Deputy Commissioner of Income-tax, Circle -3, Pune V. M/s. Sukanta Thali, Pune

ITA 72/PUN/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3888 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 09-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Income from undisclosed sources
• Section: 271(1)(c); 274; 207; 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, J UDICIAL M EMBER . / I TA NO. 72 /PUN/20 18 / ASSESSMENT YEAR : 2013 - 14 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 3, PUNE. ....... / APPELLANT / V/S. M/S. SUKANTA THALI 636, ABHINANDAN, PULACHIWADI, DECCAN GYMKHANA, PUNE - 411 004. PAN : ABAFS7613Q / RESPONDENT REVENUE BY : SHRI S.P WALIMBE A SSESSEE BY : SHRI PRAMOD SHINGTE / DATE OF HEARING : 28.05 .202 1 / DATE OF PRONOUNCEMENT : 31 . 0 5 .2021 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM THE ORDER OF THE LD. CIT(APPEAL), PUNE - 3 DATED 09.10.2017 FOR THE ASSESSMENT YEAR 2013 - 14 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE I.T. ACT OF RS.76,87,169/ - WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE DISCLOSED UNACCOUNTED INCOME OF RS.2.50 CRORES DURING THE SURVEY ACTION U/S.133A OF THE ACT, CONDUCTED ON THE ASSESSEE. 2 ITA NO. 72 /PUN/20 18 A.Y. 2013 - 14 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE DISCLOSED U NACCOUNTED INCOME WAS NEVER PART OF BOOKS OF ACCOUNTS OF THE ASSESSEE AND HAD THERE BEEN NO SURVEY ACTION ON THE ASSESSEE, THE INCOME OF RS.2.50 CRORES WOULD HAVE ESCAPED ASSESSMENT. THEREFORE, THE INCOME DECLARED IN THE RETURN FILED AFTER THE DATE OF SURV EY, CANNOT BE CONSIDERED AS VOLUNTARY. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE PENALTY WITHOUT APPRECIATING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MAK DATA PVT. LTD. VS. CIT (2013) 358 ITR 593 (S C) WHEREIN OFFER OF SURRENDER OF AMOUNT AFTER DETECTION BY ASSESSING OFFICER IN SEARCH CONDUCTED WAS NOT CONSIDERED AS BEING VOLUNTARY IN NATURE AND THE APEX COURT JUSTIFIED LEVYING OF PENALTY U/S.271(1)(C). 4. THE APPELLANT PRAYED TO BE ALLOWED TO ADD, AMEND, MODIFY, RECTIFY, DELETE OR RAISE ANY GROUNDS OF APPEAL DURING THE COURSE OF APPELLATE PROCEEDINGS. 2. IN THIS CASE, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING RESTAURANT. A SURV E Y ACTION U/S.133 OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS 'THE ACT) WAS CONDUCTED IN THE ASSESSEE'S CASE ON 1 7.07.2013 DURING WHICH IT WAS REVEALED THAT THE ASSESSEE WAS NOT ACCOUNTING ALL THE SALES RECEIPTS IN THE BOOKS OF ACCOUNT S . WHEN CONFRONTED WITH THE EVIDENCES, ONE OF THE PARTNER ADMIT TED THAT PART OF THE RECEIPTS FOUND RECORDED IN THE IMPOUNDED REGISTER S WERE NOT RECORDED IN THE BOOKS OF ACCOUNT S AND THEREFOR E, OFFERED AN AMOUNT OF RS.2.50 CRORES TO BE SURRENDERED AS UNACCOUNTED INCOME. SUBSEQUENT TO THIS SURVEY ACTION, THE ASSESSEE FIR ST TIME FILED RETURN OF INCOME ON 31.10.2013 DISCLOSING THE AFORESAID ADMITT ED UNDISCLOSED INCOME OF RS. 2.50 CRORES APART FROM ITS REGULAR INCOME. THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT ON 21.03.2016 ACCEPTING THE RETURNED INCOME OF THE ASSESSEE. THAT HOWE VER, THE ASSESSING OFFICER WAS OF THE OPINION , HA D THERE BEEN NO SURVEY ACT ION, THE ASSESSEE WOULD NOT HAVE DISCLOSED HIS ADMITTED INCOME AND THEREFORE, INITIATED PENALTY PROCEEDING U/S.271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME. 3. DURING THE PENA LTY PROCEEDING S , IN RESPONSE TO THE NOTICE ISSUED U/S.271(1)(C) R.W. S. 274 OF THE ACT, THE ASSESSEE SUBMITTED BEFORE THE 3 ITA NO. 72 /PUN/20 18 A.Y. 2013 - 14 ASSESSING OFFICER THAT IT HAD OFFERED INCOME TO BUY P EA CE OF MIND AND SINCE THE ADMITTED UNDISCLOSED INCOME WAS DISCLOSED IN THE RETURN OF INCOME FILED, PENALT Y U/S. 271(1)(C) OF THE ACT SHOULD NOT BE LEVIED. THE ARGUMENT OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE ASSESSING OFFICER AND PENALTY WAS LEVIED U/S.271(1)(C) OF THE ACT IN RESPECT OF THE UNACCOUNTED INCOME OF RS.2.50 CRORES AT THE RATE OF 100% WHICH WORKE D OUT AT RS. 76,87,169/ - . 4. THE LD. CIT(APPEALS) IN HIS ORDER VIDE PARA NO. 5.3.2 OBSERVED THAT THE ASSESSING OFFICER RELIED HEAVILY ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF MAK DATA PVT. LTD . VS. CIT, (2013) 358 ITR 593 (SC). THEREAFTER, IT WAS ANALYS ED THAT T HE FACTS IN THIS REFERRED CASE WA S SUBSTANTIALLY DIFFERENT SINCE IN THE CASE BEFORE THE HON'BLE SUPREME COURT (SUPRA.), THE SURRENDER ED INCOME WAS NOT INCLUDED IN THE ORIGINAL RETURN OF INCOME BUT THE SAME WAS SURRENDERED DU RING THE COURSE OF ASSESSMENT PROCEEDING S . HOWEVER, IN THE CASE OF THE ASSESSEE BEFORE US, THE ASSESSEE HAD INCLUDED THE SURRENDER ED INCOME IN HIS ORIGINAL RETURN OF INCOME FILED ON 31.10.2013. IN THIS BACKDROP, THE HON'BLE DELHI HIGH COURT IN THE CASE OF CI T VS. M/S. SAS PHAR MAC E UTICALS , 11 TAXMAN.COM 207 (DELHI) HAS HELD THAT . NO DOUBT, THE DISCREPANCIES WERE FOUND DURING THE SURVEY. THIS HAS YIELDED INCOME FROM THE ASSESSEE IN THE FORM OF AMOUNT SURRENDERED BY THE ASSESSEE. PRESENTLY, WE ARE NOT CONCE RNED WITH THE ASSESSMENT OF INCOME BUT THE MOOT QUESTION IS TO WHETHER THIS WOULD ATTRACT PENALTY UPON THE ASSESSEE UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. OBVIOUSLY, NO PENALTY CAN BE IMPOSED UNLESS THE CONDITIONS STIPULATED IN THE SAID PROV ISIONS ARE DULY AND UNAMBIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING SURVEY, MAY BE, IT WOULD HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAID SURVEY. HOWEVER, THERE CANNOT BE ANY PENALTY ONLY ON SURMISES, CONJECTURES AND POSSIBILITIES. SECTION 271(1)(C) OF THE ACT HAS TO BE CONSTRUED STRICTLY. UNLESS IT IS FOUND THAT 4 ITA NO. 72 /PUN/20 18 A.Y. 2013 - 14 THERE IS ACTUALLY A CONCEALMENT OR NON - DISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY CANNOT BE IMPOSED. THERE IS NO SUCH CONCEALMENT OR NON - DISCLOSURE AS THE ASSESSEE HAD MADE A COMPLETE DISCLOSURE IN THE INCOME TAX RETURN AND OFFERED THE SURRENDERED AMOUNT FOR THE PURPOSES OF TAX. 5 . THAT FURTHER THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. , (2010) 322 ITR 158 (SC), THE VERY BASIS FOR IMPOSING PENALTY U/S .271(1)(C) OF THE ACT WAS ANALYS ED AND THE PRINCIPLE EMERGED WAS THAT THE ALLEGED CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE HAS TO BE DETERMINED FROM INCOME TAX RETURNED FILED BY THE ASSESSEE. 6 . SIMILARLY, THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT - CHENNAI VS. SMT. AN ITA KUMARAN, 2017 - (IT2) - GJX - 0083 - MAD WHEREIN THE DECISION IN THE CASE OF MAK DATA PVT. LTD. VS. CIT ( SUPRA. ) WAS CONSIDERED AND WAS DISTINGUISHED ON FACTS. BASED ON THE FACTS OF THE CASE OF CIT - CHENNAI VS. SMT. ANITA KUMARAN (SUPRA.), THE HONBLE MADRAS HIGH COURT HAS HELD AS FOLLOWS: WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 7 . WE ARE IN CONFORMITY WITH THE VIEW TAKEN BY THE LD. CIT(APPEALS) AND FINDINGS ARRIVED A T BASED ON THE FACTS OF THE CASE OF THE ASSE S SEE AS WELL AS VARIOUS JUDICIAL PRONOUNCEMENTS PLACED ON RECORD. IN THE CASE OF THE ASSES S EE SURVEY ACTION TOOK PLACE ON 17.07. 2013 AND THE AMOUNT OF RS.2.50 CRORES WAS SURRENDERED AS UNACCOUNTED INCOME IN THE RETURN OF INCOME FI LED BY THE ASSES S EE ON 31.10.2013. THERE FORE, THE ASSESSEE HAD IN THE RETURN OF INCOME 5 ITA NO. 72 /PUN/20 18 A.Y. 2013 - 14 FILED ON 31.10.2013 HAD DISCLO SED THE SAID SURRENDERED UNACCOUNTED INCOME OF RS.2.50 CRORES APART FROM ITS REGULAR INCOME . TAKING GUIDANCE FROM THE DECISION S OF THE HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETROP RODUCTS (SUPRA.) AS WELL AS THE DECISION OF THE HONBLE DELHI HIGH COURT (SUPRA.) AND HONBLE MADRAS HIGH COURT ( SUPRA. ) , IT IS CLEARLY EVIDENT THAT ANY CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME HAS TO BE DETERMINED FROM THE RETURN OF INCOME FILED BY THE ASSESSEE. THAT FURTHER PROCEEDINGS U/S.271(1)(C) OF THE ACT, IS A SEPARATE PROCE EDINGS THAN FROM THE ASSESSMENT PROCEEDINGS AND THE OMISSION OR ERROR I.E. CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME SHOULD COME OUT SPECIFICALLY FROM THE RETURN OF INCOME FILED BY THE ASSESSEE BEFORE THE DEPARTMENT. THERE IS NO SCOPE FOR ANY GUESS WORK OR SURMISES OR ANY H YPOTHETICAL SITUATION FOR IMPOSING PENALTY U/S.271(1)(C) OF THE ACT. IT IS AN UNDISPUTED FACT THAT THE AMOUNT OF RS.2.50 CRORES WAS DISCLOSED IN THE RETURN OF INCOME BY THE ASSESSEE AND IT WAS ACCEPTED BY THE DEPARTMENT. TAKING THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT IN TH IS CASE OF THE ASSESSEE, IT IS NOT A FIT CASE FOR IMPOSING PENALTY U/S.271(1)(C) OF THE ACT. IN VIEW THEREOF, THE FINDINGS OF THE LD. CIT(APPEALS) DOES NOT CALL FOR ANY INTERFERENCE AND RELIEF PROVIDED TO THE ASSESSEE IS HER EBY SUSTAINED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRO NOUNCED ON 31 ST DAY OF MA Y , 20 2 1 . S D/ - S D/ - INTURI RAMA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 31 ST MA Y , 202 1 SB 6 ITA NO. 72 /PUN/20 18 A.Y. 2013 - 14 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEAL), PUNE - 3 4. THE PR. CIT - 2, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. / BY ORDER, // T RUE C OPY // / PRIVATE SECRETARY , / ITAT, PUNE . 7 ITA NO. 72 /PUN/20 18 A.Y. 2013 - 14 DATE 1 DRAFT DICTATED ON 28.05 .202 1 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 31.05 .202 1 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER