S.Sathyanarayanan, CHENNAI V. ACIT, CHENNAI

ITA 756/CHNY/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5032 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-05-2018
• Assessment Year: 2007-2008
• Appeal Filed On: 09-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure; Principle of natural justice; Revised return; Reason to believe; Reassessment proceedings
• Section: 271(1)(c); 143(3); 148; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , , [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ] ./I.T.A. NOS.754, 755 & 756/CHNY/2015 ! / ASSESSMENT YEARS : 2000-01, 2001-02 & 2007-08 . S. SATHYANARAYANAN, OLD NO.19, NEW NO.45, GIRIAPPA ROAD, T. NAGAR, CHENNAI 600 017. [PAN ABCPS 0844B] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I(5) (I/C) CHENNAI 600 034. ( / APPELLANT) ( /RESPONDENT) '# $ % / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE &' '# $ % /RESPONDENT BY : SHRI. AR.V. SREENIVASAN, JCIT. ( ) $ * /DATE OF HEARING : 01-08-2019 +,! $ * /DATE OF PRONOUNCEMENT : 20-08-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THESE ARE APPEALS FILED BY THE ASSESSEE DIRECTED AG AINST DIFFERENT ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-19, ITA NOS.754 TO 756/2015 :- 2 -: CHENNAI (IN SHORT THE CIT(A)) DATED 30.12.2014 FOR ASSESSMENT YEARS 2000-01, 2001-02 AND 2007-08 RESPECTIVELY. 2. SINCE, THE IDENTICAL FACTS AND ISSUES ARE INVOLVED IN THESE APPEALS, WE PROCEED TO DISPOSE THE SAME VIDE THIS C OMMON ORDER. 3. FOR THE SAKE OF CONVENIENCE AND CLARITY THE FACTS R ELEVANT TO THE APPEAL IN ITA NO.754/CHNY/2015 FOR ASSESSMENT YEAR 2000-2001 ARE STATED HEREIN. 4. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY OF RS.5,57,301/-LEV IED U/S 271 (1) (C) OF THE ACT. 3. THIS WAS A SEARCH CASE AND IN THE COURSE OF SEAR CH OPERATIONS, THE APPELLANTS FATHER HAD ADMITTED THAT THE ENTIRE INCOME HAD ARISEN FROM THE REAL ESTATE OPERA TIONS AND OFFERED THE ENTIRE INCOME AND ALSO TO PAY THE T AXES THERE ON IN HIS HANDS AS ALSO OTHER FAMILY MEMBERS AND THE COMPANY. IN FACT OVER 2.5 CRORES OF TAXES WERE PAID EVEN BEFORE THE COMPLETION OF ASSESSMENT AND THE FA CT THAT THE SAME IS NOT DENIED BY THE ASSESSING OFFICE R PROVED THE APPELLANTS BONA FIDES. THE LEARNED ASSE SSING OFFICER HAD HIMSELF OBSERVED IN THE PENALTY ORDER T HAT THE ASSESSEE ADMITTED A UNDISCLOSED INCOME IN THE COURS E OF SEARCH AND PAID TAX ON SUCH UNDISCLOSED INCOME. SI NCE MATERIAL FACTS CONCERNING UNDISCLOSED INCOME WERE DISCLOSED IN THE COURSE OF SEARCH PROCEEDINGS AND SUBSTANTIAL TAX WAS ALSO PAID, THE APPELLANT SATISF IES THE CONDITIONS LAID DOWN IN THE EXPLANATION (5) TO SECT ION 271 (1) (C) OF THE ACT. ITA NOS.754 TO 756/2015 :- 3 -: 4. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN RELYING ON THE SUPREME COURTS DECISION IN THE CASE OF MAK DATA PVT LIMITED SINCE IT WAS A CASE WHERE THE ASSE SSEE DID NOT COME OUT WITH FULL DISCLOSURE EVEN AFTER 10 MONTHS OF SURVEY PROCEEDINGS IN THE CASE OF THE SISTER CON CERN. 5. THE TWO CONDITIONS LAID DOWN UNDER THE EXPLANATI ON (1). TO 271 (1) (C) ARE FULLY SATISFIED BY THE APPELLANT IN THAT FOR EACH AND EVERY ADDITION IN THE APPELLANT GAVE HIS EXPLANATION WHICH WAS BONAFIDE. 6. SINCE THE APPELLANT MADE A FULL DISCLOSURE EVEN IN THE COURSE OF SEARCH PROCEEDINGS AND THE ADDITIONS MADE IN THE ASSESSMENT WERE DUE TO ONLY MISTAKES COMMITTED IN THE COMPUTATION OF THE CORRECT CONCEALED INCOME, TH E SUPREME COURT DECISION IN THE CASE OF CIT VS SURESH CHANDRA MITTAL 251 ITR PAGE 9 ALONE APPLIED TO THE FACTS OF THE CASE. 7. FOR THE ABOVE AND SUCH OTHER GROUNDS, AS MAY BE ADDUCED WITH THE PERMISSION OF THE HONOURABLE INCOM E TAX APPELLATE TRIBUNAL, IT IS PRAYED THAT THE APPEA L MAY BE ALLOWED AND RS. 5,57,031/- PENALTY LEVIED MAY BE DELETED. 5. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE BUSIN ESS OF REAL ESTATE. THERE WAS SEARCH AND SEIZURE OPERATIONS CO NDUCTED IN THE CASE OF SHRI. K. SUNDARRAJ, WHO IS THE FATHER OF T HE APPELLANT ON 21.09.2005 AND DURING THE COURSE OF SEARCH, CERTAIN ALLEGED INCRIMINATING MATERIALS WERE STATED TO HAVE BEEN S EIZED. CONSEQUENTLY, NOTICE U/S.153C OF THE ACT WAS ISSUE D TO THE ASSESSEE ON 28.08.2006. IN RESPONSE TO SUCH NOTICE, THE RETU RN OF INCOME FOR ITA NOS.754 TO 756/2015 :- 4 -: THE ASSESSMENT YEAR 2000-01 WAS FILED ON 26.03.20 07 DISCLOSING TOTAL INCOME OF RS. 23,38,865/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE ASSISTANT COMMISSI ONER OF INCOME TAX, CENTRAL CIRCLE-I(5), (ADDL. CHARGE) CHENNAI VI DE ORDER DATED 31.12.2007 PASSED U/S. 143(3) R.W.S 153C OF THE A CT AT TOTAL INCOME OF RS.44,04,489/- AFTER MAKING THE FOLLOWING ADDITI ONS:- AGRICULTURAL INCOME : 1,77,250/- UNEXPLAINED INVESTMENT IN PALLANGI VILLAGE : 2,96,120/- UNEXPLAINED INVESTMENT IN VYASARPADI BUILDING : 20,99,850/- UNEXPLAINED INVESTMENT IN KODAIKANAL : 1,50,000 UNEXPLAINED INVESTMENT IN VILPATTI VILLAGE : 25,445/ UNEXPLAINED INVESTMENT IN BANK : 3,00,000/- LONG TERM CAPITAL GAIN : 10,92,758/- THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.271 (1) (C) OF THE ACT BY ISSUING SHOW CAUSE NOTICE U/S.274 R.W.S. 271 (1) ( C) OF THE ACT. IN RESPONSE TO THE SAME, THE APPELLANT HAD F ILED EXPLANATION VIDE LETTER DATED 29.05.2008 WHICH IS EXTRACTED BY THE ASSESSING OFFICER AT PARA 3 OF THE PENALTY ORDER. THE SUM AND SUBSTANCE OF THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF ADDITION NO.1 & 3 ARE THAT THE ITA NOS.754 TO 756/2015 :- 5 -: ASSESSED INCOME HAS BEEN OFFERED AS UNDISCLOSED I NCOME AND THEREFORE LEVY OF PENALTY WERE NOT JUSTIFIED. THE ASSESSING OFFICER CONSIDERING THE EXPLANATION HELD THAT LONG TERM CAP ITAL GAINS ARISING ON SALE OF LAND AT PALLANGI VILLAGE, WAS NOT DISC LOSED IN THE ORIGINAL RETURN OF INCOME OR IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S.153C OF THE ACT. THE ASSESSEE CO ULD NOT PROVE THAT CAPITAL GAINS HAD ARISEN PRIOR TO 01.04.1999. IN TH E CASE OF ALLEGED UNEXPLAINED INVESTMENTS IN LAND AT KODAIKANAL , THE ASSESSING OFFICER FURTHER OBSERVED THAT THE APPELLANT HAD NOT FULFILL ED THE CONDITION STIPULATED TO AVAIL THE BENEFIT OF IMMUNITY FROM TH E IMPOSITION OF PENALTY PROCEEDING PROVIDED IN EXPLANATION (5) TO SECTION 271 (1) ( C) OF THE ACT AND THEREFORE PROCEEDED TO LEVY PENALTY U/S.271 (1) (C ) OF THE ACT VIDE ORDER DATED 16.06.2008 AT K5,57,301/-. 6. BEING AGGRIEVED BY LEVY OF PENALTY, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDE R DISMISSED THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2000- 01 AND 2001-02. 7. BEING AGGRIEVED BY THE ABOVE DECISION OF THE CIT( A), THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT AP PEALS. IT IS SUBMITTED BEFORE US THAT ASSESSEE ADMITTED UNDISCLO SED INCOME DURING THE COURSE OF SEARCH AND PAID TAX ON SUCH UNDISCLOS ED INCOME AND THEREFORE LEVY OF PENALTY IS NOT WARRANTED AND HE A LSO PLACED RELIANCE ITA NOS.754 TO 756/2015 :- 6 -: ON THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF CIT VS. SURESH CHANDRA MITTAL, 251 ITR 9. HE FURTHER CONTENDED TH AT THE LD. CIT(A) OUGHT NOT HAVE UPHELD THE DECISION OF HON'BLE SUPRE ME COURT IN THE CASE OF MAK DATA (P) LTD VS. CIT, 38 TAXMANN.COM 44 8. FURTHER, HE SUBMITTED THAT RELEVANT COLUMN IN THE SHOW CAUSE NO TICE WAS NOT STRUCK OFF, THEREFORE HE FILED THE ADDITIONAL GRO UNDS OF APPEAL, WHEREIN IT WAS STATED AS UNDER:-. 1. THE CIT(A) ERRED IN SUSTAINING THE LEVY OF PEN ALTY U/S 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DESPITE THE WRONG INITIATION OF THE PROCEEDINGS IN THE SHOW CAUSE NOTICE DATED 31.12.20 07 BY THE ASSESSING OFFICER WITHOUT ASSIGNING PROPER REAS ONS AND JUSTIFICATION. 2. THE CIT(A) FAILED TO APPRECIATE THAT THE LACK OF PRECISE CHARGE WITHIN THE SCOPE OF SECTION 271(1)(C) OF THE ACT AS TO WHETHER THE PENALTY WAS LEVIABLE FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME WHILE INITIATING THE PENALTY PROCEEDINGS IN ISSUING THE S HOW CAUSE NOTICE WOULD VITIATE THE CONSEQUENTIAL PENALT Y ORDER UNDER CONSIDERATION AND ACCORDINGLY OUGHT TO HAVE APPRECIATED THAT THE ORDER IMPOSING PENALTY U/S 271 (1)(C) OF THE ACT SHOULD BE RECKONED AS INVALID IN THE EYE S OF LAW. LD. AUTHORISED REPRESENTATIVE FURTHER SUBMITTED TH AT THE ADDITIONAL GROUNDS OF APPEAL ARE PURELY LEGAL IN NATURE AND GO ES TO THE ROOT OF THE MATTER AND THEREFORE THE SAME MUST BE ADMITTED IN THE LIGHT OF THE LAW LAID BY THE HONBLE SUPREME COURT IN THE CA SE OF NATIONAL THERMAL POWER CO. LTD VS. CIT, 229 ITR 383. FURTHE R, IT IS SUBMITTED ITA NOS.754 TO 756/2015 :- 7 -: THAT THE SHOW CAUSE NOTICE IS NOT CLEAR WHETHER NOT ICE IS FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. THEREFORE, THE ASSESSEE WAS NOT SURE OF THE CHARGE MADE AGAINST HIM AND IN THE LIGHT OF THE DECISION OF HONBLE KARNATA KA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565, WHICH WAS AFFIRMED BY THE HON'BLE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS IN CC NO.11485 OF 2017 DATED 05.08.2016 BY DISMISSAL OF THE SLP CITING THE ABOVE CIRCUMSTANCES , LD. AUTHORISED REPRESENTATIVE PRAYED FOR SQUASHING OF PENALTY PRO CEEDINGS. 8. CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, T HE ADDITIONAL GROUNDS OF APPEAL ARE ADMITTED FOR ADJUD ICATION. THE RATIO OF THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) IS NO T APPLICABLE TO THE FACTS OF THE PRESENT CASE AS IN THE PRESENT CASE, T HE ASSESSEE HAD OFFERED EXPLANATION IN RESPONSE TO SHOW CAUSE NOTI CE HAVING FULLY UNDERSTOOD THE SHOW CAUSE NOTICE. FURTHER, THE BAN GALORE BENCH OF THE TRIBUNAL IN THE CASE OF P.M.ABDULLA VS. ITO (IN ITA NOS.1223 & 1224/BANGALORE/2012, DATED 17.10.2016 ) HAD HELD THAT THIS CANNOT BE A VALID REASON FOR DELETION OF THE PENALTY U/S.271( 1) (C) OF THE ACT BY HOLDING AS UNDER:- ITA NOS.754 TO 756/2015 :- 8 -: 9. WE HEARD RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. THE ONLY ISSUE INVOLVED IS WHETHER LEVY OF PENALTY U/S. 271(1) ( C) IS VALID IN LAW KEEPING IN VIEW THE DECISION OF THE JURISDIC TIONAL HIGH COURT IN THE CASE OF MANJUNATHA COTTON &GINNING FACTORY (SUP RA). THE CONTENTION OF THE ASSESSEE IS THAT SINCE THE ASSESS ING OFFICER HAD NOT TICKED OFF THE RELEVANT COLUMN IN THE SHOW CAUSE NO TICE, IT GOES TO PROVE THAT THE ASSESSING OFFICER HAD NOT REACHED SA TISFACTION BEFORE INITIATING PROCEEDINGS U/S.271(1) ( C). THE CONTEN TION OF THE LEARNED COUNSEL FOR ASSESSEE THAT THE RELEVANT COLUMN HAS N OT BEEN TICKED, CANNOT BE ACCEPTED AS IT IS FOUND FROM MATERIAL PLA CED BEFORE US THAT FOR BOTH THE YEARS, THE COLUMN RELEVANT TO CONCEALM ENT OF PARTICULARS OF INCOME HAS BEEN TICKED BY THE ASSESSING OFFICER. IN ANY EVENT, IT IS FOUND THAT THE ASSESSEE HAD OFFERED AN EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOME ONLY. THE ASSESSEE, AT NO STAGE OF PENALTY PROCEEDINGS AND AT NO STAGE HAD COMPLAINED OF VIOLA TION OF THE PRINCIPLES OF NATURAL JUSTICE. THUS, NO PREJUDICE I S CAUSED ON ACCOUNT OF ANY OMISSION OR COMMISSION IN THE SHOW CAUSE ISS UED. THE PROVISIONS OF SECTION 292B CLEARLY LAY DOWN THAT :- RETURN OF INCOME, ETC, NOT TO BE INVALID ON CERT AIN GROUNDS: 292B:- NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUM MONS OR OTHER PROCEEDING FURNISHED OR MADE OR ISSUED OR TAK EN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT S HALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON O F ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOM E, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OT HER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. THE HONBLE JURISDICTIONAL HIGH COURT HAD NEITHER C ONSIDERED NOR BROUGHT TO THE NOTICE OF THE HONBLE HIGH COURT, PR OVISIONS OF SECTION 292B OF THE ACT. EVEN ASSUMING THAT THERE IS A DEFE CT IN THE SHOW CAUSE NOTICE ISSUED, AS CANVASSED BY THE LEARNED CO UNSEL FOR ASSESSEE THAT WILL VITIATE THE ENTIRE PENALTY PROC EEDINGS, THE JUDGMENT WAS RENDERED BY THE HONBLE HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) WITHOUT CONSIDERING THE PROVISIONS OF SECTION 292B. SUBSEQUENTLY, THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SRI DURGA ENTER PRISES (2014) 44 TAXMANN.COM 442 (KAR) WHILE DEALING WITH THE VALIDI TY OF NOTICE U/S.148 OF THE ACT AS VALID AND RESPONDED TO IT IN LETTER AND SPIRIT AND PARTICIPATED IN THE PROCEEDINGS AND IN LIGHT OF THE PROVISIONS OF ITA NOS.754 TO 756/2015 :- 9 -: SECTION 292B, NOTICE ISSUED U/S.148 WAS HELD TO BE VALID. THE RELEVANT PARAGRAPH OF JUDGMENT IS EXTRACTED BELOW:- 9. IN THE PRESENT CASE, AS OBSERVED EARLIER, THE AS SESSEE NOT ONLY RESPONDED TO THE NOTICE UNDER SECTION 148 OF THE ACT WITHIN ONE MONTH, BUT ON THE BASIS OF THE RETURN FI LED EARLIER, PARTICIPATED IN THE PROCEEDINGS TILL THE MATTER REA CHED THE FAA AND WAS DISPOSED OF. A GLANCE AT SECTION 292B OF THE ACT, SHOWS THAT UNDER THIS PROVISION, CERTAIN ACTS ARE N OT TO BE TREATED AS INVALID, MAY BE BY REASON OF ANY MISTAKE , DEFECT OR OMISSIONS, EITHER IN RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDINGS. IN OTHER WORDS, A NOT ICE CANNOT BE INVALIDATED BY REASON OF ANY MISTAKE, SUC H AS THE ONE OCCURRED IN THE PRESENT CASE, NAMELY, THE PERIO D OF FILING RETURN OF INCOME WAS NOT SPECIFIED AS CONTEMPLATED BY SECTION 148 OF THE ACT. IF SUCH A DEFECT IS NOT ALLOWED TO BE CURED, OR TREATED AS INVALID SO AS TO DECLARE THE NOTICE INVA LID, DESPITE THE FACT THAT ASSESSEE HAD TAKEN THAT NOTICE AS VAL ID AND RESPONDED TO IT IN LETTER AND SPIRIT AND PARTICIPAT ED IN THE PROCEEDINGS, THE VERY PURPOSE/OBJECTIVE OF THE PROV ISIONS CONTAINED IN SECTION 292B OF THE ACT WOULD STAND FRUSTRATED/DEFEATED. THE INTENT OF THE LEGISLATURE IS CLEAR FROM THE LANGUAGE EMPLOYED IN THIS PROVISION WHICH STATE S THAT A DEFECTIVE NOTICE, SUCH AS THE ONE IN THE PRESENT CA SE, CANNOT BE DECLARED INVALID BY REASON OF ANY MISTAKE, DEFEC T OR OMISSION, IF THE NOTICE IN `SUBSTANCE' AND IN `EFFE CT' IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT OF PURPO SE OF THIS ACT. THE INTENT OR PURPOSE OF ISSUING THE NOTICE IS TO CALL UPON THE ASSESSEE TO FILE RETURN, IF THE ASSESSING OFFIC ER FINDS THAT INCOME HAS ESCAPED THE ASSESSMENT. THIS BEING THE I NTENT AND PURPOSE OF THE PROVISIONS CONTAINED IN SECTION 148 OF THE ACT, IN OUR OPINION, IT STANDS SATISFIED IF THE NOTICE I S RESPONDED WITHIN REASONABLE TIME, WHICH IN THE PRESENT CASE W AS 30 DAYS, IRRESPECTIVE OF THE FACT WHETHER THE PERIOD WAS SPE CIFIED OR NOT IN THE NOTICE FOR FILING RETURN OF INCOME. IN THE P RESENT CASE, IF THE ASSESSEE HAD NOT RESPONDED TO THIS NOTICE AT AL L AND HAD RAISED SUCH GROUND OF CHALLENGE, PERHAPS, HE WOULD NOT SUCCEED. BUT HAVING RESPONDED AND PARTICIPATED IN T HE PROCEEDINGS, HE CANNOT BE ALLOWED TO TURN AROUND AN D RAISE OBJECTION FOR THE FIRST TIME BEFORE THE TRIBUNAL SE EKING INVALIDATION OF THE PROCEEDINGS INITIATED BY ISSUIN G NOTICE UNDER SECTION 148 OF THE ACT. IN THE CIRCUMSTANCE, WE ALLOW THIS APPEAL ANSWERING BOTH THE SUBSTANTIAL QUESTION S OF LAW IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. IN VIEW OF THE ITA NOS.754 TO 756/2015 :- 10 -: PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THERE SHALL BE NO ORDER AS TO COSTS. THUS, HAVING REGARD TO THE RATIO LAID DOWN BY THE H ONBLE JURISDICTIONAL HIGH COURT IN THE SUBSEQUENT DECISIO N IN THE CASE OF SRI DURGA ENTERPRISE (SUPRA) WE HOLD THAT SHOW CAUSE NO TICE ISSUED U/S.274 R.W.S 271(1) ( C) CANNOT BE HELD TO BE INVA LID. FURTHER, THE HON'BLE SUPREME COURT IN THE CASE OF KANTAMANI VENKATA NARAYANA AND SONS VS. FIRST ADDITIONAL INC OME TAX OFFICER, RAJAMUNDHRY, (1967) 63 ITR 638 HAD HELD THAT MERE M ISTAKE IN THE SHOW CAUSE NOTICE DOES NOT RENDER THE SHOW CAUSE V OID NULL AND VOID. FURTHERMORE, MERE DISMISSAL OF THE SLP DOES NOT MEA N LAYING DOWN LAW BY THE HON'BLE SUPREME COURT AND THEREFORE THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF KANTAMANI VE NKATA NARAYANA AND SONS (SUPRA) PREVAILS OVER THE DECISION OF HON BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA). THUS, IN THE LIGHT OF THE LEGAL POSITIONS ENUMERATE D ABOVE, THE ADDITIONAL GROUNDS OF APPEAL FILED BY THE ASSESSEE ARE DISMISSED. 9. COMING TO THE MERITS OF LEVY OF PENALTY, ADMITTEDL Y, UNDISCLOSED INCOME WAS RETURNED IN RESPONSE TO NOTI CE ISSUED U/S.153C OF THE ACT AND ADDITIONS IN RESPECT OF CAP ITAL GAINS MADE IN THE ASSESSMENT PROCEEDINGS FOR INVESTMENT MADE IN L AND AT PALLANGI VILAGE AND VYSARPADI BUILDING. THE IMMUNITY CONTEM PLATED UNDER UNEXPLAINED INVESTMENT IS APPLICABLE ONLY IN THE CA SE WHEN IF THE ITA NOS.754 TO 756/2015 :- 11 -: AMOUNT FOUND DURING THE SEARCH IS SURRENDERED AND TAX WITH INTEREST IS PAID AND THE ASSESSEE HAD DISCLOSED THE MANNER I N WHICH HE HAD DERIVED UNDISCLOSED INCOME. IN THE PRESENT CASE, ADMITTEDLY, ASSESSEE HAD ONLY PAID TAXES PARTLY AND ALL THE ASS ESSED INCOME WAS ALSO NOT DISCLOSED IN THE RETURN OF INCOME. THEREF ORE, IT CAN BE SAID THAT ASSESSEE HAD FAILED TO FULFILL THE REQUIREMEN T OF THE EXPLANATION (5) TO SECTION 271 (1)(C) OF THE ACT AND LEVY OF P ENALTY IS VALID AS HELD BY HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CA SES OF SURENDER PAUL VS. CIT, (2006) 287 ITR 223 AND ASHOK KUMAR G UPTA VS. CIT, 287 ITR 376. IN THE RESULT, THE APPEAL OF THE ASSES SEE IN ITA NO.754/CHNY/2015, FOR ASSESSMENT YEAR 2000-2001 IS DISMISSED. ITA NO.755/CHNY/2015, FOR ASSESSMENT YEAR 2001-201 2 8 . SINCE, THE FACTS IN THE PRESENT APPEAL IS IDENTIC AL TO THE FACTS IN ITA NO.754/CHNY/2015, FOR ASSESSMENT YEAR 2000-2 001 FOR THE REASONS MENTIONED THEREIN, WE DISMISS THE APPEAL ON THE ABOVE LINES INDICATED IN APPEAL ITA NO.754/CHNY/2015 SUPRA. HEN CE, THE ABOVE CAPTIONED APPEAL FILED BY THE ASSESSEE IS DISMISSED . 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.755/CHNY/2015, FOR ASSESSMENT YEAR 2001-2002 STA NDS DISMISSED. ITA NOS.754 TO 756/2015 :- 12 -: 11. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA NO.756/CHNY/2015, FOR ASSESSMENT YEAR 2007-2008 FOR ADJUDICATION. 12. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1.THE ORDER THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. IN THE RETURN ORIGINALLY FILED UNDER SECTION 139 (4) OF THE ACT THE APPELLANT ADMITTED A CAPITAL GAINS OF 54,43 ,464. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT FURNISHED A DETAILS BEFORE THE ASSESSING OFFICER EX PLAINING THAT THE CORRECT CAPITAL GAINS WERE ONLY 35,72,678. THIS WAS ACCEPTED BY THE ASSESSING OFFICER AFTER DUE SCRUTIN Y OF THE EVIDENCE FILED BY THE ASSESSEE. THE ASSESSMENT WAS LATER REOPENED TO INCLUDE CERTAI N OTHER CAPITAL GAINS AMOUNTING TO RS.829680 AND ALSO A BUS INESS INCOME OF RS.686001 WHICH THE APPELLANT INCLUDED IN THE ORIGINAL RETURN BUT WHICH WAS OMITTED TO BE ASSESSE D BY THE THEN ASSESSING OFFICER. IN THE PRESENT ASSESSMENT T HE LEARNED ASSESSING OFFICER HAD REVOKED THE DECISION TAKEN BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT AS SESSING THE CAPITAL GAINS AT RS.35,72,678/-. IN THE REASSES SMENT THE LEARNED ASSESSING OFFICER HAD ASSESSED THE CAPITAL GAINS IN RESPECT OF THESE ASSETS AT RS.54,43,464/- AS ORIGIN ALLY RETURNED BY THE APPELLANT IGNORING THE FACT THAT TH IS PART OF ASSESSMENT HAD BECOME FINAL IN THE ORIGINAL ASSESSM ENT AFTER DUE SCRUTINY OF THE EVIDENCE PRODUCED BY THE APPELLANT IN THE ORIGINAL ASSESSMENT. THE REASON ADDUCED BY THE ASSESSING OFFICER IS THAT THE APPELLANT FILED ONLY A REVISED STATEMENT IN THE COU RSE OF ORIGINAL ASSESSMENT PROCEEDINGS AND NO REVISED RETU RN WAS FILED IS NOT AN ISSUE IN THE RE ASSESSMENT PROCEEDI NGS. 3.THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ASSESSMENT MADE BY THE ASSESSING OFFICER ASSESSING THE CAPITAL GAINS AT RS.54,43,464/- AS AG AINST THE CORRECT CAPITAL GAINS OF RS.44,02,358/-. ITA NOS.754 TO 756/2015 :- 13 -: 4.THE LEARNED ASSESSING OFFICER HAD CONCEDED IN THE ASSESSMENT ORDER THAT THE CORRECT CAPITAL GAINS IS ONLY RS.44,02,358/- BUT ASSESSED THE CAPITAL GAINS OF RS.54,43,464/- ON THE GROUND THAT THIS WAS RETURNED IN THE ORIGINAL RETURN, IGNORING THE FACT THAT THE ASSESSM ENT OF CAPITAL GAINS TO THE EXTENT OF 35,72,678 HAD BECOME FINAL IN THE ORIGINAL ASSESSMENT AND FILING ONLY A DETAILED STATEMENT AND NOT A REVISED RETURN HAPPENED IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS AND THESE ARE NOT RELEVANT I SSUES BEFORE THE ASSESSING OFFICER IN THE RE ASSESSMENT PROCEEDINGS. 5. FOR THE ABOVE AND SUCH OTHER GROUNDS HAS MAY BE ADDUCED WITH THE PERMISSION OF THE APPELLATE TRIBUN AL, IT IS PRAYED THAT THE APPEAL MAY BE ALLOWED. 13. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE BUSIN ESS OF DEALING IN LAND. THE ORIGINAL RETURN OF INCOME FO R THE AY 2007-08 WAS FILED ON 29.03.2008 DISCLOSING TOTAL INCOME OF RS. 74,45,470/- INCLUDING CAPITAL GAINS. AGAINST THE SAID RETURN OF INCOME , THE ASSESSMENT WAS COMPLETED BY THE ASSISTANT COMMISSIONER OF INCOME T AX, CENTRAL CIRCLE- I(5) (I/C) CHENNAI VIDE ORDER DATED 30.12.2 011 PASSED U/S. 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AT TOTAL INCOME UNDER NORMAL PROVISIONS OF K14,84,916/ - AND CAPITAL GAINS OF K35,72,678/-. SUBSEQUENTLY, THE ASSESSING OFFIC ER NOTICED FROM THE STATEMENT FILED BY THE ASSESSEE DURING THE COURSE O F ORIGINAL ASSESSMENT PROCEEDINGS THAT ASSESSEE HAS REVISED ST ATEMENT SHOWING CAPITAL GAIN AT K44,02,358/-. BASED ON THIS, HE FO RMED AN OPINION THAT ITA NOS.754 TO 756/2015 :- 14 -: THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSME NT AND ISSUED NOTICE U/S.148 OF THE ACT ON 30.03.2011. IN RESPON SE TO NOTICE, NO RETURN OF INCOME WAS FILED BY THE ASSESSEE . HOWEV ER, REVISED RETURN OF INCOME WAS FILED ON 14.12.2011, WHEREIN PROFITS AND GAINS FROM BUSINESS AND PROFESSION OF K6,86,001/- WAS SHOWN. HOWEVER, THE ASSESSING OFFICER HAD NOT TAKEN COGNIZANCE OF RETU RN OF INCOME WHICH WAS FILED BELATEDLY AND PROCEEDED WITH ASSESSMENT BY ASSESSING THE CAPITAL GAINS AT K54,43,464/- AS DISCLOSED IN THE O RIGINAL RETURN OF INCOME VIDE ORDER DATED 30.12.2011 PASSED U/S.143(3 ) R.W.S 147 OF THE ACT. 14. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DISMISSED THE APP EAL PLACING RELIANCE ON THE JUDGMENT OF HON'BLE SUPREME COURT I N THE CASE OF CIT VS. SUN ENGINEERING WORKS (P) LTD, 64 TAXMAN 442 . 15. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), TH E APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. IT IS CONTENDED THAT THERE WAS NO REASON TO BELIEVE THAT INCOME ESCAPED ASSESS MENT AND THEREFORE INITIATION OF REASSESSMENT PROCEEDINGS A RE NOT VALID IN LAW. WITHOUT PREJUDICE TO THE ABOVE, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER OUGHT TO HAVE TAKEN COGNIZANCE OF REVISED STATEMENT OF CAPITAL GAINS NOTWITHSTANDI NG THE FACT THAT ITA NOS.754 TO 756/2015 :- 15 -: REVISED RETURN OF INCOME WAS FILED BEYOND THE DUE D ATE STIPULATED UNDER THE ACT. 16. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 17. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE REVISED STATEMENT OF CAPITAL GAINS FILE D BY THE ASSESSEE DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDIN GS SHOWN THE CAPITAL GAINS AT K44,02,358/- ENABLED THE ASSESSING OFFICER TO FORM AN OPINION THAT INCOME ESCAPED ASSESSMENT. HENCE, WE UPHOLD THE VALIDITY OF REASSESSMENT PROCEEDINGS . 18. NOW COMING TO THE ISSUE ON THE MERITS OF THE ADDITI ON, THE ASSESSING OFFICER OUGHT TO HAVE COMPUTED CAPITAL GA INS IN ACCORDANCE WITH LAW NOTWITHSTANDING THE FACT THAT THERE IS N O VALID REVISED RETURN IN RESPONSE TO NOTICE ISSUED U/S.148 OF THE ACT. TH ERE IS NO BAR TO COMPUTE THE INCOME IN ACCORDANCE WITH LAW EVEN IN T HE ABSENCE OF VALID RETURN OF INCOME. THEREFORE WE REMAND THIS M ATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR DENOVO ASSESSMENT OF CAPITAL GAINS IN ACCORDANCE WITH LAW. ITA NOS.754 TO 756/2015 :- 16 -: 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.756/CHNY/2015 FOR ASSESSMENT YEAR 2007-2008 IS P ARTLY ALLOWED FOR STATISTICAL PURPOSE. 20. TO SUMMARIZE THE RESULT, THE APPEALS OF THE ASSESS EE IN ITA NOS.754 & 755/CHNY/2015 FOR ASSESSMENT YEARS 2000-2 001 AND 2001- 2002 STAND DISMISSED WHEREAS ITA NO.756/CHNY/2015 F OR ASSESSMENT YEAR 2007-2008 IS PARTLY ALLOWED FOR STATISTICAL PU RPOSE. ORDER PRONOUNCED ON 20TH DAY OF AUGUST, 2019, AT CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER - ) / CHENNAI . / DATED: 20TH AUGUST, 2019 KV $ &*01 21!* / COPY TO: 1 . '# / APPELLANT 3. ( 3* () / CIT(A) 5. 16 &*7 / DR 2. &' '# / RESPONDENT 4. ( 3* / CIT 6. 8 9) / GF