ITO, Ward 3(2), Pune V. Shri Sohanlal S. Vishnoi, Pune

ITA 366/PUN/2013

• Counselvise Citation: 36624514 RSA 2013
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-06-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 05-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Revised return
• Section: 143(3); 139(5); 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.366/PN/2013 ASSESSMENT YEAR : 2005-06 THE INCOME TAX OFFICER, WARD 3(2), PUNE. . APPELLANT VS. SHRI SOHANLAL S. VISHNOI, 215, GANESHKHIND ROAD, PUNE 411 016. PAN : AAJPV3299B . RESPONDENT DEPARTMENT BY : SHRI RAJESH DAMOR ASSESSEE BY : SHRI SUNIL GANOO DATE OF HEARING : 18-05-2015 DATE OF PRONOUNCEMENT : 20-05-2015 ORDER PER SUSHMA CHOWLA, JM : THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-II, PUNE DATED 28.09.2012 RELATING TO ASSESSMENT YEAR 2005-0 6 AGAINST ORDER PASSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT HOLDING THA T THE RETURN OF INCOME WAS FILED VOLUNTARILY WITHOUT APPRECIATING THAT THE REV ISED RETURN OF INCOME OFFERING ADDITIONAL INCOME OF RS.38,57,252/- WAS FILED ONLY AFTER DETECTION OF CONCEALMENT BY THE DEPARTMENT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT CONSIDERING THAT THE ADIT(LNV-1), PUNE IN HIS REPOR T HAD MENTIONED THAT THE ASSESSEE ON BEING EXPLAINED ABOUT THE MANIPULATIONS HAD AGREED TO PAY TAX ON THE SALE CONSIDERATION OF SHARES. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THAT, IN ANY CASE THE REVISED RETURN O F INCOME WAS FILED ON 20.04.2006 AFTER THE ISSUANCE OF SUMMONS U/S.131 ON 18.04.2006 WHEN THE CONCEALMENT HAD ALREADY BEEN DETECTED? ITA NO.366/PN/2013 2 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAIN ST THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE WAS AN INDIVIDUAL CARRYING ON THE PROPRIETARY BUSINESS OF CONSTRUCTIO N AND WAS ALSO A PROMOTER/DEVELOPER. THE ASSESSEE HAD DECLARED INCO ME FROM TRADING IN SHARES. IN THE RETURN OF INCOME FILED FOR THE YEAR UNDER CO NSIDERATION, THE ASSESSEE HAD DECLARED THE TOTAL INCOME OF RS.7,11,790/-, FILED O N 31.10.2005. THEREAFTER, THE ASSESSEE FILED REVISED RETURN OF INCOME ON 20.04.20 06 DECLARING TOTAL INCOME OF RS.45,69,038/-. THE ASSESSING OFFICER DURING THE A SSESSMENT PROCEEDINGS HAD RECEIVED INFORMATION FROM THE INVESTIGATION WING TH AT THE ASSESSEE HAD PURCHASED 71,500 SHARES OF M/S FAST TRACT ENTERTAIN MENT LTD. THROUGH STOCK BROKER M/S T.H. VAKIL SHARES AND SECURITY, MUMBAI F OR TOTAL CONSIDERATION OF RS.97,299/- ON 04.07.2003. THE ASSESSEE HAD SOLD T HE SAID SHARES THROUGH BROKER M/S VIJAY BHAGWANDAS & CO., MUMBAI I.E. 40,0 00 SHARES WERE SOLD ON 21.06.2004 AND 31,500 SHARES WERE SOLD ON 23.06.200 4 FOR CONSIDERATION OF RS.21,88,400/- AND RS.17,37,540/- RESPECTIVELY. TH E ASSESSEE HAD NOT DECLARED THE INCOME ARISING FROM THE SAID TRANSACTION IN THE ORIGINAL RETURN OF INCOME. HOWEVER, THE SAME WAS DECLARED IN THE REVISED RETUR N OF INCOME FILED ON 20.04.2006. THE ASSESSMENT WAS COMPLETED BY THE AS SESSING OFFICER UNDER SECTION 143(3) OF THE ACT AS PER THE REVISED RETURN OF INCOME. HOWEVER, THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. BEFORE THE ASSESSING OFFICER, DURING THE COUR SE OF PENALTY PROCEEDINGS, THE CLAIM OF THE ASSESSEE WAS THAT THE REVISED RETURN O F INCOME WAS FILED VOLUNTARILY AND BOTH THE RETURNS OF INCOME WERE WITHIN THE STAT UTORY LIMIT AS PROVIDED UNDER SECTION 139(1) AND SECTION 139(5) OF THE ACT. HOWE VER, THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND PLAC ING RELIANCE ON SERIES OF DECISIONS OBSERVED THAT FILING OF REVISED RETURN VO LUNTARILY SHOWING ADDITIONAL INCOME, WHICH REMAINED TO BE DISCLOSED IN THE ORIGI NAL RETURN OF INCOME DID NOT ABSOLVE THE ASSESSEE FROM LEVY OF PENALTY. THE ASS ESSING OFFICER HELD THAT THE ITA NO.366/PN/2013 3 ASSESSEE TO HAVE WILLFULLY CONCEALED THE INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME AND LEVIED PENALTY UNDER SECT ION 271(1)(C) OF THE ACT AT RS.13,17,509/-. 5. BEFORE THE CIT(A), THE PLEA OF THE ASSESSEE WAS THAT THE REVISED RETURN OF INCOME WAS FILED, BEFORE THE ASSESSING OFFICER HAVI NG STARTED ANY INVESTIGATION AND HENCE THE SAME WAS VOLUNTARILY FILED AND THERE WAS NO MERIT IN THE LEVY OF PENALTY. THE CIT(A) NOTED THAT SUMMONS WERE ISSUED TO THE ASSESSEE ON 18.04.2006 REQUIRING THE ASSESSEE TO APPEAR ON 31.0 5.2006 AND THE ASSESSEE FILED THE REVISED RETURN OF INCOME ON 20.04.2006. IN REPLY, THE EXPLANATION OF THE ASSESSEE WAS THAT THE ASSESSING OFFICER HAD NOT MEN TIONED THE DATE OF SERVICE OF SUMMONS AND THEREFORE THE REMAND REPORT DUE TO T HIS LACUNA COULD NOT BE CONSIDERED. THE CIT(A) NOTED THE FACT THAT THE ASS ESSEE HAD FURNISHED THE ORIGINAL RETURN OF INCOME AND REVISED RETURN OF INC OME WITHIN THE STATUTORY TIME AS PROVIDED IN SECTION 139(1) AND SECTION 139(5) OF TH E ACT RESPECTIVELY. THE PLEA OF THE ASSESSEE BEFORE THE CIT(A) WAS THAT THE RETURN OF INCOME WAS REVISED DUE TO MISTAKE IN RESPECT OF PROFIT/INCOME ON SHARES AND T HE ADDITIONAL INCOME AMOUNTING TO RS.38,57,252/- ON SALE OF SHARES WAS D ECLARED AND THE TAXES DUE THEREON WERE PAID ENTIRELY. THE FACTUAL FINDINGS O F THE CIT(A) IN THIS REGARD VIDE PARA 3.7 ARE AS UNDER :- 3.7 THE APPELLANT HAS PLACED RELIANCE ON THE DECIS ION OF THE PUNE ITAT IN THE CASE OF ACIT VS DILIP P SONIGARA (SUPRA ) AND THE CASE OF ASHOK S. SHAW VS DCIT (SUPRA) DATED 27-4-2012 WHEREIN THE IT AT PUNE HAS DELETED THE PENALTY OF THE APPELLANT AND HAS HELD THAT THE ASSESSEE HAD FILED THE REVISED RETURN SUO MOTO WITHIN THE PERIOD ALLOWED B Y SEC. 139(1). THE BENCH WHILE ARRIVING AT ITS CONCLUSION IN THE CASE OF ASH OK S. SHAW MENTIONED ABOVE HAS HELD AS UNDER: 'FROM THE ORDERS OF THE AUTHORITIES BELOW APART FRO M A GENERALIZED OBSERVATION THAT THE INVESTIGATIONS WERE BEING CARR IED OUT WITH REGARD TO THE PURCHASE AND SALE OF SHARES OF CERTAIN COMPA NIES REFERRED TO AS 'PENNY STOCK' SHARES, THERE IS NO SPECIFIC CASE MADE OUT THAT ANY WRONG DOING ON THE PART OF THE ASSESSEE WAS IN THE CONCLUSIVE KNOWLEDGE OF THE ASSESSING OFFICER PRIOR TO THE ASS ESSEE REVISING ITS RETURN ON 9.6.2006. EVEN IN THE ENQUIRIES THAT WERE BEING UNDERTAKEN BY THE INVESTIGATION WING WITH THE ASSESSEE, AS EME RGING FROM ASSESSEES COMMUNICATION DATED 9-6-2006, THE ONLY AS PECT THAT IS BORNE OUT IS THAT CERTAIN MAL PRACTICES WERE BEING CARRIED OUT BY THE ITA NO.366/PN/2013 4 BROKERS WHEREAS ASSESSEE ASSERTED UNDERTAKING OF TR ANSACTIONS IN GOOD FAITH, NOTWITHSTANDING TO BUY PEACE OF MIND AN D TO AVOID PROLONGED LITIGATIONS, THE ASSESSEE CHOSE TO DECLAR E SUCH INCOME AS ADDITIONAL INCOME BY REVISING THE RETURN OF INCOME ON 9-6-2006. IN FACT, IN THE CASE OF SHRI DILIP P SONIGARA (SUPRA) WHEREIN ALSO THE ASSESSEE HAD INITIALLY DECLARED LONG TERM CAPITAL G AIN ON SALE OF SHARES AND WHICH WAS LATER DECLARED AS ADDITIONAL I NCOME IN THE REVISED RETURN, PENALTY WAS FOUND UNTENABLE BECAUSE THE RETURN WAS REVISED EVEN BEFORE ISSUANCE OF NOTICES UNDER SECTI ON 148 OR EVEN BEFORE THE COMMUNICATION WAS RECEIVED FROM THE INVE STIGATION WING OF THE DEPARTMENT THAT THE, ASSESSEE HAD BOOKED NON -GENUINE CAPITAL GAINS. QUITE EARLY, IN THE PRESENT CASE THERE IS NO MATERIAL TO SHOW THAT ANY COMMUNICATION AT ALL HAS BEEN RECEIVED BY THE ASSESSING OFFICER FROM THE INVESTIGATION WING OF THE DEPARTME NT INFORMING ABOUT BOOKING OF NON-GENUINE CAPITAL GAIN BY THE ASSESSEE QUA THE SALE OF SHARES IN QUESTION.' THEREFORE, CONSIDERING THE ENTIRE FACTS AND CIRCUMS TANCES OF THE CASE AND ALSO THE RATIO OF THE JUDICIAL DECISIONS, THE PENALTY LE VIED BY THE A.O. U/S 271 (1)(C) IS NOT LEVIABLE AND IS LIABLE TO BE DELETED. 6. THE CIT(A) THEREAFTER PLACED RELIANCE ON THE RAT IO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN ACIT VS. DILIP P. SONIGARA IN ITA NO.266/PN/2009 RELATING TO ASSESSMENT YEAR 2003-04, ORDER DATED 31 .08.2010 AND SHRI ASHOK S. SHAW VS. DCIT IN ITA NO.28/PN/2011 RELATING TO ASSE SSMENT YEAR 2005-06, ORDER DATED 27.04.2012 AND HELD THAT NO PENALTY UND ER SECTION 271(1)(C) OF THE ACT IS LEVAIABLE. 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF TH E CIT(A). 8. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 9. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE PLACED RELIANCE ON THE DECISIONS OF THE PUNE BENCH OF THE TRIBUNAL IN ACIT VS. DILIP P. SONIGARA IN ITA NO.266/PN/2009 RELATING TO ASSESSMENT YEAR 2003 -04, ORDER DATED 31.08.2010 AND SHRI ASHOK S. SHAW VS. DCIT IN ITA N O.28/PN/2011 RELATING TO ASSESSMENT YEAR 2005-06, ORDER DATED 27.04.2012 AND POINTED OUT THAT THE ISSUE IS SQUARELY COVERED BY THE RATIOS LAID DOWN BY THE TRIBUNAL. ITA NO.366/PN/2013 5 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD ORIGINALLY FI LED THE RETURN OF INCOME IN WHICH THE INCOME FROM CAPITAL GAIN WAS NOT DECLARED . THEREAFTER, THE ASSESSEE FILED THE REVISED RETURN OF INCOME DECLARING THE SA ID CAPITAL GAINS AND OFFERED ADDITIONAL INCOME OF RS.38,57,252/-. SIMULTANEOUSL Y, THE ASSESSING OFFICER HAD RECEIVED INFORMATION FROM THE INVESTIGATION WING WI TH REGARD TO THE SALE OF THE SAID PENNY STOCK BY THE ASSESSEE. THE CLAIM OF THE ASSESSEE WAS THAT THE INCOME WAS OFFERED BY WAY OF REVISED RETURN OF INCO ME PRIOR TO ANY INVESTIGATION HAVING STARTED AGAINST THE ASSESSEE AND IN SUCH CIR CUMSTANCES, WHERE THE ASSESSEE HAD DECLARED THE ADDITIONAL INCOME ON ITS OWN MOTION, NO PENALTY IS LEVIABLE UNDER SECTION 271(1)(C) OF THE ACT. 11. WE FIND THAT SIMILAR ISSUE OF LEVY OF PENALTY A ROSE BEFORE THE TRIBUNAL IN SHRI ASHOK S. SHAW VS. DCIT (SUPRA) WHICH, IN TURN, RELYING ON RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN ACIT VS. DILIP P. SONIGARA (SUPRA) DELETED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT H OLDING AS UNDER :- 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN THIS CASE, ORIGINALLY THE ASSESSEE FILED A RETURN OF INCOME ON 31.10.2005 WHICH INCLUDED LONG TERM CAPITAL GAIN ON SALE OF SHARES OF THE CON CERN, NAMELY, FAST TRACK ENTERTAINMENT LTD OF RS 10,37,450/-, WHICH WAS CLAI MED AS EXEMPT UNDER SECTION 54EC OF THE ACT. SUBSEQUENTLY, A REVISED RETURN WAS FILED ON 9.6.2006, WHEREIN THE INCOME WAS ENHANCED TO RS 30,82,660/- THEREBY D ECLARING AN ADDITIONAL INCOME OF RS 10,37,450/- N ACCOUNT OF GAIN ON SALE OF SUCH SHARES OF FAST TRACK ENTERTAINMENT LTD. AS INCOME FROM OTHER SOURCES. TH E SAID INCOME WAS ASSESSED AS SUCH UNDER SECTION 143(3) OF THE ACT AN D A FURTHER ADDITION OF RS 26,000/- WAS MADE ATTRIBUTING IT TO THE UNEXPLAINED COMMISSION EXPENSES INCURRED BY THE ASSESSEE FOR OBTAINING INCOME ON LO NG TERM CAPITAL GAIN SURREPTITIOUSLY. HENCE TOTAL INCOME WAS DETERMINED AT RS 31,73,290/-IN THE ASSESSMENT FINALIZED UNDER SECTION 143(3) OF THE AC T ON 22.10.2007. THE JUSTIFICATION MADE OUT BY THE ASSESSING OFFICER OR TREATING SUCH INCOME AS FALLING WITHIN THE MEANING OF SECTION 271(1)(C) IS TO THE E FFECT THAT THE REVISED RETURN ON 9.6.2006 WAS FILED BY THE ASSESSEE ONLY AFTER DETEC TION OF SUCH CONCEALMENT BY THE DEPARTMENT AND, THEREFORE, THE RETURN OF INCOME FILED ORIGINALLY ON 30.10.2005 NOT INCLUDING THE ADDITIONAL INCOME AMOUNTED TO CON CEALMENT OF INCOME. IN ORDER TO APPRECIATE THE AFORESAID, WE FIND IT APPROPRIATE TO REFER TO THE ASSESSEES COMMUNICATION DATED 9.6.2006 ADDRESSED TO THE INVES TIGATION WING WHICH BRINGS OUT THE BACKGROUND AND THE MANNER IN WHICH THE REVI SED RETURN WAS FILED BY THE ASSESSEE, WHICH IS BEING REPRODUCED AS UNDER: FROM ASHOK S SHAW, 368 NANA PETH, ITA NO.366/PN/2013 6 PUNE 411 002 DT 09/06/2006 TO JT. DIRECTOR OF INCOME-TAX (INV)(OSD), AAYKAR BHAWAN, 12, SADHU VASWANI ROAD, PUNE 411 001 REF : YOUR SUMMONS U/S 131 OF I.T ACT, DT 17.4.2006 AND SHOW CAUSE NOTICE DT. 31.5.2006 MADAM, AS PER YOUR ABOVE REFERRED SUMMONS CALLED ON 25.4.2 006, FOR ATTENDANCE AND SUBMISSION OF INFORMATION, DOCUMENTS REQUIRED B Y YOU, I HAVE ATTENDED TO YOUR OFFICE ON 25.4.2006. I HAVE ALSO T OLD YOU REGARDING VOLUNTARILY FILING OF REVISED RETURN OF INCOME IN R ESPECT OF MY SHARE INCOME FOR AY 2005-06. REGARDING YOUR SHOW CAUSE NOTICE DT 31.5.2006, I HAVE DEPOSITED THE DUE TAXES, BUT CHALLAN FROM THE BANK RECEIVED LATE HENCE COULD NOT PRODUCE BEFORE YOU THE DETAILS OF PAYMENT AND RETURNS COPY, HENCE YOUR HONOUR REQUESTED TO CONDONE THE DELAY AN D DROP THE PENALTY PROCEEDINGS. I HAVE GIVEN TO UNDERSTAND THAT CERTAIN MAL PRACTIC ES ARE CARRIED BY THE BROKERS WHILE ISSUING CONTRACT NOTES, BILLS ETC. IN MY TRANSACTIONS OF SHARES. IN THIS REGARDS, I WOULD LIKE TO STATE THAT , I HAVE CARRIED OUT THE TRANSACTIONS IN GOOD FAITH FOR WHICH I HAVE GOT THE AL LEGAL DOCUMENTS RECEIVED FROM THE BROKER. IN SPITE OF HAVING ALL REQUISITE LEGAL DOCUMENTATIO N IN RESPECT OF MY SHARE TRANSACTION OF FAST TRACK ENT. SHARES. I PREFER TO PAY FULL TAX ON THE MY THIS SHARE TRANSACTION IN ORER TO DISCHARGE MY MORA L RESPONSIBILITY AFTER HAVING BEEN EXPLAINED BY YOU HONOUR AND IN ORDER TO BUY A PEACE OF MIND AND IN ORDER TO AVOID PROLONGED LITIGATION AND PROC EDURAL HASSLES. I WISH TO FURTHER SUBMIT THE FOLLOWING FURTHER ADDITIONAL INF ORMATION/DOCUMENTS. 1. BRIEF ABOUT ORIGINAL RETURN OF INCOME AND REVISE D RETURN OF INCOME. I HAVE ALREADY SUBMITTED MY ORIGINAL RETURN OF INCO ME FOR THE AY 2005-06 DECLARING HE TOTAL INCOME OF RS 2015210/ - VIDE ACK. NO. 0202000546 DT. 31.10.2005, WHICH INCLUDES LONG TERM CAPITAL GAIN OF RS 1037450/-, WHICH WAS SHOWN EXEMP TED U/S 54, BEING THE INVESTMENT IN BONDS. NOW I HAVE VOLUNTARILY FILED MY EVISD RETURN OF INC OME FORT AY 2005-06, DECLARING THE TOTAL INCOME RS 3082660/-. A ND ACCORDINGLY I HAVE VOLUNTARILY PAID THE INCOME TAX ALONG WITH INTEREST U/S 234 A/B/C OF THE IT ACT. REVISED RETUR N FILED VIDE ACK. NO 0202000034 DT 9.6.2006. COPY OF ORIGINAL RE TURN AND REVISED RETURN IS ENCLOSED HEREWITH. 2. BRIEF ABOUT THE SHARES PURCHASED DURING THE PERIOD FROM 1999-2000 TO TILL DATE I HAV E PURCHASED THE SHARES OF COMPANIES IN MYSELF. THE DETAILS OF P URCHASES AND SALES OF SHARES ARE ENCLOSED HEREWITH. 3. DETAILS OF NAME OF SHARES, QTY. PURCHASE PRICWE, NAME OF COMPANY. I AM ENCLOSING HEREWITH THE DETAILS CHART OF TRANSA CTION OF SHARES WITH THE COMPANY, NAME, QUANTITY, PURCHASE P RICE, SALES PRICE ETC. ITA NO.366/PN/2013 7 4. NAME AND ADDRESS OF BROKER/SUB-BROKER DURING THE ABOVE PERIOD I HAVE PURCHASED THE SHARES FROM THE SHARE BROKERS WHICH NAME, ADDRESS HAVE SHOWN THE EN CLOSED CHART. DETAILS OF CONTRACT NOTE, BILLS ISSUED BY TH E BROKER ARE ENCLOSED HEREWITH. 5. SOURCE AND MODE OF PAYMENT I AM ASSESSED TO INCOME TAX AND FILING MY INCOME TA X RETURNS REGULARLY FROM LAST MANY YEARS. I HAVE INVESTED THE SHARES OUT OF MY WITHDRAWALS FROM BUSINESS INCOME. THE MODE OF PAYMENT IS BY CASH/CHEQUE. 6. CLARIFICATION ABOUT PHYSICAL DELIVERY OF SHARES TAKEN. I HAD TAKEN THE DELIVERY OF THE PART OF SHARES IN P HYSICAL MODE AND PART OF SHARES THROUGH DMAT ACCOUNT. 7. DETAILS OF DMAT ACCUNT A) NAME OF ACCOUNT/A/C NO 18777638 B) NAME OF PARTICIPANT STOCK HOLDING CORPORATION OF INDIA LTD. 8. I AM ENCLOSING HEREWITH THE XEROX COPIES OF INCO ME TAX RETURNS FILED ALONG WITH ALL ANNEXURES/ENCLOSURES. LOOKING TO THE ABOVE FACTS & CIRCUMSTANCES AND IN V IEW OF VOLUNTARILY DISCLOSURE OF INCOME, I REQUEST YOUR HONOUR. KINDLY GRANT ME IMMUNITY FROM THE PENALTY/PROSECUTION OF THE I. T. ACT. KINDLY ACKNOWLEDGE & DO THE NEEDFUL. THANKING YOU, YOURS FAITHFULLY, SD/- (ASHOK S SHAW) ENCL: AS ABOVE FROM THIS COMMUNICATION, IT APPEARS THAT CERTAIN E NQUIRIES WERE BEING CARRIED OUT BY THE INVESTIGATION WING OF THE DEPARTMENT WIT H REGARD TO CERTAIN MAL PRACTICES CARRIED OUT BY THE BROKERS WHILE ISSUING CONTRACT NOTES/BILLS, ETC., IN THE CASE OF DEALINGS OF THE SHARES OF M/S FAST TRACK E NTERTAINMENT IN WHICH THE ASSESSEE HAD ALSO DEALT WITH. THE ASSESSEE ASSERTED IN THIS COMMUNICATION THAT HE HAD CARRIED OUT THE TRANSACTIONS IN GOOD FAITH AND FOR WHICH HE HAD ALL LEGAL DOCUMENTS RECEIVED FROM THE BROKER. THEREAFTER, IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT IN ORDER TO BUY PEACE OF MIND AND IN ORDER TO AVOID PROLONGED LITIGATION AND PROCEDURAL HASSLES, HE PREFERRED TO PAY FULL TAX ON THE SHARE TRANSACTION UNDERTAKEN BY HIM IN RESPECT OF THE SHA RES OF M/S FAST TRACK ENTERTAINMENT LTD. APART THEREFROM, IT HAS BEEN ASS ERTED THAT THE ASSESSEE HAD PURCHASED SHARES OF VARIOUS COMPANIES FROM 1999-200 0 AND GAVE DETAILS THEREOF. THE DETAILS OF THE NAMES AND ADDRESSES OF THE BROKERS WERE ALSO PROVIDED. THE SOURCE AND MODE OF PAYMENT WITH REFE RENCE TO INCOME-TAX RETURNS FOR THE LAST YEARS WAS ALSO PROVIDED. IN THESE CIRC UMSTANCES, THE ASSESSEE COMMUNICATED THAT THE DISCLOSURE SOUGHT TO BE MADE IN THE RETURN WAS VOLUNTARY AND ALSO STATED THAT HE BE GRANTED IMMUNITY FROM PE NALTY/PROSECUTION. THE POINT TO BE APPRECIATED IS AS TO WHETHER THE ACT OF THE A SSESSEE IN DECLARING TOTAL INCOME ON ACCOUNT OF SALE OF THE SHARES OF M/S FAST TRACK ENTERTAINMENT LTD. WAS IN GOOD FAITH. IN THIS REGARD, THE HONBLE BOMB AY HIGH COURT IN THE CASE OF LAXMAN (SUPRA) REFERRED TO THE MEANING OF THE WORD GOOD FAITH AS DEFINED UNDER SECTION 2(22) OF THE GENERAL CLAUSES ACT, 1897 AND STATED THAT IN ORDINARY PARLANCE, AN ACT DONE IN GOOD FAITH MEANS AN ACT DO NE HONESTLY EVEN IF IT IS ITA NO.366/PN/2013 8 TAINTED WITH NEGLIGENCE OR MISTAKE. AS PER THE HON BLE HIGH COURT, ALL THAT IS REQUIRED IS THAT THE DISCLOSURE OF INCOME MUST BE F ULL AND TRUE ACCORDING TO THE HONEST BELIEF OF THE ASSESSEE. 6. FROM THE ORDERS OF THE AUTHORITIES BELOW, APART FROM A GENERALIZED OBSERVATION THAT THE INVESTIGATIONS WERE BEING CARR IED OUT WITH REGARD TO THE PURCHASE AND SALE OF SHARES OF CERTAIN COMPANIES RE FERRED TO AS PENNY STOCK SHARES, THERE IS NO SPECIFIC CASE MADE OUT THAT ANY WRONG DOING ON THE PART OF THE ASSESSEE WAS IN THE CONCLUSIVE KNOWLEDGE OF THE ASSESSING OFFICER PRIOR TO THE ASSESSEE REVISING ITS RETURN ON 9.6.2006. EVEN IN THE ENQUIRIES THAT WERE BEING UNDERTAKEN BY THE INVESTIGATION WING WITH THE ASSESSEE AS EMERGING FROM ASSESSEES COMMUNICATION DATED 9.6.2006, THE ONLY A SPECT THAT IS BORNE OUT IS CERTAIN MAL PRACTICES WERE BEING CARRIED OUT BY THE BROKERS WHEREAS ASSESSEE ASSERTED UNDERTAKING OF TRANSACTIONS IN GOOD FAITH, NOTWITHSTANDING TO BUY PEACE OF MIND AND TO AVOID PROLONGED LITIGATIONS, THE ASS ESSEE CHOSE TO DECLARE SUCH INCOME AS ADDITIONAL INCOME BY REVISING THE RETURN OF INCOME ON 9.6.2006. IN FACT, IN THE CASE OF SHRI DILIP P SONIGARA (SUPRA) WHEREI N ALSO THE ASSESSEE HAD INITIALLY DECLARED LONG TERM CAPITAL GAIN ON SALE O F SHARES WHICH WAS DECLARED AS ADDITIONAL INCOME IN THE REVISED RETURN, WITH RESPE CT TO PENNY STOCK SHARES, PENALTY WAS FOUND UNTENABLE BECAUSE THE RETURN WAS REVISED EVEN BEFORE ISSUANCE OF NOTICES UNDER SECTION 148 OR EVEN BEFOR E THE COMMUNICATION WAS RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTM ENT THAT THE ASSESSEE HAD BOOKED NON-GENUINE CAPITAL GAINS. QUITE CLEARLY, IN THE PRESENT CASE THERE IS NO MATERIAL TO SHOW THAT ANY COMMUNICATION AT ALL HAS BEEN RECEIVED BY THE ASSESSING OFFICER FROM THE INVESTIGATION WING OF TH E DEPARTMENT INFORMING ABOUT BOOKING OF NON-GENUINE CAPITAL GAIN BY THE ASSESSEE QUA SALE OF SHARES IN QUESTION. IN ANY CASE, THE PARITY OF REASONING CONS IDERED BY THE TRIBUNAL IN THE CASE OF SHRI DILIP P SONIGARA (SUPRA) CAN BE UNDERS TOOD IN THE FOLLOWING DISCUSSION: 7. HAVING GONE THROUGH THE ORDERS OF THE LOWER AUT HORITIES, WE FIND THAT CERTAIN IMPORTANT FACTS OF THE CASE HAVE NOT B EEN DISPUTED. THESE FACTS ARE THAT THE ASSESSEE HAD CORRECTLY DISCUSSED HIS INCOME AND PAID TAXES DUE THEREON BEFORE ISSUANCE OF NOTICE U/S 148 OF THE ACT BY THE ASSESSEE OR PRIOR TO THE DATE 17.7.2006 O WHICH A L ETTER WAS WRITTEN BY THE INVESTIGATION WING OF THE INCOME-TAX DEPARTMENT TO THE AO., THAT THE ASSESSEE HAD BOOKED ON-GENUINE LONG TERM CAPITAL GA IN FOR THE RELEVANT YEAR ON ACCOUNT OF SALE OF SHARES OF DATABASE FINAN CE LTD. IN VIEW OF THESE ADMITTED MATERIAL FACTS, WE ARE OF THE OPINIO N THAT THERE IS NO REASON TO INTERFERE WITH THE FINDING OF THE LD CIT( A) WHILE DELETING THE PENALTY THAT THERE WAS NO CONCEALMENT OF PARTICULAR S OF INCOME OR FURNISHING OF INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE TOWARDS THE ADDITION TO LEVY PENALTY U/S 271(1)(C) THEREUPON. THIS MATERIAL FACT HAS ALSO NOT BEEN REBUTTED BY THE DEPARTMENT A S NOTED BY THE LD CIT(A) THAT THE AO HAS DROPPED PENALTY PROCEEDINGS INITIATED U/S 271(1)(C) OF THE ACT FOR AY 2004-05 ON SIMILAR FACT S. THE FIRST APPELLATE ORDER IN QUESTION IS THUS UPHELD. THE GROUNDS ARE A CCORDINGLY REJECTED. ON THE BASIS OF THE AFORESAID, IF SUCH REASONING IS APPLIED TO THE FACTS OF THE PRESENT CASE, IN OUR VIEW, THE REVISED RETURN OF IN COME OF THE ASSESSEE WOULD NOT LEAD TO AN INFERENCE THAT THE ORIGINAL RETURN FILED BY THE ASSESSEE ON 30.10.2005 CONTAINED A CONCEALED INCOME ON ACCOUNT OF SALE OF SHARES, ESPECIALLY IN A SITUATION WHERE INCOME SO DECLARED IN THE REVISED R ETURN HAS BEEN ACCEPTED AS SUCH IN THE ASSESSMENT FINALIZED UNDER SECTION 143( 3) OF THE ACT. THE DECISION OF THE PUNE BENCH IN THE CASE OF SHRI DILIP P SONIGARA (SUPRA) HAS BEEN DISTINGUISHED BY THE COMMISSIONER OF INCOME-TAX (AP PEALS) AND WHICH SOUGHT TO BE SUPPORTED BY THE REVENUE ON THE GROUND THAT IN T HE PRESENT CASE ENQUIRIES WERE BEING CARRIED OUT BY THE INVESTIGATION WING PR IOR TO THE FILING OF REVISED ITA NO.366/PN/2013 9 RETURN BY THE ASSESSEE AND, THEREFORE FILING OF THE REVISED RETURN, THOUGH SUO MOTU, CANNOT B CONSIDERED AS FILED PRIOR TO DETECTI ON BY THE REVENUE. IN OUR VIEW, ABSENCE OF THE ENQUIRY BY THE INVESTIGATION WING IS NOT CONCLUSIVE OF THE FACT THAT ON THE DATE OF FILING OF THE REVISED RETURN, THE CO NCEALMENT LAY DETECTED BY THE DEPARTMENT. THUS, IN OUR CONSIDERED OPINION, THE RE ASONING ADOPTED BY OUR CO- ORDINATE BENCH IN THE CASE OF SHRI DILIP P SONIGARA (SUPRA) IS EQUALLY APPLICABLE IN THE PRESENT CASE TOO. 7. CONSIDERING THE ENTIRETY OF CIRCUMSTANCES AND TH E FACTS OF THE INSTANT CASE, WE HOLD THAT THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN THE INSTANT CASE IS UNWARRANTED AND IS LIABLE TO BE SET ASIDE. WE, THEREFORE, SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX ( APPEALS) AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE PENALTY IMPOSED U NDER SECTION 271(1)(C) OF THE ACT. 12. THE ISSUE ARISING BEFORE US IS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL AND FOLLOWING THE SAME PARITY OF REASONING WHERE EVEN I F THE SOME ENQUIRIES WERE INITIATED BY THE INVESTIGATION WING, WHICH WERE NOT CONCLUSIVE OF THE FACT THAT ON THE DATE OF FILING THE REVISED RETURN, THE CONCEALM ENT LAY DETECTED BY THE DEPARTMENT, THERE IS NO MERIT IN THE LEVY OF PENALT Y UNDER SECTION 271(1)(C) OF THE ACT. ACCORDINGLY, UPHOLDING THE ORDER OF THE CIT(A ), WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 20 TH DAY OF MAY, 2015. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 20 TH MAY, 2015 SUJEET COPY OF THE ORDER IS FORWARDED TO: - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE