PRABODH U. POLADIA, MUMBAI V. ITO WD 21(1)(4), MUMBAI

ITA 5975/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4056 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 09-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 133(6)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI D. KARUNAKARA RAO,AM AND SHRI AMARJIT S INGH, JM / I.T.A. NO.5975/M/13 ( / ASSESSMENT YEAR: 2007-08) PRABODH U. POLADIA DINBANDHU COLLECTION, 10, PRABODH NIWAS, N.S.ROAD NO.2, J.V.P.D. SCHEME, VILEPARLE(W), MUMBAI - 400056 / VS. INCOME TAX OFFICER 21(1)(4) 6 TH FLOOR, 606, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI - 400051 ./ ./ PAN/GIR NO. : AGTPP5645B ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 08.12.2015 /DATE OF PRONOUNCEMENT: 03.02.2016 !' / O R D E R PER AMARJIT SINGH, JM: THIS APPEAL FILED AGAINST THE ORDER DATED 30.07.20 13 OF LEARNED CIT(A) 32, MUMBAI FOR THE ASSESSMENT YEAR 2007-08 W HEREIN THE PENALTY IMPOSED BY THE ASSESSING OFFICER HAS BEEN C ONFIRMED. 2. THE FACT OF THE CASE IS THAT THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME AT RS.5,07,410/- ON 31.10.20 07. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT ASSESSEE BY: SHRI V.G.GINDE DEPARTMENT BY: SHRI DURGA DUTT ITA NO.5975/MUM/2013 ASSESSMENT YEAR: 2007-08 2 PROCEEDING NOTICES WERE ISSUED U/S. 133(6) OF THE I NCOME TAX ACT, 1961( IN SHORT THE ACT) TO VARIOUS PURCHASE PARTI ES TO VERIFY THE GENUINENESS OF PURCHASES TRANSACTIONS. NOTICES ISS UED TO THREE PARTIES VIZ. GAUTAMI TEXTILE, HARSHAD TEXTIL, DURGA TEXTILE S WERE RETURNED BY THE POSTAL AUTHORITIES BEING UNSERVED. THE ASSESSE E WAS ASKED TO FURNISH THE NEW ADDRESSES OF THESE PARTIES WITH THEIR PAN C ARD, PURCHASE BILL, IDENTITY PROOF AND BOOKS OF ACCOUNTS BY VIRTUE OF O RDER SHEET DATED 09.11.2009 BUT THE ASSESSEE FAILED TO PRODUCE THE S AME. THEREFORE THE ASSESSING OFFICER TREATED THE CESSATION OF LIABILIT IES TO MAKE PAYMENTS TO THESE SUNDRY CREDITORS U/S. 41(1) OF THE ACT AND AD DED THE INCOME OF THE ASSESSEE TO THE TUNE OF RS.6,86,388/-. THEREAFTER, THE PENALTY ORDER U/S. 274 R.W.S. 271(1)(C) OF THE ACT DATED 26.03.2013 WA S PASSED BY LEVYING THE PENALTY TO THE TUNE OF RS.1,96,307/-. SUBSEQ UENTLY, THE APPEAL WAS FILED BEFORE THE CIT(A) 32, MUMBAI BUT THE CIT(A) 3 2, MUMBAI CONFIRMED THE ORDER. AGGRIEVED, THE PRESENT APPEAL HAS BEEN FILED. 3. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEAR NED REPRESENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE RECORD CAREFULLY. THE ONLY ISSUE WHICH HAS BEEN RAISED BEFORE US IS T HAT IF THE LEARNED CIT(A) WAS WRONG IN CONFIRMING THE PENALTY TO THE T UNE OF RS.1,96,307/- U/S. 271(1)(C) OF THE ACT. THE LEARN ED REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE ASSESSEE FIRM WAS DEALING WITH THE SAID THREE PARTIES NAMELY GAUTAMI TEXTILE, HARSHAD TEXTI L, DURGA TEXTILES FOR THE PERIOD EFFECT FROM 2006-07 ONWARDS AND THE TRANSACTIONS HAS DULY BEEN REFLECTED IN ITS PROFIT AND LOSS ACCOUNT BUT AT THE TIME OF ASSESSMENT HE WAS UNABLE TO DISCLOSED THE WHERE ABO UT OF THE PARTIES ITA NO.5975/MUM/2013 ASSESSMENT YEAR: 2007-08 3 AND THE LETTER ISSUED BY THE LEARNED ASSESSING OFFI CER RECEIVED BACK UNSERVED BUT THE ASSESSEE DID NOT FURNISH ANY INACC URATE PARTICULARS OF HIS INCOME NOR CONCEALED ANY PARTICULARS OF INCOME TO EVADE THE TAX THEREFORE NO PENALTY IS LEVIABLE IN VIEW OF THE LAW SETTLED IN [2011] 14 TAXMANN.COM 85(KAR.) TITLED AS COMMISSIONER OF INCO ME TAX, BANGALORE VS. S.L.N. TRADERS AND IN CASE OF COMMISS IONER OF INCOME TAX VS. RELIANCE PETROPRODUCTS (PVT.) LTD. (SC)[201 0] 2010 322 ITR 158(SC). WHILE ON THE OTHER HAND THE LEARNED REPRE SENTATIVE OF THE DEPARTMENT REFUTED THE SAID CONTENTION. THE ASSESS MENT ORDER DATED 21.12.2009 SPEAKS THAT THE ASSESSEE WAS HAVING THE TRANSACTIONS WITH THE SAID THREE PARTIES NAMELY GAUTAMI TEXTILE, HARSHAD TEXTIL, DURGA TEXTILES FOR THE PERIOD EFFECT FROM 2006-07 ONWARDS . THE LETTER SENT BY THE ASSESSING OFFICER RECEIVED BACK UNSERVED. HOWE VER, THE ASSESSEE WAS ALSO UNABLE TO FURNISH THE LATEST/PRESENT ADDRE SS OF THE SAID PARTIES. THEREFORE, IN THE SAID CIRCUMSTANCES THE ASSESSING OFFICER TREATED THE CESSATION OF LIABILITIES TO MAKE PAYMENTS TO THE SU NDRY CREDITORS U/S.41(1) OF THE ACT AND ADDED RS.6,86,388/- TOWARD S THE INCOME OF THE ASSESSEE. ASSESSING OFFICER WAS OF THE VIEW THAT T HESE TRANSACTIONS WERE NOT GENUINE THEREFORE THE AMOUNT WAS ADDED TO THE I NCOME OF THE ASSESSEE. THE ONLY REASON WHICH HAS BEEN RAISED BY THE ASSESSING OFFICER IS THAT THE LETTERS SENT TO THESE PARTIES W ERE RECEIVED BACK UNSERVED AND THE ASSESSEE FAILED TO FURNISH THEIR P RESENT ADDRESSES. THESE GROUNDS NOWHERE LEAD TO THIS FACT THAT THE AS SESSEE HAS FURNISHED THE INACCURATE PARTICULARS OF HIS INCOME AND CONCEA LED THE PARTICULARS OF ANY INCOME TO EVADE THE TAX. HONBLE APEX COURT IN COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUCTS (PVT.) LTD. ( SC) SPEAKS THAT ITA NO.5975/MUM/2013 ASSESSMENT YEAR: 2007-08 4 A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY COULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. IT IS ALSO ARGUED THAT THE ON THE SIMILAR FACTS AND CIRCUMSTANCE OF THE CASE IN HAND THE HONBLE HIGH COURT OF KARNATAKA H AS ALSO HELD THE PENALTY UNJUSTIFIABLE IN CASE CITED [2011] 14 TAXMA NN.COM 85(KAR.) ITA NO.5975/MUM/2013 ASSESSMENT YEAR: 2007-08 5 TITLED AS COMMISSIONER OF INCOME TAX, BANGALORE VS. S.L.N. TRADERS. MOREOVER, ON THE BASIS OF SIMILAR FACTS AND CIRCUM STANCE THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH IN ITA NO.3091 /M/2011 DATED 18.07.2012 IN CASE TITLED AS SHIVA PIGMENTS PRIVATE LIMITED VS. INCOME TAX OFFICER (9)(3)(1) HELD THE ACTION OF ASSESSING OFFICER AS UNJUSTIFIABLE AND DELETED THE PENALTY. 4. IN VIEW OF THE SAID CIRCUMSTANCES AND BY HONOURI NG THE ABOVE SAID PRONOUNCEMENTS PASSED BY THE ABOVE SAID DIFFE RENT HONBLE COURTS WE ARE OF THE VIEW THAT THE PENALTY HAS WRONGLY BEE N CONFIRMED BY THE LEARNED CIT(A) BY VIRTUE OF ORDER DATED 30.07.2013. THEREFORE, WE SET ASIDE THE SAID ORDER AND DELETED THE PENALTY IN QUE STION. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD FEBRUARY , 2016. SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) ! / ACCOUNTANT MEMBER $% ! /JUDICIAL MEMBER & ' MUMBAI; (! DATED : 3 RD FEBRUARY, 2016 MP MP MP MP ITA NO.5975/MUM/2013 ASSESSMENT YEAR: 2007-08 6 !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+, %%-. , -. , & ' / DR, ITAT, MUMBAI 6. ,/0 1 / GUARD FILE. / BY ORDER, * % //TRUE COPY// % / & ' (DY./ASSTT. REGISTRAR) , & ' / ITAT, MUMBAI