Shri Maheshbhai R.Pandya, Dist.Baroda V. The ACIT.,Circle-3, Baroda

ITA 3449/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9087 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-12-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 17-10-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K MADHUSUDANSR
• Assessee Lawyers: P M PATEL
• Keywords: Opportunity of being heard; Revised return; Set aside
• Section: 271(1)(c); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH B BB B BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI, , , , ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AND AND AND AND SHRI SHRI SHRI SHRI MAHAVIR SINGH, JUDICIAL MEMBER MAHAVIR SINGH, JUDICIAL MEMBER MAHAVIR SINGH, JUDICIAL MEMBER MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING : DRAFTED ON: ITA NO. 3449 /AHD/ 2008 ASSESSMENT YEAR :2002-03 ITA NO.192/AHD/2010 ASSESSMENT YEAR :2001-02 DR. MAHESH R. PANDYA, PROP. OF GHANSHYAM CLINIC, BHADARWA TIMBA ROAD CROSSING, SAVLI, TALUKA SAVLI, DISTRICT BARODA. VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-3, AAYAKAR BHAVAN, NR.RACE COURSE CIRCLE, ALKAPURI, BARODA. PAN/GIR NO. : AEKPP 4748 L (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI P.M. PATEL RESPONDENT BY: SHRI K. MADHUSUDAN,SR.D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), DATED 20-10-2009 AND 3-7- 2008 FOR ASSESSMENT YEARS 2001-02 AND 2002-03 RESPE CTIVELY. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE ASSESSEE IN BOTH THE YEAR UNDER APPEAL IS THAT THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) WAS NOT JUSTIFIED IN CONFIRMING PENALTY OF `.2,50,000/- IN ASSESSMENT YEAR 2001-02 AND `.2,76,000/- IN THE ASSESSMENT YEAR 200 2-03 UNDER SECTION 271(1)(C) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY UNDER SECTION 133A WAS CONDUCTED ON 18-2-2004. DURING THE COURSE OF SURVEY OPERATION THE ASSESSEE MADE DISCLOSURE OF `.7 LACS IN ASSESSMENT YEAR 2001 -02 AND `.9 LACS IN ASSESSMENT YEAR 2002-03 ON ACCOUNT OF SUPPRESSION O F RECEIPTS. THE ASSESSEE FILED REVISED RETURN OF INCOME SHOWING THE DISCLOSU RES MADE AND PAID THE TAX AND INTEREST DUE THEREON. THEREAFTER THE LEARNED A SSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR FURN ISHING INACCURATE PARTICULARS PAGE 2 OF 5 OF INCOME ON THE ABOVE DISCLOSED RECEIPTS. THE SAME WAS CONFIRMED IN APPEAL BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) . 4. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED BEFORE US THAT THE DEPARTMENT CAME TO THE CONCLUSION THAT THERE WAS DIFFERENCE IN INCOME SHOWN IN ONE SET OF ACCOUNTING RECORD AND OT HER SET OF ACCOUNTING RECORD NAMELY ANNEXURE A/42, A/43 AND A/44 WHICH WE RE THE RECEIPT ISSUED TO THE PATIENT FOR AMOUNT RECOVERED FROM THEM AND THE ANNEXURE A/7, A/8, A/9 AND A/10 WHICH WERE MEDICAL AND CONSULTING FEES REG ISTER. THE SURVEY PARTY HURRIEDLY COMPARED BOTH SET OF ACCOUNTING RECORDS A ND IN CERTAIN RECEIPTS FOUND THAT AMOUNT SHOWN IN RECEIPT ISSUED WAS LARGE R THAN AMOUNT ENTERED IN FEES REGISTER. THE SURVEY PARTY DID NOT MAKE ANY EXERCISE TO FIND OUT THE EXACT DIFFERENCE BETWEEN THE TWO SETS OF ACCOUNTING RECORD. AS IN FEW RECEIPTS THEY FOUND DIFFERENCES, AS USUAL OCCURS IN THE CASE OF SURVEY, THEY PERSUADED THE ASSESSEE TO DISCLOSE CERTAIN AMOUNT AS ADDITION AL INCOME AND ULTIMATELY THE ASSESSEE DECLARED `.7 LACS AS ADDITIONAL INCOME IN ASSESSMENT YEAR 2001- 02 AND `.9 LACS IN THE ASSESSMENT YEAR 2002-03. FU RTHER THE ASSESSEE IN PENALTY PROCEEDINGS ATTEMPTED TO BRING THE FACT ON RECORD THAT THE CONCEALED INCOME ON THE BASIS OF THE ANNEXURES WAS ONLY `.4,1 44/- IN ASSESSMENT YEAR 2001-02 AND TOO BECAUSE OF SOME CLERICAL MISTAKE. SIMILARLY IN THE ASSESSMENT YEAR 2002-03 THE DIFFERENCE WAS `,.73,614/-. HE FUR THER SUBMITTED THAT IN ASSESSMENT YEAR 2001-02 THE TRIBUNAL VIDE ITS ORDER DATED 20-10-2006 IN ITA NO.1692/AHD/2006 RESTORED THE MATTER TO THE FILE OF THE LEARNED ASSESSING OFFICER OBSERVING THAT THE CONTENTION OF THE ASSESS EE THAT CONCEALMENT IF ANY WAS `.4,144/- AND OTHER OFFER WAS TO BUY PEACE HAS TO BE EXAMINED WITH REFERENCE TO THE DISCLOSURE MADE BY THE ASSESSEE VI S-A-VIS MATERIAL AVAILABLE AND FOUND DURING THE COURSE OF SURVEY PROCEEDINGS. HE ARGUED THAT IN THE SET ASIDE PROCEEDINGS THE LEARNED ASSESSING OFFICER DID NOT CARRY OUT THE DIRECTION OF THE TRIBUNAL AND REPEATED THE VERY SAME ORDER TH AT WAS PASSED IN THE ORIGINAL PENALTY PROCEEDINGS IN ASSESSMENT YEAR 200 1-02. IN ASSESSMENT YEAR 2002-03 ALSO NO ENDEAVOUR WAS MADE BY THE LEARNED A SSESSING OFFICER TO VERIFY WITH THE MATERIAL AVAILABLE DURING THE SURVE Y PROCEEDINGS AS THE ONLY DIFFERENCE WAS `.73,614/-. HE THEREFORE PRAYED THAT IN THE CIRCUMSTANCES THE PENALTY IF AT ALL TO BE LEVIED HAS TO BE LEVIED ON THE SUM OF `.4,144/- AND PAGE 3 OF 5 `.73,614/- BEING THE DIFFERENCE FOUND IN THE BOOKS OF ACCOUNT AND NOT THE ENTIRE DISCLOSURE OF INCOME MADE BY THE ASSESSEE IN THOSE ASSESSMENT YEARS. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORT ED THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE THA T THE ASSESSEE IS A DOCTOR. A SURVEY WAS CONDUCTED IN THE PROFESSIONAL PREMISES O F THE ASSESSEE ON 18-2- 2004 WHEREIN CERTAIN INCRIMINATING DOCUMENTS WERE F OUND. IN PURSUANCE TO THE SAME THE ASSESSEE DISCLOSED INCOME OF `.7 LACS IN T HE ASSESSMENT YEAR 2001- 02 AND `.9 LACS IN THE ASSESSMENT YEAR 2002-03 WHIC H WERE NOT DISCLOSED IN THE ORIGINAL RETURN. IN THE ASSESSMENT MADE THEREAFTER THE LEARNED ASSESSING OFFICER ACCEPTED THE ABOVE DISCLOSURES. THEREAFTER THE LEARNED ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF ` .2,50,000/- IN ASSESSMENT YEAR 23001-02 AND `.2,76,000/- IN ASSESSMENT YEAR 2 002-03. IN THE INSTANT CASE THE CONTENTION OF THE ASSESSEE WAS THAT DURING THE COURSE OF SURVEY THE PAPERS FOUND ONLY REVEALED UNDISCLOSED INCOME OF `. 4,144/- IN ASSESSMENT YEAR 2001-02 AND `.73,614/- IN ASSESSMENT YEAR 2002-03 W HEREAS THE ASSESSEE DISCLOSED ADDITIONAL INCOME OF `.7 LACS IN ASSESSME NT YEAR 2001-02 AND `.9 LACS IN ASSESSMENT YEAR 2002-03 TO BUY PEACE OF MIND. IN OTHER WORDS THERE WAS NO MATERIAL BEFORE THE REVENUE EXCEPT THE VOLUNTARY DI SCLOSURE OF THE ASSESSEE TO ASSESS INCOME OF `.6,95,856/- IN ASSESSMENT YEAR 20 01-02 AND `.8,26,386/-IN ASSESSMENT YEAR 2002-03. THE MATTER CAME BEFORE THE TRIBUNAL AND THE TRIBUNAL RESTORED THE MATER BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER IN THE FIRST ROUND WITH THE FOLLOWING DIRECTIONS:- 16. THE PENALTY FOR CONCEALMENT IS TO BE LEVIED WI TH RESPECT TO THE ORIGINAL RETURN OF INCOME AND A REVISED RETURN MAY NOT WIPE OUT THE DEFAULT IN THE ORIGINAL RETURN. IT MAY, HOWEVER, BE NOT DECISIVE IN EACH AND EVERY CASE. SEE IN THIS CASE K. P. MADHUSUDANAN VS. CIT (251 ITR 99), IF THE ASSESSEE MAKES A VOLUNTARY DISCLOSURE B EFORE THE ASSESSMENT IS TAKEN UP OR BEFORE DETECTION BY THE LEARNED ASSE SSING OFFICER, PENALTY SHOULD NOT BE IMPOSED CIT VS. J.K.A. RAJAPPA CHET TIAR (153 ITR 215).THEREFORE, IT ALL DEPENDS UPON THE ANSWERS TO THE QUESTION WAS IT A VOLUNTARY ACT OF THE ASSESSEE TO DISCLOSE THE INC OME TO BUY PEACE? OR WAS THERE NO OPTION WITH THE ASSESSEE TO REVISE THE RETURN ON BEING CAUGHT IN THE NET? INFORMER CASE PENALTY MAY NOT BE LEVIED, WHEREAS IN THE LATER CASE HE HAS TO SUFFER THE PENALTY. PAGE 4 OF 5 17. IN OUR OPINION, THEREFORE, THE CONTENTION OF TH E ASSESSEE THAT CONCEALMENT, IF ANY, WAS ONLY FOR `.4,144/- AND THE OTHER OFFER WAS TO BUY PEACE HAS TO BE EXAMINED WITH REFERENCE TO THE DISC LOSURE MADE BY THE ASSESSEE VIS-A-VIS MATERIAL AVAILABLE AND FOUND DUR ING THE SURVEY PROCEEDINGS. WE, THEREFORE, SET ASIDE THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS OF THE ASSESSING OFFICER AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESS ING OFFICER TO EXAMINE THE MATTER AFRESH AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. THE LEARNED ASSESSING OFFICER IN THE FRESH PENAL TY PROCEEDINGS IN PURSUANCE TO THE ABOVE DIRECTIONS OF THE TRIBUNAL A GAIN LEVIED PENALTY OF THE SAME AMOUNT FOR BOTH THE YEARS. WE FIND THAT THE LE ARNED ASSESSING OFFICER HAS NOT RECORDED ANY FINDING OF THE INQUIRY/VERIFIC ATION MADE BY HIM IN PURSUANCE TO THE ABOVE DIRECTIONS OF THE TRIBUNAL. IN THE ABOVE CIRCUMSTANCES, WE FIND THAT THE ASSESSEES CONTENTION THAT NO ADVE RSE MATERIAL WAS FOUND DURING THE COURSE OF THE SURVEY IN RESPECT OF INCOM E OF `. 6,95,856/- OUT OF ADDITIONAL INCOME OF `. 7 LACS DISCLOSED FOR THE A SSESSMENT YEAR 2001-02 AND IN RESPECT OF INCOME OF `.8,26,386/- OUT OF ADDITIO NAL INCOME OF `.9 LACS DISCLOSED IN ASSESSMENT YEAR 2002-03 AND THE SAID DISCLOSURE WAS A VOLUNTARY DISCLOSURE BY THE ASSESSEE. THUS IN VIEW OF THE DEC ISION OF THE TRIBUNAL IN THE FIRST ROUND THE LEARNED ASSESSING OFFICER SHOULD NO T HAVE LEVIED PENALTY IN RESPECT OF ADDITIONAL INCOME OF `.6,95,856/- IN ASS ESSMENT YEAR 2001-02 AND ADDITIONAL INCOME OF `.8,26,386/- IN ASSESSMENT YEA R 2002-03. THE REVENUE SHOULD HAVE LEVIED PENALTY WITH REFERENCE TO THE IN COME OF `.4,144/- FOR ASSESSMENT YEAR 2001-02 AND `.73,614/- FOR ASSESSME NT YEAR 2002-03 ONLY. WE THEREFORE DIRECT THE LEARNED ASSESSING OFFICER TO L EVY PENALTY IN ACCORDANCE WITH THE OBSERVATIONS MADE HEREINABOVE. THUS THE GR OUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR BOTH THE YEARS UNDER CONSIDERATION. 8. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR B OTH THE YEARS UNDER CONSIDERATION ARE PARTLY ALLOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 24 TH DAY OF DECEMBER,2010. SD/- SD/- ( MAHAVIR SINGH) (N.S. S AINI) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED: AHMEDABAD, 24 TH DAY OF DECEMBER, 2010 PAGE 5 OF 5 COMPILED AND COMPARED BY: PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD DATE INITIALS 1. DRAFT DICTATED ON 23-12-2010 -------------- ----- 2. DRAFT PLACED BEFORE AUTHORITY 23-12-2010 ----- -------------- 3. DRAFT PROPOSED & PLACED 23-12-2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 23-12-2010 ---------- --------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 23-12-2010 -------- ------------ 6. KEPT FOR PRONOUNCEMENT ON 24-12-2010 --------- ----------- 7. FILE SENT TO THE BENCH CLERK 24-12-2010 ------- ------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------