S.M.J.Foundation, CHENNAI V. DCIT, CHENNAI

ITA 549/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4820 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 28-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T BANUSEKAR SHRI SHAJI P JACOB
• Section: 143(3); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER A ND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 549/MDS/2011 ASSESSMENT YEAR : 2004-05 M/S. S.M.J. FOUNDATION, (REP. BY ERSTWHILE PARTNER SHRI SUBHASHCHAND NAHAR), NO.6/1, NAHAR DRIVE, MAHARANI CHINNAMMA ROAD, ALWARPET, CHENNAI-600 018. V. THE DEPUTY COMMISSIONER OF INCOME-TAX. CENTRAL CIRCLE-II(1), CHENNAI. (PAN: ABEFS5589B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T. BANUSEKAR RESPONDENT BY : SHRI SHAJI P. JACOB O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED CIT(APPEALS)-II, CHENNAI IN ITA NO. 25/08-09 DATED 03-01-2011 FOR THE ASSESSMENT YEAR 2004-05 AGAINST THE CONFIRMATION OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. I.T.A. NO.549/MDS/2011 2 2. SHRI T.BANUSEKAR, CA REPRESENTED ON BEHALF OF T HE ASSESSEE AND SHRI SHAJI P. JACOB, LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT THE ASSESSEE IS A PARTNERSHIP FIRM WHICH WAS FORMED ON 08-09-200 3 AND WAS DISSOLVED BY A DISSOLUTION DEED DATED 31-03-2004. DURING THE PERI OD OF EXISTENCE THE ASSESSEE FIRM HAD PAID ` 60 LAKHS AS ADVANCE FOR LAND AT PERUNGUDI TO M/S. B.N.T. CREATIONS BUT THE LAND WAS SOLD BY M/S. B.N.T. CREATIONS TO M /S. LANDMARK CONSTRUCTIONS AND THE ASSESSEE FIRM RECEIVED COMPENSATION OF ` 1,00,131/- FROM M/S. LANDMARK CONSTRUCTIONS. THE ASSESSEE FIRM DID NOT FILE A RE TURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 BY THE DUE DATE. IT WAS TH E SUBMISSION THAT THERE WAS A SEARCH IN THE CASE OF MR. SUBHASH CHAND NAGAR, PA RTNER OF THE FIRM ON 26-10- 2005. IT WAS THE SUBMISSION THAT AFTER THE SEARCH THE ASSESSEE FIRM FILED ITS RETURN OF INCOME ON 30.08.2006 DISCLOSING A TOTAL I NCOME OF ` 71,193/-. SUBSEQUENT TO THE SEARCH ON SHRI SUBHASH CHAND NAGA R, NOTICE U/S 153C OF THE ACT WAS ISSUED TO THE ASSESSEE ON 15-10-2007 AND IN RESPONSE TO THE NOTICE THE ASSESSEE FIRM FILED A RETURN OF INCOME ON 19.12.200 7 DISCLOSING THE SAME TOTAL INCOME OF ` 71,193/-. ORDER U/S 153C READ WITH SECTION 143(3) WAS [ASSED PM 31-12-2007 DETERMINING THE TOTAL INCOME AT ` 71,193/- AS RETURNED. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED AND THE ASSESSEE HAD REPLIED THAT PENALTY WAS NOT LEVIABLE AS PER THE EXPLANATION 3 TO SECTION 271(1). IT WAS THE SUBMISSION BY THE LEARNED AUTHORISED REPRESENTA TIVE THAT THERE WAS NO I.T.A. NO.549/MDS/2011 3 INTENTION OF CONCEAL THE INCOME AND THE ASSESSMENT HAD BEEN COMPLETED BY ACCEPTING THE RETURNED INCOME WHICH WAS THE SAME RE TURNED INCOME AS PER THE RETURN FILED BEFORE THE ISSUE OF NOTICE UNDER SECTI ON 153C. IT WAS THE SUBMISSION BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE A SSESSING OFFICER HAD LEVIED THE PENALTY HOLDING THAT IF THE SEARCH WAS NOT THERE, T HE ASSESSEE FIRM WOULD NOT HAVE DISCLOSED THE INCOME. IT WAS THE SUBMISSION THAT T HE RETURNED INCOME HAVING BEEN ACCEPTED, NO PENALTY WAS LEVIABLE. 4. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET FOR THE LEVY OF PENALTY UNDER SEC. 271(1)(C), THERE SHOULD BE CONCE ALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. TRUE, THE AS SESSEE FILED ITS ORIGINAL RETURN BEFORE THE ISSUE OF THE NOTICE UNDER SECTION 153C O F THE ACT AND THIS RETURN WAS ALSO BARRED BY LIMITATION AND WAS CONSEQUENTLY INVA LID RETURN. HOWEVER, WHEN THE NOTICE UNDER SECTION 153C WAS ISSUED, THE ASSESSEE DISCLOSED THE SAME INCOME AND THAT RETURN BECOMES A RETURN UNDER SECTION 139 AS PER THE PROVISIONS OF SECTION 153C OF THE ACT. NO ADDITIONS HAD BEEN MAD E NOR ANY CONCEALMENT FOUND. ONCE THERE IS NO CONCEALMENT FOUND, NOR IS THERE ANY ALLEGATION OF HAVING FURNISHED INACCURATE PARTICULARS, THERE CANNOT BE A LEVY OF PENALTY U/S 271(1)(C). IN THE CIRCUMSTANCES, IN THE FACTS OF THE CASE THE PENALTY AS LEVIED BY THE I.T.A. NO.549/MDS/2011 4 ASSESSING OFFICER AND AS CONFIRMED BY THE LEARNED C IT(A) STANDS CANCELLED. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS AL LOWED. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 24/06/2 011. SD/- SD/ - (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 24 TH JUNE, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE