Shri Mukesh V. Khant, RAJKOT-GUJARAT V. The Assistant Commissioner of Tax, Central Circle-1,, RAJKOT-GUJARAT

ITA 394/RJT/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2222 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-03-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 12-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Keywords: Income from undisclosed sources; Bonafide mistake; Reassessment proceedings
• Section: 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENC H, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI S. S. GOD ARA, J.M.) ( , , ) ITA NOS. 391 TO 395 & 420/RJT/2012 (ASSESSMENT YEARS: 2000-01 TO 2004-05 & 2006-07) SHRI MUKESH V. KHANT RADHE KRISHNA , KRISHNA NAGAR, NR. TELEPHONE EXCHANGE, RAJKOT VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, RAJKOT (APPELLANT) (RESPONDENT) / BY ASSESSEE : SHRI MEHUL RANPURA, C.A. / BY REVENUE : SHRI C. S. ANJARIA, SR. D.R. DATE OF HEARING : 14-03-201 6 DATE OF PRONOUNCEMENT : 18-03-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THESE SIX APPEALS FILED BY THE ASSESSEE ARE AGAINST THE ORDERS OF CIT(A)-IV, AHMEDABAD, DATED 19 TH APRIL, 2012 FOR A.Y. 2000-01 TO 2004-05 AND DATED 17 TH MAY, 2012 FOR A.Y. 2006-07. 2. BEFORE US, AT THE OUTSET, LD. A.R. SUBMITTED THA T THOUGH THE SIX APPEALS OF THE ASSESSEE PERTAIN TO DIFFERENT ASSESSMENT YEARS, BUT THE ISSUES ARE IDENTICAL ITA NOS. 391 TO 395 & 420/RJT/2012 . A.Y. 2000- 01 TO 04-05 & 06-07 (SHRI MUKESH V. KHANT) 2 EXCEPT FOR THE AMOUNTS AND ASSESSMENT YEARS AND THE REFORE THE SUBMISSION MADE BY HIM WOULD BE APPLICABLE TO ALL SIX ASSESSMENT YE ARS. LD. D.R. DID NOT OBJECT TO THE AFORESAID SUBMISSION OF LD. A.R. WE THEREFORE FOR THE SAKE OF CONVENIENCE PROCEED TO DISPOSE OF ALL THE SIX APPEALS BY A COMM ON ORDER AND PROCEED WITH THE FACTS FOR A.Y. 2000-01. 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON REC ORD ARE AS UNDER. 4. THE ASSESSEE IS AN INDIVIDUAL AND DEALER OF M/S. BALAJI WAFERS PVT. LTD. AND WAS PROPRIETOR OF M/S. SHREENATHJI SALES AGENCY . A SEARCH U/S.132 OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF M/S. SH REENATHJI SALES AGENCY AND ITS PARTNERS, NAMELY, SHRI DIPAK V KHANT AND MUKESH V K HANT (ASSESSEE) ON 27.10.2015. DURING THE COURSE OF SEARCH, STATEMENT OF ASSESSEE WAS RECORDED U/S.131(1A) ON 16.12.2005 WHEREIN HE ADMITTED UNACC OUNTED SALES OF DIFFERENT PRODUCTS OF BALAJI WAFERS PVT. LTD. AMOUNTING TO RS .3.40 CRORE FROM F.Y. 1999- 2000 TO NOVEMBER 2005. IN RESPONSE TO THE NOTICE U /S.153A, ASSESSEE FILED HIS RETURN OF INCOME ON 01.05.2007 DECLARING TOTAL INCO ME AT RS.1,35,000/-. A.O. NOTICED THAT THOUGH AT THE TIME OF SEARCH, ASSESSEE HAD ADMITTED UNACCOUNTED SALES OF RS.3.40 CRORES BUT ASSESSEE HAD CONSIDERE D PROFITS OF ONLY RS.2.70 CRORE. IN THE ABSENCE OF ANY PLAUSIBLE REPLY, A.O. REJECTE D THE BOOKS OF ACCOUNTS U/S.145 OF THE ACT AND THEREAFTER ESTIMATED THE PROFITS TO BE @ 7.5% OF UNACCOUNTED SALES. SINCE IN THE DISCLOSURE FOR THE YEAR UNDER CONSIDER ATION, ASSESSEE HAD ADMITTED UNACCOUNTED SALES OF RS.19 LACS, A.O. ESTIMATED THE PROFIT ON UNACCOUNTED SALES AT RS.1,42,500/- (7.5% OF RS.19LACS) AND AFTER GIVING THE CREDIT OF THE PROFIT SHOWN BY THE ASSESSEE, MADE ADDITION OF DIFFERENCE AMOUNT OF RS.72,500/- WHICH WAS CONCLUDED BY THE A.O. TO BE REPRESENTING INCOME IN RESPECT OF WHICH ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME AND THEREFORE IN VIEW OF EXPLANATION 1 TO ITA NOS. 391 TO 395 & 420/RJT/2012 . A.Y. 2000- 01 TO 04-05 & 06-07 (SHRI MUKESH V. KHANT) 3 SECTION 271(1)(C) OF THE ACT LEVIED PENALTY OF RS.1 6,000/- VIDE ORDER DATED 16.09.2010. 5. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE CONSOLIDATED ORDER FOR A.YS. 2000-0 1 TO 2004-05 DATED 19.04.2012, UPHELD THE LEVY OF PENALTY BY HOLDING A S UNDER: 6.12 IN VIEW OF THE ABOVE DISCUSSION, IT IS SUM MED UP AS UNDER: (I) THE APPELLANT HAS DISCLOSED ADDITIONAL UNACCOUN TED INCOME IN THE RETURNS FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT ON THE BA SIS OF THE INCRIMINATING SEIZED MATERIAL. THIS ADDITIONAL INCOME WAS NOT DISCLOSED IN THE RETURNS ORIGINALLY FILED U/S 139 OF THE ACT AND THE APPELLANT HAS FAILED TO ESTABLIS H THAT SUCH OMISSION WAS A BONAFIDE MISTAKE AND NOT DELIBERATE. (II) SUCH DISCLOSURE OF ADDITIONAL INCOME IS NOT VO LUNTARY. IT IS ON ACCOUNT OF THE SEARCH AND ON THE BASIS OF SCRUTINY OF SEIZED MATER IAL, UNACCOUNTED INCOME HAS BEEN DISCLOSED IN DIFFERENT ASSESSMENT YEARS. (III) IMMUNITY FROM PENAL PROVISIONS OF SECTION 271 (1)(C) R/W EXPLANATION 5 IS NOT AVAILABLE TO THE APPELLANT SINCE THE ASSESSEE HAS D ISCLOSED ADDITIONAL UNACCOUNTED INCOME SUBSEQUENT TO THE DATE OF SEARCH WHICH WAS N OT DISCLOSED IN THE ORIGINAL RETURNS FILED. (IV) CONCEALMENT IS ALWAYS WITH REFERENCE TO THE OR IGINAL RETURN OF INCOME FILED BY THE ASSESSEE U/S 139 OF THE ACT. RETURNS FILED IN R ESPONSE TO NOTICE U/S 153A / 153C OF THE ACT, DISCLOSING ADDITIONAL INCOME, SUBSEQUENT T O THE DATE OF SEARCH WITH A VIEW TO PRE-EMPT ANY ACTION BY THE DEPARTMENT ON THE BASIS OF SEIZED MATERIAL CANNOT ABSOLVE THE APPELLANT FROM THE RIGOUR OF PENALTY U/S 271(1) (C) OF THE ACT READ WITH EXPLANATION 5. (V) ONCE THERE IS A DIFFERENCE IN RETURNED / ASSESS ED INCOME AS PER SECTION 153A / 153C OF THE ACT AND RETURNED INCOME AS PER RETURN F ILED ORIGINALLY U/S 139 OF THE ACT, THE ONUS IS ON THE ASSESSEE TO PROVE THAT FAILURE T O RETURN HIS CORRECT INCOME WAS NOT DUE TO FRAUD OR NEGLECT [K. P. MADHUSUDHANAN VS. CIT [2 001] 251 ITR 99(SC)]. (VI) THE HUGE DIFFERENCE BETWEEN THE RETURNED INCOM E FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT DISCLOSING UNACCOUNTED ADDITIONAL I NCOME SUBSEQUENT TO THE DATE OF SEARCH AND THE RETURNED INCOME AS PER ORIGINALLY FI LED RETURNED INCOME U/S 139 OF THE ACT, (AMOUNT OF DISCLOSURE BEING MUCH MORE THAN THE RETURNED INCOME U/S 139 OF THE ACT), CLEARLY PROVES THE FACT THAT THE OMISSION AT THE TIME OF FILING ORIGINAL RETURNS WAS DELIBERATE AND CONSCIOUS SINCE THE ASSESSEE HAS FAI LED TO ESTABLISH THAT THE OMISSION IN THE ORIGINAL RETURN WAS ON ACCOUNT OF ANY BONAFIDE INADVERTENCE OR MISTAKE. [G. C. AGARWAL VS. CIT (1990) 186 ITR 571 (SC)]. ITA NOS. 391 TO 395 & 420/RJT/2012 . A.Y. 2000- 01 TO 04-05 & 06-07 (SHRI MUKESH V. KHANT) 4 (VII) ONCE RETURN OF INCOME IS FILED IN RESPONSE TO NOTICE U/S 153A / 153C OF THE ACT, ONLY PENDING ASSESSMENT OR REASSESSMENT PROCEEDINGS DO ABATE AND NOT ALL THE PAST ACTIONS. THE RETURNS FILED ORIGINALLY DO NOT ABATE AT ALL. 6.13 IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED O PINION THAT THE APPELLANT HAS CONCEALED THE PARTICULARS OF INCOME IN RESPECT OF A DDITIONAL INCOME DISCLOSED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT AND IS, THEREFORE, LIABLE TO PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, PENALTY LEV IED BY THE AO U/S 271(1)(C) AT AROUND THE MINIMUM RATE OF 100% TAX SOUGHT TO BE EVADED IS HEREBY CONFIRMED IN EACH ASSESSMENT YEAR. 6. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE I S NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING EFFECTIVE GROUND: 2.1 THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS)-IV, AHMEDABAD [CIT(A)] ERRED ON FACTS AS ALSO IN CONFIRMING THE PENALTY U/ S.271(1)(C) OF THE ACT ON INCOME ADMITTED DURING THE COURSE OF SEARCH OF AT 7 0,000/-. THE PENALTY U/S.271(1)(C) OF THE ACT MAY KINDLY BE DELETED. 6.1 AT THE OUTSET BEFORE US, LD. A.R. SUBMITTED THA T ON IDENTICAL FACTS AND ON THE SIMILAR ADDITION MADE ARISING OUT OF THE SAME SEARC H, PENALTY THAT WAS LEVIED U/S.271(1)(C) OF THE ACT ON ANOTHER ASSESSEE, NAMEL Y, M/S. BALAJI WAFERS PVT. LTD., WAS DELETED BY THE HONBLE ITAT IN THE CASE O F ACIT VS. M/S. BALAJI WAFERS PVT. LTD. IN ITA NOS. 15 TO 20/RJT/2011, ORDER DATE D 18.12.2014. HE PLACED ON RECORD THE COPY OF THE AFORESAID ORDER. HE, THEREF ORE, SUBMITTED THAT SINCE THE FACTS OF THE CASE IN THE YEAR ARE IDENTICAL TO THAT OF M/S. BALAJI WAFERS PVT. LTD. AND THEREFORE, RELYING UPON THE DECISION OF CO-ORDI NATE BENCH IN THE CASE OF M/S. BALAJI WAFERS (SUPRA), THE PENALTY IN THE PRESENT C ASE ALSO NEEDS TO BE DELETED. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDERS OF A.O. AND LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO LE VY OF PENALTY U/S.271(1)(C) OF THE ACT. WE FIND THAT CO-ORDINATE BENCH OF TRIBUNAL IN CASE OF ACIT VS. M/S. BALAJI ITA NOS. 391 TO 395 & 420/RJT/2012 . A.Y. 2000- 01 TO 04-05 & 06-07 (SHRI MUKESH V. KHANT) 5 WAFERS PVT. LTD. (SUPRA) ON IDENTICAL FACTS HAS DEL ETED THE PENALTY. THE OPERATIVE PORTION OF THE ORDER IS REPRODUCED AS UNDER: 4.1. THE CONTENTION OF THE LD.COUNSEL FOR THE ASSE SSEE IS THAT UNDER THE IDENTICAL FACTS, THE ISSUE OF LEVY OF PENALTY TRAVELLED UPTO THE STA GE OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. M/S.BALAJI MULTIFLEX PVT.LTD. IN TA X APPEAL NOS.83 & 84 OF 2011 (SUPRA). WE FIND THAT THE LD.CIT(A) WHILE DELETING THE ADDITION HAS FOLLOWED THE DECISION OF HON'BLE COORDINATE BENCH RENDERED IN THE CASE OF DCIT VS. BALAJI MULTIFLEX PVT.LTD & ORS, WHEREIN THE PENALTY LEVIED U/S.271(L)(C) OF THE ACT ON THE INCOME ADMITTED DURING THE COURSE OF SURVEY PROCEEDINGS WAS DELETED BY THE TRIBUNAL. THE CONTENTION OF THE ASSESSEE IS NOT CONTROVERTED BY THE REVENUE BY PLAC ING ANY MATERIAL ON RECORD, THEREFORE RESPECTFULLY FOLLOWING RATIO LAID DOWN BY THE HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF KIRIT DAHYABHAI PATEL VS. A SST.CIT IN TAX APPEAL NOS. 1181, 1182 & 1185 OF 2010, DATED 03/12/2014(SUPRA) AND AL SO THE DECISION OF COORDINATE BENCH IN THE CASE OF DCIT VS. BALAJI MULTIFLEX P. L TD. (SUPRA), WE DO NOT FIND ANY MERIT IN THE REVENUE'S APPEAL IN IT(SS)A NO.L5/RJT/2011 F OR AY 2000-01, SAME IS HEREBY REJECTED. 7.1 BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE SUBMISSIONS MADE BY LD. A.R. NOR HAS PLACED ANY MATERIAL ON RECORD TO DEMONSTRATE ANY DISTINGUISHABLE FEATURE IN THE FACT S OF THE PRESENT CASE AND THAT OF M/S. BALAJI WAFERS PVT. LTD. (SUPRA). FURTHER, IT IS ALSO A FACT THAT THE ADDITION HAS BEEN BASED ON THE BASIS OF ESTIMATION OF NET PROFIT S. WE, THEREFORE, RELYING UPON THE DECISION OF M/S. BALAJI WAFERS PVT. LTD.(SUPRA) AND IN VIEW OF THE FACT THAT THE ADDITIONS ON WHICH THE PENALTY HAS BEEN LEVIED IS O N ESTIMATE AND GUESS WORK, WE DIRECT THE DELETION OF PENALTY. THUS, THE GROUND O F ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . 9. BEFORE US, SINCE, BOTH THE PARTIES HAD SUBMITTED THAT GROUNDS RAISED IN THE APPEALS OF ASSESSEE FOR A.Y. 2001-02 TO 2004-05 & 2 006-07 ARE IDENTICAL TO THAT OF GROUNDS RAISED IN ASSESSEES APPEAL IN A.Y. 2000 -01 AND THE SUBMISSION MADE BY THEM WHILE ARGUING THE APPEAL FOR A.Y. 2000-01 A RE ALSO APPLICABLE TO THE GROUNDS RAISED IN PRESENT YEARS AND IN VIEW OF THE AFORESAID SUBMISSIONS, WE FOR ITA NOS. 391 TO 395 & 420/RJT/2012 . A.Y. 2000- 01 TO 04-05 & 06-07 (SHRI MUKESH V. KHANT) 6 THE SIMILAR REASONS AS STATED HEREINABOVE, WHILE DE CIDING THE GROUNDS FOR A.Y.2000-01 AND FOR SIMILAR REASONS ALLOW THE PRESE NT APPEALS OF ASSESSEE FOR A.YS. 2001-02 TO 2004-05 & 2006-07. 10. IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 18/03/2016 SD/- SD/- (S. S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED. 18/03/2016 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT