ITO-1, Itarsi V. Shri Anil Kumar Soni, Itarsi

ITA 334/Ind/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4122 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 24-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N AGRAWAL; BHAV ESH AGRAWAL ARS
• Keywords: Revised return
• Section: 271(1)(c); 143(3); 133A; 139(1); 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE RAJPAL YADAV, VICE PRESIDENT AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING ITA NO.334/IND/2020 ASSESSMENT YEARS: 2011-12 ITO-1 ITARSI : APPELLANT V/S SHRI ANIL KUMAR SONI ITARSI : RESPONDENT PAN:ACRPS3167M REVENUE BY SHRI HARSHIT BARI, SR. DR RESPONDENT BY S/SHRI S.N. AGRAWAL & BHAVESH AGRAWAL, ARS DATE OF HEARING 01.09.2021 DATE OF PRONOUNCEMENT 30 .09.2021 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE O F THE REVENUE FOR ASSESSMENT YEAR 2011-12 IS DIRECTED A GAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-I (IN SHORT LD. CIT], BHOPAL DATED 11.09.2020 WHICH IS ARISING OUT OF THE ORDER SHRI ANIL KUMAR SONI. ITANO.334/IND/2020 2 U/S 271(1)(C) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 27.08.2014 FRAMED BY DCIT-1(1), BHOPAL. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN ITANO.334 /IND/2020: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN : WHETHER ON THE FACT AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING PENALTY OF RS.70,00,000/- LEVIED U/S 271(1)(C) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF JEWELLERY UNDE R HIS PROPRIETOR CONCERN IN THE NAME OF M/S BEAUTY JEWELL ERS AT ITARSI. SURVEY U/S 133A OF THE INCOME TAX ACT WAS CONDUCTED AND DURING THE COURSE OF SURVEY PROCEEDINGS ADDITIONAL INCOME OF RS.2,15,21,144/- WAS DECLARED BY THE ASSESSEE TOWAR DS EXCESS ADDITIONAL STOCK OF RS.2,14,96,454/- AND EXCESS CAS H OF RS.24,690/-. ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) ON 26.02.2014 ON RETURNED INCOME OF RS.2,22,96,660/ -. PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT WERE INITIATED. 3. IN THE PENALTY ORDER, THE LD. AO STATED THAT THE ASSESSEE HAD DECLARED UNDISCLOSED INCOME OF RS.2,15,21,144/- DUR ING THE COURSE OF SURVEY WHICH WOULD NOT HAVE BEEN DECLARED UNLESS SURVEY PROCEEDINGS WOULD HAVE BEEN CONDUCTED AT THE PREMISES SHRI ANIL KUMAR SONI. ITANO.334/IND/2020 3 AND HENCE HE HELD THAT IMPOSITION OF PENALTY IS VAL ID SINCE THE REVISED RETURN WAS FILED ONLY AFTER DISCOVERY OF CO NCEALMENT BY THE REVENUE. THEREFORE, THE AO LEVIED PENALTY OF RS.70, 00,000/- U/S 271(1)(C) OF THE ACT. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD. CIT(A) CHALLENGING THE LEVY OF PENALTY U/S 271(1)(C) OF TH E ACT AND SUCCEEDED. 5. NOW REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 6. LD. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED T HE ORDER OF LD. AO. 7. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE FINDING OF LD. CIT(A) AND ALSO REFERRED TO THE WRITTEN SUBMISS IONS AND PAPER BOOK PLACED AT PAGES 1 TO 100. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE JUD GMENTS REFERRED AND RELIED BY THE LD. COUNSEL FOR THE ASSE SSEE. REVENUES SOLE GRIEVANCE IS AGAINST THE FINDING OF LD. CIT(A) DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. WE NOTICE THAT THE SURVEY U/S 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS P REMISES ON 26.10.2010. THE ASSESSEE DECLARED UNDISCLOSED INCOM E OF SHRI ANIL KUMAR SONI. ITANO.334/IND/2020 4 RS.2,15,21,144/- WHICH CONSISTED OF EXCESS STOCK OF RS.2,14,96,454/- AND EXCESS CASH OF RS.24,690/-. TH IS SURVEY WAS CONDUCTED DURING F.Y. 2010-11 (A.Y. 2011-12). A SSESSEE FILED THE RETURN OF INCOME ON 30.09.2011 I.E. BEFORE THE DUE DATE OF FILING THE INCOME TAX RETURN AND DECLARED INCOME OF RS.2,22,96,660/- INCORPORATING THE UNDISCLOSED INCO ME OF RS.2,15,21,144/- SURRENDERED DURING THE COURSE OF S URVEY. ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT WAS CA RRIED OUT AND THE LD. AO MADE NO ADDITION AND ASSESSED THE IN COME AS DISCLOSED IN THE RETURN OF INCOME. HOWEVER, LD. AO LEVIED PENALTY U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME. 9. WE FIND THAT IT IS A JUDICIARY SETTLED PROPOSITI ON THAT WHERE THE INCOME DECLARED DURING THE COURSE OF SURVEY IS OFFE RED TO TAX IN THE RETURN OF INCOME FILED WITHIN THE DUE DATE PRES CRIBED U/S 139(1) OF THE ACT AND THE ASSESSING OFFICER ACCEPTS THE INCOME DECLARED IN THE RETURN, THE ASSESSEE CANNOT BE HELD TO HAVE CONCEALED THE PARTICULARS OF INCOME NOR OR HAS FUR NISHING INACCURATE PARTICULARS OF INCOME BECAUSE THE DUE DA TE OF FILING RETURN OF INCOME DID NOT EXPIRE AND THE PARTICULARS FURNISHED IN THE RETURN OF INCOME HAVE NOT FOUND TO BE UNTRUE. I N SUPPORT OF SHRI ANIL KUMAR SONI. ITANO.334/IND/2020 5 THIS VIEW WE RELY ON THE JUDGMENT OF HON'BLE HIGH C OURT OF GUJARAT IN THE CASE OF CIT VS. R. UMEDBHAI JEWELLERS PVT. LTD. IN ITANO.549 OF 2016 WHEREIN IT HAS BEEN HELD THAT WHERE ASSESSEE HAVING FILED THE RETURN OF INCOME BY THE DUE DATE, IN WHICH DISCLOSED INCOME DURING THE SURVEY WAS ALSO OFFERED TO TAX AND NO FURTHER ADDITION HAS BEEN MADE DURING THE ASSESSMEN T, THE QUESTION OF ASSESSE HAVING FURNISHED INACCURATE PAR TICULARS OF THE INCOME AND IMPOSING PENALTY THEREON WOULD NOT ARISE . 10. SIMILAR VIEW WAS ALSO TAKEN BY HON'BLE HIGH COU RT OF DELHI IN THE CASE OF CIT VS. SAS PHARMACEUTICALS (2011)335 ITR 259 (DEL) WHEREIN HONBLE HIGH COURT HELD AS FOLLOWS: 12. AFTER CONSIDERING THE RESPECTIVE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE PARTIES, WE ARE OF THE VIEW THAT THE ARGUME NT OF THE LEARNED COUNSEL FOR THE ASSESSEE HAS TO PREVAIL AS IT CARRI ED SUBSTANTIAL WEIGHT. IT IS TO BE KEPT IN MIND THAT SECTION 271(1)(C) OF THE ACT IS A PENAL PROVISION AND SUCH A PROVISION HAS TO BE STRICTLY CONSTRUED. UNLESS THE CASE FALLS WITHIN THE FOUR-CORNERS OF THE SAID PROVISION, PENA LTY CANNOT BE IMPOSED. SUB-SECTION (1) OF SECTION 271 STIPULATES CERTAIN CONTINGENCIES ON THE HAPPENING WHEREOF THE AO OR THE COMMISSIONER (APPEA LS) MAY DIRECT PAYMENT OF PENALTY BY THE ASSESSEE. WE ARE CONCERNE D HEREWITH THE FUNDAMENTALITY PROVIDED IN CLAUSE (C) OF SECTION 271 (1) OF THE ACT, WHICH AUTHORIZES IMPOSITION OF PEN ALTY WHEN THE AO IS SATISFIED THAT THE ASSESSEE HAS EITH ER; (A) CONCEALED THE PARTICULARS OF HIS INCOME; OR (B) FURNISHED INACCURATE PARTICULARS OF SUCH INCOME . 13. IT IS NOT THE CASE OF FURNISHING INACCURATE PAR TICULAR OF INCOME, AS IN THE INCOME TAX RETURN, PARTICULARS OF INCOME HAVE B EEN DULY FURNISHED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLE CTED IN THE INCOME TAX RETURN. THE QUESTION IS WHETHER THE PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSEE OR NOT. IT WOULD DEPEND U PON THE ISSUE AS TO WHETHER THIS CONCEALMENT HAS REFERENCE TO THE INCOM E TAX RETURN FILED BY THE ASSESSEE, VIZ., WHETHER CONCEALMENT IS TO BE FO UND IN THE INCOME TAX RETURN. SHRI ANIL KUMAR SONI. ITANO.334/IND/2020 6 14. WE MAY, FIRST OF ALL, REJECT THE CONTENTION OF THE LEARNED COUNSEL FOR THE REVENUE RELYING UPON THE EXPRESSION IN THE COU RSE OF ANY PROCEEDINGS UNDER THIS ACT OCCURRING IN SUB-SECTION (1) OF SECTION 271 OF THE ACT AND CONTENDING THAT EVEN DURING SURVEY WHEN IT WAS FOUND THAT THE ASSESSEE HAD CONCEALED THE PARTICULA R OF HIS INCOME, IT WOULD AMOUNT CONCEALMENT IN THE COURSE OF ANY PROC EEDINGS . THE WORDS IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT ARE PREFACED BY THE SATISFACTION OF THE AO OR THE COMMISSIONER OF I NCOME TAX (APPEALS). WHEN THE SURVEY IS CONDUCTED BY A SURVEY TEAM, THE QUESTION OF SATISFACTION OF AO OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER DOES NOT ARISE. WE HAVE TO KEEP IN MIND THAT IT IS THE AO WHO INITIATED THE PENALTY PROCEEDINGS AND DIRECTED THE PAYMENT OF PENALTY. HE HAD NOT RECORDED ANY SATISFACTION DURING THE COURSE OF SURV EY. DECISION TO INITIATE PENALTY PROCEEDINGS WAS TAKEN WHILE MAKING ASSESSME NT ORDER. IT IS, THUS, OBVIOUS THAT THE EXPRESSION IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT CANNOT HAVE THE REFERENCE TO SURVEY PROCEEDINGS, I N THIS CASE. 15. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PART ICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULAR OF INCOME BY TH E ASSESSEE HAS TO BE IN THE INCOME TAX RETURN FILED BY IT. THERE IS SUFFICI ENT INDICATION OF THIS IN THE JUDGMENT OF THIS COURT IN THE CASE OF COMMISSIO NER OF INCOME TAX, DELHI-I VS. MOHAN DAS HASSA NAND 141 ITR 203 AND IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA), THE SUPREME COURT HAS CLINCHED THIS ASPECT, VIZ., THE ASSESSEE CAN FURNISH THE PARTICUL ARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UPON THE INCOME TAX RETURN FILED BY THE ASSESSEE. THIS VIEW GETS SUPPORTED BY EXPLANATI ON 4 AS WELL AS 5 AND 5A OF SECTION 271 OF THE ACT AS CONTENDED BY THE LEARNED COUNSEL FOR THE RESPONDENT. 16. NO DOUBT, THE DISCREPANCIES WERE FOUND DURING T HE SURVEY. THIS HAS YIELDED INCOME FROM THE ASSESSEE IN THE FO RM OF AMOUNT SURRENDERED BY THE ASSESSEE. PRESENTLY, WE ARE NOT CONCERNED WITH THE ASSESSMENT OF INCOME, BUT THE MOOT QUESTION IS TO W HETHER THIS WOULD ATTRACT PENALTY UPON THE ASSESSEE UNDER THE PROVISI ONS OF SECTION 271(1) (C) OF THE ACT. OBVIOUSLY, NO PENALTY CAN BE IMPOSE D UNLESS THE CONDITIONS STIPULATED IN THE SAID PROVISIONS ARE DULY AND UNAM BIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING SURVEY, MAY B E, IT WOULD HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAID SURVEY. H OWEVER, THERE CANNOT BE ANY PENALTY ONLY ON SURMISES, CONJECTURES AND PO SSIBILITIES. SECTION 271 (1) (C) OF THE ACT HAS TO BE CONSTRUED STRICTLY. U NLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OR NON-DISCLOSURE O F THE PARTICULARS OF INCOME, PENALTY CANNOT BE IMPOSED. THERE IS NO SUCH CONCEALMENT OR NON- DISCLOSURE AS THE ASSESSEE HAD MADE A COMPLETE DISC LOSURE IN THE INCOME TAX RETURN AND OFFERED THE SURRENDERED AMOUNT FOR T HE PURPOSES OF TAX. 17. WE, THUS, ANSWER THE QUESTIONS AS FORMULATED AB OVE, IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FINDING NO FAULT W ITH THE DECISIONS OF THE CIT (A) AS WELL AS THE TRIBUNAL. AS A RESULT, T HIS APPEAL IS DISMISSED. SHRI ANIL KUMAR SONI. ITANO.334/IND/2020 7 11. WE, THUS RESPECTFULLY FOLLOWING THE JUDGMENTS A ND DECISIONS REFERRED HEREINABOVE, AND UNDER GIVEN FACTS AND CIR CUMSTANCES OF THE CASE, ARE OF THE CONSIDERED VIEW THAT THE ASSES SEE CANNOT BE HELD TO HAVE CONCEALED OR FURNISHED THE PARTICULARS OF INCOME SINCE THE INCOME DECLARED DURING THE COURSE OF SURV EY HAS BEEN OFFERED TO TAX IN THE RETURN OF INCOME FILED BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. WE, THUS, FIND NO REAS ON TO INTERFERE IN THE FINDING OF LD. CIT(A) AND THE SAME STANDS CONFI RM. GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 12. IN THE RESULT, REVENUES APPEAL IN ITANO.334 /IND/2020 IS DISMISSED. THE ORDER PRONOUNCED AS PER RULE 34 OF ITAT RULES, 1963 ON 30.09.2021. SD/- SD/- (RAJPAL YADAV) (MANISH BORAD) VICE PRESIDENT ACCOUNTANT ME MBER / DATED : 30.09. 2021 PATEL/PS COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE