ANIL KUMAR SUREKHA, MUMBAI V. ASST CIT CEN CIR 3(2), MUMBAI

ITA 3862/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1448 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 22-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DILIP V LAKHANI LD
• Keywords: Salary income; Principle of natural justice
• Section: 143(3); 153A

Judgement Text

ITA NO.3856 TO 3864/M/2015 SHRI ANIL KUMAR SUREKHA & SMT. NISHA ANIL SUREKHA ASSESSMENT YEAR 2006-07 TO 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO. 3861 TO 3864/MUM/2015 ( [ [ / ASSESSMENT YEAR: 2006-07 & 2008-09 TO 2010-11) SHRI ANIL KUMAR SUREKHA C-1901, CHAITANYA TOWER APPASAHEB MARATHE MARG PRABHADEVI MUMBAI 400 025 / VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 3(2) (ERSTWHILE ACIT CC 18 & 19) 402, AAYKAR BHAWAN M.K.ROAD MUMBAI -400 020 ./ ./PAN/GIR NO. AJGPS-8652-M ( /APPELLANT ) : ( / RESPONDENT ) & ./ I.T.A. NO. 3856 TO 3860/MUM/2015 ( [ [ / ASSESSMENT YEAR: 2006-07 TO 2010-11) SMT. NISHA ANIL SUREKHA C-1901, CHAITANYA TOWER APPASAHEB MARATHE MARG PRABHADEVI MUMBAI 400 025 / VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 3(2) (ERSTWHILE ACIT CC 18 & 19) 402, AAYKAR BHAWAN M.K.ROAD MUMBAI -400 020 ./ ./PAN/GIR NO. CAFPS-8308-J ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI DILIP V.LAKHANI, LD. AR / RESPONDENT BY : SHRI K.RAVIKIRAN, LD. DR ITA NO.3856 TO 3864/M/2015 SHRI ANIL KUMAR SUREKHA & SMT. NISHA ANIL SUREKHA ASSESSMENT YEAR 2006-07 TO 2010-11 2 / DATE OF HEARING : 06/04/2017 / DATE OF PRONOUNCEMENT : 06 /04/2017 / O R D E R PER BENCH 1. THE CAPTIONED APPEALS BY TWO ASSESSEE ASSAILS SEPARATE ORDERS OF LD. PR. COMMISSIONER OF INCOME TAX (OSD) [H/C CIT(APPEALS)-51] [HEREINAFTER REFERRED TO AS CIT(A)] QUA CONFIRMATION OF PENALTY U/S 271(1)(C) FOR SEVERAL ASSESSMENT YEARS [AY]. SINCE, THE ISSUE SPRINGS OUT FROM COMMON SET OF FACTS, WE DISPOSE-OFF ALL THE APPEALS BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. FIRST, WE TAKE UP ITA NO. 3861/MUM/2015 FOR AY 2006-2007 FILED BY SHRI ANIL KUMAR SUREKHA , WHERE THE ASSESSEE IS AGGRIEVED BY CONFIRMATION OF PENALTY OF RS.4,13,659/- U/S 271(1)(C) VIDE LD. CIT(A) ORDER DATED 04/03/2015. 2. BRIEFLY STATED, THE ASSESSEE, BEING RESIDENT INDIVIDUAL WAS SUBJECTED TO AN ASSESSMENT U/S 153A READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961 FOR IMPUGNED AY VIDE ASSESSING OFFICER [AO] ORDER DATED 22/03/2013 CONSEQUENT TO SEARCH & SEIZURE ACTION U/S 132(1) IN CASE OF M/S ISPAT INDUSTRIES LIMITED AND ITS GROUP CONCERNS. THE ASSESSEE WAS EXECUTIVE DIRECTOR (FINANCE) OF THE SAID GROUP AND IN-CHARGE OF THE FINANCE AND ACCOUNT OF THE COMPANY FOR PAST MANY YEARS AND DERIVED INCOME FROM SALARY AND OTHER SOURCES . THE ORIGINAL RETURN OF INCOME WAS FILED DECLARING INCOME OF RS.42,29,900/- WHICH WAS ENHANCED TO RS.50,17,019/- IN RETURN FILED PURSUANT TO NOTICE UNDER SECTION 153A AND THE SAME WAS ACCEPTED AS SUCH BY THE REVENUE WITHOUT ANY FURTHER ADDITIONS IN THE SAID ASSESSMENT. THE PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED IN THE ASSESSMENT ORDER FOR CONCEALMENT OF PARTICULARS OF INCOME AND ACCORDINGLY, A NOTICE U/S 274 READ WITH SECTION 271(1)(C) WAS ISSUED TO THE ASSESSEE. FINALLY, THE ASSESSEE WAS SADDLED WITH A PENALTY OF RS.4,13,659/- @100% OF TAX SOUGHT ITA NO.3856 TO 3864/M/2015 SHRI ANIL KUMAR SUREKHA & SMT. NISHA ANIL SUREKHA ASSESSMENT YEAR 2006-07 TO 2010-11 3 TO BE EVADED ON RS.7,87,119/-, BEING THE DIFFERENCE BETWEEN INCOME REFLECTED IN ORIGINAL RETURN VIS--VIS INCOME REFLECTED IN 153A RETURN FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY INVOKING EXPLANATION 5A OF SECTION 271(1)(C). THE SAME WAS CONFIRMED BY THE LD. CIT(A) VIDE ORDER DATED 04/03/2015 BY NOTING THE EXPRESS PROVISIONS OF EXPLANATION 5A, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD. COUNSEL FOR ASSESSEE [AR], SHRI D.V.LAKHANI, FIRST OF ALL, PLACING RELIANCE ON JUDGMENT OF HONBLE DELHI HIGH COURT IN PCIT VS. SHRI NEERAJ JINDAL [ITA NO. 463/2016 & CM NO. 26604/2016 DATED 09/02/2017], CONTENDED THAT THE RETURNED INCOME U/S 153A HAS BEEN ACCEPTED AS SUCH WITHOUT ANY FURTHER ADDITIONS BY THE REVENUE AND THEREFORE, PENALTY COULD NOT BE LEVIED. FURTHER, THE DIFFERENCE IN THE TWO INCOMES AROSE ONLY DUE TO CERTAIN INTEREST ON BANK DEPOSITS WHEREAS ALL THE ACCOUNTS HELD BY THE ASSESSEE WERE DULY DISCLOSED IN THE ORIGINAL RETURN OF INCOME AND HENCE, THERE WAS NO MALA-FIDE INTENTION TO EVADE THE TAXES AND THE ASSESSEE REFLECTED THE CORRECT INCOME AFTER REALIZING THE MISTAKE, WHICH WAS FINALLY ACCEPTED BY THE REVENUE. THE REVENUE HAS NOWHERE DISTURBED THE INCOME RETURNED BY THE ASSESSEE AND THEREFORE, PENALTY DESERVES TO BE DELETED. FURTHER, OUR ATTENTION HAS BEEN DRAWN TO THE FACT THAT THE PENALTY HAS BEEN INITIATED IN THE ASSESSMENT ORDER FOR CONCEALMENT OF PARTICULARS OF INCOME WHEREAS THE PENALTY HAS FINALLY BEEN LEVIED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH ARE TWO DIFFERENT CONNOTATIONS AND THEREFORE, VITIATES PENALTY PROCEEDINGS ON THE GROUNDS OF VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE SHOWCASE NOTICE U/S 274 DID NOT SPECIFY THE LIMB FOR WHICH THE PENALTY WAS BEING INITIATED / LEVIED AND THEREFORE, THE ASSESSEE NEVER KNEW THE GROUNDS OF LEVY OF PENALTY AND THEREFORE, THE SAME WAS LIABLE TO BE QUASHED IN TERMS OF DECISION OF APEX COURT IN THE CASE OF CIT VS SSAS EMERALD MEADOWS [72 TAXMANN.COM 248] . PER CONTRA, THE LD. DR, HAS DRAWN OUR ATTENTION TO THE EXPLICIT LANGUAGE PROVIDED IN EXPLANATION 5A TO THE SECTION 271(1)(C) TO CONTEND THAT THE DEEMING FICTION PROVIDED IN THE EXPLANATION SQUARELY APPLIES TO THE FACTS OF THE CASE AND THEREFORE, THE PENALTY HAS RIGHTLY BEEN LEVIED BY THE LOWER AUTHORITIES. ITA NO.3856 TO 3864/M/2015 SHRI ANIL KUMAR SUREKHA & SMT. NISHA ANIL SUREKHA ASSESSMENT YEAR 2006-07 TO 2010-11 4 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD. SO FAR AS THE APPLICABILITY OF EXPLANATION 5A IS CONCERNED, WE FULLY AGREE WITH THE CONTENTIONS OF THE LD. DR THAT THE LANGUAGE OF EXPLANATION 5A MAKES IT AMPLY CLEAR THAT WHENEVER ADDITIONAL INCOME IS DECLARED IN A RETURN OF INCOME FILED AFTER THE DATE OF SEARCH, THE ASSESSEE IS DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHING OF INACCURATE PARTICULARS WITHIN THE MEANING OF SECTION 271(1)(C). THE CITED JUDGMENT OF HONBLE DELHI HIGH COURT WAS RENDERED IN THE CONTEXT OF EXPLANATION 5 AND HENCE, THE SAME DO NOT APPLY TO THE CASE OF THE ASSESSEE. HOWEVER, WE HAVE ALSO NOTE THAT THE PENALTY HAS BEEN INITIATED ON ONE LIMB BUT FINALLY IMPOSED FOR ANOTHER LIMB. FURTHER, THE SHOW-CAUSE NOTICE U/S 274 READ WITH SECTION 271 ISSUED TO THE ASSESSEE DID NOT SPECIFY THE LIMB FOR WHICH THE PENALTY PROCEEDINGS WERE BEING INITIATED AGAINST THE ASSESSEE WHICH TOOK AWAY A VALUABLE RIGHT OF THE ASSESSEE AND THEREFORE, VITIATES THE PENALTY PROCEEDINGS. OUR VIEW STANDS FORTIFIED BY THE ABOVE-CITED JUDGMENT OF APEX COURT WHERE THE DECISION OF HONBLE KARNATAKA HIGH COURT HAS BEEN CONFIRMED, WHICH IN TURN, RELIED UPON THE JUDGMENT OF SAME COURT IN CIT VS MANJUNATHA COTTON & GINNING FACTORY [359 ITR 565]. RESPECTFULLY FOLLOWING THE SETTLED JUDICIAL DISCIPLINE / PRECEDENT, WE HOLD THE PENALTY PROCEEDINGS TO BE BAD IN LAW AND THEREFORE, QUASH THE SAME. THE ASSESSEES APPEAL STANDS ALLOWED. 5. THE ASSESSEE IS SADDLED WITH SIMILAR PENALTIES UNDER SIMILAR CIRCUMSTANCES FOR OTHER AYS WHICH HAVE BEEN CONTESTED BEFORE US IN THE FOLLOWING MANNER:- NO. ASSESSMENT YEAR PENALTY APPEAL NO. 1. 2008 - 2009 13,000/ - ITA NO. 3862/M/2015 2. 2009-2010 1,66,196/- ITA NO. 3863/M/2015 3. 2010-2011 1,64,780/- ITA NO. 3864/M/2015 THERE BEING NO CHANGE IN FACTS OR CIRCUMSTANCES, EXCEPT FOR FIGURES / DATES AND MINOR VARIATIONS, TAKING THE SAME STAND, WE DELETE ALL THE PENALTIES ON SAME REASONING AND ALLOW THE APPEALS OF THE ASSESSEE. ITA NO.3856 TO 3864/M/2015 SHRI ANIL KUMAR SUREKHA & SMT. NISHA ANIL SUREKHA ASSESSMENT YEAR 2006-07 TO 2010-11 5 6. NOW, WE TAKE UP ITA NOS. 3856 TO 3860/M/2015 THE WIFE OF THE ASSESSEE, NAMELY, SMT.NISHA ANIL SUREKHA , WAS ALSO SUBJECTED TO ASSESSMENTS U/S 153A READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961 FROM AYS 2006-07 TO 2010-11. THE ASSESSEE FILED RETURN OF INCOME FOR VARIOUS AYS FOR THE FIRST TIME PURSUANT TO NOTICE U/S 153A WHICH WAS ACCEPTED AS SUCH WITHOUT ANY FURTHER ADDITIONS BY THE REVENUE. CONSEQUENTLY, SHE IS SADDLED WITH PENALTY FOR ALL THE YEARS AS PER FOLLOWING DETAILS, WHICH HAS BEEN CONTESTED BEFORE US: NO. ASSESSMENT YEAR PENALTY 1. 2006-2007 81,442/- 2. 2007-2008 1,25,586/- 3. 2008-2009 1,81,020/- 4. 2009-2010 2,95,131/- 5. 2010-2011 4,00,851/- SIMILAR ARGUMENTS HAVE BEEN ADVANCED BY BOTH THE SIDES AND HERE ALSO, WE FIND THAT THE PENALTY PROCEEDINGS STANDS VITIATED BY THE SAME INFIRMITIES AS IN THE CASE OF SHRI ANIL KUMAR SUREKHA . THEREFORE, THERE BEING NO CHANGE IN FACTS OR CIRCUMSTANCES OF THE CASE, EXCEPT FOR FIGURES/DATES AND MINOR VARIATIONS, TAKING THE SAME STAND, WE DELETE THE IMPUGNED PENALTIES AND ALLOW ALL THE APPEALS OF THE ASSESSEE. 7. IN NUTSHELL, ALL THE APPEALS OF BOTH THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH APRIL, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 06 .04.2017 SR.PS:- THIRUMALESH ITA NO.3856 TO 3864/M/2015 SHRI ANIL KUMAR SUREKHA & SMT. NISHA ANIL SUREKHA ASSESSMENT YEAR 2006-07 TO 2010-11 6 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI