RAJENDRA KUMAR CHOUDHARY, Jaipur V. ITO, Kishangarh

ITA 559/JPR/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2154 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 14-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Assessee Lawyers: S L PODDAR; ISHA KANUNGO
• Keywords: Reassessment proceedings
• Section: 143(3); 142(1); 147; 27; 148

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 HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 559/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2005-06 SHRI RAJENDRA KUMAR CHOUDHARY, HAMIR COLONY, OPP. RAILWAY STATION, MADANGANJ, KISHANGARH-305801 . CUKE VS. INCOME - TAX OFFICER, WARD- KISHANGARH. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAKPC 5942 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR & ISHA KANUNGO (ADV.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/01/2018 MN?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 02/02/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 30.06.2014 OF LD. CIT(A), AJMER ARISING FROM PENALT Y ORDER PASSED U/S 271(1)(C) OF THE INCOME TAX ACT, FOR THE ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE T HE PENALTY ORDER PASSED BY ASSESSING OFFICER U/S 271(1)(C) IS BAD IN LAW AND VOID- AB-INTIO. 2. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS. 1,01,391/- LEVIED BY THE LD. ASSESSING OFFICER WITH OUT CONSIDERING THE FACTS OF THE CASE AND REPLY OF THE ASSESSEE. 3. THAT THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD , AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL AT THE TIME OF, THE HE ARING OF THE APPEAL. 2 ITA NO. 559/JP/2014. SHRI RAJENDRA KUMAR CHOUDHARY. 2. THE ASSESSEE FILED HIS RETURN OF INCOME ON 12.12 .2015 DECLARING INCOME OF RS. 1,33,931/-. SUBSEQUENTLY, THE AO RECEIVED A IR INFORMATION AND FOUND THAT THE ASSESSEE HAS DEPOSITED RS. 19,51,090/- IN SAVING BANK ACCOUNT OF THE ASSESSEE WITH IDBI BANK. THE AO PROPOSED TO RE OPEN THE ASSESSMENT BY ISSUING A NOTICE U/S 148 ON 03.04.2008. THERE WAS NO COMPLIANCE MADE BY THE ASSESSEE OF THE NOTICE ISSUED U/S 148. HOWEVER , IN RESPONSE TO THE NOTICES ISSUED U/S 142(1) THE ASSESSEE HAS OFFERED AN ADDITIONAL INCOME OF RS. 3,23,943/-. THE AO WHILE COMPLETING THE REASSESSME NT MADE THE ASSESSMENT OF THE ENTIRE AMOUNT OF RS. 19,51,090/- DEPOSITED I N THE BANK ACCOUNT. ON APPEAL, THE LD. CIT(A) ACCEPTED THE INCOME OFFERED BY THE ASSESSEE TO THE EXTENT OF RS. 3,23,943/- BY APPLYING A GP RATE OF 1 6.61% ON THE UNDISCLOSED TURNOVER FOUND DEPOSITED IN THE BANK ACCOUNT. THE AO CONSEQUENTLY LEVIED THE PENALTY U/S 271(1)(C) IN RESPECT OF THE ADDITIO N SUSTAINED BY THE LD. CIT(A) OF RS. 3,23,943/- VIDE ORDER DATED 23.3.2012 PASSED U/S 271(1)(C) OF THE ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE AO, LEVYING THE PENALTY OF RS. 1,01,391/- BEFORE THE LD. CIT(A). HOWEVER, THE LD. CIT(A) WAS NOT IMPRESSED WITH THE CONTENTION AND EXPLANATION OF TH E ASSESSEE AND CONFIRMED THE PENALTY LEVIED BY THE AO. 3. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A SMALL TIME COMMISSION AGENT IN THE LINE OF RETAIL B USINESS OF MARBLES. THE ASSESSEE ITSELF HAS DECLARED THE ADDITIONAL INCOME OF RS. 3,23,943/- ON 3 ITA NO. 559/JP/2014. SHRI RAJENDRA KUMAR CHOUDHARY. ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT. HE HAS FU RTHER CONTENDED THAT THE ADDITION ON WHICH THE PENALTY HAS BEEN LEVIED BY TH E AO IS PASSED ON ESTIMATION OF INCOME BY THE LD. CIT(A) BY ADOPTING THE GP RATE OF 16.61%. THEREFORE, NO PENALTY CAN BE LEVIED ON THE ADDITION BASED ON ESTIMATION OF INCOME. IN SUPPORT OF HIS CONTENTION, HE HAS RELIE D UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. KRISHI TYRE RETARDING AND RUBBER INDUSTRIES 263 CTR 484 AS WELL AS THE DE CISION IN THE CASE OF CIT VS. MAHENDRA SINGH KHEDLA 71 DTR 189. THE NEXT CON TENTION OF THE LD. AR IS THAT WHEN THE ASSESSEE ITSELF HAS OFFERED THE SAID INCOME TO TAX AND THERE IS NO DIFFERENCE BETWEEN THE INCOME OFFERED BY THE ASS ESSEE AND INCOME ASSESSED BY THE AO, THEN THE PENALTY CANNOT BE LEVI ED U/S 271(1)(C) OF THE ACT. HE HAS RELIED UPON THE DECISION OF THE HONBL E DELHI HIGH COURT IN THE CASE OF CIT VS. SAS PHARMACEUTICALS 335 ITR 259 AND SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT WHEN THE ASSESSEE DISCLOSED THE INCOME IN RETURN OF THE INCOME SUBSEQUENT TO THE SURVEY, THE PENALTY CANNOT BE LEVIED ON SURMISES, CONJECTURES AND ON THE POSSIBILITIES, THAT THE ASSESSEE WOULD NOT HAVE OFFERED THE SAME IF NO SURVEY HAD BEEN CARRIED OUT. THUS, THE LD. AR HAS CONTENDED THAT THE PENALTY LEVIED BY THE AO MAY BE DELETED. 4. ON THE OTHER HAND, LD. D/R HAS SUBMITTED THAT IT IS THE CASE OF CONCEALMENT OF INCOME. THE ASSESSEE HAS NOT DISCLO SED THE BANK ACCOUNT WHILE FILING HIS ORIGINAL RETURN OF INCOME BUT ONLY WHEN THE ASSESSING OFFICER 4 ITA NO. 559/JP/2014. SHRI RAJENDRA KUMAR CHOUDHARY. RECEIVED THE AIR INFORMATION ABOUT THE DEPOSITS MAD E IN THE IDBI BANK THE ASSESSEE SURRENDERED THE INCOME DURING THE COURSE O F ASSESSMENT PROCEEDINGS. THEREFORE, THE ASSESSEE HAS INTENTION ALLY NOT DISCLOSED THE DEPOSITS MADE IN THE BANK ACCOUNT MAINTAINED WITH I DBI BANK AND ALSO NOT DISCLOSED HIS CORRECT TURN OVER. HENCE, IT IS A CL EAR CASE OF CONCEALMENT OF PARTICULARS OF INCOME AND THEREFORE THE PENALTY LEV IED BY THE AO IS JUSTIFIED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME ON 12.12.2005 DECLARING INCOME OF RS. 1,33,931/-. THERE IS NO DI SPUTE THAT THE ASSESSEE DID NOT DISCLOSE HIS BANK ACCOUNT MAINTAINED WITH IDBI BANK WHEREIN A CASH DEPOSITED OF RS. 19,51,090/- WAS MADE DURING THE YE AR UNDER CONSIDERATION. ONLY DURING THE REASSESSMENT PROCEEDINGS U/S 147 RE AD WITH SECTION 143(3) THE ASSESSEE SURRENDER THE EXTRA INCOME OF RS. 3,23 ,943/-. THUS, IT IS NOT A CASE OF SURRENDER AND DISCLOSURE OF INCOME IN THE O RIGINAL RETURN OF INCOME BUT ONLY WHEN THE AO REOPENED THE ASSESSMENT ON THE BASIS OF THE MATERIAL DISCLOSING THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE WHICH WAS NOT DISCLOSED BY THE ASSESSEE ALONG WITH THE ORIGIN AL RETURN OF INCOME, THE ASSESSEE CAME FORWARD TO OFFER THE EXTRA INCOME OF RS. 3,23,943/- THEREFORE, THE DECISIONS RELIED UPON BY THE LD. AR ARE NOT APP LICABLE IN THE CASE OF THE ASSESSEE, AS IT IS NOT THE VOLUNTARILY SURRENDER OF THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME. THOUGH, THE LD. CIT(A) HAS DELET ED THE ADDITION MADE BY 5 ITA NO. 559/JP/2014. SHRI RAJENDRA KUMAR CHOUDHARY. THE AO AND ACCEPTED THE SURRENDERED MADE BY THE ASS ESSEE HOWEVER, THE REASONING FOR ACCEPTED THE SURRENDER GIVEN BY THE L D. CIT(A) WAS THAT THIS INCOME OF RS. 3,23,943/- IS EQUIVALENT TO GP RATE 1 6.61% ON THE UNDISCLOSED TURN OVER BEING THE DEPOSITS MADE IN THE BANK ACCOU NT. HENCE, THE LD. CIT(A) HAS NOT MADE ANY SEPARATE ADDITION BUT THE A DDITION MADE BY THE AO WAS DELETED BY GIVING THIS REASONS. IT IS A CLEAR CASE OF SURRENDER OF THE INCOME WHICH WAS NOT DISCLOSED BY THE ASSESSEE IN T HE ORIGINAL RETURN OF INCOME AND THEREFORE THE TECHNICAL OBJECTION RAISED BY THE LD. AR OF THE ASSESSEE CANNOT BE ACCEPTED. THE LD. CIT(A) WHILE PASSING THE IMPUGNED ORDER CONSIDERED THIS ISSUE IN PARA 3.3 AS UNDER:- 3.3 I HAVE CONSIDERED THE CONTENTIONS OF THE APPEL LANT AS WELL AS PENALTY ORDER. IT IS SEEN THAT ASSESSEE'S CONTENTIO N THAT ASSESSEE HAS VOLUNTARILY DISCLOSED THE INCOME TO PURCHASE PEACE OF MIND HAS BEEN ADEQUATELY DEALT WITH BY THE AS REPRODUCED ABOVE IN PARA 3.1. THOUGH THE AO HAD REOPENED THE CASE IN VIEW OF THE AIR INF ORMATION RECEIVED BY THE AO REGARDING CASH DEPOSITS OF RS. 19,51,090/ - ASSESSEE'S ACCOUNT, ASSESSEE DID NOT FILED ANY RETURN IN RESPO NSE TO NOTICE U/S 148. SO THE ABOVE IDBI BANK ACCOUNT IN WHICH CASH OF RS. 19,51,090 WAS DEPOSITED WAS NOT DISCLOSED IN THE ORIGINAL RETURN AND NO RETURN WAS FILED IN RESPONSE TO NOTICE U/S 148. IN VIEW OF THE FINDINGS OF THE AO AND ABOVE DISCUSSION, IT CANNOT BE SAID THAT ASSESS EE HAS VOLUNTARILY OFFERED THE ADDITIONAL INCOME FOR TAX. AS REGARDING THE ASSESSEE'S CONTENTION THAT THE ADD ITION HAS BEEN MADE ON THE ESTIMATE BASIS, IT MAY BE MENTIONED THAT IN THE ORIGINAL BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME ON 12.1 2.2005, THE ASSESSEE 6 ITA NO. 559/JP/2014. SHRI RAJENDRA KUMAR CHOUDHARY. HAD NOT SHOWN THE SAVING BANK ACCOUNT IN THE IDBI B ANK IN HIS RETURN OF INCOME. IN FACT ASSESSEE HAD NOT FILED ANY RETUR N EVEN IN RESPONSE TO NOTICE U/S 148 INCLUDING ABOVE BANK ACCOUNT. DURING REASSESSMENT PROCEEDINGS, THE ASSESSEE MERELY FILED THE COMPUTAT ION OFFERING THE ADDITIONAL INCOME OF RS. 3,23,943/- AS OTHER INCOME . THE CIT(A) IN THE QUANTUM APPEAL HAS ACCEPTED THIS OTHER INCOME AS BE ING INCOME FROM UNACCOUNTED TURNOVER OF THE ASSESSEE OF RS. 19,50,5 00 BASED ON THE TRANSACTIONS SHOWN IN THE ABOVE BANK ACCOUNT. AS S UCH, IT IS APPARENT THAT THE TRANSACTIONS SHOWN IN THE IDBI BANK ACCOUN T WERE NOT SHOWN BY THE ASSESSEE IN THE ORIGINAL RETURN AND THE LD. CIT(A) HAS CONSIDERED THE SAME TO BE UNACCOUNTED TURNOVER OF THE ASSESSEE LIABLE TO TAX ON THE INCOME @16.61% AS SHOWN BY THE ASSESSEE HIMSELF IN THE COMPUTATION FILED DURING THE REASSESSMENT PROCEEDIN GS. IN VIEW OF ABOVE, IT IS APPARENT THAT THE ABOVE TRA NSACTIONS AS WELL AS ADDITIONAL INCOME SHOWN BY THE ASSESSEE DURING REAS SESSMENT PROCEEDINGS CANNOT BE HELD TO BE MERELY A ESTIMATE WITHOUT ANY BASIS. IN FACT, THE AO HAS MADE THE ADDITION BASED ON THE INCRIMINATING BANK ACCOUNT OF THE ASSESSEE AND INCOME HAS BEEN ACCEPTE D BY THE ASSESSEE HIMSELF ON THE ABOVE TRANSACTIONS. THE SAID INCOME WAS NOT SHOWN IN THE ORIGINAL RETURN. THE CASE LAWS RELIED UPON BY THE ASSESSEE ARE ON TH EIR OWN FACTS AND ARE DISTINGUISHABLE AS IN THOSE CASES THE INCOME HA S BEEN ENHANCED MERELY AFTER REJECTING BOOKS OF ACCOUNTS U/S 145(3) OR NO INCRIMINATING MATERIAL WAS FOUND TO MAKE THE ADDITION. IN VIEW OF ABOVE DISCUSSIONS AND FINDINGS OF THE AO , THE PENALTY LEVIED BY THE AO IS CONFIRMED. 7 ITA NO. 559/JP/2014. SHRI RAJENDRA KUMAR CHOUDHARY. 5.1 THE FACTS RECORDED BY THE LD. CIT(A) HAS NOT DI SPUTED BY THE ASSESSEE EXCEPTED THE CONTENTION THAT THE ASSESSEES BANK AC COUNT WAS USED BY OTHER PERSONS WHICH IN THE ABSENCE OF ANY SUPPORTING EVID ENCE CANNOT BE ACCEPTED AS A BONAFIDE EXPLANATION AT THIS STAGE. HENCE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDERS OF THE AUTHORITIES BELOW IN LEVY THE PENALTY U/S 27 1(1)(C) OF THE ACT. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/02/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 02/02/2018. POOJA/- VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAJENDRA KUMAR CHAUDHARY, KISHA NGARH. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD- KISHANGARH. 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. 559/JP/2014] VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR