Shri Kantilal Siyaram, Baroda V. The ACIT.,Cent.Circle-1, Baroda

ITA 685/AHD/2012

• Counselvise Citation: 68520514 RSA 2012
• Duration Of Justice: 3 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 22-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIMESH YADAV SR DR
• Keywords: Opportunity of being heard; Reasonable cause; Revised return; Bonafide mistake
• Section: 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ././ ./ ITA NO. 685/AHD/2012 / ASSESSMENT YEAR: 2007-08 M/S. KANTILAL SIYARAM, STATION ROAD, PAVI JETPUR, DIST. BARODA, GUAJRAT PAN: AABFK 9234 D VS ACIT, CENTRAL CIRCLE-1, BARODA ./ ././ ./ ITA NO. 688/AHD/2012 / ASSESSMENT YEAR: 2007-08 SHRI MANOJKUMAR KANTILAL SHAH, STATION ROAD, PAVI JETPUR, DIST. BARODA, GUAJRAT PAN: AJLPS 6906 M VS ACIT, CENTRAL CIRCLE-1, BARODA / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE(S) BY : SHRI HEMANT SUTHAR, AR REVENUE BY : SHRI NIMESH YADAV, SR. DR. !' # $%&/ // / DATE OF HEARING : 29/05/2015 '( # $%& / // / DATE OF PRONOUNCEMENT: 05/06/2015 )* )* )* )*/ // / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER:- THESE ARE THE APPEALS FILED BY TWO DIFFERENT ASSES SEES AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX ( APPEALS)-IV, AHMEDABAD, BOTH DATED 10.02.2011 FOR ASSESSMENT YEA R 2007-08. SINCE FACTS AND GROUNDS ARE IDENTICAL AND ALSO THESE APPEALS AR ISE OUT OF SAME SEARCH ACTION, BOTH THESE APPEALS WERE TAKEN UP TOGETHER F OR HEARING AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 685/AHD/2012 : AY 2007-08 BY M/S. KANTILAL SIYARAM 2. FIRST, WE TAKE UP THE APPEAL IN THE CASE OF M/S . KANTILAL SIYARAM VIDE ITA NO.685/AHD/2012 PERTAINING TO ASSESSMENT Y EAR 2008-09. IN THIS APPEAL, THE SOLE GROUND RAISED BY THE ASSESSEE READ S AS UNDER:- ITA NOS. 685 & 688 AHD 2012 KANTILAL SIYARAM & SHRI MANOJKUMAR KANTILAL SHAH FOR AY 2007-08 2 THE LD. CIT(A), AHMEDABAD, HAS ERRED IN FACTS AND I N LAW IN CONFIRMING THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT OF RS.1,01 ,000/- IN RESPECT OF THE INCOME OF RS.3,00,000/- DISCLOSED DURING THE COURSE OF SEARCH PROCEEDINGS, WHICH WAS OFFERED FOR TAXATION IN THE REVISED RETUR N OF INCOME. THUS, THE PENALTY OF RS.1,01,000/- IS PRAYED TO BE CANCELLED. 3. THE BRIEFLY STATED FACTS ARE THAT A SEARCH ACTIO N U/S 132 OF THE INCOME- TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT' ) WAS CARRIED OUT IN THE CASE OF M/S HARIOM GROUP OF CASES ON 31.05.2006 COVERING THE BUSINESS AND RESIDENTIAL PREMISES. THE ORIGINAL RETURN WAS FILED ON 31.10.2007 DECLARING TOTAL INCOME AT RS.1,04,490/-. ASSESSMENT PROCEEDI NGS U/S 153A WERE INITIATED IN THE PRECEDING ASSESSMENT YEARS AND THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE ASSESSING OFFICER OBSERVED CERTAIN DISCREPANCIES WI TH REGARD TO STOCK AND INCOME EARNED FROM UNACCOUNTED SOURCES AMOUNTING TO RS.2,59,351/- AND RS.40,649/- RESPECTIVELY. THE ASSESSING OFFICER OB SERVED THAT IN THE LETTER DATED 04.12.2008, THE ASSESSEE ADMITTED THOSE DISCR EPANCIES. ON 23.12.2008, THE ASSESSEE FILED ITS REVISED RETURN DECLARING TOT AL INCOME OF RS.4,04,490/-. THE ASSESSING OFFICER FRAMED ASSESSMENT U/S 143(3), ASSESSING THE INCOME AS DECLARED IN THE REVISED RETURN AT RS.4,04,490/- AND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED VIDE ORDER DATED 24.06.2009. THE ASSESS ING OFFICER IMPOSED PENALTY OF RS.1,01,000/-. AGAINST THIS, THE ASSESSE E FILED AN APPEAL BEFORE THE CIT(A) WHO, AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE, DISMISSED THE APPEAL. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN LEVYING THE PENALTY AND CONFI RMING THE SAME. HE SUBMITTED THAT A SEARCH ACTION WAS CARRIED OUT ON 3 1.05.2006 AND THE ASSESSEE HAD MADE PAYMENT OF ADVANCE TAX ON 15.06.2 006 ON THE BASIS OF ITA NOS. 685 & 688 AHD 2012 KANTILAL SIYARAM & SHRI MANOJKUMAR KANTILAL SHAH FOR AY 2007-08 3 DISCLOSURE MADE. HE SUBMITTED THAT INADVERTENTLY IN THE ORIGINAL RETURN THIS AMOUNT WAS NOT INCORPORATED; HOWEVER WHEN IT WAS PO INTED OUT BY THE ASSESSING OFFICER, THE SAME WAS INCORPORATED BY WAY OF REVISED RETURN WHICH WAS FILED ON 23.12.2008. 5. ON THE CONTRARY, THE LD. SR.D.R. SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE CIT(A) HAS D ECIDED THE ISSUE IN PARAGRAPH 2.1 OF HIS ORDER WHICH READS AS UNDER:- 2.1 IT IS EVIDENT FROM RECORD THAT NO EXPLANATION WAS MADE BEFORE THE ASSESSING OFFICER EVEN AFTER SHOW CAUSE NOTICE ISSU ED AND SERVED AND SUFFICIENT TIME WAS ALSO ALLOWED TO COMPLY WITH SUC H SHOW CAUSE NOTICE. APPARENTLY, THE APPELLANT HAD NOT COMPLIED WITH THE TERMS OF CLAUSE (A) OF EXPLANATION 1 TO SEC. 271(1)(C)OF THE ACT AND THERE FORE, THE INCOME OF RS.3,00,000/- DISCLOSED DURING THE COURSE OF SEARCH AND ADDED TO THE TOTAL INCOME ON ACCOUNT OF REVISED RETURN OF THE APPELLAN T WILL REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED. HOWEVER, NEITHER ANY EXPLANATION WAS FURNISHED BEFORE THE ASSESSING OFFICER IN COMPLIANCE TO TH0 SHOW CAUSE NOTICE ISSUED NOR ANY REASONS WERE G IVEN AS TO WHY THE SHOW CAUSE NOTICE OF THE ASSESSING OFFICER WAS NOT COMPL IED WITH. IF THE APPELLANT WOULD HAVE BEEN PREVENTED BY ANY REASONABLE CAUSE F OR THE NON-COMPLIANCE OF THE SHOW CAUSE NOTICE OF THE ASSESSING OFFICER A ND SUCH REASONABLE CAUSE WAS BROUGHT ON RECORD DURING THE COURSE OF APPELLAT E PROCEEDINGS, THE EXPLANATION FURNISHED BY THE LD. COUNSEL COULD HAVE BEEN ACCEPTABLE AFTER GIVING THE OPPORTUNITY OF BEING HEARD TO THE ASSESS ING OFFICER. HOWEVER, THE LD. COUNSEL OF THE APPELLANT HAD FAILED TO FURNISH ANY REASONABLE CAUSE DURING APPELLATE PROCEEDINGS FOR THE NON-COMPLIANCE OF THE SHOW CAUSE NOTICE OF THE ASSESSING OFFICER. UNDER SUCH CIRCUMSTANCES, IT IS HELD THAT THE APPELLANT WAS NOT PREVENTED BY ANY REASONABLE CAUSE TO COMPLY WITH THE SHOW CAUSE NOTICE ISSUED BY ASSESSING OFFICER. THE APPELLANT ON ACCOUNT OF NEGLIGENCE HAD NOT FURNISHED ANY EXPLANATION IN COM PLIANCE TO THE SHOW CAUSE NOTICE OF THE ASSESSING OFFICER. THEREFORE, T HE ASSESSING OFFICER WAS JUSTIFIED IN IMPOSING THE PENALTY U/S 271(1)(C) OF THE ACT FOR CONCEALING THE PARTICULARS OF INCOME TO THE EXTENT OF RS.3,00,000/ -. THE PENALTY SO LEVIED FOR RS.1,01,000/- IS HEREBY CONFIRMED. THE FIRST GROUND OF APPEAL IS ACCORDINGLY DISMISSED. ITA NOS. 685 & 688 AHD 2012 KANTILAL SIYARAM & SHRI MANOJKUMAR KANTILAL SHAH FOR AY 2007-08 4 7. THE UNDISPUTED FACTS IN THIS CASE ARE THAT IN TH E ORIGINAL RETURN THE ASSESSEE HAD NOT INCORPORATED THE DISCREPANCIES FOU ND DURING THE COURSE OF SEARCH PROCEEDINGS I.E. THE AMOUNT RELATED TO UNACC OUNTED STOCK AMOUNTING TO RS.2,59,351/- AND INCOME EARNED FROM UNACCOUNTED SOURCES AMOUNTING TO RS.40,649/- WHICH WAS ADMITTED BY THE ASSESSEE DURI NG THE COURSE OF SURVEY PROCEEDINGS. THE ASSESSEE HAD MADE PAYMENT OF ADVAN CE TAX ON 15.06.2006 ON THE BASIS OF DISCLOSURE MADE, AS PER THE NOTE SU BMITTED DURING THE APPELLATE PROCEEDINGS BEFORE THIS TRIBUNAL. AS PER THE ORIGINAL RETURN, THE ADVANCE TAX PAID IS OF RS.35,000/-; HOWEVER, THE CO NTENTION OF THE ASSESSEE IS THAT ADVANCE TAX WAS PAID ON 15.06.2006 AMOUNTING T O RS.1,01,000/-. IN THE REVISED RETURN, THE ADVANCE TAX PAID IS OF RS.1,36, 000/-. AS PER CALCULATION OF TAX ENCLOSED WITH THE ORIGINAL RETURN, THE ASSES SEE HAS CLAIMED TO HAVE PAID ADVANCE TAX ON 27.03.2007 OF RS.35,000/-. IN THE ORIGINAL RETURN, THE ASSESSEE HAS NOT CLAIMED ADVANCE TAX PAID ON 15.06. 2006 AMOUNTING TO RS.1,01,000/-. HOWEVER, IN THE REVISED RETURN, THE ASSESSEE HAS CLAIMED THAT IT HAD PAID ADVANCE TAX OF RS.1,01,000/- ON 15.06.2 006 AND RS.35,000/- ON 27.03.2007. IT IS THE CONTENTION OF THE ASSESSEE T HAT INADVERTENTLY THE AMOUNT DISCLOSED WAS NOT INCORPORATED INTO THE ORIGINAL RE TURN OF INCOME. HOWEVER, TAX ON SUCH INCOME WAS PAID BY WAY OF ADVANCE TAX O N 15.06.2006. THE ASSESSEE HAS NOT EVEN CLAIMED REFUND IN THE ORIGINA L RETURN QUA THE ADVANCE TAX PAID. THEREFORE, THE PENALTY OUGHT NOT TO HAVE BEEN LEVIED. 8. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO TH E SUBMISSION OF THE ASSESSEE AS WELL AS THE MATERIAL PLACED ON RECORD. IT IS THE SETTLED PROPOSITION OF LAW THAT A BONAFIDE MISTAKE OF THE ASSESSEE CANNOT BE FASTENED WITH TH E LIABILITY OF PENALTY. THE ASSESSEE HAS CLAIMED THAT ADVANCE TAX WAS PAID, WHICH WAS NOT RECORDED IN THE ORIGINAL RETURN, WHEN THE ASSESSEE REALIZED THE MISTAKE WHICH WAS POINTED OUT BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE FILED A REVIS ED RETURN ALTHOUGH SUCH ITA NOS. 685 & 688 AHD 2012 KANTILAL SIYARAM & SHRI MANOJKUMAR KANTILAL SHAH FOR AY 2007-08 5 REVISED RETURN WAS NOT FILED WITHIN THE PRESCRIBED TIME LIMIT. UNDER THE PECULIAR FACTS OF THE PRESENT CASE, WE DEEM IT PROP ER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION WHETHER THE ASSESSEE HAD MADE PAYMENT OF ADVANCE TAX ON 15.06.2006, AMOUNTIN G TO RS.1,01,000/- ON THE BASIS OF DISCLOSURE MADE. THEREAFTER, THE ASSES SING OFFICER WOULD DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN CASE HE FINDS THAT ASSESSEE ALREADY MADE THE PAYMENT OF ADVANCE TAX ON 15.06.20 06 FOR RS.1,01,000/-. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ITA NO. 688/AHD/2012 : AY 2007-08 BY SHRI MANOJKUM AR KANTILAL SHAH 9. IN THIS APPEAL BY THE ASSESSEE I.E. SHRI MANOJKU MAR KANTILAL SHAH FOR ASSESSMENT YEAR 2007-08, IDENTICAL GROUNDS ARE RAIS ED. THEREFORE, FOR THE DETAILED DISCUSSION IN THE CASE M/S. KANTILAL SIYAR AM IN ITA NO.685/AHD/2012 FOR ASSESSMENT YEAR 2007-08, THIS A PPEAL OF THE ASSESSEE IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 5 TH JUNE, 2015 AT AHMEDABAD. SD/- SD/- (G.D. AGRAWAL) VICE-PRESIDENT (KUL BHARAT) JUDICIAL MEMBER AHMEDABAD; DATED 05/06/2015 BIJU T., PS ITA NOS. 685 & 688 AHD 2012 KANTILAL SIYARAM & SHRI MANOJKUMAR KANTILAL SHAH FOR AY 2007-08 6 )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ !- / CONCERNED CIT 4. !- ( ) / THE CIT(A) 5. +01 $ , , / DR, ITAT, AHMEDABAD 6. 13 4' / GUARD FILE . )*! )*! )*! )*! / BY ORDER, TRUE COPY 5 55 5/ // / 6 6 6 6 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD