ACIT, Kota V. HARBANS LAL SETHI, Kota

ITA 455/JPR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3578 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MAHENDRA GARGIEYA DHK
• Keywords: Revised return; Bonafide mistake
• Section: 271(1)(c); 133A; 195

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 455/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. THE ACIT, CIRCLE-1, KOTA. CUKE VS. SHRI HARBANS LAL SETHI, 97, DUSHERA SCHEME, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AJYPS 6625 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI ANOOP SINGH (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADVOCATE) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28.05.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 07/08/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 24.03.2017 OF LD. CIT (A), KOTA FOR THE ASSESSMENT YEAR 2011-12 . THE REVENUE HAS RAISED THE SOLITARY GROUND AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) HAS ERRED IN ( I) DELETING PENALTY OF RS. 51,49,485/- BY IGNORI NG THE FACT AND CIRCUMSTANCES OF THE CASE AND THE FACTS MENTIONED B Y THE AO IN THE PENALTY ORDER ; (II) THE APPELLANT CRAVES LIBERTY TO RAISE ADDITION AL GROUND AND TO MODIFY/AMEND THE GROUND OF APPEAL AT THE TIME OF HE ARING. 2 ITA NO. 455/JP/2017 SHRI HARBANS LAL SETHI, KOTA. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONTR ACT. A SURVEY UNDER SECTION 133A OF THE I.T. ACT WAS CONDUCTED ON 9 TH FEBRUARY, 2011. DURING THE SURVEY PROCEEDINGS, THE ASSESSEE SURRENDERED HIS UNDISCLOS ED INCOME OF RS. 1,51,50,000/-. HOWEVER, THE ASSESSEE DID NOT DECLARE THE SURRENDER ED INCOME IN THE RETURN OF INCOME FILED ON 30 TH MARCH, 2012. DURING THE ASSESSMENT PROCEEDINGS, TH E AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY THE ADD ITION OF RS. 1,51,50,000/- SHOULD NOT BE MADE TO THE TOTAL INCOME OF THE ASSES SEE AS THE ASSESSEE HAS NOT DISCLOSED THE SAME IN THE RETURN OF INCOME. IN REP LY TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT DUE TO OVERSIGHT AND LACK O F TIME SUCH INCOME WAS NOT SHOWN IN THE COMPUTATION OF INCOME WHEREAS SUCH INC OME WAS SHOWN IN THE CAPITAL ACCOUNT AND BALANCE SHEET OF THE ASSESSEE. SINCE T HE TAX DUE ON THE SAID INCOME WAS ALREADY PAID BY THE ASSESSEE, THEREFORE, THE AS SESSEE REVISED ITS COMPUTATION OF INCOME AND OFFERED THE SAME. THE AO ACCORDINGLY MA DE AN ADDITION OF RS. 1,51,50,000/- TO THE TOTAL INCOME OF THE ASSESSEE A ND CONSEQUENTLY INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE AO PASSED A PENALTY ORDER UNDER SECTION 271(1)(C) ON 21 ST MAY, 2015 AND LEVIED THE PENALTY OF RS. 51,49,485/- BEING 100% OF TAX SOUGHT TO BE EVADED. THE ASSESSEE CHALLENGED THE LEVY OF PENALTY BEFORE THE LD. CIT (A) AND CONTENDE D THAT WHEN THE ASSESSEE OFFERED THE INCOME IN THE REVISED RETURN WHICH WAS REGULARI ZED, THEN NO PENALTY IS LEVIABLE ON SUCH INCOME. IT WAS FURTHER CONTENDED THAT THER E WAS A BONAFIDE MISTAKE FOR NOT INCLUDING THE SURRENDERED INCOME IN THE COMPUTATION OF TOTAL INCOME THOUGH THE ASSESSEE ALREADY PAID THE TAX ON SUCH INCOME. THER EFORE, EVEN IF THE AO MADE THE ADDITION, THE EXPLANATION OF THE ASSESSEE WAS BONAF IDE ONE. THE LD. CIT (A) ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE PA YMENT OF TAX MADE BY THE 3 ITA NO. 455/JP/2017 SHRI HARBANS LAL SETHI, KOTA. ASSESSEE AND NOT CLAIMING REFUND OF THE SAME ESTABL ISHED THAT THERE WAS INADVERTENT OMISSION OF ADDITIONAL INCOME FROM COMPUTATION AND SUBSEQUENTLY REVISION THROUGH THE COMPUTATION IN THE COURSE OF ASSESSMENT PROCEED INGS SHOW THE INTENTION OF THE ASSESSEE TO BE BONAFIDE. ACCORDINGLY, THE LD. CIT ( A) DELETED THE PENALTY LEVIED BY THE AO. 3. BEFORE US, THE LD. D/R HAS SUBMITTED THAT IT IS NOT A VOLUNTARY SURRENDER OR DECLARATION OF INCOME BUT IT WAS DETECTED DURING TH E SURVEY UNDER SECTION 133A BY THE AO. DESPITE THE ASSESSEE SURRENDERED THE SAID INCOME OF RS. 1,51,50,000/-, THE ASSESSEE DID NOT DECLARE THE SAID INCOME IN THE RET URN OF INCOME AND ONLY WHEN THE AO ISSUED A SHOW CAUSE NOTICE, THE ASSESSEE FILED A REVISED COMPUTATION AND AGREED TO THE ADDITIONAL INCOME. THUS THE LD. D/R HAS SUB MITTED THAT IT IS A CLEAR CASE OF CONCEALMENT OF INCOME WHICH ATTRACTS THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. HE HAS RELIED UPON THE ORDER OF THE A.O. 3.1. ON THE OTHER HAND, THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAD DISCLOSED THE ADDITIONAL INCOME DURING THE SURVEY AND ALSO PAID THE ADVANCE TAX ON THE SAID INCOME PRIOR TO THE END OF THE FINANCIAL YEAR WHICH ITSELF SHOW THE BONAFIDE OF THE ASSESSEE EVEN IF THE SAID INCOME WAS NOT INCLUDED IN THE COMPUTATION OF INCOME OF THE ASSESSEE. MOREOVER TH E ENTRIES WERE PASSED IN THE ACCOUNTS AND THE SURRENDERED INCOME WAS DULY SHOWN IN THE CAPITAL ACCOUNT AND BALANCE SHEET WHICH WERE FILED ALONG WITH THE ORIGI NAL RETURN OF INCOME ITSELF. THUS DUE TO INADVERTENCE AND BONAFIDE MISTAKE, THE SAID INCOME COULD NOT BE INCLUDED IN THE RETURN OF INCOME FILED BY THE ASSESSEE ON THE L AST DATE OF LIMITATION. THE LD. A/R HAS THUS SUBMITTED THAT THERE IS NO ATTEMPT BY THE ASSESSEE TO EITHER CONCEAL THE 4 ITA NO. 455/JP/2017 SHRI HARBANS LAL SETHI, KOTA. PARTICULARS OF INCOME OR FURNISH INACCURATE PARTICU LARS OF INCOME. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE FOLLOWING DECISI ONS :- BRIJ MOHAN VS. CIT 120 ITR 1 (SC) CIT VS. ONKAR SARAN & SONS, 195 ITR 1 (SC) B.N. SHARMA VS. CIT 226 ITR 442 (SC) 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD, WE NOTE THAT IF THE ASSESSEE HAS NOT DECLAR ED THE SURRENDERED INCOME IN THE RETURN OF INCOME AND ALSO NOT FILING REVISED RETURN OF INCOME, THEN THE CASE OF THE ASSESSEE WOULD CERTAINLY FALL IN THE CATEGORY OF FU RNISHING INCORRECT PARTICULARS OF INCOME IN THE RETURN OF INCOME AS THE ASSESSEE HAD ALREADY DECLARED AND SURRENDERED THE SAID INCOME DURING THE COURSE OF SU RVEY PROCEEDINGS UNDER SECTION 133A. HOWEVER, IN THE CASE IN HAND THE ASSESSEE HA S PAID THE DUE TAX ON THE SAID INCOME PRIOR TO THE FILING OF THE RETURN OF INCOME AND FURTHER THIS AMOUNT WAS DULY REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. ONCE THE ASSESSEE HAS CONSIDERED THE ADDITIONAL INCOME SURRENDERED DURING THE SURVEY IN THE BOOKS OF ACCOUNTS AND ALSO PAID THE TAX ON THE SAME, THEN ME RE NON INCLUSION OF THE SAID INCOME IN THE RETURN OF INCOME DUE TO INADVERTENCE AND BONAFIDE MISTAKE WOULD NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS CONCEA LED PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME PARTICU LARLY WHEN THE ASSESSEE DID NOT CLAIM ANY REFUND OF THE ADVANCE TAX PAID ON SUCH IN COME. THE LD. CIT (A) HAS ADJUDICATED THIS ISSUE AT PAGES 8 AND 18-19 AS UNDE R :- 5 ITA NO. 455/JP/2017 SHRI HARBANS LAL SETHI, KOTA. I HAVE GONE THROUGH ASSESSEES SUBMISSION AND A OS FINDINGS. FROM THE FACTS IT IS CLEAR THAT THOUGH THE ASSESSEE HAD PAID ALL THE TAXES DUE ON THE ADDITIONAL INCOME OFFERED TO TAX D URING THE SURVEY PROCEEDINGS BUT HAD NOT DISCLOSED IT IN THE COMPUTA TION OF INCOME SEPARATELY. THE TAX WAS PAID BY MARCH 2011 AND REMA INED WITH THE DEPARTMENT TILL THE TIME THE RETURN WAS TAKEN UP FO R SCRUTINY IN NOVEMBER, 2014, WHEN THE FACT OF NON DISCLOSURE OF THE ADDITIONAL INCOME WAS BROUGHT UP BY THE AO BY ISSUING A SHOW C AUSE NOTICE. ON THE BASIS OF THE DECISIONS RELIED UPON COURTS HAVE FORMED A VIEW THAT A. PENALTY IS NOT AN AUTOMATIC CONSEQUENCE OF ADDITION TO INCOME; B. PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN COME INTO PLAY ONLY WHEN THE CONDITIONS LAID DOWN UNDER THAT SECTION AR E SATISFIED ; C. CONCEALMENT OF INCOME CANNOT BE A PASSIVE SITUATION AND IT IMPLIES THAT THE PERSON CONCEALING THE INCOME IS HIDING, CO VERING UP OR CAMOUFLAGING AN INCOME ; D. PENALTY IS NOT LEVIABLE IN CASE WHERE ASSESSEE IS A BLE TO PROVIDE A BONA FIDE EXPLANATION ; AND E. PENALTY IS NOT LEVIABLE IN CASES WHERE ASSESSEE MAD E ERRORS, UNDER BONA FIDE BELIEFS. IT IS NOT NECESSARY THAT THE CLAIMED BONA FIDE BELI EF MUST BE SUBSTANTIATED WITH SOME DOCUMENTARY EVIDENCE. THE C LAIM OF BONA FIDE BELIEF CAN ALSO BE SUBSTANTIATED BY CIRCUMSTANTIAL EVIDENCE WHEN POSSIBILITY OF DOCUMENTARY EVIDENCE CANNOT BE EXPEC TED. SINCE THE ENTIRE PROCESS IN THIS CASE HAS INVOLVED VOLUNTARY SURRENDER, THERE WAS NO QUESTION OF CONTEST BEFORE THE FIRST A PPELLATE AUTHORITY WHICH HAS BEEN MADE A GROUND BY THE A.O. WHILE IMPO SING THE PENALTY. THE HUGE AMOUNT OF TAXES PAID WHICH WERE IN DEPARTMENTS COFFERS SHOW THAT THE INTENT OF THE ASSESSEE WAS NO T MALAFIDE OR ELSE 6 ITA NO. 455/JP/2017 SHRI HARBANS LAL SETHI, KOTA. HE COULD HAVE NOT LEFT IT FOR 2 YEARS IN THE GOVERN MENT ACCOUNT AND INSTEAD WOULD HIMSELF HAVE EARNED SUBSTANTIAL INTER EST ON THE SAME. THUS, IN THE PRESENT CASE IT IS CLEAR THAT THE PAYM ENT OF TAXES, NOT CLAIMING REFUND OF THE SAME, INADVERTENT OMISSION O F ADDITIONAL INCOME FROM THE COMPUTATION AND SUBSEQUENT REVISION THROUG H A COMPUTATION IN THE COURSE OF ASSESSMENT PROCEEDINGS SHOW THE IN TENTION OF THE ASSESSEE TO BE BONAFIDE AND IN MY HUMBLE VIEW, DULY COVERED UNDER THE OPINION OF THE COURTS AS DISCUSSED ABOVE IN THI S ORDER. IN THE ABSENCE OF BRINGING OUT ANY DELIBERATE AND M ALAFIDE INTENT BEHIND THE OMISSION OR ALLEGED CONCEALMENT THE PENA LTY OF RS. 51,49,485/- LEVIED BY THE AO IS NOT FOUND TO BE SUS TAINABLE AND IS DIRECTED TO BE DELETED. THIS GROUND OF APPEAL IS TREATED AS ALLOWED. ACCORDINGLY, THE FACTS AS DISCUSSED AND CONSIDERED BY THE LD. CIT (A) HAS NOT BEEN DISPUTED BEFORE US BY THE REVENUE THAT THE ASSESSEE MADE THE PAYMENT OF TAX BEFORE FILING OF THE RETURN AND NOT CLAIMED REFUND OF THE SAME. THE NON-INCLUSION OF THE SAID INCOME WAS EXPLAINED AS DUE TO INADVERTENT OMISSION AND BONAFIDE MISTAKE. THEREFORE, THE EXPLANATION TENDERED BY THE ASSESSEE WITH THE SUPPORTING FACTS AND DETAILS FALLS IN THE CLAUSE-B OF EXPLANATION-2 TO S ECTION 271(1)(C) OF THE ACT. HENCE WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUG NED ORDER OF THE LD. CIT (A). 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 07/08/ 2018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 07/08/2018. DAS/ 7 ITA NO. 455/JP/2017 SHRI HARBANS LAL SETHI, KOTA. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ACIT, CIRCLE-1, KOTA. 2. THE RESPONDENT SHRI HARBANS LAL SETHI, KOTA. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 455/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 8 ITA NO. 455/JP/2017 SHRI HARBANS LAL SETHI, KOTA.