SANGEETA KABRA, BHILWARA V. ACIT, Ajmer

ITA 365/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5540 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Assessee Lawyers: RAJEEV KUMAR INANAI
• Keywords: Search and seizure; Revised return; Documents seized
• Section: 143(3); 153A; 27; 132; 139

Judgement Text

RIVAL VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO.365/JP/ 14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : SMT. SANGEETA KABRA M/S KABRA SONOGRAPHY CENTRE, 4, DOCTOR HOUSE, SEWA SADAN ROAD, BHILWARA CUKE VS. ACIT, CENTRAL CIRCLE, AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AEKPK 8329 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI RAJEEV KUMAR INANAI (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 11/01 /2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 04 /02/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), CENTRAL, JAIPUR DATED 20.02.2014 WHERE THE LD. CIT(A) HAS C ONFIRMED LEVY OF PENALTY OF RS. 32,220/- U/S 271(1)(C) OF THE ACT. ITA NO. 365/JP/14 SMT. SANGEETA KABRA VS. ACIT, CENTRAL CIRCLE, AJMER 2 2. THE RELEVANT FACTS FOR THE ISSUE UNDER CONSIDERA TION ARE THAT THE ASSESSEE IS AN INDIVIDUAL WHO HAS FILED THE ORIGINAL RETURN U/S 139 OF THE ACT DECLARING INCOME OF RS. 5,36,710/-AND AGRICULTURAL INCOME OF RS. 90, 936/-. SUBSEQUENTLY, SEARCH AND SEIZURE OPERATIONS U/S 132 OF THE ACT WAS CARRI ED OUT AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE AS WELL AS HER FA MILY MEMBERS. IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT, THE ASSESSEE FILED HER RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 6,42,893/- AND AGRICULTURAL INC OME OF RS. 90,936/-. THE ASSESSMENT WAS FINALIZED U/S 153A READ WITH SECTION 143(3) ASSESSING THE TOTAL INCOME AT RS.6,42,910/-. AS PER THE AO, THERE IS D ISCLOSURE AND SURRENDER OF ADDITIONAL INCOME OF RS. 1,06,200/- ON ACCOUNT OF U NDISCLOSED RECEIPT INCOME INVESTED TOWARDS PURCHASE OF PLOT IN THE REVISED RE TURN OF INCOME FILED BY THE ASSESSEE U/S 153A OF THE ACT WHICH IS NOT VOLUNTARI LY BUT ON THE BASIS OF VARIOUS INCRIMINATING DOCUMENTS SEIZED DURING THE SEARCH OP ERATION. ACCORDINGLY, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. THE A O THEREAFTER LEVIED THE PENALTY AT 100% OF THE TAX SOUGHT TO BE EVADED AMOUNTING TO RS. 32,220/-. 2.1 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE LEVY OF PENALTY U/S 27 1(1)(C) READ WITH EXPLANATION 5A OF THE ACT. ITA NO. 365/JP/14 SMT. SANGEETA KABRA VS. ACIT, CENTRAL CIRCLE, AJMER 3 2.2 DURING THE COURSE OF HEARING, THE LD. AR FILED DETA ILED WRITTEN SUBMISSION AND ARGUED THE MATTER AT LENGTH. LD. AR SUBMITTED T HAT THE ASSESSEE HAS ALREADY PAID DUE TAXES ALONGWITH INTEREST BY HONOURING THE SURRENDER MADE DURING THE COURSE OF SEARCH PROCEEDINGS WHICH PROVES THAT THE ASSESSEE HAS DULY CO-OPERATED IN ALL THE PROCEEDINGS AS PER LAW AND HONESTLY FILE D HER RETURN IN COMPLIANCE OF NOTICE BY THE DUE DATE. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS NOT CONCEALED THE PARTICULARS OF HER INCOME RATHER SHE HAS INCLUD ED HER UNDISCLOSED INCOME IN THE RETURN FILED U/S 153A OF THE ACT WHICH HAS BEEN DULY ACCEPTED BY THE LD. AO WITHOUT MAKING ANY FURTHER ADDITIONS TO THE RETURNE D INCOME. THE LD. AR DRAWN OUR REFERENCE TO DISTINCTION BETWEEN THE PROVISIO NS OF SECTION 271(1)(C) READ WITH EXPLANATION 5A AND PENALTY U/S 271AAA. FURT HER, THE LD. AR DRAWN SUPPORT FROM THE DECISION OF HONBLE DELHI HIGH COURT IN TH E CASE OF S..S. PHARMACEUTICALS (ITA NO. 1058 OF 2009) DATED 08.04.2011. 2.3 THE LD. DR ARGUED THE MATTER AT LENGTH AND DRAW N OUR REFERENCE TO PROVISIONS OF SECTION 271(1)(C) OF THE ACT WHEREIN UNDER EXPLANATION 5A, IT IS STATED CLEARLY THAT EVEN IF THE ASSESSEE HAS DISCL OSED THE INCOME, FOUND DURING THE COURSE OF SEARCH, SUBSEQUENTLY IN HER RETURN OF INC OME, THE PENAL PROVISIONS U/S 271(1)(C) WOULD CONTINUE TO APPLY, HENCE THE LEVY O F PENALTY BY THE AO AND CONFIRMATION THEREOF BY LD. CIT(A) IS FULLY JUSTIFIE D IN THE INSTANT CASE. ITA NO. 365/JP/14 SMT. SANGEETA KABRA VS. ACIT, CENTRAL CIRCLE, AJMER 4 3. WE HEARD THE CONTENTIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE SURRENDER OF INCOME OF R S. 1,06,200/- IS MADE DURING THE COURSE OF SEARCH U/S 132 OF THE ACT AND SUBSEQ UENTLY THE ASSESSEE HAS DISCLOSED THE SAID INCOME IN HER RETURN OF INCOME F ILED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT. IT IS ALSO NOT DISPUTE THAT T HE SAID UNDISCLOSED INCOME OF RS. 1,06,200/- WAS NOT REPORTED IN THE ORIGINAL RE TURN FILED U/S 139 OF THE ACT. IN LIGHT OF THESE UNDISPUTED FACTS, EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT WHICH HAS BEEN INVOKED IN THIS INSTANT CASE READS A S UNDER: EXPLANATION 5A WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTI CLE OR THING (THEREIN THIS EXPLANATION REFERRED TO ASSETS) AND T HE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILI ZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOU NTS OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRE SENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND , (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN D ECLARED THEREIN, OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SU CH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES ITA NO. 365/JP/14 SMT. SANGEETA KABRA VS. ACIT, CENTRAL CIRCLE, AJMER 5 OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SU B-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULAR S OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 3.1 THE LD. CIT(A) HAS GIVEN CLEAR FINDINGS AT PAGE 9 & 10 OF HIS ORDER THAT EACH OF THE CONDITIONS SPECIFIED IN EXPLANATION 5A IS FU LFILLED IN THE INSTANT CASE AND BEING DEEMING PROVISIONS FOR LEVY OF PENALTY IN CAS E OF SEARCH CASES, THE PENALTY IS CLEARLY ATTRACTED IN THE INSTANT CASE. THE RELEVANT FINDINGS OF LD. CIT(A) IS REPRODUCED AS UNDER: (IV) THIS EXPLANATION IS A NON-OBSTANTE CLAUSE AND IT IS A DEEMING PROVISION FOR THE PURPOSE OF IMPOSITION OF PENALTY U/S 271(1)(C) ONCE THE SPECIFIC CONDITIONS ARE FULFILLED. THUS NOTWITHSTANDING THAT INCOME FROM M EDICAL PROFESSION AND ITS APPLICATION IN INVESTMENT AND IN UNACCOUNTED EXPEND ITURE WAS DECLARED BY THE APPELLANT IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A, AND SUBSEQUENTLY REVISED, THE APPELLANT WOULD BE DEEMED TO HAVE CONC EALED HIS INCOME AS PER THE EXPLANATION 5A TO SECTION 271(1)(C), SINCE ALL THE THREE CONDITIONS ARE FULFILLED AS PER EXPLANATION 5A TO SECTION 271(1)(C) AS FOLLOWS: (A) THE SEARCH WAS CARRIED OUT ON 16.09.2009 AT T HE PREMISES OF APPELLANT I.E. AFTER 01.06.2007 SINCE WHEN THE DEEMING PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C). (B) THE RETURN OF INCOME FOR A.Y. 2007-08 WAS FI LED U/S 139(1) ON 10.10.2007 DECLARING INCOME OF RS. 5,36,710/- AND AGRICULTURA L INCOME OF RS. 90,936/-. THE ADDITIONAL INCOME OF RS. 1,06,200/- ON ACCOUNT OF U NDISCLOSED RECEIPT INCOME WAS NOT DECLARED IN THE ORIGINAL RETURN FILED U/S 139(1). (C) IT IS PERTINENT TO NOTE THAT EVIDENCE REGAR DING THE ABOVE UNDISCLOSED INCOME WAS GATHERED DURING THE COURSE OF SEARCH. T HE INCOME FROM THIS BUSINESS WAS NOT DISCLOSED IN THE RETURN FILED U/S 139(1). HOWEVER, THE DETAILS OF THIS INCOME WAS FILED ALONGWITH REVISED RETURN U/S 153A. MOREOVER, THE FACT OF THE UNDISCLOSED INCOME DURING THIS A.Y. WAS ADMITTE D BY THE AR OF THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ITA NO. 365/JP/14 SMT. SANGEETA KABRA VS. ACIT, CENTRAL CIRCLE, AJMER 6 THUS IT IS SEEN THAT THE APPELLANT THROUGH HIS AR HAS HIMSELF ADMITTED THAT DISCLOSURE OF INCOME WAS BEING MADE ON THE BASIS OF SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH. 3.2 WE FOUND FORCE IN THE ARGUMENTS OF THE LD. DR T HAT IN VIEW OF THE EXPLANATION 5A TO SECTION 271(1)(C) AND ALL THE CON DITIONS SPECIFIED THEREIN BEING SATISFIED IN THE INSTANT CASE, THE LEVY OF PENALTY IS CLEARLY APPLICABLE IN THE INSTANT CASE. 3.3 FURTHER WE HAVE GONE THROUGH THE DECISION OF HO NBLE DELHI HIGH COURT IN THE CASE OF S.A.S. PHARMACEUTICALS (ITA NO. 1058 OF 2009) DATED 08.04.2011 WHEREIN QUESTION FOR CONSIDERATION BEFORE THE HONB LE HIGH COURT WAS WHETHER THE ITAT WAS CORRECT IN LAW IN HOLDING THAT NO CONC EALMENT WAS MADE BY THE ASSESSEE THOUGH THE ASSESSEE HAD SURRENDERED THE AM OUNT OF RS. 88,14,676/- DURING THE SURVEY ON ACCOUNT OF DISCREPANCY FOUND I N CASH, STOCK AND DIFFERENCE IN RENOVATION. IN THAT CASE, A SURVEY WAS CARRIED OU T AT THE BUSINESS PREMISES AND GODOWN OF THE RESPONDENT ASSESSEE ON 06.01.2003 AND TIME LIMIT FOR FILING RETURN OF INCOME HAS NOT EXPIRED. SUBSEQUENTLY, THE I.T. RETURN WAS FILED BY THE ASSESSEE WHEREIN THE ASSESSEE DECLARED HIS INCOME INCLUDING THE INCOME SURRENDERED DURING THE COURSE OF SEARCH. FURTHER, IT IS NOTED FROM THE SAID RULING THAT REFERENCE TO EXPLANATION 5 & 5A TO SECTION 271(1)(C ) WAS DRAWN BY THE COUNSEL FOR ITA NO. 365/JP/14 SMT. SANGEETA KABRA VS. ACIT, CENTRAL CIRCLE, AJMER 7 THE RESPONDENT ASSESSEE TO SUPPORT HIS ARGUMENTS TH AT IN ABSENCE OF ANY DEEMING FICTION SIMILAR TO WHAT HAS BEEN PROVIDED U /S 5 & 5A OF THE ACT, IMPOSING OF PENALTY IN CASE OF SURVEY WHERE RETURN IS NOT DU E FOR FILING AND SUBSEQUENTLY, THE INCOME FOUND DURING THE SURVEY WAS DISCLOSED IN THE RETURN OF INCOME, THE PENALTY PROVISIONS OF SECTION 271(1)(C) OF THE ACT CANNOT BE INVOKED AS THE MANDATORY INGREDIENTS ARE NOT MET AT ALL. IN THAT CONTEXT, THE HONBLE COURT HAS HELD THAT THE FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE HAS TO BE SEEN AND DEPEND UPON INCOME TAX RETURN FILED BY THE ASSESSEE AND NOT OTHERWISE. ACCORDINGLY, WE ARE UNABLE TO FOLLOW TH E DECISION OF HONBLE DELHI HIGH COURT AS THE SAME HAS BEING RENDERED IN THE DI FFERENT FACTS AND CIRCUMSTANCES AND THE APPLICATION OF EXPLANATION 5A TO SECTION 271(1)(C) WAS NOT UNDER CONSIDERATION BEFORE THE HONBLE HIGH COURT. 3.4 IN LIGHT OF PROVISIONS OF EXPLANATION 5A TO SEC TION 271(1)(C) WHEREIN A DEEMING FICTION HAS BEEN CREATED FOR LEVY OF PENALT Y AND SATISFACTION OF REQUIRED CONDITIONS SPECIFIED THEREIN, WE ARE UNABLE TO ACCE DE THE REQUEST OF THE LD. AR TO INTERFERE WITH THE ORDER OF THE LD CIT(A) WHO HAS P ASSED A DETAILED AND WELL REASONED ORDER. HENCE THE LEVY OF PENALTY U/S 271( 1)(C) READ WITH EXPLANATION 5A AMOUNTING TO RS. 32,220/- IS HEREBY CONFIRMED. ITA NO. 365/JP/14 SMT. SANGEETA KABRA VS. ACIT, CENTRAL CIRCLE, AJMER 8 IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/02/2016 SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 04 / 02 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SMT. SANGEETA KABRA, BHILWARA 2. THE RESPONDENT- THE ACIT, CENTRAL CIRCLE, AJMER 3. THE CIT(A) CENTRAL, JAIPUR 4. THE CIT- CENTRAL, JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO.365 /JP/14) VKNS'KKUQLKJ@ BY ORDER, LGK;DIATHDKJ@ ASSISTANT. REGISTRAR. ITA NO. 365/JP/14 SMT. SANGEETA KABRA VS. ACIT, CENTRAL CIRCLE, AJMER 9 A SL. NO. DATE INITIAL 1 DATE OF DICTATION 2 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER 3 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S 4 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 6 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9 DATE OF DISPATCH OF THE ORDER