Dr.S.F.V.Selvaraj, CHENNAI V. DCIT, CHENNAI

ITA 674/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8824 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Assessee Lawyers: G BASKAR
• Keywords: Revised return
• Section: 153A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.671, 672, 673, 674, 675 & 676/MDS/2016 ( )( / ASSESSMENT YEARS : 2006-07 TO 2011-12 DR. S.F.V. SELVARAJ, NO.22, 5 TH STREET, DR. THIRUMURTHY NAGAR, NUNGAMBAKKAM, CHENNAI - 600 034. PAN : AASPS 5404 L V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(5), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI G. BASKAR, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI SHIVA SRINIVAS, JCIT 1 / 2% / DATE OF HEARING : 30.05.2016 3') / 2% / DATE OF PRONOUNCEMENT : 15.07.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THESE APPEALS OF THE ASSESSEE ARE DIRECTED A GAINST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME T AX (APPEALS) 18, CHENNAI, DATED 27.01.2016, FOR THE ASSESSMENT YEARS 2006-07 TO 2011-12, CONFIRMING THE PENALTY LE VIED BY THE 2 I.T.A. NOS.671 TO 676/MDS/16 ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE IN COME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THERE WAS A SEARCH OPERATION IN THE PREMISES O F THE ASSESSEE ON 24.11.2011. DURING THE COURSE OF SEARCH OPERATI ON, THE REVENUE AUTHORITIES FOUND CASH OF ` 3,45,45,000/-. IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT, THE ASSESSEE ADMITTE D THE ENTIRE INCOME AND PAID TAXES. THE ASSESSEE DISCLOSED THE ENTIRE AMOUNT OF ` 3,45,45,000/-, WHICH WAS EARNED IN THE COURSE OF I NVESTMENT IN THE SHARES IN THE RETURN FILED UNDER SECTION 153A O F THE ACT AND THE SAME WAS ALSO ACCEPTED BY THE ASSESSING OFFICER WIT HOUT ANY FURTHER ADDITION. HOWEVER, THE ASSESSING OFFICER F OUND THAT THE ASSESSEE COULD NOT EXPLAIN THE DIFFERENCE BETWEEN T HE INCOME DISCLOSED IN THE ORIGINAL RETURN UNDER SECTION 139( 1) OF THE ACT ON 31.10.2006 AND THE INCOME DISCLOSED IN THE RETURN O F INCOME FILED UNDER SECTION 153A OF THE ACT. ACCORDINGLY, THE AS SESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE CIT(APPEALS) HAS ALSO CONFIRMED THE PENALTY LEVIED BY THE ASSESS ING OFFICER UNDER SECTION 271(1)(C) OF THE ACT REFERRING TO EXP LANATION 5A(A) OF THE ACT. THE LD.COUNSEL SUBMITTED THAT THIS BENCH OF THE TRIBUNAL 3 I.T.A. NOS.671 TO 676/MDS/16 IN DCIT V. LAKSHMI CERAMICS IN I.T.A. NO.1033/MDS/2 014, ON IDENTICAL SET OF FACTS, FOUND THAT WHEN THERE WAS S EARCH AND THE ASSESSEE FILED RETURN OF INCOME DISCLOSING ALL THE INCOME, PENALTY CANNOT BE LEVIED. IN THE CASE BEFORE THIS TRIBUNAL IN LAKSHMI CERAMICS (SUPRA), A REVISED RETURN WAS FILED BY THE ASSESSEE, WHICH WAS ADMITTED BY THE ASSESSING OFFICER. IN THE CAS E BEFORE US, THE RETURN FILED CONSEQUENT TO THE NOTICE ISSUED UNDER SECTION 153A OF THE ACT WAS ACCEPTED AND NO FURTHER ADDITION WAS MA DE. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE CASE OF THE PRESE NT ASSESSEE IS BETTER THAN THE CASE BEFORE THIS TRIBUNAL IN LAKSHM I CERAMICS (SUPRA). 3. AGAIN REFERRING TO THE ORDER OF THIS TRIBUNAL IN LAKSHMI CERAMICS (SUPRA), THE LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT POWER TO LEVY PENALTY UNDER SECTION 271(1)(C) OF TH E ACT IS ONE THING AND EXERCISE OF THAT POWER IS ANOTHER THING. THE T RIBUNAL ULTIMATELY FOUND THAT POWER OF THE ASSESSING OFFICER TO LEVY P ENALTY HAS TO BE EXERCISED JUDICIOUSLY IN APPROPRIATE CASES AND WHEN THE ASSESSEE FILED RETURN OF INCOME BY WAY OF REVISED RETURN AND NO OTHER ADDITION WAS MADE, LEVY OF PENALTY IS NOT JUSTIFIED. ACCORD ING TO THE LD. COUNSEL, IN VIEW OF THIS ORDER OF THE CO-ORDINATE B ENCH OF THIS 4 I.T.A. NOS.671 TO 676/MDS/16 TRIBUNAL, THE CIT(APPEALS) IS NOT JUSTIFIED IN CONF IRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI SHIVA SRINIVAS, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE FILED R ETURN OF INCOME IN THE REGULAR COURSE. HOWEVER, THE INCOME GENERAT ED OUT OF SHARE TRANSACTION WAS NOT DISCLOSED IN THE REGULAR RETURN . CONSEQUENT TO THE SEARCH OPERATION, A NOTICE WAS ISSUED UNDER SEC TION 153A OF THE ACT AND THE ASSESSEE HAS FILED RETURN DISCLOSIN G ALL THE INCOME. THE ASSESSING OFFICER, IN FACT, ACCEPTED THE RETURN FILED BY THE ASSESSEE UNDER SECTION 153A OF THE ACT. ACCORDING TO THE LD. D.R., THE ASSESSEE HAS NOT DISCLOSED ENTIRE INCOME IN THE RETURN FILED ON 31.10.2006 UNDER SECTION 139(1) OF THE ACT. WHEN T HE ASSESSEE HAS NOT DISCLOSED ENTIRE INCOME IN THE ORIGINAL RET URN FILED BEFORE THE DATE OF SEARCH, IT IS FOR THE ASSESSEE TO EXPLAIN W HY HE COULD NOT DISCLOSE THE ENTIRE INCOME IN THE ORIGINAL RETURN. SINCE NO EXPLANATION WAS FORTHCOMING, THE ASSESSING OFFICER FOUND THAT THERE WAS CONCEALMENT OF INCOME, THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER LEVIED THE PENALTY UNDER SECT ION 271(1)(C) OF THE ACT AND THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE SAME. 5 I.T.A. NOS.671 TO 676/MDS/16 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE ORDERS OF THE LOWER AUTHORITIES IT APPEARS THAT THE ASSESS EE IS A MEDICAL PRACTITIONER BY PROFESSION. THE ASSESSEE HAD FILED RETURN OF INCOME IN THE REGULAR COURSE UNDER SECTION 139(1) OF THE A CT. DURING THE COURSE OF SEARCH OPERATION, THE REVENUE AUTHORITIES FOUND CASH IN THE PREMISES OF THE ASSESSEE. IN FACT, THE ASSESSE E ADMITTED THE ENTIRE AMOUNT AS INCOME WHILE FILING RETURN OF INCO ME CONSEQUENT TO THE NOTICE ISSUED UNDER SECTION 153A OF THE ACT. T HE CLAIM OF THE ASSESSEE IS THAT THE CASH FOUND WAS FROM MEDICAL PR OFESSION OR TRANSACTION OF PURCHASE AND SALE OF SHARES. THE AS SESSING OFFICER ACCEPTED THE ENTIRE INCOME DISCLOSED IN THE RETURN FILED UNDER SECTION 153A OF THE ACT WITHOUT ANY FURTHER ADDITIO N. THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE RETURN FILED B Y THE ASSESSEE UNDER SECTION 153A OF THE ACT WAS ACCEPTED BY THE A SSESSING OFFICER WITHOUT FURTHER ADDITION, CAN WE SAY THERE WAS CONCEALMENT OF INCOME UNDER SECTION 271(1)(C) OF THE ACT? THIS FACT WAS EXAMINED BY THIS TRIBUNAL IN LAKSHMI CERAMICS (SUPR A). IN THE CASE OF LAKSHMI CERAMICS (SUPRA) ALSO, THERE WAS SEARCH OPERATION UNDER SECTION 132 OF THE ACT. THIS TRIBUNAL FOUND THAT POWER TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS ONE T HING AND EXERCISE 6 I.T.A. NOS.671 TO 676/MDS/16 OF THAT POWER IS ANOTHER THING. THIS TRIBUNAL FUR THER FOUND THAT WHEN THE RETURN OF INCOME WAS ACCEPTED BY THE ASSES SING OFFICER WITHOUT ANY FURTHER ADDITION, EXERCISING THE POWER TO LEVY PENALTY IS NOT JUSTIFIED AND ACCORDINGLY, THE PENALTY WAS DELE TED BY THIS TRIBUNAL. IN THIS CASE ALSO, THE RETURN FILED BY T HE ASSESSEE CONSEQUENT TO THE NOTICE ISSUED UNDER SECTION 153A OF THE ACT WAS ACCEPTED AND NO FURTHER ADDITION WAS MADE. 5. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 271AAA OF THE ACT. SECTION 271AAA WAS, IN FACT, IN TRODUCED IN THE STATUTE BOOK BY FINANCE ACT, 2007 WITH EFFECT FROM 01.04.2007. AS PER THIS SECTION, IN RESPECT OF SEARCH INITIATED U NDER SECTION 132 OF THE ACT ON OR AFTER 01.06.2007 BUT BEFORE 01.07.201 2, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM AT THE RATE OF 10% OF UNDISCLOSED INCOME. SUB-SECT ION 3 OF SECTION 271AAA OF THE ACT CLEARLY SAYS THAT NO PENALTY UNDE R THE PROVISIONS OF SECTION 271(1)(C) SHALL BE IMPOSED UPON THE ASSE SSEE IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTIO N (1). IN THE CASE BEFORE US, THE SEARCH WAS ADMITTEDLY MADE ON 24.11. 2011. IN RESPECT OF SEARCH CARRIED ON OR AFTER 01.06.2007 BU T BEFORE 01.07.2012, THE PENALTY, IF ANY, HAS TO BE LEVIED O NLY UNDER SECTION 7 I.T.A. NOS.671 TO 676/MDS/16 271AAA OF THE ACT AND NOT UNDER SECTION 271(1)(C) O F THE ACT IN VIEW OF SECTION 271AAA(3) OF THE ACT. THEREFORE, T HIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT INITIATION OF PENALTY P ROCEEDING UNDER SECTION 271(1)(C) OF THE ACT IS NOT JUSTIFIED AT AL L. IN VIEW OF THE ABOVE DISCUSSION, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW AND ACCORDINGLY, SAME ARE SET ASI DE AND THE PENALTY LEVIED BY THE ASSESSING OFFICER AS CONFIRME D BY THE CIT(APPEALS) IS DELETED. 6. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED. ORDER PRONOUNCED ON 15 TH JULY, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 15 TH JULY, 2016. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-18, CHENNAI 4. PRINCIPAL CIT, CENTRAL-2, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.