M/s Annapurna Estates, Berhampur V. ITO, Berhampur

ITA 400/CTK/2010

• Counselvise Citation: 40022114 RSA 2010
• Duration Of Justice: 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 03-08-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 09-11-2010
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Keywords: Unexplained investment; Corroborative evidences

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO. 400 AND 401/CTK/2010 (ASSESSMENT YEAR S 2002 - 03 AND 2003 - 04) M/S.ANNAPURNA ESTA TES, GANDHI NAGAR, BERHAMPUR PAN: AAMFM 3820 A VERSUS INCOME - TAX OFFICER, WARD 1, BERHAMPUR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: NONE FOR THE RESPONDENT SHRI S.C.MOHANTY, DR ORDER SHRI K.K.GUPTA, ACCOUNTANT MEMBER : THESE TWO APPEALS ARE F ILED BY THE ASSESSEE AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME - TAX (APPEALS) OF EVEN DATED THE 30 TH JUNE, 2010 AGITATING THE PART SUSTENANCE OF THE PENALTY LEVIED U/S.271(1)(C) OF THE INCOME - TAX ACT,1961 FOR THE ASSESSMENT YEARS 2002 - 03 AND 2003 - 04. 2. THESE APPEALS WERE FIRST POSTED FOR HEARING ON 18.4.2010 AND IT BEING A HOLIDAY, THE CASE WAS ADJOURNED TO 12.5.2011, 30.6.2011 AND LASTLY TO 03.8.2011. NONE APPEARED ON BEHALF OF THE ASSESSEE ON THESE DATES INCLUDING THE DATE LASTLY FIXED FOR HEARING FOR WHICH THE NOTICE HAS DULY BEEN SERVED ON 15.7.2011 (COPY OF ACKNOWLEDGEMENT IS PLACED ON RECORD). THEREFORE, WE PROCEED TO HEAR THE CASE AND DISPOSE OF THE SAME EXPARTE QUA ASSESSEE AFTER HAVING HEARD THE LEARNED DR AND PERUSING THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW. 3. THE UNDISPUTED FACTS AS BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE IS AN AOP WHICH APPROACHED THE ASSESSING OFFICER BY A LETTER DT. 02.01.2006 REQUESTING THEREIN TO ISSUE NOTICE U/S.148 OF THE I.T.ACT,1961 SINCE IT DID NOT FI LE THE RETURN FOR THE AYS UNDER CONSIDERATION IN TIME THOUGH HAVING TAXABLE INCOME . ACCORDINGLY, THE ASSESSING OFFICER ISSUED NOTICE U/S.148, IN RESPONSE TO WHICH THE ASSESSEE FILED ITS RETURNS ON 14.3.2006 ITA NO.400 AND 401/CTK/2010 2 DECLARING INCOME OF 1,60,625 AND 2,65,660 IN THE ASSESSMENT YEARS 2002 - 03 AND 2003 - 04 RESPECTIVELY. 4. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT FOR BOTH THE AYS UNDER CONSIDERATION ON 31,12,2007 U/S.143(3)/147 OF THE ACT ON A TOTAL INCOME OF 6,60,630 FOR THE ASSESSMENT YEAR 2002 - 03 BY WAY OF MAKING ADDITION OF 5,00,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT THE ASSESSEE HAVING FAILED TO ESTABLISH IDENTITY OF 27 NUMBER OF PERSONS. FOR THE ASSESSMENT YEAR 2003 - 04, HOWEVER, THE ASSESSING OFFICER ACCEPTED THE RETURNED INCOME AT 2,65,660. 5. TH E ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS REQUIRED TO FILE THE RETURNS FOR THE AYS 2002 - 03 AND 2003 - 04 LATEST BY THE END OF THE ASSESSMENT YEAR I.E., ON 31.3.2003 AND 31.3.2004 RESPECTIVELY, BUT IT HAS FILED THE RETURNS ON 14.3.2006 FOR BOTH THE Y EARS AND THAT TOO AFTER ISSUANCE OF NOTICE U/S.148 OF THE I.T.ACT,1961. THEREFORE, TAKING RECOURSE OF THE EXPLANATION 3 TO SECTION 271(1)(C), THE ASSESSING OFFICER LEVIED PENALTY OF 1,75,630 AND 56,383 FOR THE ASSESSMENT YEAR 2002 - 03 AND 2003 - 04 RESPECTIVELY BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED. 6. AGGRIEVED, THE ASSESSEE FILED APPEALS BEFORE THE CIT(A). IT WAS CONTENDED BEFORE HIM THAT SINCE THE RETURNED INCOME WAS VOLUNTARILY DISCLOSED BY IT AND THE ASSESSING OFFICER ONLY ISSUED NOTICE U/S.148 ON THE BASIS OF REQUEST FROM THE ASSESSEE, THE DISPUTED AMOUNT IS NEITHER A CONCEALMENT OF INCOME NOR THE ASSESSEE HAS DELIBERATELY CONCEALED ANY PARTICULARS OF INCOME. THE L EARNED CIT(A) TURNED THE SAID CONTENTION OBSERVING THAT THE INFORMATION GIVEN TO THE ASSESSING OFFICER BY A LETTER TO ISSUE NOTICE U/S.148 CANNOT BE TREATED AS A VOLUNTARY DISCLOSURE AS NO DISCLOSURE CAN BE MADE BY AN ASSESSEE U/S.148 OF THE I.T.ACT. HE FU RTHER OBSERVED THAT THE ASSESSEE COULD HAVE PAID THE TAX AND FILED THE BELATED ITA NO.400 AND 401/CTK/2010 3 RETURN BEFORE ISSUE OF NOTICE U/S.148 OF THE ACT. INSTEAD, IT WAITED THE ASSESSING OFFICER TO ISSUE NOTICE U/S.148. THEREFORE, HE UPHELD THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT BUT REDUCED THE QUANTUM OF PENALTY FOR THE ASSESSMENT YEAR 2002 - 03, HOLDING THAT PENALTY U/S.271(1)(C) IS NOT LEVIABLE ON THE ADDITION OF 3,88,000 MADE U/S.69 AND FOR THE ASSESSMENT YEAR 2002 - 03 BY CONSIDERING THE SELF - ASSESSMENT ADVANCE TAX PAID BY THE ASSESSEE IN THE ASSESSMENT YEAR 2003 - 04. 7. AGGRIEVED, THE ASSESSEE HAS FILED THESE APPEALS BEFORE THE TRIBUNAL RAISING ALMOST SIMILAR CON TENTIONS AS WERE RAISED BEFORE THE LEARNED CIT(A) THAT THE DISPUTED AMOUNT IS NEITHER A CONCEALMENT OF INCOME NOR THE ASSESSEE HAS DELIBERATELY CONCEALED ANY PARTICULARS, AND SINCE THE ASSESSEE HAS VOLUNTARILY DISCLOSED THE INCOME, LEVY OF PENALTY U/S.271( 1)(C) OF THE ACT IS NOT JUSTIFIED. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE IMPUGNED ORDERS OF THE LEARNED CIT(A). 8. HAVING HEARD THE LEARNED DR AND GOING THROUGH THE IMPUGNED ORDER OF THE AUTHORITIES BELOW, IT IS NOTICED THAT THE ASSESSEE ADMITT EDLY HAVING TAXABLE INCOME OUGHT TO HAVE FILED RETURNS AT BEST UP TO THE END OF THE ASSESSMENT YEARS UNDER CONSIDERATION. BUT THE ASSESSEE HAS NOT FILED THE SAME WITHIN THAT DATE. ON THE OTHER HAND, MUCH LATTER I.E., ON 20.1.2006, IT WROTE A LETTER TO THE ASSESSING OFFICER TO ISSUE NOTICE U/S.148 AND ACCORDINGLY, THE ASSESSING OFFICER ISSUED NOTICE U/S.148 IN RESPONSE TO WHICH THE ASSESSEE HAS FILED THE RETURN. THIS , IN OUR CONSIDERED VIEW, CANNOT BE HELD TO BE A VOLUNTARY DISCLOSURE OF INCOME AS CLAIMED B Y THE ASSESSEE. RATHER, THE ACTION OF THE ASSESSEE IS CLEARLY POINTS OUT TO AN EXERCISE IN ORDER TO EXONERATE ITSELF FROM THE PENAL CONSEQUENCE FOR NON - FILING OF RETURN WITHIN THE STIPULATED TIME, IT HAVING TAXABLE INCOME. FURTHER, THERE IS NO EXPLANATION OFFERED BY THE ASSESSEE FOR SUCH BELATED FILING OF THE RETURN, WITH ITA NO.400 AND 401/CTK/2010 4 SUPPORTING EVIDENCE EITHER BEFORE THE AUTHORITIES BELOW OR EVEN BEFORE THIS FORUM. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN ITS ENTIRETY, WE ARE OF THE CONSIDERED VIEW THAT THE LOWER AUTHORITIES ARE JUSTIFIED IN LEVYING PENALTY U/S.271(1)(C) OF THE ACT TAKING RECOURSE OF EXPLANATION 3 OF THAT SECTION, WHICH STIPULATES THAT WHERE ANY PERSON HAVING TAXABLE INCOME FOR ANY ASSESSMENT YEAR FAILS, WITHOUT REASONABLE CAUS E, TO FURNISH RETURN WITHIN THE PERIOD SPECIFIED, SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME IN RESPECT OF SUCH ASSESSMENT YEAR NOTWITHSTANDING THAT SUCH PERSON FURNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY OF TH E STIPULATED PERIOD IN PURSUANCE OF A NOTICE U/S.148. WE THEREFORE, UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER SO FAR AS LEVY OF PENALTY U/S.271(1)(C) IS CONCERNED. IT IS NOTEWORTHY THAT THE ASSESSEE HAS NOT CHALLENGED THE QUANTUM OF LEVY OF PENALTY EVEN AS RETAINED BY THE LEARNED CIT(A). THEREFORE, WE UPHOLD THE IMPUGNED ORDERS OF THE LEARNED CIT(A) AND DISMISS THE APPEALS OF THE ASSESSEE BEING DEVOID OF MERIT. 9. IN THE RESULT, THE APPEALS OF THE ASSESS EE ARE DISMISSED. PRONOUNCED IN OPEN COURT ON DT. 5 TH AUGUST, 2011 S D / - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 5 TH AUGUST, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. ITA NO.400 AND 401/CTK/2010 5 CO PY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: M/S.ANNAPURNA ESTATES, GANDHI NAGAR, BERHAMPUR 2. THE RESPONDENT: INCOME - TAX OFFICER, WARD 1, BERHAMPUR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.