MADAN S KOLAMBEKAR, NAVI MUMBAI V. DCIT CEN CIR 39, MUMBAI

ITA 3139/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88220 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: MATHURIA
• Keywords: Search and seizure; Reasonable cause
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM I.T.A. NO. 3139/MUM/2013 ( / ASSESSMENT YEAR: 2008-09) MADAN S. KOLAMBEKAR RH-4, BALAJI KRUPA COMPLEX, PLOT NO.3-A, SECTOR 28, NERUL, NAVI MUMBAI-400 707 VS. DY. CIT, CENTRAL CIRCLE-39, 112, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400 020 ! ./PAN/GIR NO. AHGPK 9177 R ( ' /APPELLANT ) : ( #$ ' / RESPONDENT ) '%& / APPELLANT BY : SHRI M. S. MATHURIA #$ '%& / RESPONDENT BY : SHRI LOVE KUMAR ' ()%*+ / DATE OF HEARING : 04.02.2015 ,-.%*+ / DATE OF PRONOUNCEMENT : 10.02.2015 /0 O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-41, MUMBAI (CIT(A) FOR SH ORT) DATED 26.02.2013, CONFIRMING THE LEVY OF PENALTY U/S.271B OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2008-09 BY THE ASSESSING OFF ICER (A.O.) VIDE HIS ORDER DATED 29.06.2011. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DID NOT FILE HIS RETURN OF INCOME FOR THE RELEVANT YEAR, DUE ON 30.09.2008, BY THE SAID D ATE OR EVEN BELATEDLY BY 31/3/2009. HE, 2 ITA NO. 3139/MUM/2013 (A.Y. 2008-09) MADAN S. KOLAMBEKAR VS. DY. CIT / BEING THE MAIN PERSON OF THE MADAN KOLAMBEKAR GROUP , WAS SUBJECT TO SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT ON 22.01.2009, AN D ASSESSMENT PROCEEDINGS INITIATED BY THE ISSUE OF NOTICE U/S.153A ON 20.08.2009. THE ASS ESSEE FILED HIS RETURN, DECLARING INCOME AT RS.32.74 LACS, ON 20.07.2010, WHICH STOOD SUBSEQUENTLY REVISED TO RS.111.91 LACS ON 08.10.2010, I.E., DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS U/S. 143(3) R/W S. 153A. THE ASSESSMENT WAS FINALLY COMPLETED ON 29 .12.2010, AT A TOTAL INCOME OF RS.69.25 CRORES, EVEN AS PENALTY U/S.271(1)(B) STOO D ALSO LEVIED AT RS.20,000/- FOR NON- COMPLIANCE OF STATUTORY NOTICES ISSUED DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS. PENALTY PROCEEDINGS U/S.271(1)(C) WERE ALSO INITIAT ED ON 29.12.2010. FURTHER, THE ASSESSEES TURNOVER FOR THE YEAR BEING AT RS.18.20 CRS., HIS RETURN OF INCOME WAS REQUIRED BY LAW TO BE ACCOMPANIED BY A TAX AUDIT REPORT U/S. 44AB, WHICH, RATHER OUGHT TO HAVE BEEN FILED BY THE DUE DATE OF FILING THE RETURN, I. E., 30.09.2008. NOTICE U/S.274 OF THE ACT, REQUIRING HIM TO SHOW CAUSE AS TO WHY PENALTY U/S.2 71B, I.E., FOR THE DEFAULT OF THE PROVISION OF SECTION 44AB, WHICH REQUIRES OBTAINING AND FURNISHING A TAX AUDIT REPORT AS PRESCRIBED WHERE ANY PERSONS SALES, TURNOVER OR GR OSS RECEIPTS FOR THE YEAR EXCEEDS RS.40 LACS, BE NOT IMPOSED, WAS ALSO ISSUED ALONG WITH, I .E., ON 29.12.2010. FURTHER OPPORTUNITY WAS PROVIDED TO THE ASSESSEE VIDE NOTICE DATED 10.0 6.2011. THE ASSESSEE NOT FILING ANY REPLY TO EITHER OF THE SAID NOTICES, PENALTY STOOD LEVIED AT RS.1 LAC, BEING THE LOWER OF RS.1 LAC AND ONE-HALF PER CENT OF THE QUALIFYING AMOUNT OF TOTAL SALES, TURNOVER OR GROSS RECEIPT. BEFORE THE LD. CIT(A), THE ASSESSEE COULD NOT MAKE OUT ANY CASE, MERELY STATING THAT THE DEFAULT U/S.44AB WAS INVOLUNTARY, WHICH WAS FOUND A S WITHOUT MERIT, AND PENALTY CONFIRMED. AGGRIEVED, THE ASSESSEE IS IN SECOND APP EAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE ASSESSEES SOLE CONTENTION BEFORE US, INVOKING THE DECISION BY THE APEX COURT IN HINDUSTAN STEEL LTD. VS. STATE OF ORISSA [1972] 83 ITR 26 (SC), WAS OF HE BEING NOT GUIDED P ROPERLY, SO THAT THE DEFAULT IN NON-FURNISHING OR, RATHER, NON-OBTAINING THE TAX AUDIT REPORT WAS NOT VOLUNTARY. THE REVENUES CHARGE THAT THE ASSESSEE DID NOT OBTA IN THE TAX AUDIT REPORT EVEN SUBSEQUENTLY, WOULD NOT AMOUNT TO MUCH AS OBTAINING THE SAID REPORT SUBSEQUENTLY, I.E., 3 ITA NO. 3139/MUM/2013 (A.Y. 2008-09) MADAN S. KOLAMBEKAR VS. DY. CIT / AFTER THE DUE DATE OF FURNISHING THE RETURN OF INCO ME U/S.139(1) (30.09.2008), WOULD BE OF LITTLE CONSEQUENCE IN VIEW OF THE AMENDMENT TO SECT ION 44AB W.E.F. 01.07.1995, REQUIRING THE FURNISHING OF THE SAID REPORT BY THE DUE DATE FOR FILING THE RETURN U/S. 139(1). WE FIND THE ASSESSEES PLEA AS BOTH PRESUMPTUOUS AN D WITHOUT SUBSTANCE. THE DEFAULT OF SECTION 44AB IS ADMITTED. THE ONLY SAVING FROM PENA LTY U/S.271B, I.E., THE PROVISION PROVIDING FOR PENALTY FOR THE DEFAULT OF THE FORMER SECTION, WOULD THEREFORE BE S.273B, I.E., UPON PROVING REASONABLE CAUSE, TOWARD WHICH, HOWEVER, THE ASSESSEE HAS NOT MADE OUT ANY CASE, I.E., APART FROM MAKING A BALD CLAIM OF BEING NOT PROPERLY INFORMED OF THE LAW. SECTION 44AB IS ON THE STATUTE BOOK SINCE THE YEAR 1984. ITS EXISTENCE IS RATHER A MATTER OF COMMON KNOWLEDGE FOR THE ASSESSEES, EVEN AS THE ASSESSEE IS A SUCCESSFUL BUSINESSMAN, WITH THE RANGE OF ECONOMIC INTERESTS. WHY, THE DIFFERENT ENTITIES IN WHICH HE HAS INTEREST, OR ARE BEING CONTROLLED BY HIM, WO ULD BE REGULARLY SUBJECT TO BOTH, THE STATUTORY AUDIT UNDER THE GOVERNING STATUTE, AS WEL L AS TAX AUDIT U/S.44AB OF THE ACT. IN FACT, HE BEING AN ASSESSEE UNDER THE ACT WOULD HIMS ELF BE PROPERLY INSTRUCTED BY COUNSELS IN THE MATTER. THE ASSESSEES CLAIM, WHICH HE IS IN ANY CASE OBLIGED TO SUBSTANTIATE, IS, TO SAY THE LEAST, FANCIFUL. IT IS FOR THESE REASONS TH AT WE HAVE OBSERVED OF HIS CASE AS PRESUMPTUOUS AND WITHOUT SUBSTANCE. THE INVOCATION OF THE DECISION IN THE CASE OF HINDUSTAN STEEL LTD. (SUPRA) IS, AGAIN, MISCONCEIVED. ON THE CONTRARY, W E FIND THE ASSESSEES CONDUCT, AS WELL AS THE REASON ADVANCED FOR NON-OBTAINING THE TAX AUDIT REPORT, AS BETRAYING A LACK OF BONA FIDES . TRUE, THE LAW STANDS AMENDED, SO THAT HE IS REQUI RED NOT ONLY TO OBTAIN, BUT ALSO FURNISH THE TAX AUDIT REPO RT BY THE DUE DATE SPECIFIED U/S. 139(1). HOWEVER, OBTAINING THE SAME SUBSEQUENTLY, I.E., AT THE TIME THE ASSESSEE CLAIMS TO HAVE BECOME AWARE OF HAVING VIOLATED THE PROVISION, WOU LD HAVE ONLY STRENGTHENED HIS CLAIM WITH REGARD TO A BONA FIDE CONDUCT AND OF A GENUINE MISTAKE, I.E., TOWARD EST ABLISHING A REASONABLE CAUSE, WHICH ALONE COULD SAVE PENALTY. W E, THEREFORE, FIND NO MERIT IN THE ASSESSEES CASE AND, ACCORDINGLY, DISMISS HIS APPEA L. WE DECIDE ACCORDINGLY. 4 ITA NO. 3139/MUM/2013 (A.Y. 2008-09) MADAN S. KOLAMBEKAR VS. DY. CIT / 4. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D 1.*23451*% 1%*6 ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 10, 2015 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / / ACCOUNTANT MEMBER ' 7) MUMBAI; 8/ DATED : 10.02.2015 (3 ROSHANI , SR. PS ! ' #$%& ' &$ COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #$ ' / THE RESPONDENT 3. ' 9* : ; / THE CIT(A) 4. ' 9* / CIT - CONCERNED 5. <(=>#3*3?4 +?4. ' 7) / DR, ITAT, MUMBAI 6. >5@) GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , ' 7) / ITAT, MUMBAI