The ITO, Ward-1(2), RAJKOT-GUJARAT V. Shri Nitin J. Raichura, RAJKOT-GUJARAT

ITA 433/RJT/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1282 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Assessee Lawyers: MJ RANPURA
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AH MEDABAD] (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI KUL BHARAT, JUDICIAL MEMBER) ITA. NO: 433/RJT/2012 (ASSESSMENT YEAR: 2007-08) ITO, WARD-1(2), RAJKOT V/S SHRI NITIN J. RAICHURA, PROP. OF MADHAV DEVELOPERS, 15/3, JUNCTION PLOT, RAJKOT (GUJARAT). (APPELLANT) (RESPONDENT) PAN: ABSPR 8649H APPELLANT BY : SHRI C.S. ANJARIA, SR. D. R. RESPONDENT BY : SHRI M.J. RANPURA, C.A. ( )/ ORDER DATE OF HEARING : 16 -05-201 6 DATE OF PRONOUNCEMENT : 18 -05-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF LD. CIT(A)-I, RAJKOT DATED 24.04.2012 PERTAINING TO A.Y . 2007-08. ITA NO. 399/ RJT/2013 . A.Y.1998-99 2 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN DELETING THE PENALTY LEVIED BY THE A.O U/S. 271(1)( C) OF THE ACT. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER DATED 30.12.2008 MADE U/S. 143(3) OF THE ACT. A SEARCH AC TION U/S. 132 OF THE ACT WAS CARRIED OUT AT THE PREMISES OF THE ASSE SSEE ON 22.12.2006. PURSUANT TO THE SEARCH OPERATION PROCEE DINGS U/S. 153A OF THE ACT WAS INITIATED AND THE RETURN OF INCOME W AS FILED ACCORDINGLY. THE RETUNED INCOME OF RS. 63,15,820/- WAS ASSESSED AT RS. 83,38,164/- AND PENAL PROCEEDINGS WERE SEPARATELY I NITIATED. THE MATTER RELATING TO THE QUANTUM ADDITIONS TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 06.09.2010 IN ITA NO. 722/RJT/2010 DELETED THE ADDITIONS SO MADE. HOWEVER, THE A.O INI TIATED PENAL PROCEEDINGS ON UNACCOUNTED EXPENSES FOUND IN THE SE IZED MATERIAL. THE ASSESSEE WAS CONFRONTED WITH THE SAME AND ON RE CEIVING NO SATISFACTORY REPLY, THE A.O. PROCEEDINGS BY LEVYING PENALTY OF RS. 27,91,389/-. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A). BEFORE THE FIRST APPELLATE AUTHORITY, HEAVY RELIANCE WAS PLACED ON E XPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) HELD AS UNDER:- 3.4 I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE A.R. OF THE APPELLANT AS WELL AS GONE THROUGH THE RECORDS. ON P ERUSAL OF THE PENALTY ORDER, IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE APPELLANT HAD MADE DISCLOSURE OF INCOME IN THE FORM OF HIS ST ATEMENT RECORDED U/S. 132(4) OF THE ACT. HE HAS PAID THE TAX ON THE SAME. THE AR OF THE APPELLANT ARGUED THAT THE AO HAS NARROWLY INTER PRETED THE RELIEF GRANTED BY THE LEGISLATURE IN FORM OF EXPLANATION 5 TO SECTION 271 ITA NO. 399/ RJT/2013 . A.Y.1998-99 3 (L)(C). 1 HAVE GONE THROUGH THE FINDING OF THE AO I N THE PENALTY ORDER AS ALSO THE SUBMISSION OF THE ID. AR OF THE APPELLA NT. IT IS WORTH NOTING THE PRINCIPLE LAID DOWN BY THE HON'BLE HIGH COURT O F GUJARAT IN THE CASE OF CIT VS. MAHENDRA C. SHAH [2008] 299 ITR 305 (GUJ) THAT ONE IS NOT REQUIRED TO SPECIFY THE MANNER IN WHICH THE INCOME WAS EARNED IN RESPECT OF AMOUNT OFFERED TO TAX IN THE RETURN O F INCOME FILED PURSUANT TO SEARCH ACTION BY PAYING TAXES THEREON F OR AVAILING IMMUNITY FROM PENALTY UNDER EXPLANATION 5 OF SECTIO N 271 (1) (C) OF THE ACT. 5. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. THE LD . D.R. COULD NOT BRING ANY DISTINGUISHING DECISION IN FAVOUR OF THE REVENUE NOR HE COULD REBUT THE FINDINGS OF THE LD. CIT(A). 6. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IN OUR HUMBLE OPINION, EXPLANATI ON 5 TO SECTION 271(1)(C) SQUARELY APPLY ON THE FACTS OF THE CASE, THE SAME READ AS UNDER:- EXPLANATION 5 TO SECTION 27L(L)(C) 'WHERE IN THE COURSE OF SEARCH INITIATED UNDER SECT ION 132 BEFORE THE FIRST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO B E OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREINAFTER IN THIS EXPLANATION REFERRED TO ASSETS) AND THE ASS ESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME (A) FOR ANY PREVIOUS YEAR WHICH HAS BEEN ENDED BEF ORE THE DATE OF SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR H AS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHERE SUCH RETUR N HAS BEEN ITA NO. 399/ RJT/2013 . A.Y.1998-99 4 FURNISHED BEFORE THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AF TER THE DATE OF SEARCH, THEN NOTWITHSTANDING THAT SUCH INCOME IS DECLARED B Y HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF PENALTY UNDER CLA USE (C) OF SUB SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONC EALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME, UNLESS,- (1) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING IN SU CH INCOME ARE RECORDED (I) IN A CASE FALLING UNDER CLAUSE (A), BEFORE TH E DATE OF SEARCH; AND (II) IN A CASE FALLING UNDER CLAUSE (B), ON OR B EFORE THE SUCH DATE, IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE THE SAID DATE; OR (2) HE, IN THE COURSE OF SEARCH, MAKES A STATEMEN T UNDER SUB SECTION 4 OF SECTION 132 THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE AT-TIDE OR THING FOUND IN HIS POSSESSION OR UNDER H IS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCL OSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SUB SECTION (1) OF SECTION 139, AND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PA YS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME. ITA NO. 399/ RJT/2013 . A.Y.1998-99 5 7. SINCE, THE FIRST APPELLATE AUTHORITY HAS GIVEN A FA CTUAL FINDING ON THE APPLICABILITY OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT, THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE SAME. APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 18 - 05 - 2016 SD/- SD/- (KUL BHARAT) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH 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,RAJK OT