SHRI QASIM ALI, Bhopal V. THE ITO 3(1), Bhopal

ITA 625/IND/2014

• Counselvise Citation: 62522714 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Revised return
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO. 625 /IND/201 4 A.Y. : 2009-10 SHRI QASIM ALI, ITO BHOPAL VS. 3(1), BHOPAL APPELLANT RESPONDENT PAN NO.AAXPA2090C APPELLANTS BY : NONE - WRITTEN SUBMISSIONS RESPONDENT BY : SHRI R. A. VERMA, DR O R D E R PER D. T. GARASIA, J.M. TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF CIT(A)-II, BHOPAL, DATED 16.07.2014, FOR ASSESSMENT YEAR 2009- DATE OF HEARING : 08. 10.2015. DATE OF PRONOUNCEMENT : 0 7 . 1 2 .2015 SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 2 2 10. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF TRADING OF NUTS, BOLTS, SCREWS A ND TOOL ITEMS. THE ASSESSEE HAS SHOWN THE TURNOVER OF RS. 33,12,84 4/- ON WHICH NET PROFIT OF RS. 1,81,403/- WAS DECLARED. AS PER THE AIR INFORMATION RECEIVED BY THE ASSESSING OFFICER, THE ASSESSEE FOUND TO HAVE MADE CASH DEPOSITS OF RS. 22,27,500/- IN HIS SAVING BANK ACCOUNT WITH AXIS BANK. THE ASSESSEE HA S REVISED THE RETURN DECLARING ADDITIONAL INCOME OF RS. 1,11, 375/-BEING PROFIT @ 5% U/S 44AF ON TURNOVER OF RS. 22,27,500/- ALONGWITH RS. 9,336/- AS INTEREST ON THIS SAVING BANK ACCOUNT . THE AO HAS IMPOSED THE PENALTY ON THIS CONCEALED INCOME OF RS. 1,20,711/-. 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS CONFIRMED THE SAME. 4. THE LD. AUTHORIZED REPRESENTATIVE HAS FILED THE WRI TTEN SUBMISSION, WHICH READS AS UNDER :- IN THE ABOVE MATTER THIS WRITTEN SUBMISSION BE SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 3 3 KINDLY CONSIDERED FOR DECIDING THE APPEAL. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AD FILED HIS ORIGINAL RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION ON 29.7.2009 DECLARING TOTAL INCOME O F RS. 1,64,097 WHICH WAS REVISED BY FILING A REVISED RETURN ON 10.03.2011 OFFERING AN ADDITIONAL INCOME OF RS. 1,20,741 [I.E. RS. 1,11,375/- BEING THE NET PRO FIT @ 5% U/S 44AF ON ESTIMATED SALE PROCEEDS OF RS. 22,27,500 CONSEQUENT TO SALE AND PURCHASE TRANSACTIONS APPEARING IN THE ASSESSEE'S BANK ACCOU NT WITH AXIS BANK AND INTEREST OF RS. 9,366 RECEIVED I N THE SAID AXIS BANK ACCOUNT] AND THE TAX DUE ON REVISED RETURNED INCOME WAS ALSO PAID. THEREAFTER, THE ASSESSEE HAS ALSO GIVEN A LETTER DATED 9.3.2011 FIL ED BEFORE THE LEARNED AO ON 10.3.2011 TOGETHER WITH TH E REVISED RETURN WITH A REQUEST THAT NO PENALTY PROCEEDINGS BE INITIATED TO SUCH ADDITIONAL INCOME OFFERED IN THE REVISED RETURN OF INCOME. IN THE SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 4 4 ASSESSMENT MADE THE LEARNED AO ACCEPTED THE ESTIMATED SALES PROCEEDS FROM TRANSACTIONS AXIS BAN K ACCOUNT AT RS. 22,27,500 AS DECLARED BY THE ASSESSE E IN HIS REVISED RETURN BUT ESTIMATED NET PROFIT @ 5. 47 % ON SUCH ESTIMATES SALES AS AGAINST NET PROFIT DECLA RED @ 5% U/S 44AF ON SUCH ESTIMATED SALES AND THEREBY AN ADDITION OF RS. 10,469 HAS ALSO BEEN MADE. IT IS SUBMITTED THAT THE REVISED RETURN WAS FILED O N 10.3.2011 AND PRIOR TO THAT THE LEARNED AO ISSUED NOTICES U/S 143(2) & 142(I) BOTH DATED 6.9.2011 . IT MAY BE SEEN FROM THE SAID NOTICES ISSUED ON 6.9.201 0 THAT DETAILS SOUGHT BY THE LEARNED ARE GENERAL IN NATURE AND NOTHING HAS BEEN MENTIONED OR ASKED SPECIFICALLY REGARDING THE AXIS BANK ACCOUNT OF THE ASSESSEE. IT IS FURTHER SUBMITTED THAT THE SAID OFF ER OF AN ADDITIONAL INCOME WAS MADE VOLUNTARILY BY THE ASSESSEE IN HIS REVISED RETURN BEFORE ANY DETECTIVE MODE BY THE LEARNED AO AND THEREFORE IT CANNOT BE SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 5 5 ASSUMED THAT THE ABOVE OR ADDITION MADE BY THE LEARNED AO REPRESENT THE CONCEALED INCOME OF THE ASSESSEE OF THE ASSESSEE. THE LEARNED CLT(A) IN PARA (3) AT PAGE 4 OF HER APPELLATE ORDER REPRODUCED THE SUBMISSION OF THE ASSESSEE MADE BEFORE HER. IT IS FURTHER SUBMITTED THAT THE RELIANCE PLACED BY THE LEARNED CIT(A) IN THE CASE OF N. RANJIT VS. CIT-V, (2013) 35 TAXMAN.COM. 555(MAD) [ALSO REPORTED IN 26 2 CTR 41 & 91 DTR 17] IS DISTINGUISHABLE ON FACTS BECAUSE IN THE SAID CASE THE RETURN WAS REVISED AFT ER THE STATEMENT OF ASSESSEE WAS RECORDED. WHEREAS IN THE PRESENT CASE THE ASSESSEE HAD MADE FULL AND TRU E DISCLOSURE OF ALL MATERIAL FACTS TO THE COMPUTATION OF HIS INCOME AND THE SAID OFFER OF AN ADDITIONAL INCOME W AS MADE VOLUNTARILY BY THE ASSESSEE IN HIS REVISED RET URN BEFORE ANY DETECTIVE MODE BY THE LEARNED AO. HENCE THE FACTS OF THE CASE RELIED BY THE LEARNED CIT(A) ARE SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 6 6 ENTIRELY DIFFERENT AND NOT APPLICABLE ON THE CASE O F THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AND SUBMISSIONS, IT IS C LEAR THAT THE HIMSELF OFFERED THE SAID ADDITIONAL INCOME IN HIS REVISED RETURN FILED VOLUNTARILY AND THEREFORE, ASSESSEE HAS NOT CONCEALED ANY PARTICULAR OF HIS INCOME. HENCE THE ASSESSEE IS NOT LIABLE FOR ANY PENALTY. THEREFORE, IT IS PRAYED THAT THE PENALTY B E KINDLY CANCELLED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THIS CASE ORIGINAL RETURN WAS FILED ON 29.7.2009, WHEREIN THE ASSESSEE HAS DECLARED NET PROFIT AT RS. 1,81,403/- FROM THE BUS INESS TURNOVER OF RS. 33,12,844/-. AS PER THE AIR DETAILS RECEIVED BY THE ASSESSING OFFICER THAT THERE WAS CASH DEPOSIT O F RS. 22,27,500/- IN ASSESSEES BANK ACCOUNT AT BHOPAL AN D AS PER THIS INFORMATION, THE ASSESSEE HAS FILED THE REVISE D RETURN OFFERING A FURTHER INCOME OF RS. 1,20,711/- CONSIST S OF RS. SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 7 7 1,11,3 7 5/ - GENERATED FROM ESTIMATED SALE PROCEEDS OF RS. 22,27,500/- ALONG WITH RS. 9,336/- AS INTEREST ON T HIS SAVING BANK ACCOUNT IN AXIS BANK. WE FIND FROM THE RECORD THAT IN HIS RETURN, THE ASSESSEE HAS NOT MENTIONED ANY SAVING BANK ACCOUNT MAINTAINED IN AXIS BANK AND INTEREST THEREO N. HE HAS DECLARED THE BUSINESS TURNOVER ONLY. THE AO ISSUED NOTICES U/S 143(2) AND 142(1), WHEN THE ASSESSEE HAS FILED THE RETURN ON 29.7.2009. THE ASSESSEE HAS COME FORWARD WITH THIS ADDITIONAL INCOME AT THE STAGE OF PROCEEDINGS TILL THE AO OBTA INED ASSESSEES RELEVANT BANK STATEMENT FROM THE CONCERN ED BANK ACCOUNT ON 21.2.2011. THUS, IT IS NOT FOUND TO BE A N INNOCUOUS OMISSION ON THE PART OF THE ASSESSEE BUT DELIBERATE ACT OF CONCEALMENT OF INCOME IN HIS RETURN. THOUGH THE ASS ESSEE HAS FILED THE REVISED RETURN GIVING FRESH PARTICULARS O F HIS, BUT IT HAS BEEN DONE ONLY WHEN HE HAS BEEN CORNERED CONSEQUENT UPON RECEIPT OF AIR INFORMATION AND HIS BANK ACCOUNT STA TEMENT BY THE ASSESSING OFFICER. WE FIND SUPPORT FROM THE ORD ER OF HON'BLE SUPREME COURT IN THE CASE OF SURESH CHANDRA MITTAL, (2001) 251 ITR 009 :119 TAXMAN 433, WHEREIN IT IS HELD THA T THE SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 8 8 REVISED RETURN FILED SHOWING HIGHER INCOME, THE ASSESSEE SURRENDERED THE INCOME AFTER PERSISTENT INQUIRY BY THE ASSESSING OFFICER, HOWEVER, REVISED RETURNS HAVE BE EN R3EGULARISED BY THE REVENUE. THE EXPLANATION OF THE ASSESSEE THAT HE HAS DECLARED ADDITIONAL INCOME TO BUY PEACE AND TO COME OUT OF VEXED LITIGATION COULD BE TREATED AS BO NA FIDE AND PENALTY RIGHTLY CANCELLED. WE FIND THAT IN THIS CAS E THE ASSESSEE HAS REVISED THE RETURN AFTER THE INQUIRY BY THE ASS ESSING OFFICER, BUT REVISED RETURN HAS BEEN ACCEPTED BY THE DEPARTM ENT. THEREFORE, NO PENALTY CAN BE LEVIED. WE ALSO GET SU PPORT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF K. DEED AR AHMED VS. ITO, 99 TTJ 0927 (HYD), WHEREIN IT IS HELD AS UNDER :- ADMITTEDLY, THE ASSESSEE OWNED THE TRANSACTIONS IN THE BANK ACCOUNT ONLY UPON ENQUIRY BY THE A 0. IT IS NOT A CASE WHERE THE ASSESSEE OFFERED AN EXPLANATION TO STATE THAT THE INCOME ASSESSED TO TAX IS NOT HIS INCOME. HE CATEGORICALLY SUBMITTED THAT HE OWNED THE RESPONSIBILITY OF MAINTAINING A BANK ACCOUNT IN A SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 9 9 BENAMI NAME. THUS, ASSESSEE STATED THE TRUTH IN RESPONSE TO THE SHOW-CAUSE NOTICE. IN FACT, IT IS NOT THE CASE OF THE ASSESSEE THAT HE HAS FURNISHED TRUE AND CORRECT PARTICULARS OF INCOME. HE ADMITTED THE MISTAKE AND FILED REVISED RETURNS IN RESPONSE TO NOTICE UNDER S. 148. THIS IS A CASE WHERE IT CANNOT BE SAID THAT THE REVISED RETURNS WERE FILED AFTER DETECTION BY THE DEPARTMENT. THE VERY FACT THAT THE INCOME RETURNED IN RESPONSE TO NOTICE UNDER S. 148 WAS ASSESSED ON PROTECTIVE BASIS SHOWS THAT ON THE DALE OF FILING REVISED RETURN, THE A 0 HAS NOT DETECTED CONCEALMENT OF INCOME OF ASSESSEE. THE RETURNS OF INCOME WERE FILED BY THE ASSESSEE VOLUNTARILY AND HE CO-OPERATED WITH THE AO IN ALL RESPECTS IN COMPLETION OF ASSESSMENT. SEC. 271(1)(C) GIVES DISCRETION TO THE AO TO EXONERATE AN ASSESSEE FROM LEVY OF PENALTY, EVEN IN A CASE WHERE THE ASSESSEE HAS CONCEALED INCOME OR SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 10 10 FURNISHED INCORRECT PARTICULARS OF INCOME. NO DOUBT MERE FILING OF REVISED RETURN WILL NOT AUTOMATICALLY PROTECT AN ASSESSEE FROM LEVY OF PENALTY BUT, IN A GIVEN CASE, WHERE AN ASSESSEE COMES FORWARD WITH CLEAN BREAST THOUGH AFTER DETECTION, AND FILES RETURNS OF INCOME OFFERING ADDITIONAL INCOME AND EXPRESSES REMORSE FOR HIS PAST CONDUCT UN-HESITANTLY, THE A 0 MAY HAVE TO EXERCISE THE DISCRETION IN FAVOUR OF SUCH ASSESSEE AS OTHERWISE THE EXPRESSION 'MAY' IN S. 271(1)(C) REMAINS A DEAD LETTER IF IT IS UNDERSTOOD THAT IN A CASE OF ADMITTED CONCEALMENT PENALTY IS AUTOMATIC. ATLEAST IN SOME EXCEPTIONAL CASES, DISCRETION VESTED IN THE OFFICER SHOULD BE USED TO DROP PROCEEDINGS. THE PRESENT CASE IS A MORE BEFITTING CASE TO EXERCISE SUCH DISCRETION, PARTICULARLY IN VIEW OF THE FACT THAT AT THE TIME OFFERING REVISED RETURNS, THE AO HAS NOT MADE UP HIS MIND TO ADD THE INCOME IN ASSESSEE'S HANDS SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 11 11 BUT ASSESSEE VOLUNTARILY OFFERED IT TAX AND THUS IT CANNOT BE SAID TO BE A CASE OF DECLARING THE INCOME AFTER DETECTION BY DEPARTMENT. CONSIDERING THE PECULIAR CIRCUMSTANCES OF THE CASE, IT IS A FIT CASE FOR CANCELLING THE PENALTY HINDUSTAN STEEL LIMITED VS. STATE OF ORISSA, (1972) 83 ITR 26 ( S.C.) APPLIED ; CIT VS. S. V. ELECTRICALS (P) LTD., (2005) 274 ITR 334 (MP) AND CIT VS. SHYAMLAL M. SONI, (2005) 276 ITR 156 RELIED ON. 6. WE ALSO GET SUPPORT FROM THE DECISION OF JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS. SHYAMLAL M. SONI, (2005) 276 ITR 0156 (MP) : (2005) 144 TAXMAN 0666 (MP), WHEREI N IT IS HELD AS UNDER :- IN APPEAL TO TRIBUNAL, THE ORDER IMPOSING PENALTY W AS SET ASIDE HOLDING, INTER ALIA, THAT SINCE THE ASSES SEE FILED REVISED RETURNS, DISCLOSING HIS INCOME AND THE SAME WAS ACCEPTED BY REVENUE, THE DISCLOSURE DOES SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 12 12 NOT AMOUNT TO EITHER CONCEALMENT SO AS TO ATTRACT T HE RIGOUR OF S. 271(1)(C) IBID. ACCORDINGLY, PENALTY I MPOSED BY AO WAS SET ASIDE. THE FINDING SO RECORDED BY THE TRIBUNAL IS CONCURRED WITH AS IT IS BASED ON EXERCI SE OF DISCRETION AND THE FACTS BROUGHT ON RECORD. THUS, S UCH ORDER BASED ON DISCRETIONARY EXERCISE OF POWER BY T HE TRIBUNAL IS NOT INTERFERED WITH. 7. WE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, DEL ETE THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT O N 7 TH DECEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED :7 TH DECEMBER, 2015. SHRI QASIM ALI, BHOPAL VS. ITO,3(1), BHOPAL I.T.A.NO. 625/IND/2014 A.Y. 2009-10 13 13 CPU*