The ITO, Ward-6(1), Surat V. Shri Dineshbhai C.Patel, Surat

ITA 742/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60472 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 09-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Opportunity of being heard; Benefit of exemption
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NO. 742/AHD/2010 ASSESSMENT YEAR :2007-08 INCOME TAX OFFICER, WARD-6(1), SURAT ROOM NO. 614, AAYAKAR BHAVAN MAJURA GATE, SURAT V/S . SHRI DINESHBHAI C PATEL NR. RAMJI MANDIR, KANPURA, POST:VYARA, DIST.: TAPI PAN NO. ABNPP1003C (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI SHYAM PRASAD, SR. D.R. /BY RESPONDENT SHRI JAIMIN GANDHI, A.R. /DATE OF HEARING 22.05.2012 /DATE OF PRONOUNCEMENT 31.05.2012 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS IS REVENUES APPEAL ARISES OUT OF ORDER OF CI T(A)-II, AHMEDABAD, ORDER DATED 04.11.2009 FOR ASSESSMENT YEAR 2007-08. THE EFFECTIVE GROUND OF APPEAL IS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A)-II, AHMEDBAD HAS ERRED IN DELETI NG THE PENALTY OF RS. 24,85,623/- LEVIED U/S.271(1)(C) OF THE I.T .ACT. ITA NO. 742/AHD/2010 A.Y.2007-08 PAGE 2 2. THE FIRST GROUND OF APPEAL IS AGAINST THE DELETI ON OF RS. 24,85,623/- U/S.271(1)(C) OF THE I.T.ACT. THE LD. A.O. OBSERVE D THAT THERE WAS SEARCH AND SEIZURE OPERATION U/S 132 OF THE I.T. ACT, 1961, ON 15.11.2006 ON THE NEVIL JOKHI GROUP OF VYARA. DURING THE COURSE OF SEARCH, VARIOUS INCRIMINATING DOCUMENTS FOUND AND SEIZED VIDE VARIOUS ANNEXURES T O THE PANCHANAMA DATED 15.11.2006. THE ASSESSEE MADE SURRENDER OF U NACCOUNTED INCOME OF RS. 75,00,000/-. BUT AS PER THE A.O., THE ASSESSEE HAS NOT DISCLOSED ABOUT THE PAYMENT AND TRANSACTION OF SURRENDER INCOME IN THE BOOKS OF ACCOUNTS. THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF INCOME S URRENDERED. THE ASSESSEE WAS GIVEN REASONABLE OPPORTUNITY OF BEING HEARD AT THE TIME OF IMPOSING PENALTY BY THE A.O. IT HAS BEEN DISCUSSED IN PARAGRAPH 4 OF THE PENALTY ORDER. THE A.O. REFERRED THE EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT IN HIS ORDER AND HE DEEMS THE ASSESSEE AS AN OF FENDER AND LIABLE TO PANEL ACTION UNDER THIS EXPLANATION. THE BENEFIT OF EXPL ANATION 5 CAN NOT BE GIVEN TO THE ASSESSEE BECAUSE THERE WAS NO DISCLOSURE ON THE BASIS OF ANY MONEY, BULLION, JEWELLARY OR OTHER VALUABLE ARTICLE OR THI NG FOUND IN HIS POSSESSION OR UNDER HIS CONTROL DURING SEARCH U/S 132 OF THE ACT. HE ALSO REFERRED THE INTERPRETATION CASE LAW OF PENALTIES, TITLED, N.K.JAIN VS. C.K.SHAH (SC) [1991 AIR 1289] IN WHICH STRICT INTERPRETATION OF THE PENAL STATUTES H AS BEEN CONSTRUED. HE ALSO REFERRED THE VARIOUS CASE LAWS IN PENALTY ORDER. FINALLY HE IMPOSED THE PENALTY OF RS. 24,85,623/- U/S.271(1)(C ) OF THE I.T.ACT FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PA RTICULAR. ITA NO. 742/AHD/2010 A.Y.2007-08 PAGE 3 3. BEING AGGRIEVED BY THIS PENALTY ORDER OF THE A.O ., THE APPELLANT FILED FIRST APPEAL BEFORE LD. CIT(A)-II, AHMEDABAD, WHO HAS ALL OWED THE APPEAL IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS. I AGREE WITH THE APPELLANTS VIEW. THE APPELLANT SURRENDERED THE UN DISCLOSED INCOME OF RS. 75,00,000/- DURING THE SEARCH IN HIS STATEMENT U/S. 132(4) OF THE I.T.ACT AND OFFERED IT AS INCOME IN THE RETURN AND ALSO PAID THE TAX. THE RETURNED INCOME WAS ACCEPTED. AS PER DECISION OF H ONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS MISHRIMAL SONI REP ORTED IN 162 TAXMAN 53, THERE IS NO DISTINCTION BETWEEN TANGIBLE ASSETS OR INTANGIBLE ASSETS IN RESPECT OF CLAUSE(2) OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT AND THE DISCLOSURE ON THE BASIS OF ENTRIES IN THE D OCUMENT IS ALSO COVERED. FURTHER, AS PER DECISION OF HONBLE GUJAR AT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SHAH REPORTED IN 172 TA XMAN 58, THE IMMUNITY IS GRANTED TO THE APPELLANT UNDER EXPLANAT ION 5 TO SECTION 271(1)(C) OF THE I.T.ACT EVEN IF THE MANNER IS NOT SPECIFIED IN THE STATEMENT U/S. 132(4) OF THE ACT. IN VIEW OF THESE FACTS AND THE DECISIONS, IT IS HELD THAT THE APPELLANT IS ENTITLE D FOR THE BENEFIT OF EXEMPTION UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE I.T.ACT. THEREFORE, THE ACTION OF THE ASSESSING OFFICER WAS NOT JUSTIFIED AND THE PENALTY IS DELETED. 4. NOW THE REVENUE IS IN SECOND APPEAL BEFORE US. LD. D.R. OPPOSED THE DELETION OF PENALTY MADE BY THE LD. CIT(A) WHEREAS LEARNED COUNSEL FOR THE ASSESSEE CONTENDED TO CONFIRM THE ORDER OF THE LD. CIT(A). 5. WE HAVE PERUSED THE PENALTY ORDER AND APPEAL OR DER OF THE LD. CIT(A). IT IS EVIDENT THAT RETURN OF INCOME HAS BEEN ACCEPT ED AS SUCH BY THE A.O. NO ADDITION HAS BEEN MADE ON ACCOUNT OF INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH. THE ASSESSEE HAD DISCLOSED R S. 75,00,000/- U/S 132(4) ITA NO. 742/AHD/2010 A.Y.2007-08 PAGE 4 OF THE I.T.ACT. THE LD. CIT(A) HAS ALSO CONSIDERED TANGIBLE ASSETS OR INTANGIBLE ASSETS FOR DISCLOSURE ON THE BASIS OF ENTRIES IN TH E DOCUMENTS. HE FURTHER ALSO REFERRED THE HONBLE GUJARAT HIGH COURT DECISION IN CASE OF CIT VS. MAHENDRA C. SHAH REPORTED IN 172 TAXMAN 58, IN WHICH IMMUNITY FROM THE PENALTY WAS GRANTED IN CASE OF NO MANNER HAS BEEN SPECIFIED BY THE ASSESSEE U/S 132(4) OF THE I.T.ACT. THUS, THE ORDER OF THE LD. CIT(A) IS CONFIRMED AND REVENUES APPEAL IS DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD /- ( MUKUL KR. SHRAWAT) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ; ITA NO. 742/AHD/2010 A.Y.2007-08 PAGE 5 STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 29.05.2012 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE XXXX 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 29.05.2012 4) DATE OF CORRECTION 29.05.2012 5) DATE OF FURTHER CORRECTION 6) DATE OF INITIAL SIGN BY MEMBERS 31.05.2012 7) ORDER UPLOADED ON 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON