TAURUS TRANSPORT, MUMBAI V. ASST CIT 13(2), MUMBAI

ITA 4978/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9593 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 17-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 31-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN DR
• Keywords: Business income; Principle of natural justice; Bonafide belief; Question of law; Condonation of delay; Revised return
• Section: 143(3); 133A; 260A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NOS.4978 & 4979/MUM/2014 ASSESSMENT YEAR: 2009-10 M/S TAURUS TRANSPORT, 32/33, EASTER CHAMBERS, 128/A, NANDLAL JAIN MARG, POONA STREET, MUMBAI-400009 / VS. ACIT, CIRCLE-13(2), 02 ND FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ( ! ' /ASSESSEE) ( ' / REVENUE) PAN NO.:-AAEFM0956B ! ' / ASSESSEE BY SHRI PRAKASH G. JHUNJHUNWALA ' / REVENUE BY SHRI V. JUSTIN-DR ( ' ) ' * / DATE OF HEARING : 13/09/2017 ) ' * / DATE OF ORDER: 13/09/2017 ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE ASSESSEE, AGGRIEVED B Y THE IMPUGNED ORDERS BOTH DATED 27/03/2014 OF THE LD . FIRST APPELLATE AUTHORITY, MUMBAI. FIRST, WE SHALL TAKE UP ITA NO.4978/MUM/2014, WHEREIN, THE ONLY GROUND RAISED B Y THE ASSESSEE PERTAINS TO DISALLOWING A SUM OF ` 2,32,249/- I.E. 5% OF THE TRAVELLING, ADVERTISEMENT, STAFF WEL FARE, OFFICE, REPAIR AND MAINTENANCE EXPENSES ON AD-HOC BASIS AND DISALLOWING SALARIES AND WAGES OF ` 55 LAKHS ON AD-HOC BASIS. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSEE, S HRI PRAKASH G. JHUNJHUNWALA, DID NOT PRESS THE APPEAL A ND THE GROUND RAISED THEREIN. THE LD. DR, SHRI V. JUSTIN, HAD NO OBJECTION TO THE REQUEST OF THE ASSESSEE. CONSIDERI NG THE REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE AND NO OBJECTION FROM THE LD. DR, THIS APPEAL OF THE ASSESSEE IS DIS MISSED AS NOT PRESSED. 2. NOW, WE SHALL TAKE UP THE PENALTY APPEAL OF THE ASSESSEE IN ITA NO. 4979/MUM/2014, CONFIRMING THE PENALTY OF ` 16,99,500/-, IMPOSED U/S 271(1)(C) OF THE ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 3 INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) AND CONF IRMED BY THE FIRST APPELLATE AUTHORITY. 2.1. THE CONTENTION OF THE LD. COUNSEL FOR THE ASS ESSEE IS THAT THERE IS DELAY OF 47 DAYS FOR FILING THE AP PEAL MAY BE CONDONED. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY SUPPORTED BY AN AFFIDAVIT, EXP LAINING THE REASONS OF DELAY. THE LD. COUNSEL REITERATED T HE CONTENTS OF THE APPLICATION/AFFIDAVIT BY PLEADING THAT THE D ELAY MAY BE CONDONED. ON THE OTHER HAND, THE LD. DR, CONTEND ED THAT THE ASSESSEE IS TO EXPLAIN THE DELAY OF EACH DAY, T HEREFORE, THE DELAY MAY NOT BE CONDONED. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, SO F AR AS, CONDONATION OF DELAY IS CONCERNED NO DOUBT FILING O F AN APPEAL IS A RIGHT GRANTED UNDER THE STATUTE TO THE ASSESSEE AND IS NOT AN AUTOMATIC PRIVILEGE, THEREFORE, THE A SSESSEE IS EXPECTED TO BE VIGILANT IN ADHERING TO THE MANNER A ND MODE IN WHICH THE APPEALS ARE TO BE FILED IN TERMS OF TH E RELEVANT PROVISIONS OF THE ACT. NEVERTHELESS, A LIBERAL APPR OACH HAS TO ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 4 BE ADOPTED BY THE APPELLATE AUTHORITIES, WHERE DELA Y HAS OCCURRED FOR BONA-FIDE REASONS ON THE PART OF THE A SSESSEE OR THE REVENUE IN FILING THE APPEALS. IN MATTERS CONC ERNING THE FILING OF APPEALS, IN EXERCISE OF THE STATUTORY RIG HT, A REFUSAL TO CONDONED THE DELAY CAN RESULT IN A MERITORIOUS M ATTER BEING THROWN OUT AT THE THRESHOLD, WHICH MAY LEAD T O MISCARRIAGE OF JUSTICE. THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE IN JUSTICE ON TECH NICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUS TICE AND IS EXPECTED TO DO SO. 2.3. THE HONBLE APEX COURT IN A CELEBRATED DECIS ION IN COLLECTOR, LAND ACQUISITION VS MST. KATIJI & ORS . 167 ITR 471 OPINED THAT WHEN TECHNICAL CONSIDERATION AND SUBSTANTIAL JUSTICE ARE PITTED AGAINST EACH OTHER, THE COURTS ARE EXPECTED TO FURTHER THE CAUSE OF SUBSTANTIAL JU STICE. THIS IS FOR THE REASON THAT AN OPPOSING PARTY, IN A DISP UTE, CANNOT HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON- DELIBERATE DELAY. THEREFORE, IT FOLLOWS THAT WHILE CONSIDERING MATTERS RELATING TO THE CONDONATION OF DELAY, JUDIC IOUS AND LIBERAL APPROACH IS TO BE ADOPTED. IF SUFFICIENT C AUSE IS FOUND TO EXIST, WHICH IS BONA-FIDE ONE, AND NOT DUE TO ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 5 NEGLIGENCE OF THE ASSESSEE, THE DELAY NEEDS TO COND ONED IN SUCH CASES. THE EXPRESSION SUFFICIENT CAUSE IS A DEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY LAW IN A MEAN INGFUL MANNER, WHICH SUB-SERVES THE END OF JUSTICE- THAT B EING THE LIFE PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF THE COURTS. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIO N ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED. THE HONBLE APEX COURT IN VEDABHAI VS SANTARAM 253 ITR 798 OBSERVED THAT INOR DINATE DELAY CALLS OF CAUTIOUS APPROACH. THIS MEANS THAT THERE SHOULD BE NO MALAFIDE OR DILATORY TACTICS. SUFFICI ENT CAUSE SHOULD RECEIVE LIBERAL CONSTRUCTION TO ADVANCE SUBS TANTIAL JUSTICE. THE HONBLE APEX COURT IN 167 ITR 471 OBS ERVED AS UNDER:- 3. THE LEGISLATURE HAS CONFERRED THE POWER TO COND ONE DELAY BY ENACTING SECTION 51 OF THE LIMITATION ACT OF 196 3 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PART IES BY DISPOSING OF MATTERS ON DE MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGISLATURE IS ADEQUATELY EL ASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE-PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS. IT I S COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFI ABLY LIBERAL ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 6 APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT T HE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHERS COURTS IN THE HIERARCHY. 2.4. FURTHERMORE, THE HON'BLE SUPREME COURT IN THE CASE OF VEDABAI ALIA VAIJAYANATABAI BABURAO PATIL V S. SHANTARAM BABURAO PATIL 253 ITR 798 HELD THAT THE C OURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUING THE EXPRESSION SUFFICIENT CAUSE, THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUST ICE IS OF PRIME IMPORTANCE. THE COURT HELD THAT THE EXPRESSIO N SUFFICIENT CAUSE SHOULD RECEIVE LIBERAL CONSTRUCT ION. 2.5. THE DECISION OF THE TRIBUNAL IN PEOPLE INFOCO M PRIVATE LTD. V/S CIT (ITA NO.210/MUM/2013) ORDER DA TED 19/05/2016, M/S NEUTRON SERVICES CENTRE PVT. LTD VS ITO (ITA NO.1180/MUM/2012) ORDER DATED 18/02/2016, SHRI SAIDATTA COOP-. CREDIT SOCIETY LTD. V/S ITO (ITA NO.2379/MUM/2015) ORDER DATED 15/01/2016 AND MR. NIKUNJ BAROT (PROP. ENIGMA) VS ITO (ITA NO.4887/MUM/2015) ORDER DATED 06/01/2016, WHEREIN, SUBSTANTIAL DELAY WAS CONDONED, SUPPORTS T HE CASE OF THE PRESENT ASSESSEE. HAVING MADE THE AFORESAID OBSERVATION AND VARIOUS DECISIONS DISCUSSED HEREINA BOVE, ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 7 INCLUDING FROM HONBLE APEX COURT, THE CIRCUMSTANCE S NARRATED BY THE ASSESSEE, WHEREIN, HE HAS STATED TH E REASONS WHICH CAUSED THE DELAY, WE ARE SATISFIED THAT THERE WERE BONAFIDE REASON, WHICH WERE BEYOND THE CONTROL OF T HE ASSESSEE, THEREFORE, THE DELAY IS CONDONED. 3. NOW, WE SHALL TAKE UP THE APPEAL OF THE ASSESSE E ON MERIT. THE CRUX OF ARGUMENTS ON BEHALF OF THE AS SESSEE IS THAT THE DISALLOWANCE WERE MADE BY THE LD. ASSESSIN G OFFICER ON ESTIMATE BASIS AND IDENTICALLY FOR ASSESSMENT YE AR 2007- 08 AND 2008-09, THE CLAIM OF THE ASSESSEE WAS ACCEP TED THOUGH U/S 143(1) OF THE ACT. IT WAS EXPLAINED THAT SURVEY WAS CARRIED OUT AND THERE IS NO FINDING THAT THE EX PENSES WERE INFLATED AND NOTHING INCRIMINATING WAS FOUND. IT WAS PLEADED THAT THE ASSESSEE MADE SURRENDER OF ` 55 LAKH TO BUY PEACE WITH THE DEPARTMENT AS THE ASSESSEE WAS IN CU STODY AND THE ASSESSEE DURING CUSTODY PERIOD, WAS ASKED T O SUBSTANTIATE THE CLAIM, WHICH COULD NOT BE DONE. T HE CRUX OF THE ARGUMENT IS THAT THE SURRENDER WAS MADE TO B UY PEACE WITH THE DEPARTMENT, THEREFORE, THE PENALTY M AY BE DELETED. ON THE OTHER HAND, THE LD. DR CONTENDED TH AT PENALTY CAN BE LEVIED EVEN ON A ESTIMATE BASIS FOR WHICH ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 8 RELIANCE WAS PLACED UPON THE DECISION IN CIT VS SMT . CHANDRAKANTA, 205 ITR 607 (MP), CIT VS S. KRISHNASW AMY & SONS, 219 ITR 157, A.M. SHAH & CO. VS CIT, 238 IT R 415 (GUJ.) AND CIT VS MOHAMMAD WARASAT HUSSAIN, 177 ITR 405 (PAT.). 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM, DECLAR ED INCOME OF ` 6,24,135/- IN ITS RETURN FILED ON 30/09/2009. A SUR VEY ACTION WAS CARRIED OUT U/S 133A OF THE ACT AT THE P REMISES OF THE ASSESSEE ON 15/01/2009. THE LD. ASSESSING O FFICER WHILE FRAMING THE ASSESSMENT U/S 143(3) OF THE ACT MADE DISALLOWANCE OF ` 55 LAKH TOWARDS SALARY AND WAGES ON AD- HOC BASIS AND FURTHER ` 2,32,249/- I.E. 5% OF THE TRAVELLING, ADVERTISEMENT, STAFF WELFARE, OFFICE, REPAIR AND MA INTENANCE EXPENSES ON AD-HOC BASIS. THE LD. ASSESSING OFFICE R LEVIED PENALTY OF ` 16,99,500/- U/S 271(1)(C) OF THE ACT, WHICH WAS CONFIRMED BY THE FIRST APPELLATE AUTHORITY. THE AS SESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 9 3.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, PENAL TY ORDER, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AV AILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE CO UNSEL, IF KEPT IN JUXTAPOSITION AND ANALYZED, THERE IS NO DIS PUTE TO THE FACT THAT THE ASSESSEE WAS IN CUSTODY DURING THE RE LEVANT TIME AND COULD NOT FURNISHED THE NECESSARY DOCUMENT S AS ASKED BY THE LD. ASSESSING OFFICER. THIS IS ALSO AN ADMITTED FACT THAT DISALLOWANCE WAS MADE ON AD-HOC BASIS AND THE ASSESSEE TO BUY PEACE WITH THE DEPARTMENT MADE THE SURRENDER. NOW, QUESTION ARISES, WHETHER THE PENAL TY U/S 271(1) CAN BE SAID TO BE JUSTIFIED. CONSIDERING TH E TOTALITY OF FACTS EXPLAINED BEFORE US AND SINCE, THE ASSESSEE W AS IN CUSTODY DURING THE RELEVANT PERIOD, WHEN THE ASSESS EE WAS ASKED TO PRODUCE THE NECESSARY DOCUMENTS, TO SUBSTA NTIATE ITS CLAIM, IT MAY NOT BE POSSIBLE TO FURNISH THE SA ME. THE ASSESSEE TO BUY PEACE WITH THE DEPARTMENT MADE A SURRENDER AND PAID THE TAXES THEREUPON. IN SUCH A S ITUATION, THE DECISION IN CIT V. SDV CHANDRU 266 ITR 175 (MAD ) WHEREIN IT WAS HELD BY THE HON'BLE HIGH COURT THAT WHERE THE ASSESSEE HAS NOT DISCLOSED HIS INCOME IN THE RE TURNS ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 10 FILED FOR THE PREVIOUS YEARS WHICH HAVE ENDED PRIOR TO THE DATE OF SEARCH AND IN THE STATEMENT GIVEN U/S 132(4 ), THE ASSESSEE ADMITS THE RECEIPT OF UNDISCLOSED INCOME F OR THOSE YEARS AND THEREFORE PAYS TAXES ON THE UNDISCLOSED I NCOME, SUCH UNDISCLOSED INCOME WOULD BE IMMUNIZED FROM THE LEVY OF PENALTY. SIMILARLY, IN THE CASE OF CIT V. SURESH CHAND MITAL 241 ITR 124 (MP) WHEREIN THE HON'BLE HIGH COU RT HAD HELD THAT WHERE THE ASSESSEE GIVES AN EXPLANATION T HAT ADDITIONAL INCOME IS DECLARED TO BUY PEACE WITH THE DEPARTMENT AND TO COME OUT WITH THE VEXED LITIGATIO N, PENALTY U/S 271(1)(C) WAS HELD TO BE NOT LEVIABLE. SIMILARLY, IN ITA NO/4356/DEL/12 THE CASE OF CIT V. SURAJ BHAN 294 ITR 481 (P&H) WHEREIN PURSUANT TO SEARCH & SEIZURE OPERATION, THE ASSESSEE FILED REVISED RETURN DECLAR ING HIGHER INCOME AND THE HON'BLE COURT HAD HELD THAT SINCE TH E ASSESSEE SURRENDERED ADDITIONAL INCOME TO BUY PEACE OF MIND NO INFERENCE OF ADMISSION OF CONCEALMENT COULD BE DRAWN COMES TO THE RESCUE OF THE ASSESSEE. THE HON' BLE JURISDICTIONAL HIGH COURT IN CIT VS HIRA LAL DOSHI, (ITA NO.2331 OF 2013) ORDER DATED 09/02/2016 ON THE ISSU E WHEN THE ASSESSEE MADE THE SURRENDER BUY PEACE WITH THE ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 11 DEPARTMENT DECIDED IN FAVOUR OF THE ASSESSEE. THE R ELEVANT PORTION FROM THE AFORESAID ORDER IS REPRODUCED HERE UNDER:- THIS APPEAL HAS BEEN FILED BY THE REVENUE UNDER SE CTION 260A OF THE INCOME TAX ACT, 1961( THE ACT) ASSAILING THE ORDER DATED 1ST MAY, 2013 PASSED BY THE INCOME TAX APPELLATE TRIBUN AL (TRIBUNAL). THE IMPUGNED ORDER DATED 1ST MAY, 2013 DELETED THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT RELATING TO ASSESSMENT YEAR 2006-2007. 2. THE REVENUE HAS URGED THE FOLLOWING QUESTION OF LAW FOR OUR CONSIDERATION:- WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ITAT IS JUSTIFIED IN DELETING THE PENALTY U/S.271(1 )(C) OF THE I. T. ACT,1961 ON THE INCOME WHICH WAS OFFERED FOR TAXATI ON DURING SURVEY AND RETURN OF INCOME WAS REVISED AFTER DETECTION BY DEPARTMENT 3 THE RESPONDENT-ASSESSEE HAD ORIGINALLY FILED A RE TURN OF INCOME ON 31ST OCTOBER, 2006 DECLARING A TOTAL INCOME OF RS.9 .69/- LAKHS. IN ITS RETURN OF INCOME, AS FILED AN AMOUNT OF RS.1.62 CRORES WAS CREDITED TO ITS CAPITAL ACCOUNT BEING LONG TERM CAPITAL GAIN ON SALE OF SHARES. HOWEVER, NO INCOME ON ACCOUNT OF THE ABOVE WAS OFFERED FOR TAXATION. THEREAFTER, ON 5TH OCTOBER, 2007, DURING A COURSE OF SURVEY, THE RESPONDENT-ASSESSEE DECLARED ADDITIONAL INCOME OF RS. 5 CRORES WHICH INCLUDED AN AMOUNT OF RS.1.62 CRORES FOR ASSESSMENT YEAR 2006-07 WHICH HAD NOT BEEN RETURNED AS INCOME BEING LONG TERM CAPITAL GAINS IN VIEW OF EXEMPTION CLAIMED UNDER SECTION 10(38) OF THE ACT. 4. ON 29TH OCTOBER, 2007 THE RESPONDENT-ASSESSEE F ILED A REVISED RETURN OF INCOME FOR THE ASSESSMENT YEAR 200 6-07,WHEREIN AN AMOUNT OF RS.1.62 CRORES WAS RETURNED AS PART OF INCOME TOTALLY AGGREGATING TO RS.1.72 CRORES. ON 25TH NOVEMBER, 20 08, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT PROCEEDI NGS UNDER SECTION 143(3) OF THE ACT DETERMINING A TOTAL INCOM E AT RS.1.74 CRORES. THE ASSESSMENT ORDER ALSO INITIATED PENALTY PROCEEDING UNDER SECTION 271(1)(C) OF THE ACT, FOR CLAIMING IN CORRECT EXEMPTION. ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 12 5. BY AN ORDER DATED 27TH MAY, 2009 THE ASSESSING OFFICER IMPOSED A PENALTY OF RS.55.79 LAKHS UNDER SECTION 2 71(1)(C) OF THE ACT FOR HAVING CONCEALED PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS THEREOF. THIS ON THE GROUND THAT THE AMOUNT OF RS.1.62 CRORES HAD ORIGINALLY BEEN CLAIMED AS LONG TERM CAPITAL GAIN BEING EXEMPT IN ITS REGULAR RETURN OF INCOME. HOWEVER, THE SAME WAS WITHDRAWN AND OFFERED TO TAX AS BUSINESS O NLY CONSEQUENT TO THE SURVEY ON 5TH OCTOBER, 2007. 6. BEING AGGRIEVED BY THE ORDER IMPOSING PENALTY, THE RESPONDENT-ASSESSEE PREFERRED AN APPEAL TO THE COMM ISSIONER OF INCOME TAX(APPEALS) (CIT[A]). BY AN ORDER DATED 27T H MAY, 2010 THE CIT(A) DELETED THE PENALTY ON THE GROUND THAT THE A MOUNT OF RS.1.62 CRORES HAD BEEN DECLARED AS CAPITAL GAINS IN THE OR IGINAL RETURN OF INCOME. BESIDES INTER-ALIA NOTING IN THE ORDER THAT IT IS ALSO PERTINENT TO NOTE THAT ALL DETAILS RELATING THE TRA NSACTIONS HAVE BEEN DULY DISCLOSED IN THE RETURN OF INCOME. FURTHER TH E ORDER OF THE CIT(A) OBSERVES THAT DURING THE COURSE OF PROCEEDIN G BEFORE HIM SUFFICIENT EVIDENCE IN THE FORM OF BROKERS NOTE, CO PY OF BALANCE- SHEET, COPY OF DEMAT ACCOUNT, EVIDENCE OF PAYMENT F OR SHARES ETC HAS BEEN PRODUCED IN SUPPORT OF THE TRANSACTION FOR HIM TO PRIMA FACIE CONCLUDE THAT THE AMOUNT OF RS.1.62 CRORES APPEARS TO BE ATTRIBUTABLE TO LONG TERM CAPITAL GAIN. 7. ON FURTHER APPEAL BY THE REVENUE, THE TRIBUNAL BY THE IMPUGNED ORDER DATED 1ST MAY, 2013 UPHELD THE FINDI NGS OF THE CIT(A) HOLDING THE SAME TO BE REASONABLE. IN PARTIC ULAR, THE IMPUGNED ORDER RECORDS THE FACT THAT THE RESPONDENT ASSESSEE HAD DISCLOSED ITS INCOME OF RS.1.62 CRORES BUT HAD CLAI MED THE SAME TO BE A CAPITAL GAIN WHICH IS EXEMPT. THE IMPUGNED ORDER FURTHER HOLDS THAT AS THE PARTICULARS OF INCOME HAD BEEN DISCLOSE D IN THE RETURN OF INCOME, THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS NOT JUSTIFIED. IN SUPPORT IT PLACES RELIANCE UPON T HE DECISION OF THE APEX COURT IN COMMISSIONER OF INCOME TAX V/S RELIAN CE PETROLEUM PRODUCTS PRIVATE LIMITED REPORTED IN 322 ITR 158. F URTHER IT HOLDS THAT MERE CHANGE IN HEAD OF INCOME BY THE ASSESSING OFFICER FROM THAT CLAIMED, WOULD NOT ATTRACT PENALTY. IN SUPPORT , RELIANCE WAS PLACED UPON THE DECISION OF THIS COURT IN COMMISSIO NER OF INCOME TAX V/S M/S. BENNETT COLEMAN AND CO.LTD (INCOME TAX APPEAL(L)NO.2117 OF 2012 RENDERED ON 26 TH FEBRUARY, 2013. THE IMPUGNED ORDER ALSO RECORDS THE FACT THAT THE AMOUN T CLAIMED AS LONG TERM CAPITAL GAIN UNDER SECTION 10(38) OF THE ACT WHILE FILING ITS REGULAR RETURN OF INCOME ON 31 ST OCTOBER, 2006 WAS OFFERED AS PART OF ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 13 BUSINESS INCOME DURING SURVEY OF PROCEEDING ONLY BY TO BUY PEACE. IN THE CIRCUMSTANCES, THE IMPUGNED ORDER UPHELD THE DELETION OF PENALTY OF THE CIT(A). 8. MR. MALHOTRA, LEARNED COUNSEL APPEARING IN SUPP ORT OF THE APPEAL SUBMITS AS UNDER:- (A) THE COMMISSIONER OF INCOME TAX(APPEALS) HAS REF ERRED TO BROKERS NOTE, COPY OF BALANCE SHEET, COPY OF DEMAT ACCOUNT, BANK STATEMENT ETC TO REACH A CONCLUSION THAT PRIMA FACI E THE INCOME APPEARS TO BE ON ACCOUNT OF LONG TERM CAPITAL GAIN. THIS IS TOTALLY UNJUSTIFIED AS NO REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFFICER AND THE REVENUE WAS GIVEN NO OPPORTUNITY TO CONTEST THE SAME; (B) THE JUSTIFICATION BY THE ASSESSEE OF HAVING MAD E THE DISCLOSURE OF RS.1.62 CRORES AS BUSINESS INCOME WHEN ORIGINALLY C LAIMED AS CAPITAL GAIN WAS FOR THE PURPOSES OF BUYING PEACE IS NOT AV AILABLE AS HELD BY THE APEX COURT IN MAK DATA P. LTD V/S COMMISSIONER OF INCOME TAX- II(CIVIL APPEAL NO.9772 OF 2013 RENDERED ON 30TH OC TOBER, 2013; AND (C) THAT A CHANGE OF HEAD OF INCOME DURING THE ASSE SSMENT PROCEEDING WOULD WARRANT PENALTY UPON A DEFAULTING ASSESSEE IF THE SAME HAS AN IMPACT ON THE TAX PAYABLE. THUS THE DEC ISION OF THIS COURT IN BENNETT COLUMN LTD(SUPRA) WILL NOT APPLY. IN THE ABOVE VIEW, IT IS SUBMITTED THAT THE APPEAL BE ADMITTED. 9 MR. MALHOTRA'S CONTENTION THAT THE ORDER OF THE C IT(A) WAS IN BREACH OF PRINCIPLES OF NATURAL JUSTICE IN AS MUCH AS NO REMAND REPORT WAS CALLED FOR BY THE CIT(A) IN RESPECT OF T HE FRESH EVIDENCE LED BY THE RESPONDENT-ASSESSEE BEFORE HIM IS NOT EV EN MENTIONED IN THE MEMO OF APPEAL. WE FIND THAT THERE IS NOTHING O N RECORD TO INDICATE THAT NO REMAND REPORT WERE CALLED FOR BY T HE CIT(A). HOWEVER,WHEN CONFRONTED, MR MALHOTRA SUBMITS THAT E VIDENCE OF NO REMAND REPORT HAVING BEEN CALLED FOR IS THE ABSENCE OF IT BEING MENTIONED IN THE ORDER OF THE CIT(A). THUS, HE WANT S US TO INFER THAT NO REMAND REPORT WAS CALLED FOR. HOWEVER, IT IS ALS O TO BE NOTED THAT BEFORE THE TRIBUNAL, THE REVENUE DID NOT RAISE THIS ISSUE. THIS COULD EQUALLY LEAD TO THE INFERENCE THAT EITHER THE REMAN D REPORT WAS CALLED FOR OR AT THE VERY LEAST, IN ANY EVENT, THE REVENUE DID NOT HAVE ANY GRIEVANCE ON THE REMAND REPORT NOT BEING CALLED FOR BEFORE THE TRIBUNAL. THIS SUBMISSION ON BEHALF OF THE REVENUE REQUIRES DETERMINATION OF FACTS WHICH HAVE TO BE DETERMINED BY THE TRIBUNAL. ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 14 IT IS NOT OPEN AT THIS STAGE IN AN APPEAL UNDER SEC TION 260A OF THE ACT TO GO INTO FACTS WHICH WERE NOT DISPUTED AT ANY PRI OR STAGE. 10. THE RELIANCE BY THE REVENUE UPON THE DECISION OF THE APEX COURT IN MAK DATA P. LTD(SUPRA) TO CONTEND THAT THE JUSTIFICATION OF HAVING DELETED AND ACCEPTED THE AMOUNT OF RS.1.62 C RORES AS BUSINESS INCOME, TO BUY PEACE IS NOT AVAILABLE. WE FIND THAT THE FACTS IN THAT CASE ARE COMPLETELY DISTINGUISHABLE AND THE OBSERVATIONS MADE THEREIN WOULD NOT BE UNIVERSALLY APPLICABLE. I N THAT CASE, A SUM OF RS.40.74 LAKHS HAD NEVER BEEN DISCLOSED TO THE R EVENUE. DURING THE COURSE OF SURVEY, THE ASSESSEE THEREIN HAD SURR ENDERED THAT AMOUNT WITH A COVERING LETTER THAT THIS SURRENDER H AS BEEN MADE TO AVOID LITIGATION AND BUY PEACE WITH THE REVENUE. IN THE AFORESAID CIRCUMSTANCES, THE APEX COURT HELD THAT THE WORDS L IKE TO AVOID LITIGATION AND BUY PEACE IS NOT SUFFICIENT EXPLANA TION OF AN ASSESSEE'S CONDUCT. IT HELD THAT THE ASSESSEE HAD TO OFFER AN EXPLANATION FOR THE CONCEALMENT OF INCOME AND/OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY LEADING COGENT AND RELIABLE EVIDENCE. THE APEX COUR T FURTHER RECORDS THAT IN THE FACTS OF THE CASE BEFORE IT THE SURREND ER OF INCOME WAS NOT VOLUNTARY BUT WAS MADE ONLY ON THE ACCOUNT OF DETEC TION BY THE ASSESSING OFFICER DURING THE COURSE OF SURVEY. FUR THER, THE APEX COURT ALSO RECORDS THE FACT THAT THE SURVEY WAS CON DUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF I NCOME. HOWEVER, THE ASSESSEE THEREIN HAD NOT DECLARED THIS INCOME I N ITS RETURN OF INCOME FILED SUBSEQUENT TO THE SURVEY WHICH AGAIN I NDICATED THE FACT THAT HE HAD NO INTENTION TO DECLARE ITS TRUE INCOME . IN ANY EVENT, THE FACTS IN THE PRESENT CASE AS FOUND BY THE CIT(A) AN D THE TRIBUNAL IS THAT THE RESPONDENT ASSESSEE HAD DISCLOSED AN AMOUN T OF RS.1.62 CRORES IN THE ORIGINAL RETURN BY CREDITING THE SAME TO ITS CAPITAL ACCOUNT BEING LONG TERM CAPITAL GAIN ON THE SALE OF SHARE. THUS, THE APPELLANT WAS UNDER BONAFIDE BELIEF THAT THE INCOME FROM LONG TERM CAPITAL GAIN WAS EXEMPT FROM TAX. THUS, THE DECISIO N OF THE APEX COURT WOULD NOT APPLY TO THE FACTS ARISING IN THE P RESENT CASE . 11. THE CONTENTION ON BEHALF OF THE REVENUE THAT I N CASE THERE IS A TAX IMPACT BY VIRTUE OF CHANGE OF HEAD DURING THE ASSESSMENT PROCEEDINGS THEN PENALTY IS IMPOSABLE AND THE DECIS ION OF THIS COURT IN M/S. BENNETT COLEMAN(SUPRA) WOULD NOT APPLY. IN SUCH A CASE, MR. MALHOTRA, FOR THE REVENUE EMPHASIZED THE FACT THAT IN M/S BENNETT COLEMAN(SUPRA) THE COURT WAS DEALING WITH THE CHANG E OF HEAD OF INCOME BUT NOT WITH REGARD TO A CLAIM FOR FULL EXEM PTION FROM ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 15 PAYMENT OF TAX AS IN THIS CASE. WE ARE UNABLE TO AC CEPT THE AFORESAID SUBMISSION. ACCORDING TO US, THE DISTINCTION SOUGHT TO MADE ON BEHALF OF THE REVENUE IS NOT ACCEPTABLE AS THE RATIO OF TH E DECISION IN M/S BENNETT COLEMAN(SUPRA) IS WHERE COMPLETE DISCLOSURE OF INCOME HAD BEEN MADE IN THE RETURN OF INCOME AND HEAD OF THE I NCOME UNDERGOES A CHANGE AT THE HANDS OF THE ASSESSING OF FICER WOULD NOT BY ITSELF JUSTIFY THE IMPOSITION OF PENALTY UNDER S ECTION 271(1)(C) OF THE ACT. 12. WE FIND THAT THE COMMISSIONER OF INCOME TAX(A) DURING THE PENALTY PROCEEDINGS HAD AGAIN EXAMINED THE ISSUE WH ETHER THE CLAIM OF CAPITAL GAIN MADE IN THE REGULAR RETURN OF INCOM E TO THE EXTENT OF RS.1.62 CRORES WITH THE PARTICULARS IN SUPPORT OF T HE SAME. ON EXAMINATION, THE CIT(A) REACHES A PRIMA FACIE CONCL USION THAT THE INCOME COULD BE REGARDED AS LONG TERM CAPITAL GAIN. ONCE THE AFORESAID CONCLUSION HAS BEEN REACHED COUPLED WITH TWO FURTHER FACTS VIZ. THE AUTHORITIES HAVE RENDERED A FINDING OF FACT THAT THE RESPONDENT-ASSESSEE HAD NOT CONCEALED ITS INCOME NO R FILED INACCURATE PARTICULARS ATTRIBUTABLE TO CAPITAL GAIN S IN ITS REGULAR RETURN OF INCOME, THE VIEW TAKEN TO DELETE THE PENA LTY IS A POSSIBLE VIEW. 13 IN THE PRESENT FACT, THE VIEW TAKEN BY THE CIT(A ) AS WELL AS THE TRIBUNAL IS A REASONABLE AND POSSIBLE VIEW. NOTHING HAS BEEN SHOWN TO US TO HOLD THAT THE FINDINGS OF THE CIT(A) AND T RIBUNAL WAS PERVERSE AND/OR ARBITRARY WARRANTING ANY INTERFEREN CE BY THIS COURT. IT MAY BE POINTED OUT THAT EVEN IN THE MEMO OF APPE AL, IT IS NOT URGED BY THE REVENUE THAT THE FINDING OF THE CIT(A) AND T RIBUNAL ARE IN ANY MANNER PERVERSE. 14 IN THE ABOVE VIEW, WE SEE NO REASON TO ENTERTAIN THE QUESTION AS PROPOSED, AS IT DOES NOT GIVE RISE TO ANY SUBSTANTI AL QUESTION OF LAW. ACCORDINGLY, THE APPEAL IS DISMISSED. NO ORDER AS T O COSTS. 3.3. THOUGH THE LD. DR HAS SIGHTED VARIOUS DECISIO NS AS MENTIONED ABOVE, BUT FOLLOWING THE DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT IN HIRA LAL DOSHI (SUPRA) AND THE MATERIAL FACTS AVAILABLE ON RECORD, WE ARE OF THE V IEW THAT QUANTUM AND PENALTY ADDITIONS ARE ALL TOGETHER DIFF ERENT AND ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 16 SINCE AD-HOC DISALLOWANCE WAS MADE BY THE ASSESSEE AND DURING THE RELEVANT PERIOD, THE ASSESSEE, BEING IN JUDICIAL CUSTODY, COULD NOT FILE THE NECESSARY EVIDENCE AND MADE SURRENDER TO BUY PEACE WITH THE DEPARTMENT AND PAID TAXED THEREUPON, THEREFORE, AT LEAST, THE PENALTY U/S 271 (1)(C) WILL NOT SURVIVE. THUS, THIS APPEAL OF THE ASSESSEE IS ALLOWED. FINALLY, ITA NO.4978/MUM/2014 IS DISMISSED AS NOT PRESSED, WHEREAS, THE PENALTY APPEAL (ITA NO.4979/MUM/2014) IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN T HE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 13/09/2017. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) ' # / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER MUMBAI; , DATED :-13/09/2017 F{X~{T? P.S / -' !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ./01 / THE APPELLANT 2. 2301 / THE RESPONDENT. 3. 4 4 ( 5' ( ./ ) / THE CIT, MUMBAI. 4. 4 4 ( 5' / CIT(A)- , MUMBAI 5. 6'72' , 4 ./*. 8 , ( / DR, ITAT, MUMBAI ITA NOS.4978 & 4979/MUM/2014 M/S TAURUS TRANSPORT 17 6. 9 : / GUARD FILE. ! / BY ORDER, 36/'2' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ( / ITAT, MUMBAI,