S. Veerareddy Gardens, Patancheru, Hyderabad V. ITO, Sangareddy, Sanga Reddy

ITA 609/HYD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0713 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 17-07-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILANJAN DEY
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Set aside
• Section: 271(1)(c); 143(3); 133A; 139(1); 139(4)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH SMC, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO.609/HYD/2017 ASSESSMENT YEAR: 2013 - 14 S. VEERA REDDY GARDENS, PATANCHERU, NEAR YELLAMMA TEMPLE, MEDAK. PAN: ACI F S 3167 L VS. INCOME TAX OFFICER, SANGAREDDY. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI T. CHAITANYA KUMAR REVENUE BY: SRI NILANJAN DEY, DR DATE OF HEARING: 17/07/2019 DATE OF PRONOUNCEMENT: 24 /07/2019 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 2, HYDERABAD DATED 30 / 12/2016 IN APPEAL NO.0 294/2015 - 16 PASSED U/S. 271(1)(C) R.W.S., 250(6) OF THE ACT FOR THE ASSESSMENT YEAR 2013 - 14. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED SEVERAL GROUNDS HOWEVER, THE CRUX OF THE ISSUE I S THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LEVIED BY THE LD. A.O. U/S. 271(1)(C) OF THE ACT. 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF RUNNING FUNCTION HALL , EARN ING INCOME FROM LETTING OUT THE FUNCTION HALL . A SURVEY U/S. 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 21/01/2015 AND IT WAS NOTICED TH AT THOUGH THE ASSESSEE HAD STARTED ITS BUSINESS IN THE MONTH OF NOVEMBER, 2012 , THE ASSESSEE HAD NEITHER FILED THE RETURN OF INCOME WITHIN THE DUE DATE AS PROVIDED U/S. 139(1) OF THE ACT NO R MAINTAINED ITS BOOKS OF ACCOUNT WITH RESPECT TO THE RUNNING OF TH E FUNCTION HALL FOR THE RELEVANT ASSESSMENT YEAR 2013 - 14 . DURING THE COURSE OF SURVEY PROCEEDINGS , F ROM TH E ROUGH BOOKS MAINTAINED BY THE ASSESSEE , THE GROSS INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR WAS ESTIMATED AT RS. 19 LAKHS AND AFTER DEDUCTING THE EXPENDITURE RELATED TO THE BUSINESS AMOUNTING TO RS. 10,97,000/ - THE NET INCOME OF THE ASSESSEE WAS ARRIVED AT RS. 8,03,000/ - . THEREAFTER, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE RELEVANT AY 2013 - 14 BELATED LY WITHIN THE STIPULATED PERIOD U/S. 139(4) OF THE ACT ON 31/03/2015 ADMITTING THE TOTAL INCOME OF RS. 8,03,000/ - . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND THE LD. A.O. COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT BY ACCEPTING THE INCOME RE TURNED BY THE ASSESSEE VIDE ORDER DATED 26/05/2015 , HOWEVER HE INVOKED PENAL PROVISIONS U/S. 271(1)(C) OF THE ACT AND LEVIED PENALTY OF RS. 2,50,000/ - BEING 100% OF TAX SOUGHT TO BE EVADED VIDE ORDER DATED 30.11.2015 BY OBSERVING AS UNDER: - 3 9. AS THE ASS ESSEE FAILED TO DISCLOSE ITS INCOME BY FILING RETURN OF INCOME WITHIN THE STATUTORILY MANDATED PERIOD, AND EVEN TILL THE DATE OF SURVEY, EVEN THOUGH IT HAD INCOME CHARGEABLE TO TAX WHICH WAS UNEARTHED DURING THE SURVEY PROCEEDINGS, IT IS CONSTRUED THAT ASS ESSEE HAD CONCEALED THE INCOME THAT IT EARNED DURING THE PERIOD. 10. IN VIEW OF THE ABOVE, I FIND THIS IS A FIT CASE FOR LEVY OF PENALTY AS ASSESSEE HAD CONCEALED ITS INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. THE MAXIMUM PENALTY AND MAXIMUM PENALTY ARE WORKED OUT AS UNDER: INCOME SOUGHT TO BE EVADED RS. 8,03, 000 TAX THEREON (INCL EDU CESS) RS. 2,48,127 MINIMUM PENALTY = 100% OF TAX SOUGHT TO BE EVADED RS. 2,48,127 MAXIMUM PENALTY = 300% OF TAX SOUGHT TO BE EVADED RS. 7,44,381 4. ON APPEAL, THE LD. CIT (A) UPHELD THE ORDER OF THE LD. AO BY AGREEING WITH HIS VIEW THAT THE ASSESSEE HAD CONCEALED ITS INCOME BY NOT FILING THE RETURN OF INCOME WITHIN THE DUE DATE U/S. 139(1) OF THE ACT AND EVEN BEFORE THE DATE OF THE SURVEY. 5. FROM THE FACTS OF THE CASE IT IS APPARENT THAT T HE MAIN REASONS FOR LEVYING THE PENALTY U/S. 271 (1) (C) OF THE ACT WAS THAT THE ASSESSEE HAD NOT FILED ITS RETURN OF INCOME WITHIN THE DUE DATE PROVIDED U/S. 139(1) OF THE ACT AND SUBSEQUENTLY DURING THE SURVEY PROCEEDINGS ON 21/01/2015 THE REVENUE HAD UNEARTH ED THE UNDISCLOSED INCOME OF THE ASSESSEE AT RS. 8,03,000/ - FOR THE RELEVANT ASSESSMENT YEAR 2013 - 2014. 4 HOWEVER, THE PLEA OF THE ASSESSEE WAS THAT THE PROVISIONS OF SECTION 139(4) OF THE ACT ENABLES THE ASSESSEE TO FILE ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2013 - 14 ON OR BEFORE 31/03/2015 OR BEFORE THE COMPLETION OF THE ASSESSMENT , WHICHEVER IS EARLIER. SINCE THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 31/03/2015 I.E., B EFORE THE COMPLETION OF THE ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR AND ON 31/03/2015 DECLARING THE ENTIRE NET INCOME OF RS. 8,03,000/ - FOR THE FY 01/04/2012 TO 31/03/2013 DETERMINED BY THE REVENUE WHICH WAS ALSO ACCEPTED BY THE ASSESSEE THERE WAS NO C ONCEALMENT OR INACCURATE PARTICULARS OF INCOME DISCLOSED IN THE RETURN OF INCOME FILED BELATEDLY . 6. AT THE OUTSET, I DO NOT FIND ANY MERIT IN ORDERS OF THE LD. REVENUE AUTHORITIES FOR HAVING INVOKED THE PENAL PROVISION U/S. 271(1)(C) AND FURTHER SUSTAINING THE PENALTY LEVIED ON THE ASSESSEE. THE PROVISIONS OF SECTION 139(4) OF THE ACT PERMITS THE ASSESSEE TO FILE BELAT ED RETURN AT ANY TIME BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER IN CASE FOR ANY REASON IF THE ASSESSEE HAS OMITTED TO FILE THE RETURN OF INCOME WITHIN THE STIPULATED PERIOD U/S. 139(1) OF THE ACT. FROM THE FACTS OF THE CASE IT IS APPARENT THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME WITHIN THE PERIOD SPECIFIED U/S. 139(4) OF THE ACT AND IN THAT RETURN THE ASSESSEE HAD DISCLOSED THE ENTIRE NET INCOME WHICH WAS COMPUTED AND ADMITTED DUR ING THE COURSE OF THE SCRUTINY PROCEEDINGS THOUGH IT WAS SUBSEQUENT 5 TO THE DUE DATE OF FILING OF THE RETURN AS PER SECTION 139(1) OF THE ACT. THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY THE ASSESSEE BELATEDLY IS ALSO NOT DISTURBED BY THE LD. REVENUE AUTHORITIES. IN THIS SITUATION I DO NOT FIND IT APPROPRIATE TO INVOKE THE PROVISION S OF SECTION 271(1)(C) OF THE ACT BECAUSE IN THE RETURN FILED BY THE ASSESSEE THERE WAS NO CONCEALMENT OF INCOME OR ANY INACCURATE PARTICULARS OF INCOME . HENCE, I HEREBY SET ASIDE THE ORDER OF THE LD. CIT (A) AND FURTHER DELETE THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 24 TH JULY, 2019. SD/ - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 24 TH JULY , 2019 OKK COPY TO: - 1) S. VEERA REDDY GARDENS C/O. T. C HAITANYAKUMAR, ADVOCATE, FLAT NO.102, GOURI APARTMENT, URDULANE, HIMAYATNAGAR, HYDERABAD. 2) INCOME TAX OFFICER, SANGAREDDY. 3) THE CIT(A) - 2, HYDERABAD 4) THE PR. CIT - 2 , HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE