Arun Gupta H.U.F, Hyderabad V. Asst. Commissioner of Income Tax, Circle-6(1), Hyderabad

ITA 696/Hyd/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1275 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 23-01-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R MOHANKUMAR
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Opportunity of being heard
• Section: 271(1)(c); 143(3)

Judgement Text

` IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 6 9 6 / HYD/201 8 ASSESSMENT YEAR: 20 06 - 07 ARUN GUPTA, HUF, HYDERABAD. PAN A A HHA 7572A VS. ASST . COMMISSIONER OF INCOME - TAX, CIRCLE 6 ( 1 ), HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: S HRI P. MURALI MOHANA RAO REVENUE BY: SHRI R. MOHAN KUMAR DATE OF HEARING: 2 3 / 0 1 / 201 9 DATE OF PRONOUNCEMENT: 20 / 0 3 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 6 , HYDERABAD, DATED, 20 /0 1 /201 8 FOR AY 20 06 - 07. 2. BRIEF FACTS OF THE CASE ARE , THAT SEARCH AND S EIZURE OPERATIONS WERE CONDUCTED IN THE CASE OF ASSESSEE ON 14/12/2007, IN WHICH, UNACCOUNTED CASH OF RS. 2,00,000/ - AND VARIOUS INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. DURING THE COURSE OF SEARCH, AO NOTICED THAT THE ASSESSEE AND HIS WIFE SMT. PUS HPA GUPTA HAVE JOINTLY PURCHASED A HOUSE PROPERTY A T A - 108, JOURNALISTS COLONY, JUBILEE HILLS, HYDERABAD FOR A RECORDED CONSIDERATION OF RS 2,25,00,000/ - AND PAID UNACCOUNTED CASH CONSIDERATION OF RS. 1,54,00,000/ - . THE AO OBSERVED THAT WHEN THE SOURCES FO R THE CASH PAYMENTS MADE BY THE ASSESSEE WERE EXAMINED, HE SUBMITTED I.T.A. NO. 696 /HYD/1 8 ARUN GUPTA, HUF, HYD. 2 THAT CERTAIN FIXED DEPOSITS APPEARING IN THE NAME OF ASSESSEE HUF WERE ENCASHED. WHEN AO ASKED THE ASSESSEE TO PRODUCE THE COMPLETE YEAR WISE DETAILS OF FIXED DEPOSITS MADE IN BANKS AND P OST OFFICES ALONG WITH THE DETAILS OF FIXED DEPOSITS ENCHASED DURING THE PERIOD 2001 TO 2007, THE ASSESSEE FAIL ED TO PRODUCE THE DETAILS IN SPITE OF SEVERAL OPPORTUNITIES AFFORDED. THE AO OBSERVED THAT ON VERIFICATION OF THE RETURNS FILED BY THE ASSESSEE AN D HIS FAMILY MEMBERS EVIDENCED THAT SOME OF THE FIXED DEPOSITS APPEARED TO HAVE BEEN UNDISCLOSED. 2.1 IN THE ABOVE BACKGROUND, THE AO ISSUED NOTICES U/S 153C TO THE ASSESSEE HUF CALLING FOR THE RETURNS FOR THE AYS 2002 - 03 TO 2008 - 09, IN RESPONSE TO WHICH , THE ASSESSEE FILED THE RETURNS OF INCOME FOR THE SAID YEARS . THE AO COMPLETED THE ASSESSMENTS U/S 143(3) RWS 153C ACCEPTING THE INCOME RETURNED BY THE ASSESSEE. HOWEVER, THE AO OBSERVED THAT EVEN THOUGH THE ASSESSMENTS WERE COMPLETED AS PER THE INCOME RE TURNED, THE INCOME DECLARED BY THE ASSESSEE IN THE RETURNS OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S 153C CONSISTS OF UNDISCLOSED INTEREST INCOME ON UNACCOUNTED FIXED DEPOSITS . 2.2 THOUGH THE ASSESSMENTS WERE COMPLETED ACCEPTING THE INCOME RETURNE D BY THE ASSESSEE, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) FOR THE AYS 2002 - 03 TO 2008 - 09 ON THE GROUND THAT THE ASSESSEE EARNED THE INCOME WHICH WAS NOT DISCLOSED TO THE DEPARTMENT TILL THE DATE OF SEARCH. ACCORDINGLY, NOTICE WAS ISSUED U/S 271(1)( C). 2.3 THE EXPLANATION OFFERED BY THE ASSESSEE AGAINST THE SAID NOTICE WAS REJECTED BY THE AO AND COMPUTED THE CONCEALED INCOME FOR THE AY 2006 - 07 IS RS. 4,04,539/ - ( I.T.A. NO. 696 /HYD/1 8 ARUN GUPTA, HUF, HYD. 3 5,00,100 95461) AND LEVIED MINIMUM PENALTY OF RS. 97,270/ - ON THE INCOME WHICH WAS SOUGHT TO EVADE TAX. 3. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO HAS CONFIRMED THE PENALTY ORDER FOR NON - PROSECUTION BY THE ASSESSEE. 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LD . CIT(A) OUGHT TO HAVE APPRECIATED THAT THE PENALTY ORDER PASSED U / S 271 (1) ( C) OF THE ACT FOR THE YEAR UNDER CONSIDERATION I.E., A Y 2006 - 07 IS ILLEGAL AND IT DESERVES TO BE CANCELLED. 3. THE LD. CIT (A) OUGHT TO HAVE APPRECIATED THAT DURING THE COURSE OF SEARCH PROCEEDINGS ITSELF SUBMITTED THE DETAILS OF INVESTMENT IN HOUSE PROPERTY AND EXPLAINED INFLOW AND OUTFLOW OF THE SOURCES FOR THE SAID INVESTMENT. 4. THE LD. COMMISSIONER OF LNCOME TAX ( APPEALS) WITHOUT CONSIDERING THE EXPLANATION SUBMITTED SUSTAINED THE PENALTY OF RS. 97,270 / - U / S 271(1)( C ) LEVIED BY THE ASSESSING OFFICER IS UNWARRANTED AND SAME MAY BE DELETED. 5. THE LD. CIT (A) OUGHT TO HAVE APPRECIATED THAT WHEN THE IMP UGNED SEARCH HAS TAKEN PLACE DURING THE PERIOD FROM 01.06.2007 TO 01.07.2012, LEVY OF PENALTY U / S 271 (1)(C) OF THE ACT AT THE RATE OF 100% OF THE TAX SOUGHT TO BE EVADED IS VOID. 6. THE LD . C I T(A) OUGHT TO HAVE APPRECIATED THAT THE PENALTY ORDER PASSED U / S 271(1) (C) OF THE ACT DATED 30.06.2010 IS ILLEGAL AND IT DESERVES TO BE CANCE LLED . 7. THE LD. C I T(A) OUGHT TO HAVE APPRECIATED THAT NO PENALTY U / S 271(1)(C) CAN BE LEVIED WHERE THERE IS NO CLEAR FINDING REGARDING PENALTY BEING IMPOSED ON CONCEALMENT OF INCOME OR ON FURNISHING INACCURATE PARTICULARS OF INCOME. I.T.A. NO. 696 /HYD/1 8 ARUN GUPTA, HUF, HYD. 4 8. AS PER THE RATIO LAID DOWN BY THE HON'BLE 5UPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD., VS. CIT (1998) 229 ITR 383 (SC), THE \ TAT HAS JURISDICTION TO EXAMINING THE QUESTION O F LAW THAT HAS NOT BEEN RAISED BEFORE THE CIT (A) BUT HAS BEEN RAISED BEFORE THE ITAT FOR THE FIRST TIME. 5. THE LD. AR SUBMITTED THAT THE LEARNED CIT(A) DECIDED THE MATTER EX - PARTE AND, THEREFORE, IN THE INTEREST OF JUSTICE, THE MATTER MAY BE RESTORE D TO THE FILE OF CIT(A) FOR DECIDING THE AP PEAL ON MERITS AND SU B MIT T ED THAT ASSESSEE HAS A GOOD CASE ON MERIT. . THE LEARNED DR OBJECTED TO THE AFORESAID STATEMENT OF THE LEARNED AR. 6 . CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE ARE OF THE VIEW THAT INTEREST OF JUSTICE WILL BE SE RVED IF THE MATTER IS RESTORED TO THE FILE OF FIRST APPELLATE AUTHORITY FOR DECIDING GROUNDS OF APPEAL OF THE ASSESSEE ON MERITS. ACCORDINGLY, THE CIT(A) IS DIRECTED TO AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THEREAFTER DECIDE THE APPEAL ON MERITS. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH , 201 9. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 20 TH MARCH , 201 9. KV I.T.A. NO. 696 /HYD/1 8 ARUN GUPTA, HUF, HYD. 5 COPY FORWARDED TO: 1. ARUN GUPTA, HUF, C/O P. MURALI & CO., CAS, 6 - 3 - 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82 2 . A C IT, CIRCLE 6 ( 1 ), HYDERABAD . 3 . CIT (A) - 6 , HYDERABAD 4. PR. CIT 6 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 . DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 . DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 . APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 . DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 . DATE OF DISPATCH OF ORDER