LATE SH. BABU BHANI THRO. L/H RASHIDA KHATU, Jaipur V. ACIT, Jaipur

ITA 633/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5174 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 01-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Keywords: Revised return; Bonafide mistake
• Section: 143(3); 142(1); 139(5)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 633/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 LATE SHRI BABU BHAI THROUGH L/H RASHIDA KHATUN PROP. BABU BHAI RASHID BHAI DHOLI KHAR, KARAULI CUKE VS. THE ACIT CIRCLE- 5 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABOPP 1786 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY: SHRI R.A. VERMA, ADDL.CIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27/06/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 28/06/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 25-05-2015 FOR THE ASSESSM ENT YEAR 2006-07 RAISING THEREIN SOLITARY GROUND AS UNDER:- THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN C ONFIRMING THE LEVY OF PENALTY OF RS. 2,30,600/- U/S 271(1)( C ) OF THE I.T. ACT. ITA NO. 633/JP/2015 LATE SHRI BABU BHAI VS. ACIT, CIRCLE- 5, JAIPUR 2 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE R UNS A PROPRIETORSHIP CONCERN IN THE NAME AND STYLE OF M/S. BABU BHAI RAS HID BHAI IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF BID I. ACCORDING TO THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND THAT THE ASSESSEE WAS OPERATING A BANK OF BARODA BENAMI ACCO UNT OF THE CONCERN IN THE NAME OF M/S. RUKSHAR AHMAD WHO IS SON OF THE ASSESSEE. THE SAID ACCOUNT REMAINED UNDISCLOSED FOR THE ASSESSMENT YEA RS 2004-05, 2005-06 AND IN THE YEAR IN QUESTION I.E. 2006-07. AFTER ABO UT 4 MONTHS OF ISSUE OF 143(2) NOTICE, ASSESSEE FILED REVISED RETURN OWNING UP THE BENAMI ACCOUNT IN THE IMPUGNED YEAR AND SUBSEQUENT 148 PROCEEDINGS IN THE ASSESSMENT YEARS 2004-05-2005-06. THE ADDITIONS WERE ACCORDING LY CONFIRMED, THEREAFTER, LD. AO INITIATED PENALTY PROCEEDINGS WH ICH THE ASSESSEE NEITHER ATTENDED NOR MADE ANY REPRESENTATION, THE PENALTY W AS IMPOSED. 2.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL. THE LD. CIT(A) REFERRED TO AOS OBSERVATION IN QUANTUM PROCEEDINGS AS UNDER:- 2.4 IN ORDER U 143(3) DATE4D 29-12-2008, THE ASSESSING OFFICER OBJECTED TO THE REVISED RETURN OF INCOME U/S 139(5) BY OBSERVING AS UNDER:- WHEN HE WAS SERVED A NOTICE U/S 143() OF THE ACT FOR SCRUTINY ASSESSMENT, FEARING THE CONSEQUENCES HE OF FERED RS. 6,85,000/- FOR TAXATION IN THIS YEAR. IN EARLIER YE ARS, ALSO HE OFFERED INCOME ON ACCOUNT OF CASH DEPOSIT AS UNDER :- ITA NO. 633/JP/2015 LATE SHRI BABU BHAI VS. ACIT, CIRCLE- 5, JAIPUR 3 A.Y. INCOME OFFERED FOR TAXATION 2004-05 RS. 16,50,000/- 2005-06 RS. 16,30,000/- 2006-07 RS. 6,85,000/- IT MAY BE STATED THAT IN THIS CASE SECTION 139(5) O F THE ACT IS NOT APPLICABLE SINCE THIS IA CASE OF CONCEAL MENT. IN THIS CASE, THE ASSESSEE REVISED ROI ONLY WHEN HE WA S SERVED A NOTICE U/S 143(2) OF THE ACT FOR SCRUTINY ASSESSM ENT. RELIANCE IS PLACED ON THE FOLLOWING JUDGEMENT/ DECISION. REVISED RETURN CAN BE FILED U/S 139(5) ONLY IF THE ASSESSEE DISCOVERS ANY OMISSION OR WRONG STATEMENT IN THE RETURN ORIGINALLY FILED. WHILE OMISSION DENOTES ON UNINTENTIONAL ACT OR NEGLECT TO PERFORM WHAT THE LA W REQUIRES. WRONG STATEMENT SHOULD INCLUDE WITHIN ITS SCOPE O F STATEMENT WHICH IS NOT FALSE TO THE KNOWLEDGE OF TH E PERSON MAKING IT. THE WORD DISCOVERS WILL TAKE WITHIN ITS AMBIT TAT WHICH WAS HIDDEN, CONCEALED OR UNKNOWN. THEREFO RE, THE BENEFIT OF FILING A REVISED RETURN CANNOT BE CLAIME D BY A PERSON WHO HAS INITIALLY FILED A RETURN, KNOWING IT TO BE FALSE CIT VS. RADHEY SHYAM (1980) 123 ITR 125 (ALL.), CIT VS. BADRIDAS RAMRAI SHOP (1939) 7 ITR 613 (NAG.) IN OTHER WORDS, SECTION 139(5) IS NOT APPLICABLE IN CASES OF CONCEALMENT OF FALSE STATEMENTS HAMILA F ANCY STORES VS. CIT (1976) 104 ITR 190 (MAD.). OMISSION OR WRONG STATEMENT IN ASSESSEE SNANDA RAM DEKA VS. C IT (1994) 210 ITR 988 (GAUHATI). BUT THE OMISSION OR W RONG STATEMENT, REFERRED TO ABOVE MUST HAVE A BEARING ON THE ASSESSMENT OF THE ASSESSEE ITSELF AND IS NOT THAT E VERY INCORRECT STATEMENT WOULD ENABLE THE ASSESSEE TO FI LE A REVISED RETURN HAMILA FANCY STORE VS. CIT (1976) 104 ITR 190 (MAD.). ITA NO. 633/JP/2015 LATE SHRI BABU BHAI VS. ACIT, CIRCLE- 5, JAIPUR 4 IN VIEW OF THE ABOVE, IT IS VERY MUCH CLEAR THAT NO OMISSION/ WRONG STATEMENT WAS DRAWN BY THE ASSESSEE IN ITS ORIGINAL RETURN OF INCOME BUT IT HAS INTENTIONALLY CONCEALED INCOME. IN VIEW OF ABOVE LEGAL POSITION RS. 6,85,000/- ARE ADDED BACK TO THE TOTAL INCOME OF ASSESSEE AS UNEXP LAINED DEPOSITS IN HIS BENAMI BANK ACCOUNT GENERATED THROU GH SUPPRESSED INCOME OF HIS BUSINESS. FOR THIS ACT OF CONCEALMENT PENALTY PROCEEDINGS U/S 271(1)(C ) OF T HE ACT ARE HEREBY INITIATED SEPARATELY. 2.3 THE ASSESSEE OFFERED A REPLY TO PENALTY PROCEED INGS FIRST TIME BEFORE THE LD. CIT(A) CONTENDING THAT:- 2.5 IT IS THE CONTENTION OF THE APPELLANT THAT TH E REVISED RETURN OF INCOME IS VALID SINCE THE OMISSION IN THE ORIGINAL RETURN OF INCOME; OF REFLECTING THE TRANSACTIONS IN THE BENAM I BANK ACCOUNT, WAS UNINTENTIONAL AND NOT IN THE KNOWLEDGE OF THE A SSESSEE. IT HAS FURTHER BEEN EMPHASIZED THAT THE RETURN OF INCOME WAS FILED MUCH BEFORE THE ISSUANCE OF NOTICE U/S 142(1) AND THEREF ORE, THIS IS NO A CASE WHERE THE REVISED RETURN OF INCOME HAS BEEN FI LED AFTER DETECTION BY THE ASSESSING OFFICER. 2.4 THE PENALTY WAS CONFIRMED BY LD. CIT(A). AGGRIE VED ASSESSEE IS IN SECOND APPEAL. 2.5 LD. COUNSEL CONTENDS THAT THE ASSESSEE FILED TH E ORIGINAL RETURN ON 5-06-2006. NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 21-06-2007 IN A ROUTINE MANNER. THEREAFTER THE DEPARTMENT HAS NOT C ONDUCTED ANY INQUIRY NOR INITIATED ANY QUERY. ASSESSEE FINDING THAT SAID BANK OF BARODA ACCOUNTS BENAMI ACCOUNT WAS NOT DISCLOSED, TO CURE THIS OMISSION FILED ITA NO. 633/JP/2015 LATE SHRI BABU BHAI VS. ACIT, CIRCLE- 5, JAIPUR 5 THE REVISED RETURN ON 16-10-2007. FOR THE FIRST TIM E, THE QUERY REGARDING BENAMI ACCOUNT WAS RAISED MUCH LATER ON 16-05-2008 BY ASKING FOR WORKING OF PEAK OF TRANSACTIONS SHOWN IN THE REVISE D RETURN QUA THE BENAMI ACCOUNT. SINCE THE ASSESSEE HAD REVISED THE RETURN BEFORE DETECTION, THE REVISED RETURN IS VOLUNTARY AND PENA LTY U/S 271(1) CANNOT BE IMPOSED. RELIANCE IS PLACED AS UNDER:- (I) DCIT VS. IVF HOLDINGS (P) LTD. MUMBAI (ITA NO. 4960/MUM/2010 A.Y. 2006-06 ORDER DATED 22-07-2011) (II) ACIT VS. ASHOK RAJ NATH(2012) 19 ITR 070 (DEL . TRIBUNAL) (III) ITO VS. PATIL AUTOMOBILES, 79 TTJ 359 (T.M.) PUNE (IV) DR. K.C. BARUAH VS. ITO, (ITA NO. 196 (GAU) O F 1976-77 A.Y. 1972-73 ORDER DATED 28-09-1977) GAUHATI TRIB UNAL. IT IS CONTENDED THAT THE REVISED RETURN BEING FILE TO CORRECT A VALID MISTAKE AND NON DISCLOSURE THE BANK ACCOUNT BEING UNINTENTI ONAL AND RETURN HAVING BEEN REVISED BEFORE THE DETECTION BY THE DEP ARTMENT. IT IS NOT A FIT CASE OF IMPOSITION OF PENALTY. 2.6 THE LD. DR ON OTHER HAND VEHEMENTLY RELIED ON O THER DECISIONS HOLDING THAT PENALTY CAN BE LEVIED IN SUCH CIRCUMST ANCES AND FURTHER ITA NO. 633/JP/2015 LATE SHRI BABU BHAI VS. ACIT, CIRCLE- 5, JAIPUR 6 RELIED ON HON'BLE JURISDICTIONAL HIGH COURT JUDGMEN T IN THE CASE OF MAN MOHAN GUPTA VS. CIT (2004) 189 ITR 331 IN WHICH IT IS HELD :- THAT THE ASSESSEE PURPOSED TO FILE A REVISED RETU RN AFTER ITS COMING TO KNOW THAT REVENUE AUTHORITIES H AD INFORMATION IN POSSESSION REGARDING CONCEALED INCOM E OF THE ASSESSEE WHICH HAD NOT BEEN SHOWN IN THE ORIGINAL R ETURN, WOULD NOT ABSOLVE THE ASSESSEE FROM CULPABILITY U/S 271(1) (C ) OF THE I.T. ACT, 1961. IT IS CONTENDED THAT ASSESSEE CONCEALED THE BENAMI ACCOUNT DELIBERATELY, THE PLEA THAT IT WAS A BONAFIDE MISTAKE IS UNTENABL E AS THE TRANSACTIONS ARE SPANNED OVER 3 YEARS, IT CANNOT BE ASSUMED THAT THE ACT WAS MISTAKEN OR BONA FIDE, THE PENALTY HAS BEEN RIGHTLY CONFIRMED B Y LD. CIT(A); HIS ORDER IS PRAYED TO BE UPHELD. 2.7 THE LD. AR OF THE ASSESSEE IN REJOINDER CONTEND S THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAN MOHAN GUPTA VS. CIT (SUPRA) SPECIFICALLY REFERS TO INFORMATION IN THE P OSSESSION OF THE DEPARTMENT REGARDING THE CONCEALMENT OF INCOME VIS- A-VIS THE ORIGINAL RETURN. THEREFORE, THIS JUDGMENT IS NOT APPLICABLE IN ASSESSEE'S CASE. 2.8 THE LD. AR OF THE ASSESSEE FAIRLY ADMITS THAT S IMILAR PENALTIES IMPOSED IN PRECEDING YEARS I.E. 2004-05 AND 2005-06 , THEIR APPEALS ARE PENDING BEFORE LD. CIT(A) AS THEY WERE SUBSEQUENTLY IMPOSED BY THE AO DUE TO 148 PROCEEDINGS. ITA NO. 633/JP/2015 LATE SHRI BABU BHAI VS. ACIT, CIRCLE- 5, JAIPUR 7 2.9 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS UNDISPUTED THAT THE ASSE SSEE FILED THE ORIGINAL RETURN ON 5-06-2006 WHICH WAS SELECTED FOR SCRUTINY U/S 143(2) OF THE ACT BY NOTICE DTD. 21-06-2007. THE LD. AR OF THE ASSESS EE COULD NOT REPLY TO THE QUERY OF THE BENCH AS TO WHAT WAS THE DATE OF H EARING FIXED BY NOTICE U/S 143(2) OF THE ACT. ACCORDING TO HIM, IT WAS A R OUTINE NOTICE. THE REVISED RETURN OF INCOME WAS FILED ON 16-10-207 I.E . AFTER 04 MONTHS FROM THE DATE OF U/S 143(2) NOTICE. NEITHER THE LD. AR O F THE ASSESSEE NOR THE LD. DR COULD INFORM THE DATE OF HEARING FIXED BY THE SA ID NOTICE, ANY HEARING OR THE INFORMATION OF BENAMI ACCOUNT WITH LD. AO. T HUS THE CONTENTION OF THE ASSESSEE THAT THERE WAS NO INFORMATION IN THE P OSSESSION OF DEPARTMENT ABOUT BENAMI ACCOUNT COULDNOT BE VERIFIE D. BESIDES, IN MY CONSIDERED VIEW THE ISSUE NEEDS TO BE RESTORED TO T HE FILE OF THE LD. CIT(A) AND AS ACCORDING TO THE ASSESSEE PENALTY APPEALS FO R THE ASSESSMENT YEARS 2004-05 AND 2005-06 ARE PENDING FOR DECISION. I AM OF THE CONSIDERED OPINION THAT THE RELEVANT FACTS AND THE ISSUE OF IM POSITION OF PENALTY SHOULD BE DECIDED TOGETHER WITH EARLIER YEARS. IT S HOULD BE DULY VERIFIED FROM RECORD WHETHER ANY INFORMATION, INQUIRY OR QUE RY ABOUT BENAMI BANK A/C PRECEDED FILING OF THE REVISED RETURN BY T HE ASSESSEE AND WHETHER ITA NO. 633/JP/2015 LATE SHRI BABU BHAI VS. ACIT, CIRCLE- 5, JAIPUR 8 OWNING UP THE SAID BENAMI ACCOUNT WAS PROMPTED BY GOOD INTENTION OR DUE TO SOME INFORMATION IN POSSESSION OF THE DEPART MENT. IN VIEW OF THE ABOVE, IT IS DEEMED JUST AND PROPER THAT LD. CIT(A) SHALL DECIDED ALL THE APPEALS TOGETHER AFRESH, EXPEDITIOUSLY AFTER HEARIN G THE ASSESSEE AND IN ACCORDANCE WITH LAW. THUS THE APPEAL OF THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES. 3.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28/06/201 6. SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28/06/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- LATE SHRI BABU BHAI, THRU LEGAL HEI R RASHIDA KHATUN, KARAULI 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE- 5, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 633/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NO. 633/JP/2015 LATE SHRI BABU BHAI VS. ACIT, CIRCLE- 5, JAIPUR 9