RASILA R. OSWAL, MUMBAI V. DCIT RG 8(2), MUMBAI

ITA 4615/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101051 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-12-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 13-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Assessee Lawyers: BEHARILAL
• Keywords: Gift; Onus to prove; Revised return
• Section: 133A; 131; 148; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN , AM AND AMARJIT SINGH , JM ./ I.T.A. NO . 4615 , 4616, 4617 / MUM/20 1 3 ( / ASSESSMENT YEA R : 20 02 - 03 , 200 3 - 04,2004 - 05 ) MRS.RASILA R OSWAL, 81/82, SOLITAIRE, CENTRAL AVENUE , SANTACRU Z (W), MUMBAI - 400054 / VS. INCOME TAX OFFICER 8(2)(1), MUMBAI . ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AAA PO0751C ./ I.T.A. NO .4618/ MUM/20 13 ( / ASSESSMENT YEA R : 2003 - 04 ) RATANCHAND S OSWAL, 81/82, SOLITAIRE, CENTRAL AVENUE, SANTACRUZ(W), MUMBAI - 400054 / VS. JT . CIT(OSD), 8(2), MUMBAI. ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN. : AAAPO 2411M / APPELLANT S BY SHRI BEHARILAL / R EVENUE BY SHRI LOVE KUMAR / DATE OF HEARING : 0 3 .9 . 201 5 / DATE OF PRONOUNCEMENT: 03. 9. 201 5 / O R D E R P ER B ENCH : A LL THESE APPEALS FILED BY THE ASSESSEE S ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF ITA NO. 4615 - 4616 - 4617 AND 4618 / MUM/20 1 3 2 THE INCOME TAX ACT, 1961 IN THE HANDS OF THE ASSESSEES CITED ABOVE FOR THE YEARS MENTIONED IN THE CAUSE TITLE AGAINST THEIR RESPECTIVE NAMES . 2. THE LD. AR SUBMITTED THAT THE REVENUE CARRIED OUT SURVEY OPERATION UNDER SECTION 133A OF THE ACT IN THE BUSINESS PREMISES OF M/S MAHASAGAR SECURIT IES PVT LTD. AT THE TIME OF SURVEY PROCEEDINGS, A SWORN STATEMENT UNDER SECTION 131 OF THE ACT WAS RECORDED F ROM SHRI RATANCHAND S OSWAL , SENIOR MEMBER OF FAMILY . HE WAS QUESTION ED ABOUT THE LONG TERM CAPITAL GAINS (LTCG) AND GIFTS RECEI PTS DECLARED BY HIS FAMILY MEMBERS. IN THE SWORN STATEMENT, HE SURRENDERED THE LTCG AS WELL AS GIFTS REC EI PTS AS INCOME OF THE RESPECTIVE FAMILY MEMBERS. T HE ASSESSMENT S OF THE YEARS UNDER CONSIDERATION WERE REOPENED IN THE HANDS OF ASSESSEE S HEREIN BY ISSUING NOTICES U /S 148 OF THE ACT. THOUGH THE ASSESSEES, INITIALLY FILED LETTERS STATING THAT THE RETURNS OF INCOME FILED EARLIER MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO THE NOTICES ISSUED U/S 148 OF THE ACT, YET THESE ASSESSEES FILED REVISED COMPUTATION OF INC OME WHEREIN THE LTCG AND GIFTS WERE OFFERED AS INCOME. ACCORDINGLY, THE AO COMPLETED THE ASSESSMENTS BY ASSESSING THE LTCG AND GIFT RECEIPTS AS INCOME. THE APPEALS FILED BY THESE ASSESSEES BEFORE LD CIT(A) AGAINST THE ASSESSMENT ORDERS WERE DISMISSED BY L D CIT(A). T HE AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND LEVIED PENALTY. THESE ASSESSEES CHALLENGED THE PENALTY ORDERS BY FILING APPEALS BEFORE LD CIT(A), BUT COULD NOT SUCCEED. 3. T HE LD. C OUNSEL APPEARING FOR THE ASSESSE E SUBMITTED THAT THE ASSESSEE FURNISHED ALL THE DETAILS RELATING TO THE GIFT RECEI PTS/LTCG BEFORE THE ASSESSING OFFICER DURING THE COURSE OF PENALTY PROCEEDINGS, BUT THE AO LEVIED PENALTY WITHOUT EXAMINING THOSE DOCUMENTS AND OTHER EXPLANATIONS FURNISHED B Y THE ASSESSEE. THE LD. AR SUBMITT ED THAT THE PENALTY ITA NO. 4615 - 4616 - 4617 AND 4618 / MUM/20 1 3 3 PROCEEDINGS ARE INDEPENDE NT PROCEEDINGS AND HENCE THE MATERIAL S FILED BY THE ASSESSEE AND EXPLANATION S OFFERED BY HIM ARE REQUIRED TO BE EXAMINED INDEPEND ENT LY. HE SUBMITTED THAT THE LD CIT(A) ALSO FAI LED TO EXAMINE THE MATERIALS AND EXPLANATIONS FURNISHED BY THE ASSESSEES. HE SUBMITTED THAT THE CO - ORDINATE BENCH OF MUMBAI TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF ACIT V/S MADHULIKA R. OSWAL IN I.T.A. NOS.6327 & 6328/MUM/2011(AY 2003 - 0 4 & 2005 - 06), DATED 25.07.2013, WHEREIN THE TRIBUNAL RESTORED THE MATTER TO THE FIL E OF THE LD. CIT(A) TO RE - ADJUDICATE THE MATTER ON MERITS IN ACCORDANCE WITH LAW. HE ALSO RELIED UPON SOME MORE CASE LAW IN SUPPORT OF HIS CONTENTIONS THAT THE ADDITIONS MA DE IN THE ASSESSMENT ORDER WOULD NOT AUTOMATICALLY GIVE RISE TO PENALTY. ACCORDINGLY, THE LD. AR PRAYED THAT ALL THESE APPEALS MAY BE RESTORED TO THE FILE OF THE LD.CIT(A) FOR EXAMINING THE MATERIALS AND EXPLANATIONS FURNISHED BY THE ASSESSEES. 3. ON THE CONTRARY, THE LD. D . R SUBMITTED THAT ANOTHER CO - ORDINATE BENCH OF MUMBAI TRIBUNAL HAS CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF OTHER FAMILY MEMBERS , VIZ., RISHI R OSWAL V/S JT.CIT IN ITA NOS. 3331 TO 333/MUM/2013 (AY - 2002 - 03 TO 2004 - 05), DATED 12.1 2.2014 AND RATANCHAND S OSWAL V/S JCIT IN ITA NO.3329 AND 3330/MUM/2013 (AY - 2002 - 03 AND 2004 - 05), DATED 12.12.2014 AND THE TRIBUNAL HAS CONFIRMED THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT IN THESE CASES . 4 . WE HEARD THE PARTIES AND PERUSE D THE RECORD. IT IS THE CONTENTION OF THE ASSESSEE S THAT THEY HAVE FILED ALL THE MATERIAL RELATING TO RECEIPT OF GIFT S AND LTCG AND THE Y HAVE NOT BEEN CONSIDERED BY THE TAX AUTHORITIES. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE PENALTY PROCEED INGS ARE SEPARATE AND DISTINCT PROCEEDINGS. WE NOTICE THAT THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MADHULIKA R. OSWAL (SUPRA) HAS ITA NO. 4615 - 4616 - 4617 AND 4618 / MUM/20 1 3 4 CONSIDERED THE LEGAL POSITION AND ACCORDINGLY SET ASIDE THE MATTER TO THE FILE OF THE LD. CIT(A). FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVATION MADE BY THE TRIBUNAL IN THE ABOVE SAID CASE: 3.2 IT IS WELL SETTLED THAT THE FINDINGS IN THE QUANTUM PROCEEDINGS, THOUGH NOT CONCLUSIVE QUA THE LEVY OR OTHERWISE OF PENALTY, CONSTITUTE GOOD EVIDEN CE TOWARD THE CONCEALMENT OF PARTICULARS OF INCOME (REFER: CIT VS. SOMNATH OIL MILLS [1995] 214 ITR 32 (GUJ.)). THE ORDER BY THE TRIBUNAL DATED 28.03.2013 FOR A.Y. 2006 - 07 (SUPRA) WOULD ALSO BE RELEVANT AS THE FACTS OF THE TWO CASES ARE THE SAME, WHICH IS ALSO APPARENT FROM THE FACT THAT THE TRIBUNALS ORDER FOR A.Y. 2004 - 05, EXONERATING PENALTY, IS COMMON FOR ALL THE FAMILY MEMBERS. IN FACT, THE TRIBUNAL, AS A READING OF ITS ORDER DATED 28/3/2013 WOULD SHOW, WAS ALSO CONFRONTED WITH THE COMMON ORDER DELETI NG THE PENALTY FOR A.Y. 2004 - 05. THE FACTUAL FINDINGS ISSUED BY THE TRIBUNAL VIDE ITS SAID ORDER, EQUALLY APPLICABLE TO THE ASSESSEE, HAVE TO BE REGARDED AS FINAL INASMUCH AS THE TRIBUNAL IS A FINAL FACT FINDING BODY. FURTHER, THIS WOULD BE MORE SO IN THE INSTANT CASE AS, AS A NARRATION OF FACTS WOULD SHOW, ARE NOT IN DISPUTE. IN VIEW THEREOF, IN OUR CLEAR VIEW IT IS NOT POSSIBLE TO TREAT THE MATTER AS COVERED OR EVEN TO TAKE A VIEW THAT THE PRINCIPLES LAID DOWN BY THE APEX COURT IN THE CASE OF SURESH CHAND RA MITTAL (SUPRA), WHEREIN REVISED RETURNS SHOWING HIGHER INCOME WERE CONSIDERED AS AN ACT OF VOLUNTARY SURRENDER IN GOOD FAITH, SO THAT IT WOULD NOT ATTRACT LEVY OF PENALTY; AS APPLICABLE IN THE INSTANT CASE. 3.3 PENALTY, HOWEVER, BEING NOT AUTOMATIC, A ND PENALTY PROCEEDINGS BEING SEPARATE AND DISTINCT FROM THE QUANTUM PROCEEDINGS, WHAT WOULD THEREFORE NEED TO BE CONSIDERED, AND SEPARATELY, IS THE VALIDITY IN LAW OF THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT IN THE INSTANT CASE. IN THIS REGARD, IN OUR VIEW THE ISSUE THAT ARISES AND WOULD REQUIRE ADJUDICATION IS AS STATED BY THE LD. DR, I.E., WHETHER THE REVISION OF ITS INCOME BY THE ASSESSEE BY ADMITTING HIGHER INCOME OR HIGHER TAX LIABILITY ON HER INCOME, CAN BE SAID TO BE PER REVISED RETURN/S U/S. 139 (5), OR IN ANY CASE VOLUNTARY, OR NOT SO, BEING RATHER AS A RESULT OF THE EFFORTS BY THE REVENUE. PENALTY, IT IS TRITE, IS WITH REFERENCE TO THE ORIGINAL RETURN, SO THAT THE SAVING TO THE ASSESSEE FROM PENALTY, ON AN ADMISSION OF A HIGHER INCOME OR TAX LIA BILITY SUBSEQUENTLY, COULD ONLY BE ON FURNISHING A REASONABLE EXPLANATION OR OTHERWISE ESTABLISHING BONA FIDES, AS WHERE THE SAME IS ON ACCOUNT OF A GENUINE MISTAKE OR THROUGH INADVERTENCE, AND NOT A RESULT OF A DELIBERATE ACTION. THIS IN FACT REPRESENTS T RITE LAW, AS ITA NO. 4615 - 4616 - 4617 AND 4618 / MUM/20 1 3 5 EXPLAINED BY THE APEX COURT AS IN THE CASE OF G. C. AGARWAL VS. CIT [1990] 186 ITR 571 (SC). WHERE THE ADDITIONAL OFFER WAS NOT PER REVISED RETURNS, AND ONLY UPON DISCOVERY OF THE UNDERSTATEMENT OF THE INCOME BY THE REVENUE, THE SAME CANNOT BE REGARDED AS VOLUNTARY, SAVING PENALTY (REFER, INTER ALIA, ADD. CIT VS. RADHEY SHYAM 1980] 123 ITR 125 (ALL) AND CIT VS. J. K. A. SUBRAMANIA CHETTIAR [1977] 110 ITR 602 (MAD)). IT NEEDS TO BE EMPHASIZED THAT THE BURDEN OF PROOF, IN VIEW OF EXPLANATION 1 TO SECTION 271(1)(C), IS ONLY ON THE ASSESSEE, AND NOT ON THE REVENUE, SO THAT IT IS NOT REQUIRED TO ESTABLISH CONCEALMENT, BUT IS DEEMED BY LAW WHERE THE ASSESSEE FAILS TO FURNISH AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS EITHER FOUND TO BE FALSE OR IT IS UNABLE TO SUBSTANTIATE (SO THAT IT IS ONLY A BALD CLAIM), WITH THE SAME BEING BONA FIDE AND ACCOMPANIED BY DISCLOSURE OF MATERIAL FACTS. 3.4 IN THE FACTS OF THE PRESENT CASES, THE PENALTIES STAND DELETED BY THE LD. CIT(A) NOT ON THE BASIS OF ANY F INDING/S BY HIM, BUT BY FOLLOWING THE DECISION BY THE TRIBUNAL IN THE ASSESSEES CASE FOR A.Y. 2004 - 05. THE SAID ORDER, AS EXPLAINED HEREINBEFORE, WOULD NOT HOLD IN THE CONSPECTUS OF THE CASE, PARTICULARLY CONSIDERING THE FINDINGS BY THE REVENUE IN THE QUA NTUM PROCEEDINGS, SINCE CONFIRMED BY THE TRIBUNAL. THERE HAVING BEEN NO EXAMINATION OF THE ASSESSEES CASE ON MERITS, WE, THEREFORE, EVEN AS WAS THE COMMON CONTENTION OF BOTH THE PARTIES BEFORE US, RESTORE THE MATTER BACK TO THE FILE OF THE LD. CIT(A) TO R E - ADJUDICATE THE MATTER ON MERITS IN ACCORDANCE WITH LAW AND AFTER HEARING BOTH THE SIDES, ISSUING DEFINITE FINDINGS OF FACT. WE DECIDE ACCORDINGLY. 5. IN THE OTHER CASES RELIED UPON BY THE LD. DR, WE NOTICE THAT THE TRIBUNAL HAS NOT CONSIDERED THE DECIS ION RENDERED IN THE CASE OF MADHULIKA R. OSWAL (SUPRA). THE TRIBUNAL HAS EXTRACTED THE HEAD NOTES GIVEN IN THE CASE OF MAK DATA P LTD VS. CIT (2013)(358 ITR 593)(SC) AND DECIDED THE ISSUE. WE NOTICE THAT THE HEAD NOTES DISCUSSES ABOUT THE FACTS PREVAILI NG IN THE CASE OF MAK DATA P LTD (SUPRA). IN OUR VIEW, THE FOLLOWING RATIO LAID DOWN BY THE HONBLE SUPREME COURT IS MORE RELEVANT: - THE ASSESSING OFFICER, IN OUR VIEW, SHALL NOT BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE LIKE VOLUNTARY DISCLOSURE, BUY PEACE, AVOID LITIGATION, AMICABLE SETTLEMENT ETC., TO EXPLAIN AWAY ITS CONDUCT. THE QUESTION IS WHETHER THE ASSESSEE HAS OFFERED ANY ITA NO. 4615 - 4616 - 4617 AND 4618 / MUM/20 1 3 6 EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE EXPLANA TION TO SECTION 271(1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE ASSESSING OFFICER, BETWEEN REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIABLE EVIDENCE. WHEN THE INITI AL ONUS PLACED BY THE EXPLANATION, HAS BEEN DISCHARGED BY HIM, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED THE INCOME AND NOT OTHERWISE. AS ALREADY NOTICED, THE TAX AUTHORITIES HAVE NOT CONSIDERED THE MATERIALS AND EXP LANATIONS FURNISHED BY THE ASSESSEE. WE FIND THAT THE DECISION RENDERED IN THE CASE OF MADHULIKA R. OSWAL (SUPRA ) IS IN ACCORDANCE WITH THE RATIO OF THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF MAK DATA P LTD (SUPRA). ACCORDINGLY , CONSIS TENT WITH THE VIEW TAKEN BY THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MADHULIKA R OSWAL (SUPRA), WE SET ASIDE THE ORDER S OF LD.CIT(A) UNDER CONSIDERATION AND RESTORE ALL THE MATTERS TO HIS FILE WITH A DIRECTION TO RE - ADJUDICATE THEM ON MERITS I N ACCORDANCE WITH LAW AND AFTER HEARING THE PARTIES. 6 . IN THE RESULT, THE APPEAL S OF THE ASSESSEE S ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 03 RD SEPT, 2015. 03RD SEPT , 2015 SD SD ( AMARJIT SINGH ) ( B.R. BASKARAN) JUD ICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 03RD SEPT , 2015 . . . ./ SRL , SR. PS ITA NO. 4615 - 4616 - 4617 AND 4618 / MUM/20 1 3 7 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPO NDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI