Shri Bharatbhai P. Malde, Valsad V. The ACIT, Central Circle-4, Surat

ITA 673/SRT/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7776 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2000-2001
• Appeal Filed On: 05-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: S D CHHEDA
• Section: 271(1)(c); 48; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM ./ITA NOS.673 & 674/SRT/2018 ( [ [ / ASSESSMENT YEARS: (2000-01 & 2001-02) (VIRTUAL COURT HEARING) BHARAT P. MALDE, 402, AMR CHAMBERS, VALSAD. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, SURAT. ./ ./ PAN/GIR NO.: ABAPM 1579 K (ASSESSEE) (RESPONDENT) ASSESSEE BY : SHRI S.D.CHHEDA - CA RESPONDENT BY : MS. ANUPAMA SINGLA SR.DR / DATE OF HEARING : 08/07/2021 /DATE OF PRONOUNCEMENT : 23/08/2021 / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: CAPTIONED TWO APPEALS FILED BY THE ASSESSEE PERTAINING TO THE ASSESSMENT YEARS 2000-01 AND 2001-02, ARE DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS), VALSAD WHICH IN TURN ARISE OUT OF SEPARATE PENALTY ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. IN THESE TWO APPEALS OF THE ASSESSEE, IDENTICAL AND COVERED ISSUES ARE INVOLVED, THEREFORE, THESE HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER DATED 01.06.2017, PASSED BY THE DIVISION BENCH OF THIS TRIBUNAL IN M/S PADMAVATI DEVELOPERS, GROUP CASE ON IDENTICAL FACTS, IN ITA NO.240 TO 242/AHD/2014, FOR THE ASSESSMENT YEAR 2000-01 TO 2002-03, WHEREBY THE ISSUE RELATING TO PENALTY UNDER SECTION 271(1) (C ) HAS BEEN DISCUSSED AND PAGE | 2 ITA NOS.673 & 674/SRT/2018 FOR A.Y. 2000-01 & 01-02 M/S.BHARAT P. MALDE ADJUDICATED IN FAVOUR OF ASSESSEE. THE LD.COUNSEL SUBMITTED THAT THE TRIBUNAL HAS DELETED THE PENALTY BASED ON THE IDENTICAL FACTS AND TAKING INTO ACCOUNT EXPLANATION 5 OF SECTION 271(1) (C ) OF THE ACT, WHICH IS NOT APPLICABLE TO THE ASSESSEE. THUS, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT APPEAL IS SQUARELY COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL, A COPY OF WHICH WAS ALSO PLACED BEFORE THE BENCH. 4. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE DIVISION BENCH OF THIS TRIBUNAL IN ASSESSEES GROUP CASE VIDE ORDER DATED 01.06.2017. IN THIS ORDER, THE TRIBUNAL HAS INTER ALIA OBSERVED AS FOLLOWS: WE HAVE HEARD THE RIVAL CONTENTIONS. WE NOTICED THAT LD.CIT(A) HAS SUSTAINED THE PENALTY BY STATING THAT THE CONDITIONS IN THE EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT WERE NOT FULFILLED BY THE ASSESSEE. DURING THE COURSE OF APPELLATE PROCEEDINGS THE ID. COUNSEL HAS CONTENDED THAT EXPLANATION 5 WAS NOT APPLICABLE AS THE ASSESSEE WAS NOT OWNER OF ANY MONEY OR OTHER VALUABLE ARTICLE OR THINGS AND MANNER WAS ALSO NOT DISCLOSED. HE FURTHER CONTENDED THAT IF THERE WAS NO MONEY OR VALUABLE ARTICLE, PENALTY UNDER EXPLANATION 5 CANNOT BE LEVIED. WE HAVE NOTICED THAT DURING THE COURSE OF SEARCH PROCEEDINGS A NOTEBOOK CONTAINING PAGE NUMBER 1 TO 48 WAS FOUND AND SEIZED AS PER ANNEXURE BS/15 TO PANCHNAMA DATED 18/06/2003. WE FURTHER NOTICED THAT THE ASSESSEE HAS STATED DURING THE COURSE OF SEARCH PROCEEDINGS THAT THIS NOTE BOOK WAS RELATED TO THE DETAILS WRITTEN REGARDING THE SALES/BOOKING OF SHOPS/ OFFICES OF 'PADMAVATI PALACE' AT VAPI. THEREAFTER ON THE BASIS OF DETAILS MENTIONED IN THE NOTEBOOK THE ASSESSEE HAS WORKED OUT ON MONEY RECEIVED YEAR WISE AS PER DETAIL GIVEN ON PAGE FOUR OF THE ASSESSMENT ORDER. WE FIND THAT ASSESSING OFFICER HAD MADE ADDITION OF RUPEES 4,55,660/ ON ACCOUNT OF ON MONEY RECEIVED IN THE YEAR UNDER CONSIDERATION AND PENALTY PROCEEDINGS AS PER EXPLANATION 5 SECTION 271(1) WERE INITIATED FOR FURNISHING INACCURATE PARTICULARS/ CONCEALMENT OF INCOME. WE HAVE ALSO PERUSED THE EXPLANATION 5 REPRODUCED AS UNDER:- EXPLANATION 5 'WHERE IN THE COURSE OF A SEARCH UNDER SECTION 132 THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME, (A )FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHERE SUCH RETURN HAS BEEN FURNISHED BEFORE THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED THEREIN; PAGE | 3 ITA NOS.673 & 674/SRT/2018 FOR A.Y. 2000-01 & 01-02 M/S.BHARAT P. MALDE OR (B)FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFTER THE DATE OF THE SEARCH. (A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) FOR ANY PREVIOUS WHICH IS TO END OR AFTER THE DATE OF THE SEARCH, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OR SUB- SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHES INACCURATE PARTICULARS OF SUCH INCOME, UNLESS, (1) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING IN SUCH INCOME ARE RECORDED,_ (I) IN A CASE FALLING UNDER CLAUSE (A, BEFORE THE DATE OF THE SEARCH; AND (II) IN A CASE FALLING UNDER CLAUSE (B), ON OR BEFORE SUCH DATE, IN THE BOOKS OF ACCOUNT IF, ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE THE SAID DATE; OR (2)IN THE, COURSE OF SEARCH, MAKES A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132 THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND IN HIS POSSESSION OR UNDER HIS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SUB-SECTION (1) OF SECTION 139, AND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME. 5.1 AFTER PERUSAL OF THE ABOVE PROVISION WE FIND THAT IN THE CASE OF M/S BLACK DIAMPND TRADING CO. VS ACIT AHMEDABAD DECIDED BY THE COORDINATE BENCH OF THE ITAT AHMEDABAD , VIDE ITA NO.1751/AHD/2014 IT WAS HELD THAT THE EXPLANATION 5 DOES NOT, COVER THE INCOME UNEARTHED ON THE BASIS OF ENTRIES FOUND IN SOME DIARY OR NOTE BOOK UNLESS DURING SEARCH, THE ASSESSE IS FOUND-TO BE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING IS FOUND. WE FIND THAT IN THE CASE OF THE ASSESSEE ON MONEY WAS DETECTED DURING THE SEARCH ACTION ON THE BASIS OF NOTE BOOK FOUND AND SEIZED AS MENTIONED SUPRA IN THIS ORDER. WE FIND THAT ON MONEY WAS WORKED OUT ON THE BASIS ABOVE REFERRED NOTE BOOK. IN VIEW OF ABOVE STATED FACTS AND FINDINGS AS PER OUR CONSIDERED OPINION, THE EXPLANATION 5 DOES NOT COVER THE INCOME-UNEARTHED ON THE ENTRIES FOUND IN SOME DIARY OR NOTE BOOK UNLESS DURING SEARCH THE ASSESSE IS FOUND TO BE OWNER OF ANY PAGE | 4 ITA NOS.673 & 674/SRT/2018 FOR A.Y. 2000-01 & 01-02 M/S.BHARAT P. MALDE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH, WE ARE NOT INCLINED WITH THE DECISION OF LD.CIT(A), THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 6.IN THE COMBINED RESULT, ALL THE THREE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 6. THEREFORE, IT IS ABUNDANTLY CLEAR THAT EXPLANATION 5 OF SECTION 271(1) (C ) DOES NOT COVER THE INCOME-UNEARTHED ON THE ENTRIES FOUND IN SOME DIARY OR NOTE BOOK UNLESS DURING SEARCH, THE ASSESSEE IS FOUND TO BE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, THEREFORE, PENALTY WOULD NOT ATTRACT. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH, IN ASSESSEE`S GROUP CASE AND THERE IS NO CHANGE IN FACTS AND LAW AND THE REVENUE IS UNABLE TO PRODUCE ANY MATERIAL TO CONTROVERT THE AFORESAID FINDINGS OF THE DIVISION BENCH (SUPRA). WE FIND NO REASON TO INTERFERE IN THE SAID ORDER OF THE DIVISION BENCH, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE BINDING PRECEDENT, WE DELETE THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN ITA NO.673 AND 674/SRT/2018, FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02. 7. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE (IN ITA NOS. 673 AND 674/SRT/2018), ARE ALLOWED. ORDER IS PRONOUNCED ON 23/08/2021 BY PLACING RESULT ON NOTICE BOARD. SD/- SD/- (PAWAN SINGH) (DR. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT / / DATE: 23/08/2021 / SGR COPY OF THE ORDER FORWARDED TO 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A) 4. PR.CIT 5. DR/AR, ITAT, SURAT 6. GUARD FILE BY ORDER // TRUE COPY // / / TRUE COPY / / ASSISTANT REGISTRAR/SR. PS/PS ITAT, SURAT