AFTER THE SEARCH. IT HAS BEEN HELD IN BHAIRAV LAL VERMA REPORTED IN 230 ITR 855 (ALL.) THAT IF THE DEPARTMENT HAS ANY INCRIMINATING MATERIAL WITH RESPECT TO DISCLOSED INCOME THEN DISCLOSURE CANNOT BE SAID TO BE VOLUNTARY. IF INCOME IS DISCLOSED AFTER BOOKS OF ACCOUNTS HAD BEEN SEIZED AT A RAID IT CANNOT BE SAID TO BE VOLUNTARY AS PER DECISION IN HAKAM SINGH V.CIT REPORTED IN 124 ITR 228 (ALL.). IN THE CASE OF JOY A.V. AIUKKAS JEWELLERY V.CIT REPORTED IN 185 ITR 638 (KER.) IT HAS BEEN HELD THAT IT CANNOT BE SAID AS A PRINCIPLE OF LAW THAT ALL RETURNS FILED AFTER SEARCH WILL CEASE TO BE VOLUNTARY RETURNS. IN CASE OF BIMAL KUMAR DAMANI REPORTED IN 261 ITR 87 (CAL.) THE CUSTOMS AUTHORITIES INITIATED ACTION AGAINST THE ASSESSEE FOR POSSESSING AND DEALING SMUGGLED CURRENCY AND INFORMATION WAS PASSED ON TO THE ASSESSING OFFICER AND BEFORE THE ASSESSING OFFICER TOOK ANY STEPS THE ASSESSEE FILED RETURN SEEKING IMMUNITY UNDER AMNESTY SCHEME. ASSESSEE MADE CLAIM FOR DEDUCTION OF AMOUNT CONFISCATED BY CUSTOMS AS BUSINESS LOSS. THE HON'BLE COURT HELD THAT UNTIL DOCUMENTS WERE REQUISITIONED, SCRUTINI ZED AND INVESTIGATED UPON, THERE WAS NO QUESTION OF DETECTION. THE COURT ALSO HELD THAT THERE WAS NO MATERIAL TO SHOW DETECTION OF CONCEALMENT OF INCOME BY IT. DEPARTMENT BEFORE THE ASSESSEE FILED A RETURN EVEN THOUGH THERE MIGHT BE A PRIMA FACIE BELIEF AB OUT EXISTENCE OF SUCH INCOME. IN THE CASE OF ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 10 - DEEPAK CONSTRUCTION CO. V. CIT REPORTED IN 293 ITR 285, THE HON'BLE GUJARAT HIGH COURT OBSERVED THAT ONE COULD NOT BE SURE THAT SEIZED MATERIALS WOULD LEAD ANY DETECTION OF UNDISCLOSED INCOME AND AS NOTHING COUL D BE DETECTED BEFORE SCRUTINY OF SEIZED MATERIALS, THERE WAS NO DETECTION. 6.1 IN THE CASE OF THE APPELLANT NO INCRIMINATING PAPERS WERE FOUND FROM THE APPELLANT AT THE TIME OF CENTRAL EXCISE SEARCH AND THE ADDITION HAS BEEN MADE ON THE BASIS OF THIRD PAR TY STATEMENT I.E. STATEMENT OF PARTNER OF CROMPTON INDUSTRIES. DURING SEARCH BY THE EXCISE DEPARTMENT AT THE PREMISES OF THE APPELLANT, NO OMISSION OR DEFECT WAS FOUND IN PURCHASES OR STOCK OR PACKING MATERIALS. THUS, IN THE FACTS OF THE CASE THE APPELLANT HAD FILED A REVISED RETURN BEFORE DETECTION BY THE A.O. EVEN THOUGH NO SPECIFIC DOCUMENTS SHOWING UNACCOUNTED PURCHASES OF CORRUGATED BOXES OR UNACCOUNTED SALES BY THE APPELLANT WERE FOUND FROM THE APPELLANT'S PREMISES, THE APPELLANT OFFERED ADDITIONAL IN COME ON THE BASIS OF STATEMENT OF PARTNER OF CROMPTON INDUSTRIES TO BUY PEACE. AS REGARDS THE ADDITION OF UNACCOUNTED PURCHASE OF CORRUGATED BOXES AGAIN THE ADDITION HAS BEEN MADE BY THE A.O. ON THE BASIS OF THE STATEMENT OF PARTNER OF CROMPTON INDUSTRIES WHICH HAS NOT BEEN CONTESTED IN APPEAL BY THE APPELLANT TO AVOID LITIGATION AND TO BUY PEACE. 10. IN THE LIGHT OF THE ABOVE DISCUSSION, WE HEREBY SUMMARIZ E THAT AS FAR AS THE QUESTION THAT WHETHER THE RETURN WAS REVISED SUO MOTU PRIOR TO ANY NOTICE FROM THE REVENUE DEPARTMENT, WE HEREBY HOLD THAT IN THE LIGHT OF THE EVIDENCES FILED FROM THE SIDE OF THE REVENUE IN THE FORM OF PAPER BOOK THERE WAS SUFFICIENT EVIDENCES THAT REVENUE DEPARTMENT HA D ISSUED NOTICES PRIOR TO THE FILING OF THE REVISED RETURN; THE REFORE, MERELY ON THAT GROUND PENALTY CANNOT BE DELETED. BUT ON THE OTHER HAND, WE ARE OF THE VIEW THAT IN A SITUATION WHEN THE QUANTUM AS DISCLOSED IN THE REVISED RETURN WAS NOT FOUND TO BE INCORRECT OR INDICATE THE CONCEALMENT OF INCOME AND THAT THE ASSE SSEE FURTHER SUFFERED LOSSES THEREFORE IN ONE OF THE CASE AN ALTERNATE TAX PROCEDURE U/S.115JB ADOPTED, WE HEREBY HOLD THAT IN ALL THESE CASES IT WAS NOT JUSTIFIED TO HOLD THAT THERE WAS CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. WE HAVE NOTED THAT THE AS SESSEE HAS ADOPTED THE RECOURSE OF AVOIDING LITIGATION , THEREFORE , REVISED THE RETURN TO B U Y PEACE OF MIND. WE HAVE ALSO NOTED THAT MERELY ON THE BASIS OF A THIRD PARTY STATEMENT THE IMPUGNED ACTION WAS TAKEN ITA NO S . 3118, 3119 & 3127 /AHD/20 08 REGENT GRANITO INDIA LTD, SONATA CERAMICS PVT. LTD & M/S. CRYSTAL GLAZES FOR A.Y. 200 8 - 0 9 - 11 - AGAINST THE ASSESSEE. THERE WAS NO INCRIMINATIN G MATERIAL RECOVERED FROM THE FACTORY PREMISES OF THE ASSESSEE SO AS TO ESTABLISH THAT THE PARTICULAR INCOME WAS DELIBERATELY CONCEALED BY THE ASSESSEE ; HENCE UNDER THE TOTALITY OF ALL THOSE CIRCUMSTANCES AS DISCUSSED IN DETAIL HEREINABOVE , WE HEREBY CONFI RM THE FINDINGS OF LEARNED CIT(A), BOTH LEGAL AS WELL AS FACTUAL AND DISMISS THE GROUNDS OF THE REVENUE. 11. IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE HEREBY DISMISSED. SD/ - SD/ - (ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED / 0 2 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . S / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD
Other Referred Cases
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Laws Referred To
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