TRISHUL ENTERPRISES, NAVI MUMBAI V. DCIT CEN CIR 1, THANE

ITA 384/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8637 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 24-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 16-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Assessee Lawyers: MANI JAINAR
• Keywords: Unexplained expenditure
• Section: 69C; 143(3); 133A; 153A; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E, MU MBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.384/MUM/2014 (A Y - 2006-07) AND ITA NO.385/MUM/2014 (A Y - 2007-08) M/S TRISHUL ENTERPRISES, PLOT NO. 15 & 17, SECTOR 7, NEAR HIRANANDANI COMPLEX, KARGHAR, NAVI MUMBAI. PAN: AADFT1159N VS. ACIT, CIRCLE-(1), THANE (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. MANI JAIN-AR REVENUE BY : SH.B.S. BIST (DR) DATE OF HEARING : 01.02.2017 DATE OF PRONOUNCEMENT : 10.02.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JM: 1. THESE TWO APPEALS UNDER SECTION 253 OF INCOME TAX A CT (ACT) ARE DIRECTED AGAINST THE SEPARATE ORDERS OF CIT (A) II MUMBAI DA TED 05-11-2013 FOR ASSESSMENT YEAR 2006-07 AND 2007-08. IN BOTH THE AP PEALS LD. CIT(A) CONFIRMED THE PENALTY ORDER U/S 271(1)(C). IN BOTH THE APPEALS COMMON GROUNDS ARE RAISED, FACTS ARE ALMOST IDENTICAL, THU S BOTH THE APPEALS WERE HEARD TOGETHER AND ARE DECIDED BY COMMON ORDER TO AVOID T HE CONFLICTING DECISION. FIRST WE SHALL TAKE UP APPEAL ITA NO. 384/MUM/2014 FOR AY 2006-07. 2. BRIEF FACTS OF THE CASE ARE THAT RETURN OF INCOME F OR RELEVANT ASSESSMENT YEAR WAS COMPLETED ON 30-12-2009 UNDER SECTION 143(3) R. W.S. 153(A) OF THE ACT. THE AO WHILE FRAMING ASSESSMENT MADE THE ADDITION O F THE RS. 47,000/- HOLDING THAT EXPENDITURE WAS INCURRED IN CASH, WHIC H IS NOT REFLECTED IN THE 2 ITA NO. 384 & 385/M/14 TRISHUL ENTERPRISES BOOKS OF ACCOUNT. THE AO TREATED THE SAME AS UNEXP LAINED EXPENDITURE UNDER SECTION 69C OF THE ACT AND INITIATED PENALTY. THE A O ISSUE NOTICED TO THE ASSESSEE UNDER SECTION 274 R.W.S. 271(1) (C) ON 30- 12-2009 (POSTED ON 30 TH JANUARY 2010). THE SECOND NOTICE U/S 274 R.W.S. 271 C DATED 8 TH |JUNE 2010 WAS AGAIN SERVED UPON ASSESSEE. THE ASSESSEE FILED ITS REPLY DATED 23 RD JANUARY 2010. IN THE REPLY ASSESSEE CONTENDED THERE WAS NO INTENTION ON THE PART OF ASSESSEE TO HIDE OR SUPPRESS THE INCOME. THE EXPLAN ATION OF ASSESSEE WAS NOT ACCEPTED BY AO HOLDING THAT THE LEVY OF PENALTY IS A CIVIL LIABILITY AND WILFUL CONCEALMENT IS NOT AN INITIAL INGREDIENT FOR ATTRAC TING CIVIL LIABILITY. THE AO LEVIED THE PENALTY @ 100% AND WORKED OUT THE PENALT Y OF RS. 15,823/-. THE AO LEVIED THE PENALTY FOR CONCEALMENT OF INCOME. ON APPEAL BEFORE CIT(A) THE ACTION OF AO WAS CONFIRMED. THUS FURTHER AGREED BY THE ORDER OF AO THE ASSESSEE FILED THIS APPEAL BEFORE US. 3. WE HAVE HEARD THE LD. AR FOR ASSESSEE AND THE LD. D R FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. A R OF THE ASSESSEE ARGUED THAT WHILE INITIATING PENALTY IN THE ASSESSMENT ORD ER THE AO HAS NOT CLEARLY SPECIFIED AS TO WHETHER THE PENALTY IS INITIATED ON ACCOUNT OF CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULAR. DUR ING THE COURSE OF HIS SUBMISSION THE LD. AR OF THE ASSESSEE FILED THE COP Y OF NOTICE DATED 30-12- 2009 ISSUED U/S 274 R.W.S. 271(1)(C). THE LD AR MAD E STRESS THAT THE AO HAS NOT CLEARLY STRIKE OUT IF THE PENALTY WAS INITIATED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULAR AND RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN CIT V/S WHITECOURT INDIA LIMI TED 2013(38) TAXMANN.COM 15 (GUJARAT). ON THE OTHER HAND THE LD. DR FOR REVENUE ARGUED THAT THE AO WHILE FRAMING ASSESSMENT INITIATED PENA LTY ON BOTH THE CHARGES AND THE SAME IS CLEARLY REFLECTED IN THE ORDER THAT ASS ESSEE FURNISHED INACCURATE PARTICULAR AND CONCEALED INCOME. THE LD. DR FURTHE R DISPUTED THE CONTENTION OF LD. AR OF THE ASSESSEE THAT THE AO HAS NOT STRI KE OUT THE PORTION OF NOTICE U/S 274 R.W.S. 271(1)( C) ABOUT TICKING THE SPECIF IC LIMB OF CHARGES. THE LD. 3 ITA NO. 384 & 385/M/14 TRISHUL ENTERPRISES DR DRAWN OUR ATTENTION THAT THE AO HAS CLEARLY MENT IONED THAT PENALTY IS INITIATED FOR CONCEALMENT OF PARTICULARS OF INCOME. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDERS OF AUTHORITY IS BELOW. FROM THE RECORDS WE H AVE NOTICED THAT A SURVEY PROCEEDING U/S 133A WERE CARRIED OUT IN THE BUSINES S PREMISES OF PATEL GROUP OF CASES. AS ASSESSEES CASE WAS COVERED IN THIS GR OUP, CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. CONSEQUENT UPON NO TICE U/S 153A WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO SAID NOTICE ASSESSEE FILED RETURN OF INCOME ON 17-10-2008 DECLARING INCOME OF RS. 81,17,970/-. ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 153A ON 30-12-2009. THE AO MADE THE ADDITION OF RS. 47,000-/ HOLDING THAT ASSESSEE INCURRED THESE E XPENSES IN CASH IN CONSTRUCTION PATEL HERITAGE. THE AMOUNT IS NOT REFL ECTED IN THE BOOKS OF ACCOUNT. THE ASSESSEE NOT FURNISHED ANY EXPLANATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. NO APPEAL WAS FILED AGAINST THE ADDITION IN QUANTUM ASSESSMENT. THE AO LEVIED THE PENALTY HOLDING THAT THE ASSESSEE CONCEALED THE PARTICULAR OF INCOME. AND FAILED TO DISCHARGE THE PRIMARY ONUS UPON IT. IN THE EXPLANATION THE ASSESSEE SUBMITTED THAT THERE WAS N O INTENTION TO HIDE OR SUPPRESS ANYTHING. THE EXPLANATION FURNISHED BY THE ASSESSEE WAS NOT ACCEPTED BY AO, THUS MINIMUM PENALTY AS PRESCRIBED UNDER SEC TION 271(1)(C) WAS LEVIED. THE LD. CIT(A) CONFIRMED THE PENALTY HOLDI NG THAT ASSESSEE HAS NOT DISCLOSED THE EXPENDITURE INCURRED IN CASH IN ITS B OOKS OF ACCOUNT. AND IT WAS NOT DISCLOSED IN THE RETURN OF INCOME FILE SUBSEQUE NT TO THIS SEARCH ACTION. NO SATISFACTORY EXPLANATION FOR NOT DISCLOSING ADDITIO NAL INCOME ON ACCOUNT OF UNEXPLAINED EXPENDITURE WAS GIVEN BY ASSESSEE. 5. WE HAVE NOTICED THAT DURING THE SURVEY ACTION UNDER SECTION 133A ON 17.01.2008 ON THE GROUP CASES OF ASSESSEE, CERTAIN MATERIAL FOUND AND SEIZED. AFTER SURVEY THE ASSESSEE WAS SERVED NOTICE UNDER S ECTION 153A (A) ON 04.08.2008. IN RESPONSE TO THE NOTICE THE ASSESSEE FILED ITS RETURN OF INCOME ON 17.01.2008. DURING THE ASSESSMENT THE AO MADE ADDIT ION OF RS.47,000/- UNDER 4 ITA NO. 384 & 385/M/14 TRISHUL ENTERPRISES SECTION 69C. THE ADDITION WAS MADE BY AO HOLDING THAT THE ASSESSEE HAS MADE EXPENSES IN CASH AND HAS NOT REFLECTED THIS EX PENDITURE IN ITS BOOKS OF ACCOUNT. NO EXPLANATION WAS OFFERED BY ASSESSEE FOR NOT REFLECTING SUCH EXPENDITURE IN BOOKS OF ACCOUNTS. THUS, IT IS A CLE AR CASE OF CONCEALMENT OF INCOME. IT WAS NOT A CASE THAT ANY LEGAL CLAIM OF EXPANSES WAS MADE AND THE SAME WAS DISALLOWED DURING THE ASSESSMENT PROCEEDIN GS. THE MATERIAL WAS SEIZED DURING THE SURVEY UNDER SECTION 133A, DESPIT E THE EVIDENCE IN POSSESSION OF REVENUE THE ASSESSEE HAS NOT SHOWN TH E CASH EXPANSES IN ITS BOOKS OF ACCOUNT. IN THE EXPLANATION THE ASSESSEE C ONTENDED THAT THERE WAS NO INTENTION TO HIDE OR SUPPRESS ANYTHING. IN OUR CONS IDERED OPINION THE EXPLANATION OFFERED BY ASSESSEE IS NOT SATISFACTORY . THE LD AR FOR THE ASSESSEE RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COUR T IN CIT VS WHITEFORD INDIA LTD (SUPRA) WHEREIN IT WAS HELD THAT WHERE NO CLEAR FINDING WAS RECORDED BY ASSESSING OFFICER WAS GUILTY OF CONSIDERING INCO ME AND/OR FURNISHING INACCURATE PARTICULAR OF INCOME, CRIMINAL WAS JUSTI FIED IN DELETING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HOWEVER, WITH T HE UTMOST REGARD TO THE DECISION OF HONOURABLE GUJARAT HIGH COURT, WE HAVE SEEN THAT THE FACTS OF THE PRESENT CASE ARE AT VARIANCE, IN THE PRESENT CASE T HE ASSESSING OFFICER CLEARLY RECORDED THAT ASSESSEE FURNISHED INACCURATE PARTIC ULARS AND CONCEALED THE INCOME. 6. THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS SMT . KAUSHALYA (216 ITR 660) WHILE CONSIDERING SIMILAR CONTENTION WITH REGA RDS TO NOT STRIKING OFF OF INACCURATE PARTICULAR OR CONCEALED INCOME IN THE N OTICE, HELD, THAT MERE NOT STRIKING OFF SPECIFIC LIMB CANNOT BY ITSELF INVALID ATE NOTICE ISSUED UNDER SECTION 274 OF THE ACT. THE LANGUAGE OF THE SECTION DOES NO T SPEAK ABOUT THE ISSUANCE OF NOTICE. ALL THAT IS REQUIRED IS THAT THE ASSESS EE BE GIVEN AN OPPORTUNITY OF SHOW CAUSE. THE ISSUANCE OF NOTICE IS AN ADMINISTRA TIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL OF LEVY OF PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN WHY IT SHOULD NOT BE LEVIED AGAINST HIM. IF IT IS TAKEN FOR THE SAKE OF 5 ITA NO. 384 & 385/M/14 TRISHUL ENTERPRISES ARGUMENT THAT MERE MISTAKE IN THE LANGUAGE IN THE N OTICE FOR NON-STRIKING OFF OF INACCURATE PARTICULAR OR MARKING ON CONCEALMENT OF INCOME PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. ENTIRE FACTS AND B ACKGROUNDS THEREOF ARE TO BE KEPT IN MIND. EVERY CONCEALMENT OF FACT MAY ULTIMAT ELY RESULT IN FILING OF OR FURNISHING INACCURATE PARTICULAR. THE DECISION OF B OMBAY HIGH COURT IN KAUSHALYA (SUPRA) WAS BROUGHT IN THE NOTICE OF LD A R FOR ASSESSEE AT THE TIME OF HEARING OF THE SUBMISSION. WITH UTMOST REGARD TO THE DECISION OF GUJARAT HIGH COURT IN CIT VS WHITEFORD INDIA LTD (SUPRA), W E MAY NOTE THAT THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT IN C IT VS KAUSHALYA (SUPRA) IS BINDING PRECEDENT UPON US. IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION WHICH DO NOT FIND ANY MERIT IN THE SUBMISSION OF TH E DEAD AR OF THE ASSESSEE THAT WHILE ISSUING NOTICE THE SPECIFIC LIMB OF CHAR GES FOR LIVING PENALTY WAS NOT STRIKE OF IN THE NOTICE UNDER SECTION 274 READ WITH SECTION 271 (1)(C) OF THE ACT. HENCE WE DO NOT FIND ANY MERIT IN THE GROUNDS OF AP PEAL RAISED BY THE ASSESSEE, IN THE RESULT APPEAL FILED BY ASSESSEE IS DISMISSED . 7. IN ITA NO. 385/M/2014 FOR ASSESSMENT YEAR 2007-08 T HE ASSESSEE HAS RAISED IDENTICAL GROUNDS OF APPEAL, THE FACTS OF THIS APPE AL ARE ALSO SIMILAR. AS WE HAVE DISMISSED THE APPEAL OF ASSESSEE FOR ASSESSMEN T YEAR 2006-07, VIDE ITA NO.384/M/2014 THUS, THIS APPEAL IS ALSO DISMISSED W ITH SIMILAR OBSERVATION. NO ORDER IS TO COST. 8. IN THE RESULT, APPEALS OF THE ASSESSEE FOR BOTH THE AYS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N THIS 10 TH FEBRUARY, 2017. SD/- SD/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 10/02/2017 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 6 ITA NO. 384 & 385/M/14 TRISHUL ENTERPRISES BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/