DCIT, Tirunelveli V. T.R.Ramesh Raja, Palayamkottai

ITA 343/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96591 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 07-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 09-02-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: T VASUDEVAN
• Keywords: Corroborative evidences; Revised return
• Section: 143(3); 142(1); 133A; 148

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 343/MDS/2015 / ASSESSMENT YEAR :20 1 0 - 1 1 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE I, TIRUNELVELI. VS. SHRI T.R. RAMESH RAJA, DOOR NO. 132/A/2 MANI COMPLEX, TRIVANDRUM ROAD, P ALAYANKOTTAI. [PAN : AGDPR8086N] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI A.B. KOLI, JCIT / RESPONDENT BY : SHRI T. VASUDEVAN, ADVOCATE / DATE OF HEARING : 07 . 12 .201 5 / DATE OF P RONOUNCEMENT : 17 .12 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH I S APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT (APPEALS) - I , MADURAI , DATED 1 3 . 11 . 20 1 4 RELEVANT TO THE ASSESSMENT YEAR 20 1 0 - 11 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS WITH REGARD TO DELETION OF PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDU AL ENGAGED IN THE BUSINESS OF REAL ESTATE AND CONSTRUCTION OF HOUSES IN THE NAME AND I.T.A. NO . 343/M/15 2 STYLE OF MAYAN . THE ASSESSEE FILED HIS RETURN OF INCOME ON 14.09.2010 ADMITTING INCOME OF .32,91,950/ - . A SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES ON 17.02.2011. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSEE WAS ALSO ASKED TO FILE COPY OF THE RETURNS FOR THE ASSESSMENT YEARS 2010 - 11 AND 2011 - 12. DURING THE COURSE OF SURVEY, THE ASSESSEE HAS ADMITTED ADDITIONAL INCOME AND OFFERED .65,00,000/ - FOR THE ASSESSMENT YEAR 2010 - 11 AND FILED THE REVISED RETURN OF INCOME AT .97,91,950/ - ON 16.03.2011 . NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE ASSESSE E ON 27.09.2011. THEREAFTER, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON 27.03.2013 . 3. SUBSEQUENTLY, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. DURING THE COURSE OF S URVEY, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS FILED HIS ORIGINAL RETURN ON 14.09.2010 DECLARING INCOME OF .32,91,950/ - AND ONLY AFTER CONDUCT OF SURVEY UNDER SECTION 133A OF THE ACT ON 17.02.2011 , THE ASSESSEE HAS ADMITTED ADDITIONAL INCOME OF .65,00,000/ - FOR THE ASSESSMENT YEAR 2010 - 11 AND FILED THE REVISED RETURN ADMITTING INCOME OF .97,91,950/ - ON 16.03 .2011. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT BUT FOR THE SURVEY, THE ADDITIONAL INCOME WOULD NOT HAVE BEEN DISCLOSED TO THE DEPARTMENT AND THE ASSESSEE HAS FILED REVISED RETURN WITH THE ADDITIONAL INCOME OF .65,00,000/ - WHICH WAS OFFERED DURING THE COURSE OF I.T.A. NO . 343/M/15 3 SURVEY, WHICH IS SUPPORTING EVIDENCE FOR CONCEALMENT OF INCOME. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. T HE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE AR OF THE ASSESSEE HAS FILED A DETAILED WRITTEN SUBMISSIONS AND AFTER CONSIDERING THE SAME AND ALSO BY CONSIDERING THE VARIOUS DECISIONS, THE LD. CIT(A) DELETED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. 5. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND THE LD. DR HAS SUBMITTED THAT IF THE ASSESSEE DO NOT HAVE THE INTENTION OF CONCEALING INCOME, HE WOULD HAVE DISCLOSED ALL PARTICULARS OF INCOME WHILE FILING THE ORIGINAL RETURN OF INCOME AND FILING REVISED RETURN WOULD NOT HAVE ARISES. BUT FOR THE SURVEY UNDER SECTION 133A OF THE ACT, THE ASSESSEE WOULD NOT HAVE DISCLOSED THE ADDITIONAL INCOME OFFERED DURING THE COURSE OF SURVEY PROCEEDINGS. THEREFORE, IT WAS SUBMITTED THAT IT IS CLEAR CASE OF CONCEALMENT OF INCOME AND THE ORDER PASSED BY T HE LD. CIT(A) SHOULD BE SET ASIDE. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS STRONGLY SUPPORTED THE ORDER PASSED BY LD. CIT(A) AND SUBMITTED THAT INITIALLY THE RETURN WAS FILED ON 14.09.2010 AND THERE WAS A SURVEY ON 17.02.2011. AFTER C OMPLETION OF SURVEY OPERATION, THE ASSESSEE HAS FILE REVISED RETURN ON 16.03.2011 VOLUNTARILY OFFERING .65,00,000/ - AS ADDITIONAL INCOME WELL BEFORE INITIATION OF ACTION OUT OF SURVEY BY THE DEPARTMENT. THE DEPARTMENT I.T.A. NO . 343/M/15 4 HAS ISSUED NOTICE UNDER SECTION 143(2) ON 27.09.2011. THE DETAILS FURNISHED AGAINST THE 143(2) NOTICE AND THE REVISED RETURN FILED BY THE AS SESSEE WAS DULY ACCEPTED BY THE ASSESSING OFFICER AND TAXES WERE PAID . THE LD. COUNSEL FOR THE ASSESSEE HAS STRONGLY CONTENDED THAT THE LEVY OF PENALTY HAS NO LEGS TO STAND BECAUSE, THE ASSESSEE HAS FILED HIS REVISED RETURN BEFORE THE DUE DATE FOR FILING O F THE RETURN UNDER SECTION 139(4) OF THE ACT AND MOREOVER, THE ASSESSEE WAS NOT SERVED WITH ANY NOTICE UNDER SECTION 143(2) OR NOTICE UNDER SECTION 142(1) OR UNDER SECTION 148 OF THE ACT BEFORE FILING THE REVISED RETURN OF INCOME AND PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE CONFIRMED. 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE FILED HIS RETURN OF INCOME ON 14.09.2010 ADMITTING INCOME OF .32,91,950/ - . THERE WAS SURVEY UN DER SECTION 133A OF THE ACT ON 17.02.2011. DURING THE COURSE OF SURVEY PROCEEDINGS, THE ASSESSEE HAS VOLUNTEERED TO OFFER .65 LAKHS AS ADDITIONAL INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND FILED REVISED RETURN ON 16.03.2011 ADMITTING NET TOTAL INCOME OF .97,91,950/ - . THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 143(2) OF THE ACT ON 27.09.2011. THE DETAILS CALLED FOR WERE EXAMINED AND THE RETURNED INCOME OF THE ASSESSEE WAS ACCEPTED AND COMPLETED THE ASSESSMENT UNDER SECTION 14 3(3) OF THE ACT ON 27.03.2013. THEREAFTER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. AGAINST THE NOTICE I.T.A. NO . 343/M/15 5 UNDER SECTION 271(1)(C) OF THE ACT, THE ASSESSEE STRONGLY CONTENDED THAT NO PARTICULARS OF INCOME WAS CONC EALED AND THE REVISED RETURN VOLUNTARILY FILED BY HIM WAS DULY ACCEPTED BY THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ON APPEAL, THE AR OF THE ASSESSEE HAS FILED DETAILED WRITTEN SUBMISSIONS AND RELIED ON VARIOUS LAW. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) HAS OBSERVED THAT THE ONLY REASON RELIED BY THE ASSESSING OFFICER FOR LEVYING PENALTY IS THAT HAD THE SURVEY U/S 133A NOT TAKEN PLACE THE TAX EVASION WOULD NOT HAVE COME TO LIGHT AND THAT THE HIGHER INCOME WAS DISCLOSED IN THE RETURN ONLY BECAUSE OF SURVEY U/S 133A HAS MERITS. THIS IS, HOWEVER, ONLY A PREMISE AS THE DUE DATE FOR FILING OF THE RETURN UNDER SECTION 139(4) WAS NOT OVER AND THE ASSESSING OFFICER HAS NOT I SSUED ANY NOTICE CALLING FOR RETURN OF INCOME. SUBSEQUENTLY, THE ASSESSING OFFICER ACCEPTED THE INCOME DECLARED IN THE RETURN OF INCOME. THE ACT OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS SHOULD BE VIEWED WITH RESPECT TO RETURN OF INCOME. ONLY IF CERTAIN THING IS NOT DISCLOSED OR NOT FURNISHED THEREIN, ONLY THEN IT CAN BE SAID THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. ONCE THERE IS NO DIFFERENCE IN INCOME RETURNED AND INCOME ASSESSED , IT MEANS THAT THE ASSESSEE HAD NOT CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE LD. CIT(A) HAS FURTHER OBSERVED THAT FOR IMPOSITION OF PENALTY THOUGH INDEPENDENT AND SEPARATE ASPECT OF THE PROCEEDINGS, EMANATE FR OM I.T.A. NO . 343/M/15 6 ASSESSMENT PROCEEDINGS. THE OMISSION OR COMMISSION OR CONTUMACIOUS CONDUCT HAS TO BE VIEWED FROM THE RETURN OF INCOME AND IF CERTAIN THING IS NOT DISCLOSED OR NOT FURNISHED THEREIN ONLY THEN IT CAN BE SAID THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE ASSESSMENT ORDER IS VERY BRIEF, CRYPTIC AND DOES NOT BRING OUT ANY CONTUMACIOUS CONDUCT OF THE ASSESSEE OR THAT THE ASSESSEE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULA RS OF INCOME. IT IS THE DUTY OF THE ASSESSING OFFICER TO BRING OUT HOW METHOD OF CONCEALMENT SO THAT IT FORMS A BASIS FOR PENALTY ORDER AT A LATER DATES. UNDER THE ABOVE FACTS AND CIRCUMSTANCES AND ALSO BY RELYING ON THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT V. SAS PHARMACEUTICALS [2011] 11 TAXMANN.COM 207, THE LD. CIT(A) DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER. BEFORE US, THE LD. DR HAS SUBMITTED THAT BUT FOR THE SURVEY UNDER SECTION 133A OF THE ACT, THE ASSESSEE WOULD NOT HAVE DISCLOSED THE ADDITIONAL INCOME OFFERED DURING THE COURSE OF SURVEY PROCEEDINGS AND RELIED ON VARIOUS DECISIONS OF HON BLE HIGH COURT. T HE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE LEVY OF PENALTY HAS NO LEGS TO STAND BECAUSE, THE ASSESSEE HAS FILED HIS REVISED RETURN BEFORE THE DUE DATE FOR FILING OF THE RETURN UNDER SECTION 139(4) OF THE ACT AND MOREOVER, THE ASSESSEE WAS NOT SERVED WITH ANY NOTICE UNDER SECTION 143(2) OR NOTICE UNDER SECTION 142(1) OR UNDER SECTION 148 OF THE ACT BEFORE FILIN G THE REVISED RETURN OF INCOME. WE FIND FORCE IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. IN THIS CASE, I.T.A. NO . 343/M/15 7 WE FIND THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 14.09.2010. THERE WAS SURVEY UNDER SECTION 133A OF THE ACT ON 17.02.2011. DURING THE CO URSE OF SURVEY PROCEEDINGS, THE ASSESSEE HAS VOLUNTEERED TO OFFER .65 LAKHS AS ADDITIONAL INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AND FILED REVISED RETURN ON 16.03.2011 ADMITTING NET TOTAL INCOME OF .97,91,950/ - . T HE NOTICE UNDER SECTION 143(2 ) OF THE ACT WAS ISSUED ON THE ASSESSEE ONLY ON 27.09.2011 AND T HE DETAILS CALLED FOR WERE EXAMINED AND THE RETURNED INCOME OF THE ASSESSEE WAS ACCEPTED AND COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON 27.03.2013 . IT IS AN ADMITTED FACT THAT THE ASSESSEE FILED THE REVISED RETURN ON 16.03.2011 I.E. WELL BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(4) OF THE ACT AND T HE ASSESSING OFFICER ISSUED THE NOTICE UNDER SECTION 143(2) OF THE ACT ONLY ON 27.09.2011 . 8. T HE ASSESS MENT ORDER IS VERY CRYPTIC AND DOES NOT SPEAK ABOUT THE OUTCOME OF THE SURVEY PROCEEDINGS AND THE ASSESSMENT ORDER IS ALSO SILENT ABOUT THE MATERIALS IMPOUNDED BY THE SURVEY TEAM DURING THE COURSE OF SURVEY, AGAINST WHICH THE ASSESSEE HAS OFFERED ADDITIONA L INCOME. BY INCLUDING THE ADDITIONAL INCOME, THE ASSESSEE HAS FILED THE REVISED RETURN ON 16.03.2011, WHICH IS WELL BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME UNDER SECTION 139(4) OF THE ACT. IN THE PENALTY ORDER ALSO, THE ASSESSING OFFICER STATED THE REASON FOR LEVYING PENALTY IS ONLY ON THE GROUND THAT BUT FOR SURVEY, THE ASSESSEE WOULD NOT HAVE BEEN OFFERED THE ADDITIONAL INCOME IN I.T.A. NO . 343/M/15 8 THE REVISED RETURN FILED SUBSEQUENT TO THE SURVEY PROCEEDINGS. WE ARE OF THE OPINION THAT IF THE ASSESSEE HAS NOT FU LLY DISCLOSED ANY OF HIS INCOME IN THE RETURN FILED BEFORE THE COMPLETION OF DUE DATE FOR FILING OF RETURN UNDER SECTION 139(4) OF THE ACT, AND IF THE ASSESSING OFFICER FOUND ANY MAT ERIAL EVIDENCE OUT OF THE DETAILS AND RETURN FILED BY THE ASSESSEE AGAINST THE NOTICE UNDER SECTION 143(2) OF THE ACT OF ANY INCOME HAVING ESCAPED ASSESSMENT, OR IF THE ASSESSEE HAS NOT FILED ANY REPLY AGAINST THE SURVEY REPORT , HAVING IMPOUNDED INCRIMINAT ING MATERIALS LEADING TO ESCAPEMENT OF INCOME, GIVEN TO THE ASSESSEE FOR FILING OBJECTION IF ANY, THEN IT CAN BE SAID THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME , OTHERWISE NOT . 9. THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT V. SAS PHA RMACEUTICALS 335 ITR 259 HAS HELD AS UNDER: HELD, DISMISSING THE APPEAL, THAT CLAUSE (C) OF SECTION 271(1) OF THE ACT AUTHORIZES IMPOSITION OF PENALTY WHEN THE ASSESSING OFFICER IS SATISFIED THAT THE ASSESSEE HAD EITHER CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT WAS NOT A CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME, AS IN THE INCOME - TAX RETURN, PARTICULARS OF INCOME HAD BEEN DULY FURNISHED AND THE SURRENDERED AMOUNT WAS DULY REFLECTED IN THE RETURN. T HE QUESTION WHETHER THE PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSEE OR NOT WOULD DEPEND UPON WHETHER THIS CONCEALMENT HAD REFERENCE TO THE RETURN FILED BY THE ASSESSEE. THE WORDS 'IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT' WERE PREFACED BY T HE SATISFACTION OF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS). WHEN THE SURVEY WAS CONDUCTED THE QUESTION OF SATISFACTION OF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER DID NOT ARISE. IT WAS THE ASSESSING OFFICER WHO IN ITIATED THE PENALTY PROCEEDINGS AND DIRECTED THE PAYMENT OF PENALTY. HE HAD NOT RECORDED ANY SATISFACTION DURING THE COURSE OF SURVEY. THE DECISION TO INITIATE PENALTY PROCEEDINGS WAS TAKEN WHILE MAKING THE ASSESSMENT ORDER. THUS, THE EXPRESSION 'IN THE CO URSE OF ANY PROCEEDINGS UNDER THIS ACT' COULD NOT HAVE THE REFERENCE TO SURVEY PROCEEDINGS, IN THIS CASE. THE CONCEALMENT OF PARTICULARS OF INCOME OR I.T.A. NO . 343/M/15 9 FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE HAD TO BE IN THE RETURN FILED BY IT. NO PEN ALTY COULD BE IMPOSED UNLESS THE CONDITIONS STIPULATED IN THE PROVISIONS WERE DULY AND UNAMBIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING THE SURVEY, MAY BE, IT WOULD HAVE NOT DISCLOSED THE INCOME BUT FOR THE SURVEY. HOWEVER, THERE COULD NOT BE ANY PENALTY ONLY ON SURMISES, CONJECTURES AND POSSIBILITIES. SECTION 271(1)(C) OF THE ACT HAD TO BE CONSTRUED STRICTLY. UNLESS IT WAS FOUND THAT THERE WAS ACTUALLY CONCEALMENT OR NON - DISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY COULD NOT BE IMPOSED. T HERE WAS NO SUCH CONCEALMENT OR NON - DISCLOSURE AS THE ASSESSEE HAD MADE A COMPLETE DISCLOSURE IN THE RETURN AND OFFERED THE SURRENDERED AMOUNT FOR THE PURPOSES OF TAX. 10. IN VIEW OF THE DECISION OF THE HON BLE DELHI HIGH COURT AND CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY PARTICULARS OF INCOME IN THE RETURN FILED BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF RETURN . THUS, WE UPHOLD THE ORDER PASSED BY THE LD. CIT(A) IN DELETING THE PENA LTY LEVIED BY THE ASSESSING OFFICER. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 17 TH DECEMBER , 2015 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 17 . 1 2 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.