Bernard Jhon, , Bhopal V. Deputy Commissioner of Income Tax-1 (1), Bhopal

ITA 569/Ind/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5378 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2001-2002
• Appeal Filed On: 17-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B J BORICHA
• Assessee Lawyers: N D PATVA ADVS
• Keywords: Search and seizure; Set aside
• Section: 271(1)(c); 143(3); 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NOS.569 TO 576/IND/2017 ASSESSMENT YEARS: 2001-02 TO 2008-09 BERNARD JOHN, E-4/156, ARERA COLONY, BHOPAL / VS. DCIT, 1(1), BHOPAL ( APPELLANT ) (RE VENUE) P.A. AAWPJ0161B APPELLANT BY SHRI ASHISH GOYAL & N.D. PATVA ADVS , RESPONDENT BY SHRI B. J. BORICHA, SR. DR DATE OF HEARING: 23.10.2018 DATE OF PRONOUNCEMENT: 26.10.2018 / O R D E R PER BENCH: THESE BUNCH OF EIGHT APPEALS FILED AT THE INSTANCE OF ASSESSEE RELATING TO PENALTY LEVIED U/S 271(1)(C) OF T HE ACT ARE DIRECTED AGAINST THE COMMON ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-1, BHOPAL, (IN SH ORT CIT(A)), DATED 30.05.2017 WHICH ARE ARISING OUT OF T HE BERNARD JO HN, BHOPAL 2 SEPARATE ORDERS FRAMED ON 26.03.2015 BY DCIT, 1(1), BHOPAL. 2. AS THE ISSUE RAISED IN ALL THESE APPEALS ARE COMMON AN D ARE PERTAINING TO THE SAME ASSESSEE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON OR DER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. GRIEVANCES RAISED BY THE ASSESSEE IN ALL THESE EIGHT APPEALS ARE TWO FOLD; FIRST CHALLENGING THE PERCENTAGE O F PENALTY CONFIRMED BY THE LOWER AUTHORITIES PRAYING TH AT THE PENALTY SHOULD NOT HAVE BEEN LEVIED MORE THAN 100% OF THE TAX EVADED AND SECOND CHALLENGING THE QUANTUM OF PENALTIES LEVIED AT RS.1,00,000/-, RS.1,00,000/-, RS.40,000/-, RS.1,00,000/-, RS.5,00,000/-, RS.1,50, 000/-, RS.75,000/- & RS. 50,000/- LEVIED FOR A.YS. 2001-02 TO 2008-09 RESPECTIVELY. 4. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECORDS ARE THAT THE SEARCH AND SEIZURE ACTION WAS CARRIED OUT ON 15.11.2006 U/S 132(1) OF THE INCOME TAX ACT,1961 AT THE RESIDENTIAL PREMISES, BHOPAL OF THE ASSESSEE. ASSESSME NT U/S 153A R.W.S 153(3) OF THE ACT WAS COMPLETED, MAKIN G VARIOUS ADDITIONS FOR A.YS. 2001-02 TO 2008-09 TO TH E INCOME DECLARED BY THE ASSESSEE. THE ASSESSEE FILED AN APPEAL AGAINST THE ADDITIONS MADE BY THE ASSESSING OFFICE R BERNARD JO HN, BHOPAL 3 AND PARTLY SUCCEEDED BEFORE THE LD. CIT(A). AGAINST TH E CONFIRMED ADDITIONS BY THE LD. CIT(A), ASSESSEE PREFE RRED AN APPEAL BEFORE THE TRIBUNAL AND AGAIN PARTLY SUCCEEDED, AS THE TRIBUNAL PARTLY DELETED THE AMOUNT OF PENALTIES AN D FOR THE REMAINING ISSUES WERE SET ASIDE TO THE FILE O F THE ASSESSING OFFICER FOR AFRESH ADJUDICATION. SUBSEQUENT T O THE ASSESSMENT ORDER FRAMED U/S 143(3) OF THE ACT, PE NALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE ALSO INIT IATED AND PENALTIES ON THE TAX EVADED ON THE ADDITIONS CONFIRMED BY THE LD. CIT(A) WERE LEVIED. AGAINST THE IMPUGNED PEN ALTIES FOR ALL THE EIGHT ASSESSMENT YEARS ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) BUT FAILED TO SUCCEED. 5. NOW THE ASSESSEE IS IN APPEAL FOR ALL THE EIGHT ASSESSMENT YEARS AGAINST PENALTY CONFIRMED BY THE LD. CIT(A). 6. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT IN THE QUANTUM PROCEEDINGS MAJOR RELIEF HAS BEEN GIVE N BY THE HON'BLE TRIBUNAL AND MOST OF THE ADDITIONS HAVE EI THER BEEN PARTLY DELETED OR THEY HAVE BEEN SET ASIDE FOR F RESH ADJUDICATION BEFORE THE ASSESSING OFFICER AND THEREFORE , THE PENALTY SHOULD BE LEVIED ONLY ON THE ADDITIONS CONFIR MED BY THE HON'BLE TRIBUNAL. BERNARD JO HN, BHOPAL 4 7. THE LD. COUNSEL FOR THE ASSESSEE ALSO PRAYED THAT T HE ASSESSING OFFICER HAS LEVIED PENALTIES RANGING FROM 12 5 % TO 236% OF THE TAX EVADED BUT IN THE GIVEN CASE WHERE MOST OF THE ADDITIONS HAVE BEEN PARTLY SUSTAINED OR HAVE BEEN SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. LIBER AL VIEW SHOULD HAVE BEEN TAKEN BY THE ASSESSING OFFICER BY WA Y OF LEVYING PENALTY NOT MORE THAN 100% OF THE TAX EVADED. 8. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDER OF THE LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD PLACED BEFORE US AND CAREFULL Y GONE THROUGH AND PAPER BOOK RUNNING PAGE NO. 1 TO 57 FILED BY THE LD. COUNSEL FOR THE ASSESSEE. 10. GRIEVANCE OF THE ASSESSEE RAISED IN GROUNDS OF APPE AL RAISED IN THESE BUNCH OF EIGHT APPEALS CHALLENGES THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. PENALTY LEVI ED U/S 271(1)(C) ARE CALCULATED ON THE TAX EVADED ON THE ADDITI ONS MADE IN THE HANDS OF ASSESSEE. INSTANT APPEALS RELATES TO A.YS. 2001-02 TO 2008-09. THE CHART BELOW SHOWS THE ADDITIONS MADE BY THE ASSESSING OFFICER, ADDITIONS CONFIRMED BY THE LD. CIT(A), ADDITIONS CONFIRMED BY THE BERNARD JO HN, BHOPAL 5 TRIBUNAL/ISSUE SET ASIDE BY THE TRIBUNAL, PENALTY IMPOS ED BY THE ASSESSING OFFICER AS WELL AS THE PERCENTAGE OF TAX LEVIED AS PENALTY. AY RETURN ASSESSED INCOME AO ADDITION CIT(A) CONFIRMED ITAT CONFIRMED /SET ASIDE PENALTY IMPOSED BY LD. AO(BASED ON CIT(A) PENALTY PERCENTAGE OF TAX SOUGHT TO BE EVADED 2001-02 5,37,821 8,48,713 3,10,892 1,78,092 1,23,09 2 1,00,000 160% 2002-03 6,11,914 8,09,914 1,98,000 1,38,500 1,38,50 0 1,00,000 236% 2003-04 6,18,878 7,08,380 89,502 67,000 67,000 40,0 00 190% 2004-05 6,39,425 8,28,870 1,89,445 1,65,445 1,65,44 5 1,00,000 202% 2005-06 6,95,884 16,01,410 9,05,524 8,41,524 2,21,5 24 CONFIRMED 6,20,000 REMAND 5,00,000 177% 2006-07 9,88,300 13,19,930 3,3,1,630 3,01,632 140,632 CONFIRMED 1,20,000 REMAND 1,50,000 163% 2007-08 15,27,736 17,08,740 1,36,000 1,30,000 1,00, 000 CONFIRMED 1,20,000 REMAND 75,000 189% 2008-09 22,61,270 23,81,270 1,20,000 1,20,000 1,20, 000 REMAND 50,000 122% 11. FROM PERUSAL OF THE ABOVE CHART, SHOWING THE DETAIL S OF THE QUANTUM ADDITIONS MADE BY THE ASSESSING OFFICER FO R A.Y. 2001-02 TO A.Y. 2008-09 AND THE RELIEF GRANTED B Y LD. CIT(APPEALS). IT IS FURTHER OBSERVED THAT COORDINATE B ENCH AFTER ADJUDICATING THE ISSUE PERTAINING TO QUANTUM ADDITIONS HAS GIVEN RELIEF IN SOME OF THE ASSESSMENT Y EARS BY PARTLY DELETING THE PENALTY AS WELL AS HAS ALSO SETING BERNARD JO HN, BHOPAL 6 ASIDE SOME OF THE ISSUE FOR FRESH ADJUDICATION. IN THE SE GIVEN FACTS PENALIZING THE ASSESSEE WITH THE WHOPPING RATES ABOVE 100% OF THE TAX EVADED ON THE ALLEGED ADDITIONS CANNOT BE HELD TO BE JUSTIFIED. WE, THEREFORE, ALLOW THE FIRST GRIEVANCE, COMMONLY RAISED BY THE ASSESSEE AND DIRECT T HE ASSESSING OFFICER TO COMPUTE THE PENALTY IF ANY CONFI RMED BY US IN THE FORTHCOMING PARAS ONLY TO THE EXTENT OF 100% OF THE TAX EVADED ON THE ADDITIONS. 12. NOW COMING TO THE PENALTIES CONFIRMED/ PARTLY DEL ETED/ ISSUES SET ASIDE BY THE TRIBUNAL, WE ARE OF THE VIEW, THAT THE ADDITIONS WHICH HAVE CONFIRMED BY THE TRIBUNAL, TH E ASSESSEE SHOULD BE VISITED BY THE PENALTY U/S 271(1)( C) OF THE ACT. WE, THEREFORE, DIRECT THE ASSESSING OFFICE R TO RE- COMPUTE THE PENALTY @ 100% OF THE TAX EVADED ON THE ADDITIONS CONFIRMED BY THE TRIBUNAL IN ITS ORDER DATED 31.05.2017 AT RS.1,23,092/-, RS.1,38,500/-, RS.67,00 0/-, RS.1,65,445/-, RS.2,21,524/- RS.1,40,632/-, RS.1,00,000/- FOR A.Y. 2001-02 TO 2007-08 RESPECTIV ELY. 13. AS REGARDS THE ADDITION OF RS.6,20,000/-, RS.1,20,000/-, RS.1,20,000/-, RS.1,20,000/-, FOR A. YS. 2005-06 TO 2008-09, WE OBSERVE THAT THE TRIBUNAL HAS S ET ASIDE THE ISSUE FOR DE NOVO ADJUDICATION TO THE FILE OF LD. ASSESSING OFFICER AND THEREFORE, THE FATE OF PENALTY W ILL BERNARD JO HN, BHOPAL 7 DEPEND ON THE OUTCOME OF THE SET ASIDE PROCEEDINGS. AT THIS JUNCTURE, THERE IS NO JUSTIFICATION IN LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT ON THE ALLEGED ADDITIONS WHI CH HAVE BEEN SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. WE, ACCORDINGLY DIRECT THE LD. ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) O F THE ACT ON THE ADDITIONS OF RS.6,20,000/-, RS.1,20,000/-, RS.1,20,000/- AND RS.1,20,000/- FOR A.Y. 2005-06 TO A.Y. 2008-09 WITH A LIBERTY TO INITIATE THE PENALTY PROCEE DINGS, IN CASE ANY ADDITION IS MADE IN THE SET ASIDE PROCEEDING S. 14. IN VIEW OF ABOVE DIRECTIONS THE APPEALS OF THE ASSE SSEE FOR A.Y. 2001-02 TO A.Y. 2008-09 ARE PARTLY ALLOWED. 15. IN THE RESULT, ALL EIGHT APPEALS OF THE ASSESSEE AR E PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 26 .10. 2018. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 26/ 10/2018 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BERNARD JO HN, BHOPAL 8 BY ORDER ASSISTANT REGISTRAR, INDORE