M/s. Shree Hatkeshwara Cargo Movers, Pune V. Deputy Commissioner of Income-tax, Circle - 5, Pune

ITA 474/PUN/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1065 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Initiation of penalty proceedings; Revised return; Set aside
• Section: 133A; 201; 264; 147; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI ANIL CHATURVEDI , AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / I TA NO.474 /PUN/20 19 / ASSESSMENT YEAR : 2009 - 10 M/S. SHREE HATKESHWARA CARGO MOVERS, OFFICE NO.8, WONDER CITY BUILDING, KATRAJ BY PASS ROAD, KATRAJ, PUNE - 411 046. PAN : AATFS8504N ....... / APPELLANT / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 5, PUNE / RESPONDENT A SSESSEE BY : SHRI SUYOG BHAVE REVENUE BY : SHRI HOSHANG BOMAN IRANI / DATE OF HEARING : 1 8 . 1 2 .2019 / DATE OF PRONOUNCEMENT : 18 .12 .2019 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(APPEALS) - 4, PUNE DATED 28.01.2019 FOR THE ASSESSMENT YEAR 2009 - 10 AS PER THE GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 474 /PUN/20 19 A.Y. 2009 - 10 2. THE CRUX OF THE GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO THE IMPOSITION OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) BY THE ASSESSING OFFICER AND AS CONF IRMED BY THE LD. CIT(APPEALS). 3. THE FACTS LEADING TO THE IMPOSITION OF PENALTY IS THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRANSPORT AND CARGO MOVER. DURING THE FINANCIAL YEAR 2012 - 13, A SURVEY U/S.133A OF THE ACT WAS CARRIED OUT IN THE CASE. DURING THE COURSE OF SURVEY SOME INCRIMINATING DOCUMENTS WERE FOUND SUGGESTING SOME ILLEGAL PAYMENTS TO RTO OFFICERS, BORDER TOLL OFFICERS ETC. WHEN CONFRONTED ON THIS ISSUE DURING THE COURSE OF SURVEY, PARTNER OF THE FIRM AGREED FOR THE DISALLOWANCE OF SUCH EXPENDITURE AND ACCORDINGLY, THE ASSESSEE FIRM OFFERED AN INCOME OF RS.19,05,861/ - FOR THE YEAR UNDER CONSIDERATION. IT MAY NOT BE OUT OF PLACE TO MENTION HERE THAT FOR ASSESSMENT YEAR 2009 - 10, THE ASSESSEE HAD ALREADY FILED ITS RETURN OF INCOME ON 22.09.2009 DECLARING TOTAL LOSS OF RS.2,40,76,016/ - IN WHICH ALL ILLEGAL EXPENDITURES HAVE BEEN CLAIMED AS A DEDUCTION. BEING SATISFIED THAT THE ASSESSEE HAS WRONGLY CLAIMED THE EXPENDITURE WITHIN THE MEANING OF EXPLANATION 1 BELOW SECTION 37 (1) OF THE ACT, THE ASSESSING OFFICER INITIATED PROCEEDINGS U/S. 147 OF THE ACT AFTER RECORDING HIS SATISFACTION FOR DOING SO. IN THE MEANTIME, THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 29.11.2012 DECLARING TOTAL INCOME OF RS.92,08,310/ - WHICH INCLU DES THE ADMITTED INADMISSIBLE EXPENDITURE OF RS.19,05,861/ - . IN RESPONSE TO NOTICE U/S.148 OF THE ACT, THE ASSESSEE SUBMITTED THAT THE REVISED RETURN FILED ON 29.11.2012 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S.148 OF THE ACT. THE ASSESSING OFFICER THEN PROCEEDED TO FINALIZE THE ASSESSMENT PROCEEDING AND PASSED ORDER U/S.147 OF THE ACT ON 12.11.2014. SINCE THE ASSESSEE HAS ALREADY DISALLOWED THE CLAIM OF ILLEGAL PAYMENTS TO RTO OFFICERS AND OTHERS, 3 ITA NO. 474 /PUN/20 19 A.Y. 2009 - 10 NO SEPARATE ADDITION WAS MADE ON THIS COUNT . BUT THE ASSESSING OFFICER HAS RECORDED HIS SATISFACTION THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME AT THE TIME OF FILING ORIGINAL RETURN U/S.139(1) OF THE ACT AND HENCE, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. 4. THE LD. CIT(APPEALS) UPHELD THE PENALTY IMPOSED BY THE ASSESSING OFFICER AS PER DETAILED REASONING IN HIS ORDER WHICH IS ON RECORD. 5. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ORIGINAL RETURN WAS FILED ON 22.09.2009 AND THOUGH THEREIN ILLEGAL EXPENDITURES WHICH ARE INADMISSIBLE EXPENDITURE S HAVE BEEN CLAIMED AS DEDUCTION S BUT THEREAFTER, IN THE REVISED R ETURN FILED ON 29.11.2012 ALL THOSE INADMISSIBLE EXPENDITURE S OF RS.19,05,861/ - WERE INCLUDED AND TAXES PAID ACCORDINGLY. THESE FACTS HAVE BEEN ACCEPTED BY THE LD. DR ALSO. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THERE HAS BEEN NO CONCEALME NT OF INCOME SINCE ALL THE PARTICULARS OF INCOME AS WELL AS INADMISSIBLE EXPENDITURE S WERE DISCLOSED IN THE REVISED RETURN AND INCLUDED IN THE INCOME AND TAXES PAID ACCORDINGLY AND THEREFORE, THERE WAS NO LOSS TO THE REVENUE. THEREFORE THERE SHOULD NOT BE ANY IMPOSITION OF PENALTY U/S.271(1)(C) OF THE ACT. 5.1 THE LD. COUNSEL FOR THE ASSESSEE FURTHER STATED THAT THE SATISFACTION WAS RECORDED FOR LEVYING PENALTY BY THE ASSESSING OFFICER AT THE TIME OF FRAMING ORIGINAL ASSESSMENT. HOWEVER, THE TRAIL OF FACT S ARE CLEAR THAT THE PENALTY HAS BEEN LEVIED AS A MATTER O F CONSEQUENCE TO THE SURVEY ACTION U/S.133A OF THE ACT AND THEREAFTER, UNEARTHING SOME INADMISSIBLE EXPENDITURE S , BUT AT THAT POINT OF TIME OF SURVEY, THE ASSESSING OFFICER HAS NOT RECORDED HIS SATISFACTION BEFORE LEVYING PENALTY U/S.271(1)(C) OF THE ACT. 4 ITA NO. 474 /PUN/20 19 A.Y. 2009 - 10 THE ASSESSING OFFICER HAS PASSED HIS DECISION ONLY ON THE BASIS OF THE SATISFACTION RECORDED AS PER THE ORIGINA L RETURN FILED BY THE ASSESSEE U/S.139(1) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE FOLLOWING DECISIONS: (I) COMMISSIONER OF INCOME - TAX VS. BHIMJI BHANJEE & CO., (1984) 146 ITR 145 (II) DILIP YESHWANT OAK VS. ASSISTANT COMMISSIONER OF IN COME TAX, (2011) 10 TAXMANN.COM 264 (PUNE) (III) ASHOK S. AGARWAL VS. THE DEPUTY COMMISSIONER OF INCOME TAX, ITA NO.1227/PUN/2016. 6. PER CONTRA, THE LD. DR PLACED STRONG RELIANCE ON THE FINDINGS OF THE ASSESSING OFFICER AS PER THE PENALTY ORDER AND ALSO ON THE ORDER OF THE LD. CIT(APPEAL) AND SUBMITTED BEFORE US THAT IF NO SURVEY U/S.133A OF THE ACT WOULD HAVE BEEN CONDUCTED THEN THESE INADMISSIBLE EXPENDITURE S CLAIMED AS DEDUCTION S AS PER THE ORIGINAL RETURN FILED , THE BENEFIT WOULD HAVE BEEN TA KEN BY THE ASSESSEE. THAT SINCE IN THE ORIGINAL RETURN OF INCOME, THESE WERE NO T DISCLOSED IT AMOUNTS TO CONCEALMENT OF INCOME. 7. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO ANALYZED THE FACTS AND CIRCUMSTANCES IN THIS CASE WHILE CONSIDERING THE JUDICIAL PRONOUNCEMENTS PLACED BEFORE US. IN THIS CASE WHEN THE ORIGINAL RETURN WAS FILED BY THE ASSESSEE U/S.139(1) OF THE ACT, HE HAD INAPPROPRIATELY CLA IMED DEDUCTION S ON CERTAIN INADMISSIBLE EXPENDITURE S AND THIS FACT CAME TO THE NOTICE OF THE REVENUE AUTHORIT IES AT THE TIME OF CONDUCTING SURVEY U/S.133A OF THE ACT. THAT THEREAFTER, THE ASSESSEE HAD FILED REVISED RETURN IN WHICH HE HAS DISCLOSED AS INCOME ALL THOSE INADMISSIBLE EXPENDITURES WHICH WERE EAR LIER TAKEN AS DEDUCTION. THE ASSESSEE HAS ALSO PAID REQUISITE TAXES ON SUCH INCOME AS FILED IN THE REVISED RETURN. THE LD. DR BEFORE US HAS ACCEPTED 5 ITA NO. 474 /PUN/20 19 A.Y. 2009 - 10 THESE FACTS ON RECORD. MEANING THEREBY, THERE IS NO LOSS TO THE REVENUE FROM THE CONDUCT OF THE ASSESSEE. 8. NOW, THE QUESTION WHICH ARISES WHETHER PENALTY COULD BE LEVIABLE U/S.271(1)(C) OF THE ACT AND SUCH PENALTY IS LEVIABLE EITHER FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME? 8.1 IN THE CASE OF THE ASSESSEE, WHILE FILIN G REVISED RETURN, THE ASSESSEE HAS DISCLOSED HIS ENTIRE INCOME IN TOTALITY AND HAVE PAID TAXES AND THEREFORE, IT CANNOT BE SAID THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME SINCE BY WAY OF SUCH REVISED RETURN, A LL THE INACCURACIES WHICH WERE THERE IN THE ORIGINAL RETURN, WERE RECTIFIED BY THE ASSESSEE. FURTHERMORE, THE REVENUE AUTHORITIES HAVE NOT POINTED OUT ANY IRREGULARITIES IN THE REVISED RETURN FILED BY THE ASSESSEE NOR BEFORE US THE LD. DR COULD POINT OUT A NY INACCURACIES IN THE REVISED RETURN FILED. SUCH REVISED RETURN HAS ALREADY BEEN FILED WITHIN THE STIPULATED TIME. IT IS A MATTER OF SETTLED LEGAL PROPOSITION THAT PENALTY PROVISIONS HAVE TO BE STRICTLY CONST RUED AND PENALTY CANNOT BE IMPOSED ON SURMISE, WHIMS AND FANCIES. THAT WHETHER OR NOT THE ASSESSEE WOULD HAVE RECTIFIED THE INADMISSIBLE EXPENDITURE S IF THE SURVEY WAS NOT CONDUCTED, THIS CANNOT BE THE REASON FOR LEVYING PENALTY. 9. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX VS. BHIMJI BHANJEE & CO. (SUPRA.) HAS HELD THAT WHEN THE ASSESSEE HAS NOWHERE ADMITTED THAT IT HAD CONCEALED ITS INCOME, NO PENALTIES ARE LEVIABLE. 10. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DILIP YESHWANT OAK VS. ASSIS TANT COMMISSIONER OF INCOME TAX (SUPRA.) , THE FACTS WERE THAT THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING CERTAIN INCOME AND THEREAFTER, 6 ITA NO. 474 /PUN/20 19 A.Y. 2009 - 10 SURVEY ACTION WAS UNDERTAKEN U/S.133A OF THE ACT WHEREIN CERTAIN DISCREPANCIES WERE UNEARTHED. TO COVER UP THE SAME, ASSESSEE DISCLOSED AN ADDITIONAL INCOME AND ACCORDINGLY FILED A REVISED RETURN OF INCOME. THE ASSESSING OF FICER ACCEPTED INCOME RETURNED IN REVISED RETURN AND ACCORDINGLY PASSED ASSESSMENT. SUBSEQUENTLY, ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C ) OF THE ACT HOLDING THAT DISCREPANCIES NOTED DURING COURSE OF SURVEY ACTION UNDER SECTION 133A OF THE ACT AND CONSEQUENT DISCLOSURES OF ADDITIONAL INCOMES, ATTRACTED PENALTY. THE TRIBUNAL HAD HELD IN THIS CASE THAT THE ASSESSEE HAD FURNISHED VALID REVISED RETURN, WHICH WAS ACCEPTED BY ASSESSING OFFICER WITHOUT POINTING OUT A SINGLE INACCURACY AN D WITHOUT MAKING ANY FURTHER ADDITIONS IN ASSESSMENT AND IN SUCH CIRCUMSTANCES, IT WAS NOT A FIT CASE FOR LEVY OF PENALTY . REVERTING TO THE FACTS OF THE PRESENT CASE, THE REVISED RETURN WAS ACCEPTED AND TAXES PAID ACCORDINGLY. NO FURTHER ADDITION WAS MADE BY THE ASSESSING OFFICER IN THE CASE OF THE ASSESSEE. IN SUCH SCENARIO, IN THE INSTANT CASE OF THE ASSESSEE AS WELL, NO PEN ALTY U/S.271(1)(C) OF THE ACT CAN BE IMPOSED. 11. THAT FURTHER, WHILE LEVYING PENALTY U/S.271(1)(C) OF THE ACT, THE ASSESSING OFFICER HAS RECORDED HIS SATISFACTION AT THE TIME OF FRAMING ORIGINAL ASSESSMENT ORDER BASED ON THE ORIGINAL RETURN FILED BY TH E ASSESSEE U/S.139(1) OF THE ACT. THAT HOWEVER, WHILE SURVEY WAS CONDUCTED WHICH RESULTED IN LEVY OF THE PENALTY, DURING THAT TIME NO SEPARATE SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER BEFORE INITIATION OF PENALTY PROCEEDINGS. THIS IS ALSO NOT LEG ALLY PERMISSIBLE AS OBSERVED BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ASHOK S. AGARWAL VS. THE DEPUTY COMMISSIONER OF INCOME TAX (SUPRA.) . 7 ITA NO. 474 /PUN/20 19 A.Y. 2009 - 10 12. IN VIEW OF THE EXAMINATION ON MERITS OF THIS CASE AS WELL AS JUDICIAL PRONOUNCEMENTS, IT IS NOT A FIT CA SE FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. HENCE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEAL) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY FROM THE HANDS OF THE ASSESSEE. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED ON 18 TH DAY OF DECEMBER , 201 9 . SD/ - SD/ - ANIL CHATURVEDI PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 18 TH DECEMBER , 2019 . SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 4, PUNE. 4. THE PR. CIT - 3, PUNE. 5 . , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 8 ITA NO. 474 /PUN/20 19 A.Y. 2009 - 10 DATE 1 DRAFT DICTATED ON 1 8 .1 2 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 18 . 12 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER