The DCIT, Khandwa V. Shri Nageshwar, Vijay & Sanjay, Khargone

ITA 671/IND/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98935 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 13-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R R MEENA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 671/IND/2013 A.Y. : 2006-07 DY. CIT, SHRI NAGESHWAR, VIJAY & SANJAY, KHANDWA VS KHARGONE APPELLANT RESPONDENT P.A.N. NO A AAAN6998F APPELLANT BY SHRI R. R. MEENA, DR RESPONDENT BY NONE DATE OF HEARING : 12 .08.2015 DATE OF PRONOUNCEMENT : 12.08 .2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, INDORE, DATED 14.08.2013 FOR THE ASSE SSMENT YEAR 2006-07. 2. THE REVENUE HAS TAKEN GROUND STATING THAT THE LD. CIT(A) ERRED IN RESTRICTING THE PENALTY IMPOSED U/S 271(1)(C) TO 200% OF THE CONCEALED TAX WHICH IS RIGHTLY LEVIED A T 200% OF THE CONCEALED TAX BY THE ASSESSING OFFICER WHEN THE AO HAD ALREADY GIVEN BENEFIT BY NOT IMPOSING THE PENALTY A T 300% OF CONCEALED TAX. 3. THE SHORT FACTS OF THE CASE ARE AS UNDER. 4. A SURVEY WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 4.2.2009. HOWEVER, IN RESPONSE TO T HE NOTICE U/S 148, THE ASSESSEE FILED THE RETURNS. THE ASSESS EE FILED RETURN OF INCOME ON 15.4.2009 BY SHOWING INCOME OF RS. 22,16,160/-. THE RETURN OF INCOME FILED FOR ALL THE FOUR YEARS FIRST TIME ON 15.4.2009 BY ADOPTING FORMULA ON THE BASIS OF HON'BLE M.P.HIGH COURTS DECISION IN THE CASE OF BA DRIPRASAD -: 3: - 3 BHAGWANDAS & CO., (1995) 82 TAXMAN 109 (MP). AS PER THIS JUDGMENT, LICENSE FEE HAS BEEN TAKEN AS BASE FOR DE TERMINING SALES & NET PROFIT. THE SALES IS ARRIVED AT 2.5 TI MES OF LICENCE FEE AND NET PROFIT WAS WORKED OUT AT 5% OF SALES. T HE THEN LD. ACIT MADE ADDITION IN TOTAL INCOME BUT CIT(A)-II, I NDORE DELETED THE ADDITION AND ACCEPTED THE RETURN OF INC OME FILED BY THE ASSESSEE. FURTHER THE ACTION OF CIT(A)-II, IND ORE WAS CONFIRMED BY THE INDORE TRIBUNAL. THE AO LEVIED T HE PENALTY ON THE GROUND THAT THE ASSESSEE HAS NOT FILED THE R ETURNS VOLUNTARILY AND IT IS BECAUSE OF SURVEY, THE RETURN S WERE FILED. HE, THEREFORE, TREATED THAT THE ASSESSEE HAS CONCEA LED THE PARTICULARS OF INCOME 5. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) RESTRICTED THE PENALTY TO 100% OF TAXES BY OBSERVIN G AS UNDER :- IN VIEW OF ABOVE DISCUSSION, I AM CONVINCED THE PENALTY U/S 271(1)(C) READ WITH EXPLANATION 3 HAS BEEN RIGHTLY INITIATED AND LEVIED UNDER THE SAID SECTION. HOWEVER, IT IS FOUND THAT THE AO HAS DECID ED AND LEVIED THE PENALTY @ 200%, WHICH HAS BEEN -: 4: - 4 WORKED OUT AT RS. 11,01,748/-. THE QUANTUM OF PENALTY SO LEVIED HAS BEEN FOUND TO BE EXCESSIVE PARTICULARLY IN VIEW OF THE FACT THAT THE ASSESSEE HAD PAID ENTIRE TAXES ON THE RETURNED INCOME OF RS. 22,16,160/-. FURTHER THE ENTIRE ADDITIONS MADE OVER AND ABOVE THE RETURNED INCOME WAS DELETED BY CIT(A) AND HON'BLE I.T.A.T. THE ATTITUDE OF THE APPELLANT APPEARS TO HAVE BEEN COOPERATIVE DURING THE ASSESSMENT AND APPELLATE PROCEEDINGS. THEREFORE, THE PENALTY SO LEVIED BY THE ASSESSING OFFICER NEEDS TO BE RESTRICTED TO 100% OF TAXES SOU GHT TO BE EVADED WHICH IS THE MINIMUM PENALTY PRESCRIBED U/S 271(1)(C). THE APPELLANT GETS RELIEF TO THE EXTENT OF RS. 5,50,900/-. 6. THE LD. DR RELIED ON THE ORDER OF THE AO AND CONTEN DED THAT THE PENALTY WAS RIGHTLY LEVIED BY THE ASSESSIN G OFFICER AT 200%, IT SHOULD NOT HAVE BEEN RESTRICTED TO 100%. 7. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT TH E ASSESSEE DID NOT FILE ANY INACCURATE PARTICULARS OF INCOME NOR -: 5: - 5 CONCEALED ANY INCOME. THERE WAS NO MEN REA ESTABLI SHED AND NO SATISFACTION WAS RECORDED. EXPLANATION 3 OF SECT ION 271(1) WAS NOT FULLY APPLICABLE IN ASSESSEES CASE. HENCE, LEVY OF PENALTY U/S 271(1)(C) IS ILLEGAL AND BAD IN LAW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ENTIRE ADDITIONS MADE OVER AND ABO VE THE RETURNED INCOME WAS DELETED BY CIT(A) AND HON'BLE I .T.A.T. WE UPHOLD THE ACTION OF THE LD. CIT(A) IN RESTRICTING THE MINIMUM PENALTY TO 100%. OUR INTERFERENCE IS NOT CALLED FOR . 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED AT THE TIME OF HEARING IN THE OPEN COURT ON 12 TH AUGUST, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED :12 TH AUGUST, 2015. CPU* -: 6: - 6 8.9