LAXMI NARAYAN TAK, Jaipur V. ACIT, Jaipur

ITA 497/JPR/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6200 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 02-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Assessee Lawyers: O P AGARWAL
• Keywords: Search and seizure; Assessment record
• Section: 153A

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 JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 497/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 LT. SH. LAXMI NARAYAN TAK THROUGH L/H SMT. PRABHA TAK 21, KHANDA HAWA MAHAL, BADI CHAUPAR, JAIPUR. CUKE VS. THE ACIT, CENTRAL CIRCLE-2 JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABFPT 4889 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A.) & SHRI O.P. AGARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 26/02/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 12/04/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 01.05.2014 OF CIT (A), JAIPUR FOR THE ASSESSMENT YE AR 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- ITA NO. 497/JP/2014 LT. SH. LAXMI NARAYAN TAK VS. ACIT, JAIPUR 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE PENALTY OF RS. 26,43,488/- ON TOTAL INCOME OF RS. 77,77,250/- U/S 271(1)(C) OF THE INCOME TAX ACT, ARBITRARILY. 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOL DING THE PENALTY ON THE ADDITION OF RS. 1 LAC WITHOUT APPRECIATING T HE FACT THAT THE ADDITION WERE MADE ON ESTIMATE BASIS WITHOUT BRINGI NG ON RECORD ANY MATERIAL ESPECIALLY WHEN THE DETAILS SUPPLIED I N THE RETURN WAS NOT FOUND TO BE INCORRECT / ERRONEOUS OR FALSE, HEN CE THE PENALTY LEVIED U/S 271(1)(C) DESERVES TO BE DELETED IN TOTO . 1.2 THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE T HE FACT THAT THE ID. AO HAS PASSED THE IMPUGNED ORDER WITHOUT ESTABL ISHING ANY MALA FIDE INTENTION OF THE ASSESSEE AND BY IGNORING THE FACT THAT EVERY SINGLE DETAIL AS ASKED FOR HAS BEEN PROVIDED BY THE ASSESSEE AND NOTHING HAS BEEN CONCEALED NOR ANY INACCURATE P ARTICULARS HAS BEEN FURNISHED, THUS THE PENALTY OF RS. 26,43,488/- FOR CONCEALMENT OF INCOME DESERVES TO BE DELETED. 1.3 THAT THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLD ING THE PENALTY ON ADDITIONAL INCOME OF RS. 76,77,250/- DULY OFFERE D BY THE ASSESSEE ON THE BASIS OF DOCUMENTS FOUND DURING SEA RCH AND FURTHER IGNORING THE FACT THAT THE ASSESSEE HAS FUR NISHED EVERY PRECISE DETAILS IN RESPECT OF THE INCOME AND PAID T HE DUE TAX ON THIS INCOME, THUS THE PENALTY LEVIED ON THE WRONGFU L APPRECIATION OF FACTS DESERVES TO BE DELETED. 1.4 THAT THE LD.CIT(A) AS WELL AS THE LD. AO HAS FU RTHER ERRED IN IGNORING THE FACT THAT THE ADDITIONAL INCOME OFFERE D BY THE ASSESSEE WHILE FILING THE RETURN OF INCOME WAS ADMI TTED IN THE STATEMENT RECORDED U/S 132(4) DURING THE COURSE OF SEARCH, THUS ITA NO. 497/JP/2014 LT. SH. LAXMI NARAYAN TAK VS. ACIT, JAIPUR 3 THE PENALTY IMPOSED AND SUSTAINED ON SUCH INCOME DE SERVES TO BE DELETED. 2. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. THE ASSESSEE HAS ALSO RAISED THE ADDITIONAL GROU ND OF APPEAL IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER PASSED BY LD. ASSESSING OFFICER LEVYING PENALTY U/S 271(1)(C) THE INCOME TA X ACT, 1961 WITHOUT SPECIFICALLY PROVING THE CHARGE AS TO WHETH ER THE ASSESSEE HAS CONCEALED INCOME OR FURNISHED INACCURA TE PARTICULARS OF INCOME. 3. WE HAVE HEARD THE LD. AR AS WELL AS THE LD. DR O N ADMISSION OF THE ADDITIONAL GROUND WHEREBY THE ASSESSEE HAS CHAL LENGED THE VALIDITY OF NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) FOR WANT OF SPECIFYING THE DEFAULT WHETHER CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. AR OF THE ASSESSEE H AS SUBMITTED THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS LEGAL I N NATURE AND GOES TO THE ROOT OF THE MATTER. FURTHER, FOR ADJUDICATION O F THE ADDITIONAL GROUND NO FRESH INVESTIGATION OF FACT IS REQUIRED EXCEPT T HOSE ALREADY ON RECORD. THUS, THE LD. AR HAS SUBMITTED THAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF NTPC VS. CIT 229 ITR 383 THE ITA NO. 497/JP/2014 LT. SH. LAXMI NARAYAN TAK VS. ACIT, JAIPUR 4 TRIBUNAL MAY ADMIT THE ADDITIONAL GROUND WHICH IS L EGAL IN NATURE AND ARISING FROM THE FACTS WHICH ARE ON RECORD OF THE A SSESSMENT PROCEEDINGS. THE LD. AR HAS RELIED UPON THE VARIOUS DECISIONS ON THIS POINT AND SUBMITTED THAT THE ADDITIONAL GROUND RAIS ED BY THE ASSESSEE MAY BE ADMITTED FOR ADJUDICATION ON MERITS. 4. ON THE OTHER HANDS, THE LD. DR HAS RAISED STRONG OBJECTION AGAINST THE ADMISSION OF ADDITIONAL GROUND AND SUBM ITTED THAT THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY BY THE AO IN THE PENALTY PROCEEDINGS AS WELL AS BY THE LD. CIT(A) IN THE FIR ST APPELLATE PROCEEDINGS BUT THE ASSESSEE DID NOT RAISE SUCH OBJ ECTION AGAINST THE VALIDITY OF NOTICE ISSUED U/S 274 OF THE ACT. THE L D. DR HAS FURTHER CONTENDED THAT IN THE ABSENCE OF DISCLOSING A REASO NABLE CAUSE WHICH HAS PREVENTED THE ASSESSEE FROM RAISING SUCH GROUND BEFORE THE AUTHORITIES BELOW THE ADDITIONAL GROUND RAISE AT TH IS STAGE CANNOT BE ACCEPTED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ADDITIONAL GRO UND RAISED BY THE ASSESSEE IS PURELY LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER. FURTHER, THE REVENUE HAS NOT DISPUTED THE ALLEGED F ACTS IN THE NOTICE THAT THE AO HAS NOT SPECIFIED IN THE NOTICE WHETHER THE PENALTY ITA NO. 497/JP/2014 LT. SH. LAXMI NARAYAN TAK VS. ACIT, JAIPUR 5 PROCEEDINGS U/S 271(1)(C) OF THE ACT HAS BEEN INITI ATED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THUS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE AD DITIONAL GROUND RAISED BY THE ASSESSEE DOES NOT REQUIRE ANY INVESTI GATION OF NEW FACTS FOR ITS ADJUDICATION AND RELEVANT RECORD AND FACTS ARE AVAILABLE ON THE ASSESSMENT RECORD THEN, IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN CASE OF NTPC VS. CIT (SUPRA) THE ADDITIONA L GROUND RAISED BY THE ASSESSEE IS ADMITTED FOR ADJUDICATION ON MERITS . 6. ON MERITS OF THE ADDITIONAL GROUND THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT SINCE THE NOTICE ISSUED U/S 274 HAS NOT SPECIFIED THE CHARGE FOR LEVY OF PENALTY WHETHER IT WAS CONCEALME NT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME THEN TH E SAID NOTICE SUFFERS FROM ILLEGALITY AND THEREFORE, IN VIEW OF THE DECIS ION OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565 THE ORDER PASSED BY THE AO U/S 271(1)(C) OF THE ACT IS NOT SUSTAINABLE IN LAW AND LIABLE TO BE QUASHED. THE LD. AR HAS ALSO RELIED UPON THE DECISION OF HON BLE SUPREME COURT IN CASE OF CIT VS. SSAS EMERALD MEADOWS 242 TAXMAN 150 WHEREIN THE HONBLE SUPREME COURT HAS DISMISSED THE SLP FILED BY THE REVENUE AND THEREFORE, THE DECISION OF HONBLE KARN ATAKA HIGH COURT IN ITA NO. 497/JP/2014 LT. SH. LAXMI NARAYAN TAK VS. ACIT, JAIPUR 6 CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTO RY (SUPRA) WAS UPHELD. THUS, THE LD. AR HAS CONTENDED THAT THE NO TICE ISSUED U/S 274 R.W.S. 271 OF THE ACT WAS BAD IN LAW AND THEREFORE, CONSEQUENTIAL PENALTY LEVIED U/S 271(1)(C) OF THE ACT IS ALSO BAD IN LAW. HE HAS ALSO RELIED UPON THE FOLLOWING DECISIONS:- NARAYANA HEIGHTS & TOWERS VS. ITO VIDE DATED 20.02. 2017 IN ITA NO. 1033/JP/2016. SHANKAR LAL KHANDELWAL VS. DCIT VIDE DATED 11.03.20 16 IN ITA NO. 878/JP/2013. S.CHANDRASHEKAR VS. ACIT 396 ITR 538. MUNINAGA REDDY VS. ACIT 396 ITR 398. SHRI NARASIMHA REDDY VS. DCIT VIDE DATED 04.12.2015 IN ITA NO. 1013/BANG/2015. SHRI MOHD. SHARIF KHAN VS. DCIT VIDE DATED 27.07.20 17 IN ITA NO. 441/JP/2014. SHRI MOORSAVIRAPPA C. BATLI VS. ITO VIDE DATED 10.0 2.2016 IN ITA NO. 668/BANG/2015. 7. ON THE OTHER HAND, LD. DR HAS RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT WHEN THE SURRE NDER WAS MADE BY THE ASSESSEE ON ACCOUNT OF UNDISCLOSED INCOME THEN THE NATURE OF DEFAULT IS ALREADY KNOWN TO THE ASSESSEE AND ALSO S TATED IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS ALSO RE CORDED A ITA NO. 497/JP/2014 LT. SH. LAXMI NARAYAN TAK VS. ACIT, JAIPUR 7 SATISFACTION FOR INITIATION OF PENALTY U/S 271(1)(C ) OF THE ACT. HENCE, THERE IS NO DEFECT IN THE NOTICE ISSUED U/S 274 OF THE ACT. THE LD. DR HAS FURTHER CONTENDED THAT THE ASSESSEE DID NOT RAI SE THESE ISSUES/GROUNDS BEFORE THE AO OR LD. CIT(A). HENCE, THE NATURE OF DEFAULT WAS NOT QUESTIONED BEFORE THE AUTHORITIES B ELOW. THE LD. DR RELIED UPON THE VARIOUS DECISION AS UNDER:- CIT VS. USHA INTERNATIONAL LTD. 212 TAXMAN 519. SHRI RAJNISH VOHRA VS. DCIT VIDE DATED 31.10.2012 I N ITA NO. 516/CHD/2012. SNITA TRANSPORT (P.) LTD. VS. ACIT 42 TAXMANN.COM 5 4. BHARAT KUMAR G. RAJANI VS. DCIT 40 TAXMANN.COM 344. SHRI SATYA NARAIN GUPTA VS. DCIT VIDE DATED 02.01.2 018 IN ITA NO. 823/JP2016. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT IN CAS E THE ASSESSING OFFICER HAS INITIATIVE THE PENALTY PROCEEDING BY IS SUING A NOTICE U/S 274 OF THE ACT WITHOUT SPECIFYING THE CHARGE IN THE DEF AULT COMMITTED BY THE ASSESSEE AGAINST WHICH THE AO INTENDED TO IMPOSE TH E PENALTY. THE SAID, NOTICE U/S 274 OF THE ACT IS IN VIOLATION OF THE MANDATORY CONDITION OF MAKING THE ASSESSEE KNOWN ABOUT THE GROUNDS ON W HICH THE AO ITA NO. 497/JP/2014 LT. SH. LAXMI NARAYAN TAK VS. ACIT, JAIPUR 8 PROPOSE TO LEVY THE PENALTY AND CONSEQUENTLY DENYIN G THE ASSESSEE PROPER OPPORTUNITY TO CONTEST AND MEET THE CASE OF THE AO. HOWEVER, IN CASE WHERE THE ASSESSEE HAS DISCLOSED UNACCOUNTED I NCOME DURING THE COURSE OF SEARCH AND SEIZURE ACTION AND CONSEQUENTL Y SURRENDERED THE SAID INCOME IN THE RETURN FILED U/S 153A THEN THE Q UESTION OF MAKING THE ASSESSEE KNOWN ABOUT THE CHARGE DOES NOT ARISE. IN THE CASE IN HAND APART FROM THE INCOME SURRENDERED BY THE ASSESSEE A S DISCLOSED IN THE STATEMENT U/S 132(4) OF THE ACT THE AO HAS ALSO MAD E VARIOUS ADDITIONS WHILE FRAMING THE ASSESSMENT U/S 153A OF THE ACT. T HEREFORE, THIS IS NOT A CASE OF SIMPLE LEVY OF PENALTY AGAINST UNDISCLOSE D INCOME WHICH WAS DISCLOSED BY THE ASSESSEE AND CONSEQUENTLY OFFERED TO TAX WHILE FILING THE RETURN U/S 153A OF THE ACT BUT VARIOUS COMPLEX FACTS AND CIRCUMSTANCES ARE INVOLVED IN THIS CASE WHICH REQUI RES TO BE CONSIDERED WHILE DECIDING THE LEGAL ISSUE RAISED BY THE ASSESS EE AGAINST THE VALIDITY OF THE NOTICE U/S 274 OF THE ACT. IT IS PERTINENT T O NOTE THAT IF THE AO HAS CATEGORICALLY RECORDED A FINDING IN THE ASSESSM ENT REGARDING EXISTENCE OF THE GROUNDS ON WHICH THE PENALTY PROCE EDINGS WOULD BE INITIATED AGAINST EACH AND EVERY ITEM OF INCOME AND ADDITION, WHICH ARE SUBJECT MATTER OF ASSESSMENT. HENCE, THOUGH THE REL EVANT FACTS AND RECORDS ARE AVAILABLE ON THE ASSESSMENT PROCEEDINGS HOWEVER, IN VIEW ITA NO. 497/JP/2014 LT. SH. LAXMI NARAYAN TAK VS. ACIT, JAIPUR 9 OF THE COMPLEXITY THE VARIOUS FACTS AND RECORDS WHI CH ARE AVAILABLE ON THE ASSESSMENT RECORD BUT ARE NOT DISCLOSED IN THE IMPUGNED ORDERS PASSED U/S 271(1)(C) OF THE ACT AND CONSEQUENTIAL T HE IMPUGNED ORDER PASSED BY THE LD. CIT(A) DUE TO THE REASONS THAT TH E ASSESSEE DID NOT RAISE THIS ISSUE BEFORE THE AUTHORITIES BELOW, THE SAME CANNOT BE ANALYZED AND APPRECIATED IN THE ABSENCE OF THE RECO RD PRODUCED BEFORE US. SINCE, THE ASSESSEE HAS FIRST TIME RAISED THIS ISSUE AND THE PENALTY PROCEEDINGS WERE INITIATED IN RESPECT OF THE ADDITI ONS MADE BY THE AO AS WELL AS THE INCOME DISCLOSED BY THE ASSESSEE DUR ING THE SEARCH AND SEIZURE ACTION AND SUBSEQUENTLY OFFERED TO TAX IN T HE RETURN FILED U/S 153A THEREFORE, THE RELEVANT FACTS IN RESPECT OF EA CH AND EVERY ADDITION AND INCOME OFFERED BY THE ASSESSEE ARE REQUIRES TO BE CONSIDERED IN THE LIGHT OF THE VARIOUS DECISIONS AND PRECEDENTS AS RE LIED UPON BY BOTH THE PARTIES. ACCORDINGLY, IN VIEW OF THE ABOVE FACT AND CIRCUMSTANCES, THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS LEG AL IN NATURE AND GOES TO THE ROOT OF THE MATTER THE SAME IS SET ASIDE TO THE RECORD OF THE LD. CIT(A) FOR ADJUDICATION AFTER CONSIDERING ALL RELEV ANT FACTS AND RECORDS AVAILABLE ON THE ASSESSMENT RECORD AND IN LIGHT OF THE VARIOUS DECISIONS AS RELIED UPON BY THE PARTIES AND CITED SUPRA. NEED LESS TO SAY THE ITA NO. 497/JP/2014 LT. SH. LAXMI NARAYAN TAK VS. ACIT, JAIPUR 10 ASSESSEE BE GIVEN AN OPPORTUNITY OF HEARING. THE OT HER GROUNDS RAISED BY THE ASSESSEE ARE KEPT OPEN. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12/04/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12/04/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- LT. SH. LAXMI NARAYAN TAK, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CENTRAL CIRCLE-2, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 497/JP/2014} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR