Amra Ram Kumawat, JODHPUR V. DCIT, JODHPUR

ITA 599/JODH/2013

• Counselvise Citation: 59923314 RSA 2013
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-03-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 27-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: ABHINAV KOTHARI
• Keywords: Unexplained investment; Document seized; Question of law; Revised return; Documents seized
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NOS. 597, 598 & 599/JODH/2013 (A.YS. 2000-01, 2001-02 & 2002-03) AMRA RAM KUMAWAT, VS. DCIT, CENTRAL CIRCLE-1, B-107, SHASTRI NAGAR, JODHPUR. JODHPUR. PAN NO. AAVPK 9064 B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI & SHRI ABHINAV KOTHARI. DEPARTMENT BY : SHRI N.A. JOSHI- D.R. DATE OF HEARING : 06/03/2014. DATE OF PRONOUNCEMENT : 06/03/2014. O R D E R PER N.K. SAINI, A.M THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED A GAINST THE SEPARATE ORDERS EACH DATED 18/11/2013 OF LD. CIT (A ), BIKANER. IN ALL THESE APPEALS, A COMMON ISSUE RELATING TO CONFIRMAT ION OF PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) IS INVOLVED AND THE APPEALS 2 WERE HEARD TOGETHER, SO, THESE ARE BEING DISPOSED O FF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2 FIRST WE WILL DEAL WITH THE APPEAL IN I.T.A.NO. 59 7/JODH/2013. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE LD. CIT(A) HAD ERRED IN SUSTAINING THE PENA LTY OF RS. 71,420/- LEVIED BY THE LD. AO . THE PENALTY SO SUSTAINED IS BAD IN LAW AND BAD ON FACTS. 2. THE PENALTY LEVIED SIMPLY ON THE BASIS OF FINDIN G RECORDED IN THE ASSESSMENT PROCEEDINGS WAS BAD IN LAW. THE ADDITIO NS IN THE ASSESSMENT ORDER WERE ONLY ON ESTIMATE BASIS AND LE VY OF PENALTY WAS NOT JUSTIFIED. 3. THERE BEING NO CONCEALMENT OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS OF INCOME, THE PENALTY LEVIED WAS NOT J USTIFIED. 4. THE APPELLANT CRAVES LIBERTY TO ADD, AMEND, ALTE R, AND MODIFY ANY OF THE GROUND OF APPEAL ON OR BEFORE ITS HEARING BEFOR E YOUR HONOUR. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE ACT, FURNISHED THE RETURN OF INCOME DECLARING AN INCOME OF RS. 2,27,347/- AND THE AGRIC ULTURAL INCOME OF RS. 2,15,500/-. IN THE ORIGINAL RETURN OF INCOME, THE ASSESSEE HAD SHOWN INCOME AT RS. 59,150/- BESIDES THE AGRICULTURAL INC OME OF RS. 2,15,500/-. THE ASSESSING OFFICER FRAMED THE ASSESSMENT AT AN I NCOME OF RS. 3,11,847/- BY MAKING THE ESTIMATED ADDITION OF RS. 39,000/- ON ACCOUNT OF LOW HOUSEHOLD EXPENSES, RS. 36,000/- TRE ATING THE AGRICULTURAL 3 INCOME AS INCOME FROM OTHER SOURCES. ANOTHER AD DITION OF RS. 9,500/- WAS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN TH E PURCHASE OF PLOT. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A), WHO DELETED THE ADDITIONS ON ACCOUNT OF HOUSEHOLD EXPENSES AND THE ISSUE RELATING TO THE ADDITION MADE AS INCOME FROM OTHER SOURCES OUT OF A GRICULTURAL INCOME WAS NOT PRESSED. THE ASSESSING OFFICER INITIATED T HE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSEE S UBMITTED THAT THE ADDITION OF HOUSEHOLD EXPENSES AT RS. 39,500/- WAS DELETED BY THE LD. CIT(A) CENTRAL, JAIPUR AND THE ADDITION OF RS. 36,0 00/- OUT OF AGRICULTURAL INCOME WAS ON ESTIMATED BASIS, WHICH WAS NOT PRESSE D BEFORE THE LD. CIT(A) TO PUT AN END TO WASTEFUL LITIGATION AS SUCH NO PENALTY WAS LEVIABLE. RELIANCE WAS PLACED ON THE FOLLOWING CAS E LAWS:- I) SHIV LAL TAK VS. CIT (2001) 251 ITR 373 (RAJ.) II) CIT VS. GOSWAMI SMT. CHANDRALATA BAHUJI (1980) ITR 700 (RAJ.) III) CIT VS. SANT DAS NIHAL CHAND (1997) 226 ITR 2 24 (RAJ.) IV) J.P. SHARMA AND SONS VS. CIT, RAJASTHAN (1985) 151 ITR 333 (RAJ.) THE ASSESSING OFFICER DID NOT FIND MERIT IN THE SU BMISSIONS OF THE ASSESSEE AND LEVIED PENALTY OF RS. 71,420/- UNDER S ECTION 271(1)(C) OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE COMPLETE DETAILS IN RELATION TO THE AGRICULTURAL 4 INCOME AND OTHER INCOME SHOWN BY THE ASSESSEE WERE FURNISHED TO THE ASSESSING OFFICER WHICH ADEQUATELY PROVED THAT THE ADDITIONS WERE ON ESTIMATED BASIS IN THE DECLARED INCOME WHICH COULD NOT BE REGARDED AS THE REAL INCOME OF THE ASSESSEE. IT WAS FURTHER S TATED THAT THE ASSESSEE HAD NOT PRESSED CERTAIN GROUNDS OF APPEAL MERELY TO PUT AN END TO WASTEFUL LITIGATION WITH THE HOPE THAT THE PENALTY PROCEEDINGS MAY BE DROPPED. THE LD. CIT(A), HOWEVER, DID NOT FIND MER IT IN THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT SINCE THE ASSESSE E HAD FAILED TO FURNISH A SATISFACTORY EXPLANATION, THEREFORE, IT WAS A FIT CASE FOR LEVY OF PENALTY. ACCORDINGLY, THE PENALTY LEVIED BY THE ASSESSING OF FICER WAS CONFIRMED. NOW, THE ASSESSEE IN APPEAL. 5. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SU BMISSIONS MADE BEFORE THE AUTHORITIES BELOW. IT WAS FURTHER SUBMI TTED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THIS BENCH OF T HE TRIBUNAL DATED 03/06/2013 IN I.T.A.NO. 434 TO 437/JODH/2010 FOR TH E A.YS. 2000-01 TO 2004-05 IN THE CASE OF M/S. POONAM MARBLE (PVT.) LTD., AMET VS. DCIT, (CENTRAL-1), UDAIPUR . COPY OF THE SAID ORDER WAS FURNISHED. 6 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF HOUSEHOLD EXPENSES AS WELL AS OUT OF THE AGRICULTURAL INCOME TREATING THE SAME AS INCOME FRO M OTHER SOURCES WAS ON ESTIMATE BASIS AND THE LD. CIT(A) HAS DELETED TH E ADDITION ON ACCOUNT OF HOUSEHOLD EXPENSES WHILE THE ANOTHER ADDITION BY CONSIDERING A PART OF AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES WA S ON ESTIMATE BASIS. SO, IT CANNOT BE SAID THAT THE ASSESSEE CONCEALED T HE INCOME OR FURNISHED INACCURATE PARTICULARS OF THE INCOME. A SIMILAR IS SUE HAS BEEN DECIDED BY THIS BENCH OF THE TRIBUNAL IN THE CASE OF M/S. POON AM MARBLE (PVT.) LTD. VS. DCIT (SUPRA) WHEREIN THE RELEVANT FINDINGS HAS BEEN GIVEN IN PARA 7 TO 9, WHICH READ AS UNDER:- 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PAR TIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT AN INCOME OF RS. 2 ,62,300/- WAS OFFERED BY THE ASSESSEE FOR TAXATION IN THE REVISED RETURN WHI CH HAS BEEN ACCEPTED BY THE DEPARTMENT IN ITS ENTIRETY WITHOUT DETAILED DISCUSSION FOR THE SEIZED DOCUMENTS. THEREFORE, THE PENALTY 271(1)(C) OF THE ACT ON THE SAID AMOUNT OF RS. 2,62,300/- WAS NOT LEVIABLE. ON A SIM ILAR ISSUE THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS SURESH CH AND BANSAL 329 ITR 330 (SUPRA) HAS HELD AS UNDER (HEAD NOTE) :- 'THE ASSESSEE FILED A RETURN IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE INCOME-TAX ACT, 1961 OFFERING ADDITIONAL INC OME FOR ASSESSMENT 6 YEARS 1999-2000 TO 2005-06. ON THE BASIS OF THE ADD ITION AS UNDISCLOSED INCOME AN ORDER LEVYING PENALTY UNDER S ECTION 271(1)(C) WAS PASSED. ON APPEAL, THE COMMISSIONER (APPEALS) S ET ASIDE THE PENALTY HOLDING THAT THE ASSESSEE OFFERED ADDITIONA L INCOME FOR ASSESSMENT YEARS 1999-2000 TO 2005-06 AND IT WAS HE LD TO BE A GOOD OFFER, THAT IT -WAS ACCEPTED IN ITS ENTIRETY, THAT THE FACTUAL CONTEXT MUST BE CONSIDERED BEFORE TAKING A DECISION ABOUT - WHETHER THE ASSESSEE SHOULD TIE HELD GUILTY OF CONCEALMENT OF T HE INCOME OFFERED IN EACH OF THE ASSESSMENT YEARS UNDER CONSIDERATION , THAT WHILE THE OFFER WAS IN CONSEQUENCE OF SEARCH ACTION, THE ASSESSMENT ORDER IN ACCEPTING THE OFFER OF THE ASSESSEE ALSO ADMITTED T HAT THE INCOME THAT MIGHT PROPERLY BE ASSESSED IN THE CASE OF DIFFERENT PERSONS OR MAY ALSO BE PROPERLY EXPLAINED WITH SUFFICIENT EFFORT OR WHE RE NO OFFER NEED BE MADE, ADDITIONAL INCOME WAS OFFERED, THERE WAS AN E STIMATE OF UNDISCLOSED INCOME CONSIDERED NECESSARY FOR THE PUR POSE OF AVOIDING UNCERTAINTIES, AND THAT THEREFORE, LEVY OF PENALTY ON SUCH OFFER WAS NOT JUSTIFIED WITHOUT DETAILED DISCUSSION OF THE DOCUME NTS AND THEIR EXPLANATION WHICH COMPELLED THE OFFER OF ADDITIONAL INCOME. THE TRIBUNAL, ON APPEAL BY THE DEPARTMENT, UPHELD THE D ECISION OF THE COMMISSIONER (APPEALS), RELYING ON THE DECISION OF THE SUPREME COURT IN THE CASE IN DILIP N. SHROFF (2007) 291 ITR 519. IT HAS FURTHER BEEN HELD THAT:- 'THE MATTER WAS COVERED BY THE SUPREME COURT DECISION AND DID NOT CALL FOR INTERFERENCE. ' 8. SIMILARLY THE HON'BLE SUPREME COURT IN THE C ASE OF SUDARSHAN SILKS AND SAREES VS CIT 300 ITR 205 (SUPRA) HAS HELD AS UNDER :- 'ON A SEARCH CONDUCTED IN THE PREMISES OF THE ASSES SEE, APART FROM CASH AND JEWELLERY, INCRIMINATING DOCUMENTS EVIDENC ING CONCEALMENT OF INCOME WERE UNEARTHED. IT WAS FOUND THAT THE ASSESSEE WAS MAINTAINING DOUBLE SETS OF BOOKS OF AC COUNT AND WAS ACCOUNTING FOR ONLY 50 PER CENT OF THE SALES IN THE REGULAR SET OF BOOKS AND CERTAIN PURCHASES WERE NOT ACCOUNTED FOR. IN ORDER TO AVOID DIFFICULTIES AND LITIGATION, THE ASSESSEE CAM E FORWARD WITH AN OFFER OF AVOID DIFFICULTIES AND LITIGATION, THE ASSESSEE CAME FORWARD WITH AN OFFER OF INCOME ADDITIONAL TO THAT ESTIMATED BY THE ASSESSING OFFICER AND FILED REVISED RETURNS. IN THE COURSE OF THE 7 ASSESSMENT PROCEEDINGS PENAL ACTION WAS INITIATED U NDER SECTION 271(L)(C) OF THE INCOME-TAX ACT, 1961, IN WHICH THE MAXIMUM PENALTY WAS LEVIED REPELLING THE ASSESSEE'S CONTENT ION THAT A PROMISE HAD BEEN MADE NOT TO LEVY PENALTY. ON APPEA L, THE COMMISSIONER (APPEALS) HELD (I) THAT THE ASSESSEE O FFERED THE AMOUNT FOR TAXATION FOR THE PURPOSE OF PURCHASING P EACE ; (II) THAT NO BOOKS OF ACCOUNT OR OTHER DOCUMENTARY EVIDE NCE WAS DISCOVERED THAT PROVED ANY CONCEALMENT, AND THAT, O N THE FACTS AND CIRCUMSTANCES OF THE CASE, NO CASE FOR PENALTY WAS MADE OUT. THE APPELLATE TRIBUNAL UPHELD THE FINDINGS OF THE CO MMISSIONER (APPEALS) AND RECORDED THAT ALTHOUGH THERE WAS NOTH ING ON RECORD TO SHOW THAT THE ASSESSEE WAS GIVEN AN ASSUR ANCE THAT NO PENALTY WAS LEVIED, THE FACTS CLEARLY SUGGESTED THAT SUCH AN INDUCEMENT MUST HAVE BEEN GIVEN BY THE SEARCHING PA RTY; THAT WHEN ONLY PARTIAL EVIDENCE IN SUPPORT OF CONCEALMEN T FOR A VERY LIMITED PERIOD WAS DETECTED THERE WAS NO REASON WHY 'ANY PERSON WOULD GO TO OFFER MUCH HIGHER AMOUNTS FOR A LARGE N UMBER OF YEARS THAT IN VIEW OF THE DEPOSITION GIVEN UNDER SECTION 132(4) FOLLOWED BY THE CO-OPERATING ATTITUDE OF THE ASSES SEE IN PAYIN G THE TAX NO PENALTY -WOULD BE LEVIABLE UNDER SECTION 271 (1)(C); THAT THE INCRIMINATING MATERIALS FOUND DURING THE SEARCH WER E NOT USED BY THE DEPARTMENTAL AUTHORITIES IN MAKING THE ASSESSMENTS; AND THE REVISED RETURNS SHOULD, THEREFORE, BE CONSIDERED TO HAVE BE EN FILED IN GOOD FAITH. THE TRIBUNAL REFERRED TO THE HIGH COURT THE QUESTIO N WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRI BUNAL WAS RIGHT IN LAW IN UPHOLDING THE ORDER OF THE COMMISSIONER (APPEALS ) IN CANCELLING THE PENALTY UNDER SECTION 271(L)(C). THE HIGH COURT ANS WERED THE REFERENCE IN FAVOUR OF THE DEPARTMENT. THE HON'BLE SUPREME COURT REVERSED THE DECISION OF THE HON'BLE HIGH COURT AND HELD THAT:- 'THE FINAL FACT-FINDING AUTHORITY WAS THE APPELLA TE TRIBUNAL AND ITS DECISION ON THE FACTS COULD BE GONE INTO BY THE HIGH COURT ONLY IF A QUESTION HAD BEEN REFERRED ON WHETHER THE FINDING O F THE TRIBUNAL WAS PERVERSE, IN THE SENSE THAT IT WAS SUCH AS COULD NO T REASONABLY HAVE BEEN ARRIVED AT ON THE MATERIAL PLACED BEFORE THE T RIBUNAL. IN THE ABSENCE OF SUCH A QUESTION THE HIGH COURT HAD TO AC CEPT THE FINDING OF FACT ARRIVED AT BY THE TRIBUNAL AND THEN PROCEED TO DECIDE THE QUESTION 8 OF LAW REFERRED. IN THIS CASE THE QUESTION OF LAW R EFERRED TO THE HIGH COURT WAS WHETHER THE TRIBUNAL WAS RIGHT IN UPHOLDI NG THE FINDINGS OF THE COMMISSIONER (APPEALS) IN CANCELLING THE PENALT Y LEVIED UNDER SECTION 271(L)(C). THE QUESTION AS TO THE PERVERSIT Y OF THE FINDINGS RECORDED BY THE TRIBUNAL WAS NEITHER RAISED NOR REF ERRED TO THE HIGH COURT. THE TRIBUNAL IS THE FINAL COURT OF FACT. THE DECISI ON OF THE TRIBUNAL ON THE FACT CAN BE GONE INTO BY THE HIGH COURT, IN THE REF ERENCE JURISDICTION ONLY IF A QUESTION HAS BEEN REFERRED TO IT WHETHER THE FINDING ARRIVED AT BY THE TRIBUNAL ON THE FACT WAS PERVERSE IN THE SEN SE THAT NO REASONABLE PERSON COULD HAVE TAKEN SUCH A VIEW. ' 9. IN THE PRESENT CASE ALSO THE ADDITIONAL INCOME OF R S. 2,62,300/- WAS DISCLOSED BY THE ASSESSEE IN THE REVISED RETURN WHICH WAS ACCEPTED BY THE AO IN ITS ENTIRETY AND THE OTHER ADDITIONS AMOU NTING TO RS. 25,621/- WERE MADE ONLY ON THE BASIS OF THE ESTIMATED INCOME BY APPLYING THE G.P. RATE DECLARED BY THE ASSESSEE ITSELF. THEREFORE, TH E PENALTY ON THE SAID ADDITIONAL INCOME WAS NOT LEVIABLE. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREIN ABOVE ARE OF THE VIEW THAT THE PRESENT CASE IS NOT A FIT CASE FOR LEVYING THE PENALTY U/S 271(1 )(C). IN THAT VIEW OF THE MATTER WE DELETE THE PENALTY U/S 271(1)(C) OF THE A CT LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT(A). 8 . SO, BY RESPECTFULLY FOLLOWING THE AFORESAID REFER RED TO ORDER, THE IMPUGNED PENALTY OF RS. 71,420/- IS DELETED. 9 . IN I.T.A. NOS. 598 & 599/JODH/2013, THE FACTS ARE SIMILAR. THE ONLY DIFFERENCE IS IN THE AMOUNT OF THE PENALTY LEVIED B Y THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A). THEREFORE, OUR FI NDINGS IN RESPECT OF I.T.A. NO. 597/JODH/2013 FOR THE A.Y. 2000-01 GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS-MUTANDIS FOR THESE T WO APPEALS ALSO. 9 ACCORDINGLY, THE PENALTY LEVIED UNDER SECTION 271(1 )(C) OF THE ACT WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A) FOR THE A.YS. 2001-02 & 2002-03 IS ALSO DELETED. 10 . IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWE D. (ORDER PRONOUNCED IN THE COURT ON 06 TH MARCH, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 06 TH MARCH, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.