ASST CIT CC 38, MUMBAI V. RAJINDER KUMAR MALHOTRA, MUMBAI

ITA 5391/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3405 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 19-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 27-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR PRAYAG JHA
• Assessee Lawyers: A RAMCHANDRAN
• Keywords: Loose papers
• Section: 143(3); 131; 27; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI B.R.BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO 5239/MUM/2012 ASSESSMENT YEAR: 2008-09 SHRI. RAJIV KUMAR MALHOTRA. 4 TH FLOOR, AQUAMARINE BUILDING, 15 N GAMADIA ROAD, MUMBAI- 400 023. PAN:- AAOPM2664G VS. THE ACIT, CENTRAL CIRCLE - 38 , AYAKAR BHAVAN, ROOM NO. 32, MUMBAI- 400 020. (APPELLANT) (RESPONDENT) ITA NO 5393/MUM/2012 ASSESSMENT YEAR: 2009-10 THE ACIT CENTRAL CIRCLE - 38 , ROOM NO. 32(1), GROUND FLOOR, AYAKAR BHAVAN, M.K.ROAD, MUMBAI- 400 020. VS. SHRI. RAJIV KUMAR MALHOTRA. 15-A, MANEK NEPEAN SEA ROAD, MUMBAI- 400 006 PAN:- AAOPM2664G (APPELLANT) (RESPONDENT) ITA NO 5391/MUM/2012 ASSESSMENT YEAR: 2009-10 THE ACIT, CC - 38, ROOM NO. 32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI- 400 020. VS. SHRI. RAJINDER KUMAR MALHOTRA. 15-A, MANEK, NEPEAN SEA ROAD, MUMBAI- 400 006. PAN:- AABPM9909M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. DR. PRAYAG JHA & PRATEEK JHA. RESPONDENT BY : SHRI. A. RAMCHANDRAN. DATE OF HEARING: 19/08 /2016 DATE OF PRONOUNCEMENT: 26/08/20 16 O R D E R PER RAM LAL NEGI, JM ITA NO 5239 HAS BEEN FILED BY THE ASSESSEE AGA INST ORDER DATED 21/06/2012 PASSED BY THE LD. CIT(A) 41 MUMBAI, ITA NO 5393 AND ITA 2 ITA NO 5239, 5393 & 5391/MUM/2012 ASSESSMENT YEAR: 2008-09 & 2009-10 NO.5391 HAVE BEEN PREFERRED BY THE REVENUE AGAINST ORDER DATED 15/06/2012 PASSED BY THE LD. CIT(A) 41 MUMBAI. SINCE ALL THE A PPEALS WERE HEARD TOGETHER, THEY ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 5239/MUM/2012 A.Y. 2008-09 2. BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZ URE ACTION WAS CARRIED OUT IN CASE OF THE ASSESSEE ON 24/07/2008. DURING THE COUR SE OF SEARCH SOME LOOSE PAPERS WERE FOUND ON THE BASIS OF WHICH, THE ASSESS EE DECLARED ADDITIONAL INCOME OF RS.3,65,112/-, RS. 3,67,462/-, RS.3,80,68 7/-, RS.4,26,287/-, RS.5,75,984/-AND RS. 6,93,522/- FOR THE ASSESSMENT YEAR 2003-04 TO 2008-09 RESPECTIVELY ON ACCOUNT OF PAYMENT OF SALARY TO DOM ESTIC SERVANTS AND DRIVERS ETC. IN THE INSTANT YEAR, AO INITIATED PENALTY PROC EEDINGS U/S 271AAA OF THE ACT AND LEVIED PENALTY OF RS. 1,54,230/- . 3. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE CHA LLENGED THE SAME BEFORE THE CIT(A). THE LD. CIT(A) AFTER HEARING THE ASSESSEE, CONFIRMED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT, UNDER THE ERRONEOUS A PPRECIATION OF FACTS. THE ASSESSEE HAD FILED THE PRESENT APPEAL AGAINST THE I MPUGNED ORDER PASSED BY THE LD. CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED BEFORE US. WE NOTICE THAT THE AO HAS LEVIED PENALTY U/S 27 1AAA OF THE ACT, BUT THE LD. CIT(A) HAS CONFIRMED THE PENALTY UNDER THE IMPR ESSION THAT THE PENALTY HAS BEEN LEVIED UNDER SECTION 271(1)(C) OF THE ACT. SIN CE THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER ON WRONG APPRECIATION OF FACTS, WE ARE OF THE OPINION THAT HIS ORDER GETS VITIATED. ACCORDINGLY, WE ARE OF THE VIEW THAT ISSUE URGED BEFORE HIM BY THE ASSESSEE REQUIRES FRESH CONSIDERATION. W E, THEREFORE, SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND RESTORE THE MATT ER TO HIS FILE FOR FRESH CONSIDERATION. 3 ITA NO 5239, 5393 & 5391/MUM/2012 ASSESSMENT YEAR: 2008-09 & 2009-10 ITA NO. 5393/MUM/2012 A.Y. 2009-10 AND ITA NO 5391//MUM/2012 A. Y. 2009-10 SINCE THE GROUNDS URGED IN BOTH THESE APPEALS ARE I DENTICAL IN NATURE, BOTH THESE APPEALS ARE DISPOSED IN COMMON. HOWEVER, WE TAKE THE CASE OF SH. RAJIV KUMAR AS LEAD CASE AND DISCUSS THE FACTS AVAI LABLE THEREIN. BRIEF FACTS OF THE SAID CASE ARE THAT THE ASSESSEE FILED HIS RETUR N OF INCOME FOR THE A.Y. 2009-10 DECLARING THE TOTAL INCOME OF RS. 3,89,18,3 53/- INCLUDING RS. 2.25 CRORES, DECLARED DURING SEARCH ACTION CARRIED OUT U /S 132 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSMENT U/S 143(3) WAS COMPLETED ON 31/12 /2010. ACCORDINGLY, PENALTY U/S 271AAA WAS INITIATED IN RESPECT OF ADDI TIONAL INCOME OF RS. 2,25,00,000/- DECLARED BY THE ASSESSEE DURING THE C OURSE OF SEARCH. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE CONTEND ED THAT SINCE CONDITIONS CONTEMPLATED IN SUBSECTION 2 OF SECTION 271AAA ARE FULFILLED IN HIS CASE, NO PENALTY CAN BE IMPOSED UNDER SECTION 271AAA OF THE ACT. IN APPEAL THE LD. CIT(A) DELETED THE PENALTY. AGAINST THE SAID ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE DEPARTMENT HAS CHALLENGED IMPUGNED ORDER PAS SED BY THE LD. CIT(A) ON THE FOLLOWING EFFECTIVE GROUND:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE S AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT PENALTY U/ S 271AAA OF THE INCOME TAX ACT IS NOT LEVIABLE ON THE GROUND TH AT ASSESSEE HAS FULFILLED ALL CONDITIONS LAID DOWN IN SECTION 2 71AAA WHEN OFFER OF ADDITIONAL INCOME WAS MADE ONLY IN STATEME NT MADE 4 ITA NO 5239, 5393 & 5391/MUM/2012 ASSESSMENT YEAR: 2008-09 & 2009-10 UNDER SECTION 131 OF THE INCOME TAX ACT AND ALSO AS SESSEE HAS NOT BE ABLE TO SUBSTANTIATE THE MANNERS OF EARNING INCOME. 4. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE (AR ) FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY . THE A.O HAS LEVIED PENALTY ON THE GROUND THAT THE STATEMENT HAS NOT BEEN RECOR DED U/S 132(4) WHEREAS, IN FACT, THE STATEMENT WAS RECORDED U/S 132(4) AND SEC TION 131 HAS WRONGLY BEEN MENTIONED BY THE AUTHORITY CONCERNED WHO HAS RECORD ED THE STATEMENT. IN THE STATEMENT THE ASSESSEE HAS SPECIFIED THE MANNER IN WHICH THE INCOME WAS DERIVED. SINCE, THE STATEMENT WAS RECORDED DURING S EARCH OPERATION U/S 132 OF THE ACT, IT CAN SAFELY BE PRESUMED THAT THE SAME HA S BEEN RECORDED UNDER SECTION 132(4) OF THE ACT. 5. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESENT ATIVE (DR) RELYING ON THE FINDINGS OF THE A.O SUBMITTED THAT THE LD. CIT(A) W RONGLY DELETED THE PENALTY AND THE ORDER IS THEREFORE LIABLE TO BE SET ASIDE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE TH ROUGH THE MATERIAL PLACED BEFORE US. WE NOTICE THAT THE ASSESSEE OFFERED ADDI TIONAL INCOME OF RS. 2,25,00,000/- DURING THE COURSE OF SEARCH. THE AO N OTICED THAT THE STATEMENT HAS BEEN RECORDED U/S 131 OF THE ACT AND NOT UNDER SECTION 132(4). HENCE, HE TOOK THE VIEW THAT THE PROVISIONS OF 271AAA(2) SHAL L NOT APPLY. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY U/S 271AAA @ 1 0% OF UNDISCLOSED INCOME OF RS. 2,25,00,000/-. IN APPEAL, THE LD. CIT(A) TOO K THE VIEW THAT THE STATEMENT HAS BEEN RECORDED/S 132(4) BUT ERRONEOUSLY STATED A S U/S 131. HE FURTHER OBSERVED THAT STATEMENT U/S 131(1) OF THE ACT IS RE CORDED ONLY IN CASE OF SURVEY. IN THE PRESENT CASE THE AUTHORITY CONCERNED HAS INADVERTENTLY/WRONGLY MENTIONED THE SECTION 131(1) INSTEAD OF SECTION 132 (4). THE LD. CIT(A) HAS ALSO POINTED OUT THAT IT WAS ONLY A TYPING MISTAKE AND INSTEAD OF SECTION 132(4) IT WAS TYPED OR MENTIONED SECTION 131(1). ACCORDINGLY , THE LD. CIT(A) HELD THAT 5 ITA NO 5239, 5393 & 5391/MUM/2012 ASSESSMENT YEAR: 2008-09 & 2009-10 THE ASSESSEE IS ENTITLED FOR IMMUNITY PROVIDED UNDE R SECTION 271AAA(2) AND ACCORDINGLY DELETED THE PENALTY. 7. HAVING GONE THROUGH THE ENTIRE GAMUT OF FACTS, W E ARE OF THE VIEW THAT THE LD. CIT(A( (A) HAS ANALYSED THE FACTS IN A PROPER P ERSPECTIVE AND HAS ARRIVED AT THE CONCLUSION THAT THE STATEMENT IN WHICH THE ASSE SSEE SURRENDERED THE INCOME , WAS TAKEN U/S 132(4)OF THE ACT AND NOT U/S 131. SINCE THE STATEMENT WAS REQUIRED TO BE RECORDED BY THE AUTHORITY CONCER NED, IT WAS HIS DUTY TO MENTION THE CORRECT SECTION OF LAW. THE ASSESSEE SH OULD NOT SUFFER FOR THE MISTAKE WHICH HE HAS NOT COMMITTED. THEREFORE, WE A RE OF THE VIEW THAT THE LD. CIT(A) HAS RIGHTLY HELD THAT THE IMMUNITY GIVEN U/S 271AAA(2) OF THE ACT IS AVAILABLE TO THE ASSESSEE. ACCORDINGLY, WE UPHOLD T HE ORDER PASSED BY THE LD. CIT(A) IN THESE TWO CASES. 8. IN THE RESULT APPEAL FILED BY ASSESSEE RAJIV MA LHOTRA IS TREATED AS ALLOWED FOR THE STATISTICAL PURPOSES AND BOTH THE APPEALS OF TH E REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2016 SD/- SD/- ( B.R.BASKARAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED:26/08/2016 6 ITA NO 5239, 5393 & 5391/MUM/2012 ASSESSMENT YEAR: 2008-09 & 2009-10 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA