SHETH CORP P.LTD, MUMBAI V. ASST CIT CEN CIR 4(2), MUMBAI

ITA 5106/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0831 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 23-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Assessee Lawyers: CHETAN KARIA
• Keywords: Search and seizure; Revised return
• Section: 69C; 27; 132; 2

Judgement Text

, E , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANJUNATHA G, AM ITA NO.5106/MUM/2015 : ASST.YEAR 2012-2013 M/S.SHETH CORP PRIVATE LIMITED SHETH HOUSE, GENERAL A.K.VAIDYA MARG, OPP : DINDOSHI FIRE STATION MALAD (EAST), MUMBAI-400 097. PAN : AAOCS8862R. VS. THE ASST.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 4(3) MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI CHETAN KARIA /RESPONDENT BY : SHRI V.JUSTIN, DR / DATE OF HEARING : 22.01.2018 / DATE OF PRONOUNCEMENT : 24.01.2018. / O R D E R PER SAKTIJIT DEY (JM) : THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 19.08.2015 OF LEARNED COMMISSIONER OF I NCOME-TAX (APPEALS) - 52, MUMBAI, SUSTAINING PENALTY IMPOSED OF RS.1,97,760 U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961, FOR THE ASSE SSMENT YEAR 2012- 2013. 2. BRIEFLY THE FACTS ARE THE ASSESSEE, A COMPANY, F ILED ITS RETURN OF INCOME ORIGINALLY ON 27.09.2012 DECLARING LOSS OF R S.5,44,79,722. SUBSEQUENTLY, A SEARCH AND SEIZURE OPERATION U/S 13 2 OF THE ACT WAS CONDUCTED ON THE ASSESSEE GROUP ON 04.10.2012. POST SEARCH, THE ITA NO.5106/MUM/2015 M/S.SHETH CORP PVT.LTD. 2 ASSESSEE ON 09.02.2013 FILED A REVISED RETURN OF IN COME DECLARING LOSS OF RS.5,29,62,977. DURING THE SEARCH / SURVEY, CERT AIN DOCUMENTS WERE IMPOUNDED WHICH REVEALED CASH PAYMENT MADE BY THE A SSESSEE TO THE TUNE OF RS.6,40,000. DURING THE ASSESSMENT PROCEEDI NGS, THE ASSESSING OFFICER AFTER CALLING UPON THE ASSESSEE TO EXPLAIN THE SOURCE OF SUCH CASH PAYMENT FOUND THE EXPLANATION OF THE ASSESSEE UNSATISFACTORY, HENCE, MADE ADDITION OF THE SAID AMOUNT U/S 69C OF THE ACT. ON THE BASIS OF THE ADDITION SO MADE, THE ASSESSING OFFICE R INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT AND ULTIMATELY IMPOSED PENALTY OF RS.1,97,760 UNDER THE SAID PROVISION. THE ASSESSEE CHALLENGED THE IMPOSITION OF PENALTY BEFOR E THE CIT(A). HOWEVER, THE LEARNED FIRST APPELLATE AUTHORITY UPHE LD THE IMPOSITION OF PENALTY BY HOLDING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS ALSO CONCEALED THE PA RTICULARS OF INCOME. 3. THE LEARNED AR SUBMITTED, IN THE ASSESSMENT ORDE R THE ASSESSING OFFICER HAS NOT RECORDED ANY SATISFACTION ABOUT THE SPECIFIC LIMB OF SECTION 271(1)(C) FOR VIOLATION OF WHICH HE INTENDED TO IMPOSE PENALTY. HE SUBMITTED EVEN IN THE SHOW CAUSE NOTICE ISSUED U/S 274 R.W.S. 271 OF THE ACT, THE ASSESSING OFFICER HAS NO T SPECIFIED THE SPECIFIC LIMB OF SECTION 271(1)(C) FOR WHICH HE INTENDED TO IMPOSE PENALTY. HE SUBMITTED, IN THE PENALTY ORDER ALSO THE ASSESSING OFFICER HAS NOT MENTIONED THE EXACT CHARGE FOR WHICH HE HAS IMPOSED PENALTY U/S 271(1)(C) OF THE ACT. HE, THEREFORE, SUBMITTED, IMP OSITION OF PENALTY IS ITA NO.5106/MUM/2015 M/S.SHETH CORP PVT.LTD. 3 IMPROPER. IN SUPPORT OF HIS CONTENTION, THE LEARNED AR RELIED UPON THE FOLLOWING DECISIONS :- (I) THE ITAT MUMBAI BENCHES IN THE CASE OF MRS.INDR ANI SUNIL PILLAI V. ACIT [ITA NO.1339/MUM/2016, ORDER DATED 19.01.2018] (II) THE HONBLE HIGH COURT OF JUDICATURE AT HYDERA BAD FOR THE STATE OF TELUNGANA AND THE STATE OF ANDHRA PRADESH IN THE CA SE OF THE PRINCIPAL CIT V. SMT.BAISETTY REVATHI [ITTA NO.684 OF 2016 ORDER DATED 13.07.2017] (III) THE HONBLE SUPREME COURT IN THE CASE OF CIT V. M/S.SSAS EMERALD MEADOWS [ITA NO.380/2015 ORDER DATED 05.08.2016] (IV) THE HONBLE HIGH COURT OF JUDICATURE AT BOMBAY IN THE CASE OF CIT V. SHRI SAMSON PERINCHERY [ITA NO.1154 OF 2014 & ORS. ORD ER DATED 5 TH JANUARY, 2017] 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED U PON THE FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIALS ON RECORD. THE ASSESSEE HAS RAISED ADDITI ONAL GROUND ON THE FOLLOWING LEGAL ISSUES IN THE ABSENCE OF SATISFACT ION OF THE ASSESSING OFFICER REGARDING THE SPECIFIC CHARGE FOR WHICH THE PENALTY IS TO BE IMPOSED WHETHER THE PENALTY IMPOSED CAN BE SUSTAINE D? SINCE, THE ISSUE RAISED IN THE ADDITIONAL GROUND IS A PURELY L EGAL ISSUE, AND CAN BE DECIDED ON THE BASIS OF FACTS AVAILABLE ON RECORD, WE ADMIT THE ADDITIONAL GROUND AND PROCEED TO DECIDE IT AT THE OUTSET. IT IS EVIDENT, THE BASIS OF IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT IS THE ADDITION MADE OF RS.6,40,000 U/S 69C OF THE ACT. HOWEVER, WH ILE INITIATING PROCEEDINGS FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT IN THE ITA NO.5106/MUM/2015 M/S.SHETH CORP PVT.LTD. 4 ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT REC ORDED ANY SATISFACTION WHETHER THE ASSESSEE HAS FURNISHED INA CCURATE PARTICULARS OF INCOME OR CONCEALED PARTICULARS OF INCOME OR BOT H. THE ASSESSING OFFICER HAS INITIATED PROCEEDINGS FOR IMPOSITION OF PENALTY MENTIONING AS UNDER:- PENALTY PROCEEDINGS U/S 271(1)(C) ARE INITIATED ON THE ASSESSEE. 6. EVEN, IN THE SHOW CAUSE NOTICE ISSUED U/S 274 R. W.S. 271 OF THE ACT ON 06.06.2014, WHICH IS UNSIGNED AND COPY OF WH ICH WAS PLACED BEFORE US BY THE LEARNED AR, THE ASSESSING OFFICER HAS NOT SPECIFIED THE SPECIFIC LIMB OF SECTION 271(1)(C) FOR THE VIOLATIO N OF WHICH HE PROPOSES TO IMPOSE PENALTY BY STRIKING OFF THE INAPPROPRIATE WORDS. THUS, IT IS A CLEAR CASE WHERE THE ASSESSING OFFICER HAS FAILED T O RECORD ANY SATISFACTION WHETHER THE ASSESSEE HAS FURNISHED INA CCURATE PARTICULARS OF INCOME OR CONCEALED THE PARTICULARS OF INCOME AS PER THE MANDATE OF SECTION 271(1)(C) OF THE ACT. IN FACT, IN THE PENAL TY ORDER ITSELF THE ASSESSING OFFICER HAS NOT STATED WHETHER THE PENALT Y IMPOSED IS FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR CONC EALING PARTICULARS OF INCOME. THIS FACT SHOWS, THE ASSESSING OFFICER HIMS ELF WAS NOT SURE WHICH LIMB OF SECTION 271(1)(C) IS ATTRACTED. THERE FORE, IN OUR CONSIDERED OPINION, THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT IN THE FACTS OF THE PRESENT CASE IS UNSUSTAINABLE IN VIEW OF THE DE CISIONS CITED BEFORE US. THEREFORE, WE DELETE THE PENALTY IMPOSED U/S 27 1(1)(C) OF THE ACT. ITA NO.5106/MUM/2015 M/S.SHETH CORP PVT.LTD. 5 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 24 TH DAY OF JANUARY, 2018. !'#$ SD/- SD/- (MANJUNATHA G) (SAKTIJIT DEY) / ACCOUNTANT MEMBER ! / JUDICIAL MEMBER ! MUMBAI; ! DATED : 24 TH JANUARY, 2018. DEVDAS* '!#$%&%'# / COPY OF THE ORDER FORWARDED TO : / BY ORDER, '( //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT, MUMBAI. 4. ) / CIT(A)-37 , MUMBAI 5. ',#((-. , -. , ! / DR, ITAT, MUMBAI 6. #012 / GUARD FILE.