CHANDAN DODEJA, MUMBAI V. ACIT WD 21(3), MUMBAI

ITA 3734/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1331 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2016
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Keywords: Earning of tax free income; Source of fund; Revised return
• Section: 139(5); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 3734 / MUM/20 1 6 ( ASSESSMENT YEAR : 2006 - 07 ) CHANDAN DODEJA 501, SOMERSET BUILDING, PLOT BEARING CTS NO.15C POWAI, HIRANANDANI, MUMBAI 400 072 VS. ACIT WD 21(3 ) PAN/GIR NO. AFHPD2986C APPELLANT ) .. RESPONDENT ) ITA NO. 3735/ MUM/20 16 ( ASSESSMENT YEAR : 2006 - 07 ) UMESH DODEJA KARTA UMESH DODEJA HUF, 1303, 13 TH FLOOR, C WING, LAKE CASTLE BUILDING, HIRANANDANI POWAI, MUMBAI 400 076 VS. ACIT W D 21(3)(2) PAN/GIR NO. AAAHU3155N APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI BHUPENDRA SHAH ALONGWITH SHRI BHUPENDRA G. FAFADIA REVENUE BY MS. BEENA SANTOSH DATE OF HEARING 18 / 04 /201 7 DATE OF PRONOUNCEME NT 18 / 04 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A)38, MUMBAI DATED 21/03/2016 FOR THE A.Y. 2006 - 07, IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE IT ACT. 2. AT THE OUTSET, LEARNED AR PLACED ON RECORD THE ORDER OF THE TRIBUNAL IN CASE OF OTHER FAMILY MEMBERS WHEREIN SIMILA R PENALTY IMPOSED WAS ITA NO. 3734/MUM/2016 CHNDAN DODEJA ITA NO.3735/MUM/2016 UMESH DUDEJA KARTA OF UMESH DODEJA HUF 2 DELETED BY THE TRIBUNAL VIDE ITS ORDER DATED 17/02/2017 IN CASE OF MURLI DUDEJA IN ITA NO.3847 & 3848/MUM/2016. 3. RIVAL CONTENTIONS HAVE BEEN H EARD AND RECORD PERUSED. 4. FACTS IN BRIEF ARE THAT INCOME TAX DEPARTMENT RECEIVED INFORMATION REGARDING THE CASH DEPOSITS IN TH E BANK ACCOUNTS OF THE ASSESS E E AND HIS FAMILY MEMBERS. AS PER THE INFORMATION, TH E AO OBSERVED THAT THE ASSESSEE CHANDAN DODEJA HAS DE POSITED CASH AMOUNTING TO RS.7,00 ,000/- IN H IS BANK ACCOUNT AT UNION BANK OF INDIA, ULHASNAGAR WHICH WAS NOT DISCLOSED IN HIS ORIGINAL RETURN OF INCOME. HOWEVER, THE ASSESSEE ON GETTING THE INFORMATION FROM HIS OWN SOURCES FILED A REVISED RETURN ON 1 4 .03.2011 WHEREIN HE OFFERED INTER ALIA CASH DEPOSITS OF RS.7,00,000/ - AS INCOME WHEREAS ON RECEIPT OF THE ABOVE I NFORMATION, THE AO ISSUED NOTICE UNDER SECTION 148 ON 27.04.2012 AND ASSESSMENT WAS COMPLETED ON 31 .10.2013 DETERMINING THE TOTAL INCOME AT R S .39,11,690/ - . THE ASSESSEE HAD CLAIMED THAT THE MONEY IN CASH WAS RECEIVED ON DIVISION OF F AMILY BUSINESS AMONGST FAMILY MEMBERS AND IN VIEW OF THE ADVICE OF HIS ADVOCATE CUM T AX CONSULTANT, THE SAME WAS NOT DISCLOSED IN HIS ORIGINAL RETURN OF INCOME. THE AO OBSERVED THAT THE ARGUMENT OF THE ASSESSEE THAT THE AMOUNT OF CASH DEPOSIT WAS NOT OFFERED FOR TAXATION IN VIEW OF THE ADVICE OF HIS ADVOCATE AND TAX CONSULTANT WAS WITHOUT ANY EVIDENCE AND THAT THE AFFIDAVIT FILED BY THE ASSESSEE STATING SO WAS ONLY S ELF - SERVING AS NO AFFIDAVIT FROM THE ADVOCATE OR TAX CONSULTANT WAS FILED. IT WAS OBSERVED THAT NO CONFIRMATIONS OR COPY OF ACCOUNTS WERE FILED ITA NO. 3734/MUM/2016 CHNDAN DODEJA ITA NO.3735/MUM/2016 UMESH DUDEJA KARTA OF UMESH DODEJA HUF 3 SHOWING RECEIPT OF SUCH AMOUNT IN CASH AND THE AMOUNT WAS SIMPLY MENTIONED AS 'INCOME DECLARED' IN COMPUTATION OF INCOME FILED ALONGWITH REVISED RETURN. THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE REASONS SHOWN BY HIM FOR NOT DECLARING THE INCOME REPRESENTING THE CASH DEPOSIT OF RS.7, 00,000 / - IN HIS UNION B ANK ACCOUNT IN HIS ORIGINAL RETURN OF INCOME. 5. PENALTY S O IMPOSED BY AO IN RESPECT OF ADDITION OF RS.7,00,000/ - WAS CONFIRMED BY THE CIT(A) AND ASSESSEE IS IN FURTHER APPEAL BEFORE US. 6. I HAD GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE ORDER OF THE TRIBUNAL PASSED IN THE CASE OF MURLI DUD EJA IN ITA NO.3847 & 3848/MUM/2016 DATED 17/02/2017, OTHER FAMILY MEMBERS WHEREIN UNDER SIMILAR FACTS AND CIRCUMSTANCES, TRIBUNAL HAVE DELETED THE PENALTY AFTER OBSERVING AS UNDER: - 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND ALSO PERUSED THE MATERIAL AVAI LABLE ON RECORD AND CASE LAW'S RELIED UPON BY THE RIVAL PARTIES. WE HAVE OBSERVED THAT THE ASSESSEE FILED ORIGINAL RETURN OF INCOME ON 9TH AUGUST, 2005. THE ASSESSEE HELD BANK ACCOUNT WITH UNION BANK OF INDIA, SHAHAD, ULHASNAGAR IN WHICH ASSESSEE HAD DEPOS ITED AN AMOUNT OF RS. 1.5 LACS IN CASH WHICH WAS NOT DECLARED AND DISCLOSED IN THE RETURN OF INCOME ORIGINALLY FILED WITH THE REVENUE ON 09 - 08 - 2005. IT IS THE CONTENTION OF THE ASSESSEE THAT HE RELIED ON THE EXPERT ADVISE OF HIS TAX - CONSULTANT WHO ADVISED HIM THAT THE SAID AMOUNT RECEIVED WAS NOT TAXABLE BEING HIS SHARE IN PROFITS AND INVESTMENT IN DISCONTINUED FAMILY BUSINESS OF PROPERTIES ON REALIZATION OF FUNDS INVESTED IN THE PROPERTIES ON FAMILY SEPARATION . THE ASSESSEE FILED SO CALLED REVISED RETURN OF INCOME ON 28TH FEBRUARY, 2011 WHEREIN SAID CASH DEPOSIT OF RS.1.50 LACS IN UNION BANK OF INDIA, SHAHAD WAS DULY INCLUDED AS INCOME ALTHOUGH THE PRESCRIBED TIME LIMIT FOR FILING REVISED RETURN OF INCOME AS PRESCRIBED U/S 139(5) OF THE ACT HAD LAPSED LONG BACK ON 31 - 03 - 2007. THE SAID SO CALLED REVISED RETURN OF INCOME WAS ALSO NOT FILED BY THE ASSESSEE WITH JURISDICTIONAL AO BUT WITH THE ITO, KALYAN , BUT SAID SO CALLED REVISED RETURN OF INCOME WAS ADMITTEDLY FILED PRIOR TO ISSUANCE OF SEPARATE NOTICE'S U/ S 148 OF THE ACT BY ITO, KALYAN AND AS WELL BY THE JURISDICTIONAL AO WHICH REMAINED UNCONTROVERTED AND IS AN ADMITTED POSITION BETWEEN THE RIVAL PARTIES AS NOTICES U/S 148 OF THE ACT WAS ISSUED BY THE ITO, KALYAN AS WELL JURISDICTIONAL AO ONLY IN THE MONTH OF MARCH 2012 WHILE THE SO CALLED REVISED ITA NO. 3734/MUM/2016 CHNDAN DODEJA ITA NO.3735/MUM/2016 UMESH DUDEJA KARTA OF UMESH DODEJA HUF 4 RETURN OF INCOME WAS FILED EARLIER ON 28 - 02 - 2011. IT IS THE SAY OF THE REVENUE THAT TAX EVASION PETITION WAS FILED AGAINST THE ASSESSEE WHICH WAS INVESTIGATED BY REVENUE SINCE SEPTEMBER 2010 WHICH IS THE MAIN REAS ON FOR THE ASSESSEE FILING SO CALLED REVISED RETURN OF INCOME WITH THE REVENUE ON 28 - 02 - 2011. IT WAS THE CONTENTION OF THE REVENUE THAT VERY FEW PERCENTAGE OF THE CASES ARE SELECTED FOR SCRUTINY AND HAD THERE BEEN NO TAX EVASION PETITION FILED AGAINST THE ASSESSEE , THE ASSESSEE WOULD NOT HAD COME FORWARD TO FILE THE SO CALLED ITA NO. 3848/MUM/2016 REVISED RETURN OF INCOME ON 28 - 02 - 2011. THUS, IT IS THE CONTENTION OF THE REVENUE THAT THE ALLEGED REVISED RETURN OF INCOME FILED BY THE ASSESSEE ON 28 - 02 - 2011 INCLUDING THE SAID UNDISCLOSED INCOME OF RS.1,50,000/ - WHICH WAS DEPOSITED IN CASH IN AN UNDISCLOSED BANK ACCOUNT WITH UNION BANK OF INDIA WOULD HAVE NEVER COME INTO NOTICE OF THE REVENUE AND THERE WOULD HAVE BEEN LOSS OF REVENUE. MERELY BECAUSE TAX EVASIO N PETITION IS FILED AGAINST THE TAX - PAYER DOES NOT MEAN THAT THE TAX - PAYER HAS CONCEALED INCOME OR FURNISHED IN - ACCURATE PARTICULARS OF INCOME AND IT COULD NOT BE SAID WITH THE CERTAINTY THAT THE REVENUE WILL IN EACH OF SUCH CASES SHALL PROCEED AGAINST TH E TAX - PAYER BY RE - OPENING THE CONCLUDED ASSESSMENT IN EACH AND EVERY TAX EVASION PETITION FILED AGAINST THE TAX - PAYER. THE TAX - PAYER CAN ALWAYS COME FORWARD AND EXPLAIN AND ACCOUNT FOR ITS SOURCES OF INCOME WITH THE RETURN OF INCOME FILED WITH THE REVENUE . THE TAX - PAYER CAN ALSO COME FORWARD WITH AN EXPLANATION THAT CERTAIN RECEIPTS WERE NOT INCLUDED AS INCOME IN THE RETURN OF INCOME FILED WITH THE REVENUE AS THE SAID RECEIPTS DO NOT BEAR THE CHARACTER OF INCOME WITHIN THE FOUR CORNERS OF CHARGING PROVISIO NS OF THE ACT OR THE RECEIPT HAD A CHARACTER OF BEING AN EXEMPT INCOME WITHIN STATUTORY PROVISIONS OF THE ACT OF 1961 . THERE ARE ALSO POSSIBILITIES THAT THE TAX EVASION PETITIONS COULD BE FILED TO CAUSE VENGEANCE ON THE TAX - PAYER WITH A MALICE TO SEEK REV ENGE AND RETRIBUTION AGAINST THE TAX - PAYER. THE FATE OF TAX EVASION PETITION HINGES ON THE OUTCOME OF AN ENQUIRY AND INVESTIGATION CONDUCTED BY THE REVENUE. THE TAX - PAYER MAY WHEN TAX - EVASION PETITION IS FILED AGAINST HIM ALSO RE - VISIT HIS FINANCIAL DATA F OR THE RELEVANT PERIOD AND IN ORDER TO AVOID UN - NECESSARY AND PROTRACTED LITIGATION WITH REVENUE COME FORWARD TO FILE REVISED COMPUTATION OF INCOME AND PAY TAXES WITH APPLICABLE INTEREST ON SOME ADDITIONAL DISCLOSURE OUT OF CAUTION TO AVOID LITIGATION. TH IS IS A NORMAL AND REASONABLE HUMAN CONDUCT WHICH FALLS WITHIN PREPONDERANCE OF HUMAN PROBABILITIES . THE ASSESSEE IN THE INSTANT CASE CAME FORWARD AND FILED SO CALLED REVISED RETURN OF INCOME ON 28 - 02 - 2011 ALBEIT BEYOND STIPULATED TIME U/S 139(5) OF THE A CT OF 1961 WHICH EXPIRED ON 31 - 03 - 2007 BUT BEFORE ITA NO. 3848/MUM/2016 ISSUANCE OF NOTICE U/S 148 OF THE ACT BY THE REVENUE IN THE MONTH OF MARCH 2012 AS WELL THE ASSESSEE FILED AFFIDAVIT DATED 21 - 03 - 2011 EXPLAINING FACTS AND CIRCUMSTANCES UNDER WHICH THE SAID CASH OF RS.1,50,000/ - WAS DEPOSITED IN HIS BANK ACCOUNT WHICH WAS NOT INCLUDED IN THE RETURN OF INCOME FILED WITH THE REVENUE WHICH SHOWS AND PROVES BONA - FIDE CONDUCT OF THE ASSESSEE . THE ASSESSEE HAD SUBMITTED THAT THE SAID RECEIPT OF RS.1,50,000/ - WHICH WAS DEPOSITED IN CASH IN BANK ACCOUNT WITH UNION BANK OF INDIA, SHAHAD WAS ADVISED TO BE TAX - FREE BY HIS TAX - EXPERT ADVOCATE FOR LAST THIRTY YEARS .IT IS ALSO SUBMITTED THAT THE ASSESSEE BEING NOT HIGHLY EDUCATED PERSON TRUSTED THE SAID ADVOCATE TAX - EXPERT AND DID NOT INCLUDED THE SAID RECEIPT OF RS.1,50,000/ - IN THE RETURN OF INCOME FILED WITH THE REVENUE. THE ASSESSEE HAD ALSO FILED AN AFFIDAVIT DATED 21 - 03 - 2011 EXPLAINING THE FACTS AND CIRCUMSTANCES WHEREIN THE SAID INCOME WAS NOT INCLUDED AS INCO ME IN THE RETURN OF INCOME ORIGINALLY FILED ITA NO. 3734/MUM/2016 CHNDAN DODEJA ITA NO.3735/MUM/2016 UMESH DUDEJA KARTA OF UMESH DODEJA HUF 5 WITH THE REVENUE. REVENUE COULD NOT CONTROVERT THE CONTENTS OF THE AFFIDAVIT FILED BY THE ASSESSEE TO PROVE THAT THE SAID AFFIDAVIT HAD A FALSE OR UNTRUE AVERMENTS MADE BY THE ASSESSEE. IN OUR CONSIDERED VIEW KEE PING IN VIEW FACTS AND CIRCUMSTANCES OF THE CASE, PENALTY LEVIED U/S 271(1)(C) OF THE ACT CANNOT BE SUSTAINED UNDER THE AFORE - STATED CIRCUMSTANCES AS THE ASSESSEE HAD CAME FORWARD WITH AN EXPLANATION WHICH IS A REASONABLE AND BONAFIDE EXPLANATION COMPLYING WITH THE MANDATE OF SECTION 271(1)(C) OF THE ACT READ WITH EXPLANATION 1 AND HENCE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT AS CONFIRMED BY LEARNED CIT(A) IS HEREBY ORDERED TO BE DELETED. THUS, THE ASSESSEE'S APPEAL IN ITA NO. 3847/MUM/2016 FOR ASSESSMENT YEAR 2005 - 06 IS ALLOWED . WE ORDER ACCORDINGLY. 9. THE FACTS IN ASSESSEE'S APPEAL IN ITA NO. 3848/MUM/2016 FOR ASSESSMENT YEAR 2007 - 08 ARE SIMILAR TO FACTS IN ASSESSEE'S APPEAL IN ITA 3847/MUM/2 016 FOR ASSESSMENT YEAR 2005 - 06 AND HENCE OUR DECISION IN ITA NO. 3847/MUM/2016 SHALL APPLY MUTATIS MUTANDIS TO THE ASSESSEE'S APPEAL ITA NO. 3848/MUM/2016 IN ITA NO 3848/MUM/2016 FOR ASSESSMENT YEAR 2007 - 08. THUS, THE ASSESSEE APPEAL IN ITA NO. 3848/MUM/2 016 FOR ASSESSMENT YEAR 2007 - 08 STAND ALLOWED. 10. IN THE RESULT, APPEALS OF THE ASSESSEE IN ITA NO. 3847/MUM/2016 FOR ASSESSMENT YEAR 2005 - 06 AND ITA NO. 3848/MUM/2016 FOR ASSESSMENT YEAR 2007 - 08 ARE ALLOWED. 7. AS THE FACTS AND CIRCUMSTANCES IN RESPECT OF THESE TWO ASSESSEES ARE SAME IN SO FAR AS THEY ARE ALSO FAMILY MEMBERS GETTING SIMILAR AMOUNT ON DIVISION OF FAMILY. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF OTHER FAMILY MEMBERS, I DO NOT FIND ANY JUSTIFICATION FOR IMPOSITION OF PENALTY. 8. IN THE RESULT, APPEAL OF BOTH THE ASSESSEES ARE ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 18 / 04 /2017 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 20 / 04 /20 1 7 KARUNA SR. PS ITA NO. 3734/MUM/2016 CHNDAN DODEJA ITA NO.3735/MUM/2016 UMESH DUDEJA KARTA OF UMESH DODEJA HUF 6 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//