Kapilaben Mahendrabhai Patel L/h of late Mahendrabhai Patel, Vadodara V. The Dy.CIT, Central Circle-2, Vadodara

ITA 679/AHD/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 4663 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-12-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 05-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JIGAR ADHIYARU
• Keywords: Unexplained investment
• Section: 147; 271(1)(c); 139(1)

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘SMC’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD ] ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.679/Ahd/2023 Asstt.Year : 2012-13 Kapilaben Mahendrabha Patel L/h. of Late Mahendrabhai Chaturbhai Patel 1, Avdhesh, Krishnadham Society Gotri Road, Vadodara T.B. Sanatorium S.O., PAN : AGMPP 7272 F Vs DCIT, Cent.Cir.2 Vadodara. (Applicant) (Responent) Assessee by : Shri Jigar Adhiyaru, AR Revenue by : Shri V.K. Mangla, Sr.DR स ु नवाई क तार ख/D a t e o f H e a r i n g : 0 5 / 1 2 / 2 0 2 2 घोषणा क तार ख /D a t e o f P r o n o u n c e m e n t : 1 5 / 1 2 / 2 0 2 3 आदेश/O R D E R The present appeal has been filed by the assesseeagainst order passed by the Commissioner of Income Tax(Appeals)-12, Ahmedabad under section 250(6) of the Income Tax Act, 1961 dated 13.06.2023 pertaining to Asst.Year2012-13 confirming the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the AO. 2. The ground raised by the assessee is as under: “1. The ld.CIT(A) on the facts and in the circumstances of th3 case and in law has grossly erred in levying the penalty of Rs.1,85,400/- u/s.271(1)(c) of the Act. The penalty of Rs.1,85,400/- as levied by the ld.CIT(A) is totally against the law and is devoid of any merit.” ITA No.679/Ahd/2023 2 3. The facts from the orders of the authorities below reveal that the penalty was levied by the AO for concealing particulars of income of Rs.6 lakhs in the return filed in response to notice u/s 148 of the Act. The assessee had disclosed Rs. 6 lacs as other income in the said return, but the AO charged the assessee with concealment of particulars of the same noting that the disclosure was made only when the assessee was issued notice for reopening u/s 148 of the Act on the Department coming in possession of information that the assessee had made investment of Rs.6.00 lakhs in Kotak Mahindra Insurance source of which was not explained.The relevant para-5 of the assessment order passed u/s 147 of the Act dated 9.12.2019 recording satisfaction as above of the AO for initiation of penalty fis reproduced as under: 4. Thereafter, penalty proceedings were initiated, during the course of which, the assessee contended that the assessee had included impugned income in its return filed under section 148 of the Act, and had also paid due taxes thereon; that non-inclusion of ITA No.679/Ahd/2023 3 such income in his return filed under section 139(1) of the Act, was a human error, and he therefore pleaded that the penalty levied under section 271(1)(c) of the Act be deleted. 5. The ld.CIT(A), however, rejected the contention of the assessee holding that disclosure of the unaccounted investment of Rs.6.00 lakhs being made only in pursuance to the notice issued under section 148 of the Act, and it was a fit case for levy of penalty under section 271(1)(c) of the Act. His findings in this regard at para-5 of the order are as under: 6. Before the ld.CIT(A), the assessee reiterated this contention which was rejected by theld.CIT(A) who applied the ratio of the ITA No.679/Ahd/2023 4 judgment of the Hon’ble Supreme Court in the case of MAK Data P.Ltd.,(2013) 38 taxmann.com 448 (SC), and confirmed the levy of penalty. His finding at para 6.3 to 6.5 are as under: ITA No.679/Ahd/2023 5 ITA No.679/Ahd/2023 6 ITA No.679/Ahd/2023 7 7. We have heard both the parties; gone through the order of the authorities below. The charge of the Revenue right upto the ld.CIT(A) for finding assessee to have concealed particulars of income of Rs.6 lakhs in his return of income filed under section 148 of the Act, was that the assessee was forced to make the disclosure on account of law catching up on him, since the non disclosure of the same was detected by the Department and reopening of the case of the assessee resorted to u/s 147/148 of the Act. Para 6.5 of the ld.CIT(A)’s order categorically states so, and in this backdrop, theld.CIT(A) has applied the ratio laid down by the Hon’ble Apex Court in the case of MAK Data P.Ltd.(supra) which held that voluntary disclosure or surrender made in view of detection made by the AO in search conducted in the sister concern of the assessee could not be termed as voluntary disclosure, and it only reveals that the disclosure was made only when the assessee was cornered. ITA No.679/Ahd/2023 8 8. Having noted so, I find that in the present case before me, it does not come from any of the orders of the Revenue authorities as to how the Revenue officers came to the conclude that the assessee disclosed the income of Rs.6 lakhs only when she was cornered and when she knew that the Department was aware that she was caught by the Department and there was no other way out but to declare the same in the return filed under section148 of the Act. The assessment order passed under section 147 of the Act only reveals that the Department had information of Rs.6.00 lakhs of investment made by the assessee from unexplained sources. But it does not come from the assessment order that the assessee was also aware of the fact that the Department knew of the same. The assessee can be stated to be cornered only when she is aware that the Department was in the know of herincome having escaped assessment. In the facts of the case before me the Department knew of the assessee’s income having escaped assessment. But there is nothing in the assessment order before me revealing that the assessee was also aware of the same, and therefore, she disclosed the income in her return filed in response to notice under section 148 of the Act. For applying the ratio of the decision of the Hon’ble Apex Court in the case of MAK Data P.Ltd. (supra), the Revenue should have pointed out that the assessee was aware of the fact that the Department had discovered escapement of income, and therefore, the assessee had disclosed the same in its return filed under section 148 of the Act. Nothing of such circumstances having been demonstrated by the Revenue, I am inclined to believe the assessee that the disclosure of Rs.6.00 lakhs in the return of income filed by the assessee under section 147 of the Act is a pure voluntary disclosure made by the assessee, without being cornered by the Department. Therefore, the decision of the Hon’ble Apex Court in the case of MAK ITA No.679/Ahd/2023 9 Data P.Ltd. (supra) will not apply to the facts of the present case, and the assessee cannot be said to have concealed particulars of income to the tune of Rs.6.00 lakhs, particularly, when the said income was disclosed in its return of income filed under section 148 of the Act, that too, voluntarily. 9. In view of the same, I hold, the penalty levied under section 271(1)(c) of the Act to the tune of Rs.1,85,400/- to be unjustified and direct the deletion of the same. Thus, the ground of appeal of the assessee is allowed. 10. In the result, the appeal of the assessee is allowed. Order pronounced in the Court on 15 th December, 2023 at Ahmedabad. Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad,dated 15/12/2023