Appeal details
Counselvise Citation
634119914 RSA 2010
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 5 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-01-2012
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
D
Next Hearing Date
04-01-2012
Assessment Year
2006-2007
Appeal Filed On
26-08-2010
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, MUMBAI. BEFORE SHRI D.K.AGARWAL, JUDICIAL MEMBER AND PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A NO.6341/ MUM/2010 ASSESSMENT YEAR: 2006-07 DR. DEEPAK BAID .. APPELLANT (PROP. NULIFE HOSPITAL) A-1, HAREKRISHNA BUILDING LBS MARG, NEAR TELEPHONE EXCHANGE, GHATKOPAR(W), MUMBAI-096 PA NO.AADPB 1025 F VS ACIT 11(2) .. RESPONDEN T AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. APPEARANCES: CHETAN KARIA & HARESH P KENIA, FOR THE APPELLANT P.C.MAURYA , FOR THE RESPONDENT DATE OF HEARING : 4.1.2012 DATE OF PRONOUNCEMENT : 31 -1-2012 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HA S CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 11.6.2010, IN T HE MATTER OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, FOR THE AS SESSMENT YEAR 2006-07 ON THE FOLLOWING GROUNDS: I.T.A NO.6341/ MUM/2010 ASSESSMENT YEAR: 2006-07 2 1.1 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) - 3, MUMBAI [CIT (APPEALS)] ERRED IN LAW AND ON FACTS IN NOT ADJUDIC ATING UPON THE FOLLOWING GROUND NO.1 .1 OF THE APPEAL PREFERRED BY THE APPEL LANT BEFORE HIM: 1.1 YOUR APPELLANT SUBMITS THAT THE ASSESSING OFFIC ER WHILE PASSING THE ORDER UNDER SECTION 271 (1)(C) OF THE ACT OUGHT TO HAVE GIVEN CLEAR FINDING AS TO WHETHER APPELLANT HAD CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E AND IN ABSENCE OF SUCH FINDING THE IMPUGNED ORDER IS BAD, ILLEGAL, VOID IN LAW AND THEREFORE SHOULD BE CANCELLED. 1.2 THE LEARNED CIT (APPEALS) ERRED IN LAW AND ON F ACTS IN UPHOLDING THE ORDER PASSED BY ASSESSING OFFICER UNDER SECTION 271 (1 )(C) OF THE INCOME TAX ACT, 1961 (THE ACT) EVEN THOUGH THE ASSESSING OFFICER HAD NOT GIVEN A CLEAR FINDING AS TO WHETHER THE APPELLANT HAD CONCE ALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. 2. THE LEARNED CIT (APPEALS) ERRED IN LAW AND ON FA CTS IN UPHOLDING THE PENALTY LEVIED BY THE ASSESSING OFFICER VIDE ORDER UNDER SECTION 27 1(1) (C) OF THE ACT. 3. THE LEARNED CIT(APPEALS) ERRED IN LAW AND ON FAC TS IN HOLDING THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF I NCOME AND CONCEALED PARTICULARS OF INCOME IN RESPECT OF DISCLOSURE OF I NCOME OF RS.89,50,000/-. 4. WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LEARNED CIT(APPEALS) ERRED IN LAW AND ON FACTS IN STATING THAT AVAILABLE CASH OF RS.4 4,8 1,905/- INTRODUCED AS CASH IN THE BOOKS OF ACCOUNTS IS UNEXPLAINED, UNACC OUNTED AND UNDISCLOSED. 5. WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LEARNED CIT(APPEALS) ERRED IN LAW AND ON FACTS IN STATING THAT THE INCOME WAS DECLARE D DURING THE SURVEY OF RS.89,50,000/- ON ACCOUNT OF IMPROVEMENT OF HOSPITA L AS AGAINST THE ACTUAL FACT THAT THE AMOUNT OF RS.89,50,000/- STATED ON NO TE PAD WERE REPRESENTED THE MANAGEMENT OF FUND BORROWED THROUGH FRIENDS FOR THE PURPOSE OF IMPROVEMENT OF HOSPITAL. 2. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, SHR I CHETAN KARIA, LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO T HE FACT THAT IN THE PRESENT CASE, THE INCOME IN RESPECT OF WHICH PENALTY HAS BEEN IMPOSED , HAS ALREADY BEEN DISCLOSED IN THE ORIGINAL INCOME TAX RETURN FILED BY THE ASSESSE E AND, THEREFORE, PENALTY UNDER SECTION 271(1)(C) CANNOT BE IMPOSED IN RESPECT OF T HE SAME. HE INVITED OUR ATTENTION TO THE RECENT JUDGMENT OF HONBLE DELHI H IGH COURT IN THE CASE OF CIT VS. I.T.A NO.6341/ MUM/2010 ASSESSMENT YEAR: 2006-07 3 SAS PHARMACEUTICALS(335 ITR 259), WHEREIN, THEIR LO RDSHIPS HAVE HELD THAT INCOME SURRENDERED BY THE ASSESSEE DURING THE SURVEY, AS S HOWN IN THE REGULAR INCOME TAX RETURN FILED WITHIN PRESCRIBED TIME, CANNOT ATTRACT PENALTY UNDER SECTION 271(1)(C) OF THE ACT. LEARNED COUNSEL THEN POINTED OUT THAT THE ASSESSEE IS A DOCTOR AND A SURVEY ACTION UNDER SECTION 133A WAS CONDUCTED ON 1 0.3.2006 AT HIS HOSPITAL PREMISES. DURING THE COURSE OF SURVEY, THE ASSESSE E SURRENDERED AN AMOUNT OF RS.89,50,000 WHICH HAS BEEN SUBSEQUENTLY DISCLOSED AS ASSESSEES INCOME IN THE REGULAR RETURN OF INCOME FILED BY THE ASSESSEE IN D UE TIME. THE ASSESSING OFFICER WAS, HOWEVER, OF THE VIEW THAT THIS DECLARATION OF ADDITIONAL INCOME IS DUE TO SURVEY CONDUCTED BY THE INCOME TAX DEPARTMENT AND ALSO DUE TO NOTE BOOK FOUND BY THE SURVEY TEAM. THE ASSESSING OFFICER WAS FURTHER OF THE VIEW THAT HAD IT NOT BEEN FOR SURVEY, THE ENTRIES IN THE NOTE BOOK WOULD NOT HAVE COME TO LIGHT. IT IS THIS ACTION OF THE ASSESSING OFFICER WHICH HAS BEEN CONFIRMED BY T HE CIT(A), AGGRIEVED BY WHICH, ASSESSEE IS IN APPEAL BEFORE US. LEARNED COUNSEL P OINTED OUT THAT IT IS THUS CLEAR THAT THE ONLY BASIS OF IMPUGNED ADDITION IS DUE TO DECLA RATION OF INCOME MADE BY THE ASSESSEE DURING THE COURSE OF SURVEY AND IT IS NOT EVEN THE CASE OF THE DEPARTMENT THAT THERE IS ANY CONCEALMENT OF INCOME IN THE RETU RN FILED BY THE ASSESSEE. HE POINTED OUT THAT ON MATERIALLY SIMILAR FACTS HONB LE DELHI HIGH COURT IN THE CASE OF SAS PHARMACEUTICALS (SUPRA) HAVE HELD THAT ON THIS CONCEALMENT NO PENALTY UNDER SECTION 271(1)(C) CAN BE IMPOSED. HE THUS URGED US TO DELETE THE PENALTY FOR THE SHORT REASON ALONE. LEARNED COUNSEL ALSO ADDRESSED US ON MERITS, AND ON DETAILED FACTUAL MATRIX OF THE CASE, BUT FOR THE REASON, WE WILL SET OUT IN A SHORT WHILE, IT IS REALLY NOT NECESSARY TO DEAL WITH THAT ASPECT OF TH E MATTER. 3. SHRI P.C.MAURYA, LEARNED DEPARTMENTAL REPRESENTA TIVE, ON THE OTHER HAND, SUBMITTED THAT THE INCOME WHICH HAS BEEN OFFERED BY THE ASSESSEE IN HIS RETURN OF INCOME, CAME TO LIGHT AS A RESULT OF SURVEY HAVING BEEN CARRIED OUT IN THE ASSESSEES PREMISES AND THAT BUT FOR THE SURVEY, THE ASSESSEE WOULD HAVE DISCLOSED THIS INCOME. OUR ATTENTION WAS INVITED TO THE EFFECT THAT DURING THE COURSE OF SURVEY, A NOTE BOOK WAS FOUND AND THE ASSESSEE COULD NOT EXPLAIN ENTRIE S IN THE SAID BOOK. IT WAS IN I.T.A NO.6341/ MUM/2010 ASSESSMENT YEAR: 2006-07 4 THESE CIRCUMSTANCES, THE ASSESSEE WAS CORNERED INTO ADMITTING THE CONCEALMENT OF INCOME WHICH WAS NOT SHOWN BY HIM IN THE BOOKS OF A CCOUNT. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE INCOME IN RESPECT OF WHICH THE IMPUGNED PENALTY HAS BEEN LEVIED WAS CONCEALED INCO ME WHICH CAME TO LIGHT AS A RESULT OF SURVEY OPERATION CARRIED OUT BY THE INCOM E TAX DEPARTMENT. UNDER THESE CIRCUMSTANCES, ACCORDING TO HIM, IT DOES NOT MAKE A NY DIFFERENCE WHETHER THE ASSESSEE DECLARED THE SAID INCOME IN THE REGULAR RE TURN OF INCOME OR BY WAY OF A REVISED RETURN OF INCOME. THE FACTS REMAINS THAT T HE INCOME WHICH HAS NOT BEEN SHOWN IN THE RETURN OF INCOME WAS A CONCEALED INCOM E IN NATURE. HE THUS URGED US TO CONFIRM THE PENALTY AND NOT TO BE SWAYED BY PREL IMINARY OBJECTION BY THE ASSESSEE TO THE EFFECT THAT ONCE THE INCOME IS SHOW N IN THE REGULAR RETURN OF INCOME FILED WITHIN THE PRESCRIBED TIME, PENALTY UNDER SEC TION 271(1)(C) CANNOT BE IMPOSED. LEARNED DEPARTMENTAL REPRESENTATIVE FURTH ER SUBMITTED THAT SUCH AN INTERPRETATION WOULD DEFEAT THE VERY OBJECT AND PUR POSE OF SECTION 271(1)(C). HE, HOWEVER, COULD NOT PRODUCE ANY DECISION OF HONBLE JURISDICTIONAL HIGH COURT OR FOR THAT PURPOSE, OF ANY OF THE HONBLE HIGH COURTS, C ONTRARY TO THE VIEW TAKEN BY HONBLE DELHI HIGH COURT IN THE CASE OF SAS PHARMAC EUTICALS (SUPRA). HE URGED TO REJECT THE PRELIMINARY OBJECTION MADE BY LEARNED CO UNSEL AND TO DEAL WITH THE MATTER ON MERITS. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE A PPLICABLE LEGAL POSITION. 5. THE PLEA OF THE ASSESSEE IS INDEED WELL TAKEN A ND THERE IS SUBSTANCE IN THE PRELIMINARY ISSUE RAISED BY LEARNED COUNSEL FOR THE ASSESSEE. HONBLE DELHI HIGH COURT HAS, IN THE CASE OF SAS PHARMACEUTICALS (SUP RA), INTER ALIA, HELD AS FOLLOWS: 14. WE MAY, FIRST OF ALL, REJECT THE CONTENTION OF THE LEARNED COUNSEL FOR THE REVENUE RELYING UPON THE EXPRESSION IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT OCCURRING IN SUB-SECTION (1) OF SEC TION 271 OF THE ACT AND CONTENDING THAT EVEN DURING SURVEY WHEN IT WAS FOUN D THAT THE ASSESSEE HAD CONCEALED THE PARTICULAR OF HIS INCOME, IT WOULD AM OUNT TO CONCEALMENT IN THE COURSE OF ANY PROCEEDINGS. THE WORDS IN THE COURSE OF ANY I.T.A NO.6341/ MUM/2010 ASSESSMENT YEAR: 2006-07 5 PROCEEDINGS UNDER THIS ACT ARE PREFACED BY THE SAT ISFACTION OF THE ASSESS- ING OFFICER OR THE COMMISSIONER OF INCOME-TAX (APPE ALS). WHEN THE SURVEY IS CONDUCTED BY A SURVEY TEAM, THE QUESTION OF SATI SFACTION OF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMIS SIONER DOES NOT ARISE. WE HAVE TO KEEP IN MIND THAT IT IS THE ASSESSING OF FICER WHO INITIATED THE PENALTY PROCEEDINGS AND DIRECTED THE PAYMENT OF PEN ALTY. HE HAD NOT RECORDED ANY SATISFACTION DURING THE COURSE OF SURV EY. THE DECISION TO INITIATE PENALTY PROCEEDINGS WAS TAKEN WHILE MAKING THE ASSESSMENT ORDER. IT IS, THUS, OBVIOUS THAT THE EXPRESSION IN THE CO URSE OF ANY PROCEEDINGS UNDER THIS ACT CANNOT HAVE THE REFERENCE TO THE SU RVEY PROCEEDINGS, IN THIS CASE. 15. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PART ICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY T HE ASSESSEE HAS TO BE IN THE INCOME-TAX RETURN FILED BY IT. THERE IS SUFFICIENT INDICATION OF THIS IN THE JUDGMENT OF THIS COURT IN THE CASE OF CIT V. MOHAN DAS HASSA NAND [1983] 141 ITR 203 (DELHI) AND IN RELIANCE PETROPRODUCTS P VT. LTD. [2010] 322 ITR 158 (SC) THE SUPREME COURT HAS CLINCHED THIS ASPECT , VIZ., THE ASSESSEE CAN FURNISH THE PARTICULARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UPON THE INCOME-TAX RETURN FILED BY THE ASSESSEE. T HIS VIEW GETS SUPPORTED BY EXPLANATION 4 AS WELL AS EXPLANATION 5 AND EXPLA NATION 5A TO SECTION 271 OF THE ACT AS CONTENDED BY THE LEARNED COUNSEL FOR THE RESPONDENT. 16.NO DOUBT, THE DISCREPANCIES WERE FOUND DURING TH E SURVEY. THIS HAS YIELDED INCOME FROM THE ASSESSEE IN THE FORM OF AMO UNT SURRENDERED BY THE ASSESSEE. PRESENTLY, WE ARE NOT CONCERNED WITH THE ASSESSMENT OF INCOME, BUT THE MOOT QUESTION IS TO WHETHER THIS WOULD ATTR ACT PENALTY UPON THE ASSESSEE UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. OBVIOUSLY, NO PENALTY CAN BE IMPOSED UNLESS THE CONDITIONS STIPUL ATED IN THE SAID PROVISIONS ARE DULY AND UNAMBIGUOUSLY SATISFIED. SI NCE THE ASSES- SEE WAS EXPOSED DURING SURVEY, MAY BE, IT WOULD HAVE NOT DI SCLOSED THE INCOME BUT FOR THE SAID SURVEY. HOWEVER, THERE CANNOT BE ANY P ENALTY ONLY ON SURMISES, CONJECTURES AND POSSIBILITIES. SECTION 271(1)(C) OF THE ACT HAS TO BE CONSTRUED STRICTLY. UNLESS IT IS FOUND THAT THERE I S ACTUALLY A CONCEALMENT OR NON-DISCLOSURE OF THE PARTICULARS OF INCOME, PENALT Y CANNOT BE IMPOSED. THERE IS NO SUCH CONCEALMENT OR NON-DISCLOSURE AS T HE ASSESSEE HAD MADE A COMPLETE DISCLOSURE IN THE INCOME-TAX RETURN AND OF FERED THE SURRENDERED AMOUNT FOR THE PURPOSES OF TAX. 6. IN THIS VIEW OF THE MATTER EVEN WHEN AN INCOME H AS COME TO THE LIGHT AS A RESULT OF SURVEY PROCEEDINGS BUT HAS BEEN DULY DISC LOSED IN THE REGULAR RETURN OF INCOME FILED WITHIN THE PRESCRIBED TIME, PENALTY UN DER SECTION 271(1)(C) CANNOT BE IMPOSED. RESPECTFULLY FOLLOWING THE ESTEEMED VIEW SO TAKEN BY HONBLE DELHI HIGH I.T.A NO.6341/ MUM/2010 ASSESSMENT YEAR: 2006-07 6 COURT IN THE CASE OF SAS PHARMACEUTICALS (SUPRA), A ND AS THERE IS NO CONTRARY VIEW OF ANY OTHER HONBLE HIGH COURTS, AS ALSO HONBLE JURI SDICTIONAL HIGH COURT, WE UPHOLD THE PLEA OF THE ASSESSEE AND DELETE THE IMPUGNED PE NALTY FOR THE SHORT REASON THAT THE INCOME IN RESPECT OF WHICH THE IMPUGNED PENALTY HAS BEEN LEVIED, WAS DULY DISCLOSED IN THE REGULAR RETURN OF INCOME FILED WIT HIN THE PRESCRIBED TIME. IT IS THEREFORE, NOT REALLY NECESSARY TO DEAL WITH THE FA CTUAL MATRIX OF THE CASE IN A GREAT DETAIL OR TO DEAL WITH OTHER ERUDITE CONTENTION OF LEARNED REPRESENTATIVES ON MERITS. WITH THESE OBSERVATIONS, WE DIRECT THE AO TO DELETE THE PENALTY. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2012 SD/- (D.K.AGARWAL) JUDICIAL MEMBER SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER MUMBAI, DATED 31 ST JANUARY, 2012 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),3, MUMBAI 4. COMMISSIONER OF INCOME TAX,11 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH D MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI
