NADEEM ABDUL SATTAR LAKDWALA, MUMBAI V. DCIT CEN CIR 36, MUMBAI

ITA 773/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1486 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 20-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Search and seizure; Reasonable cause
• Section: 143(3); 153A; 6; 132

Judgement Text

J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.773/ MUM/2014 ( / ASSESSMENT YEAR : 2008-09) MR. NADEEM ABDUL SATTAR LAKDAWALA, B-201, LEO APARTMENT, 24 TH ROAD, KOHINOOR CHS, KHAR (W), MUMBAI 400 052. / V. ASSTT. COMMISSIONER OF INCOME TAX- CENTRAL CIRCLE 36, AAYAKAR BHAWAN, MUMBAI. ./ PAN : AAAPL4893N ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI SACHHIDANAND DUBEY / DATE OF HEARING : 09-11-2016 / DATE OF PRONOUNCEMENT : 21-12-2016 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 773/MUM/2014, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 30 TH OCTOBER, 2013 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 41, M UMBAI (HEREINAFTER CALLED THE CIT(A)), FOR THE ASSESSMENT YEAR 2008- 09, THE APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) ARISING FROM THE PENALTY ORDER DATED 22 ND JUNE, 2011 PASSED BY THE LEARNED ASSESSING OFFICER ( HEREINAFTER CALLED THE AO ) U/S 271(1)(C) OF THE INCOME-TAX ACT,1961 (HEREINAFTER CALLED THE ACT). ITA 773/MUM/2014 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT (A) -, MUMBAI, ERRED IN UPHOLDING THE PENALTY U NDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 OF RS. 8,50,918 /-, BY A) NOT CONSIDERING THE FACT THAT THE APPELLANT HAD ALREAD Y GOT HIS PERSONAL ACCOUNTS AUDITED WITHIN THE DUE DATE OF FILING THE RETURN AND THAT NON FILING IN TIME WAS DUE TO CIRCUMSTANCES BEYOND HIS CONTROL, B) HOLDING THAT SINCE THE INCOME TAX RETURN IS FILED A FTER THE SEARCH, THE APPELLANT HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS OF INCOME WHICH WILL RANK FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(L)(C) OF THE INCOME TAX ACT, 1961 ; C) NOT CONSIDERING THE FACT THAT THE RETURNED AND ASSESSED INCOME OF RS. 34,58,918/- DOES NOT CONSTITUTE ANY CONCEALED I NCOME AS NO DOCUMENTS PERTAINING TO HIS INDIVIDUAL INCOME WERE FOU ND. D) NOT CONSIDERING THE FACT THAT THE APPELLANT HAD ALWAYS FILED HIS INCOME TAX RETURN AND HAD NO REASON NOT TO FILE HIS RET URN FOR THIS YEAR. HENCE, THE PENALTY LEVIED OF RS. 2,63,237/- MAY PLEA SE BE CANCELLED. 3. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ASSESSMENT ORDER OF THE A.O. IN LEVYING OF THE PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. 8,50,918/- VIDE HIS ORDER DATED 22 ND JUNE, 2011, WHICH WAS CONFIRMED BY THE APPELLATE ORDER OF THE LEARNED CIT(A) VIDE ORDERS D ATED 30.10.2013. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD NOT FIL ED HIS ORIGINAL RETURN OF INCOME U/S. 139(1) OF THE ACT. A SEARCH AND SEIZURE OPERATION IN THE CASE OF THE ASSESSEE WAS CONDUCTED UNDER SECTION 132 OF THE ACT IN HICONS & PRANAY GROUP OF CASES INCLUDING THE ASSESSEE ON 24 TH FEBRUARY, 2009. NOTICE UNDER SECTION 143(2) OF THE ACT DATED 5 TH OCTOBER, 2009 WAS ISSUED AND SERVED UPON THE ASSESSEE , AND THE ASSESSEE SUBSEQUENTLY F ILED HIS RETURN OF INCOME ON 20 TH OCTOBER, 2010 DECLARING A TOTAL INCOME OF RS.34,58 ,710/- AND THE SAID ITA 773/MUM/2014 3 RETURN OF INCOME WAS ACCEPTED BY THE A.O. VIDE HIS ASSESSMENT ORDER DATED 30 TH DECEMBER, 2010 PASSED U/S 143(3) R.W.S. 153A OF TH E ACT. AS THE ASSESSEE HAD FILED RETURN OF INCOME ONLY AFTER SEAR CH ACTION U/S 132 OF THE ACT , PENALTY PROCEEDINGS WERE INITIATED AGAINST TH E ASSESSEE U/S. 271(1)(C) OF THE ACT. DURING THE COURSE OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE BY THE AO , WHEREBY THE ASSESSEE SUBMITTED AS UNDER:- DURING THE COURSE OF PENALTY PROCEEDINGS, A SHOW C AUSE NOTICE DATED 12.05.2011 WAS ISSUED AND DULY SERVED ON THE ASSESS EE. IN RESPONSE, TO THE SAID NOTICES, THE ASSESSEE'S REPRESENTATIVE VIDE LETTER DTD.20-05- 2011 SUBMITTED 'OUR CLIENT HAD NOT PREVIOUSLY FILED HIS RETURN FOR AY 2008-09 AS THE ACCOUNTS OF CERTAIN FIRMS WHEREIN HE WAS A PARTNER WERE NOT READY AND HENCE HIS INDIVIDUAL RETURN WAS PE NDING. FURTHER, DURING THE COURSE OF SEARCH OPERATION THERE WERE NO DOCUMENTS PERTAINING TO HIS INDIVIDUAL INCOME FOUND OR SEIZED D UE TO WHICH HIS INCOME WAS ENHANCED. IN ADDITION IT WOULD BE PERTINENT TO STATE THAT THE AUDITED ACCOUNTS OF HIS PROPRIETORSHIP BUSINESS W ERE AUDITED PRIOR TO THE DUE DATE AND NO ADDITIONS THERETO WERE MADE. HENC E, NO PART OF THE INCOME RETURNED BY HIM OR ASSESSED IS A CULMINAT ION OF THE SEARCH PROCEEDINGS TO WARRANT LEVY OF PENALTY U/S.271(1)(C). HENCE THE PENAL PROCEEDING INITIATED U/S. 271(L)(C) MAY BE DROPPED. ' 4. THE ASSESSEES ABOVE CONTENTION WAS CONSIDERED B UT WAS NOT FOUND ACCEPTABLE TO THE A.O. WHO REJECTED THE SAME VIDE P ENALTY ORDER DATED 22-06- 2011 PASSED U/S 271(1)(C) OF THE ACT, BY HOLDING AS UNDER:- (A) THE DUE DATE FOR FILING OF RETURN FOR A.Y. 200 8-09 IS 30-09-2008, HOWEVER THE ASSESSEE HAD FILED HIS RETU RN OF INCOME ONLY AFTER SEARCH ACTION ON 20-10-2010 AND THAT TOO IN RESPONSE TO NOTICE U/S.153A OF I.T. ACT. (B) IN THE REPLY, A.R. HAS NOT MENTIONED THE NAMES AND ADDRESSES OF ANY OF THE FIRMS WHOSE AUDIT WAS PENDI NG AND WHEREIN THE ASSESSEE WAS A PARTNER. FURTHER, ASSESS EE HAS NOT FURNISHED ANY REASONABLE CAUSE AS TO WHY THE AUDIT OF ANY OF THESE FIRMS GOT DELAYED. THEREFORE, THE EXPLANATION FURNISHED BY THE AR CANNOT BE RELIED UPON. ITA 773/MUM/2014 4 (C) IN CASE OF DR. MOHD. ABDUL KHADIR (2003)260 ITR 650 (MAD), IT HAS BEEN HELD THAT PENALTY U/S. 271(1)(C) CAN BE LEVIED IF RETURN IS FILED AFTER DETECTION OF CONCEALED INCOME . 4. IN VIEW OF THE ABOVE, I AM SATISFIED THAT THE AS SESSEE'S CASE ON THESE GROUNDS IS FOUND FIT FOR IMPOSITION OF PEN ALTY U/S 271(1)(C) FOR CONCEALING PARTICULARS OF INCOME. THE MINIMUM PENALTY (BEING 100% OF THE TAX SOUGHT T O BE EVADED) IS RS. 8,50,918/- THE MAXIMUM PENALTY (BEIN G 300% ON THE TAX SOUGHT TO BE EVADED) IS RS. 25,52,754/-. 5. THE ASSESSEE IS HEREBY DIRECTED TO PAY A SUM OF RS.8,50,918/- (BEING THE MINIMUM AMOUNT) AS PENALTY U/S 271(1)(C) OF THE IT ACT, 1961. 5. AGGRIEVED BY THE PENALTY ORDER DATED 22-06-2011 PASSED BY THE A.O. U/S 271(1)(C) OF THE ACT, THE ASSESSEE FILED HIS FIRST APPEAL BEFORE THE LD. CIT(A). 6. IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT( A) , THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE WAS ASSESSED TO TAX SIN CE LONG AND FILING HIS RETURN OF INCOME REGULARLY. THE ASSESSEE SUBMITTED THAT DURING THE IMPUGNED ASSESSMENT YEAR , THE ASSESSEES PERSONAL ACCOUNTS WERE AUDITED PRIOR TO THE DUE DATE OF FILING OF RETURN OF INCOME , THE SAID RETURN OF INCOME COULD NOT BE FILED AS THE ACCOUNT OF THE TWO PARTNE RSHIP FIRMS NAMELY NEETA DEVELOPERS AND CHOICE CONSTRUCTION CHEMICALS WHICH WERE UNDER THE CONTROL AND SUPERVISION OF HIS OTHER PARTNERS WERE NOT FINA LIZED WHICH HAS LED TO THE DELAY IN FILING OF RETURN OF INCOME. IT WAS SUBMITT ED THAT IN THE MEANTIME, A SEARCH AND SEIZURE ACTION WAS CARRIED OUT ON THE PR EMISES OF HIS VARIOUS FIRMS ON 24 TH FEBRUARY, 2009. IT WAS SUBMITTED THAT PURSUANT TO THE SEARCH, THE ACCOUNTS OF THE FIRMS WERE FINALIZED AND THE ASSESS EE WAS ABLE TO ASCERTAIN HIS SHARE OF INCOME FROM THE SAID PARTNERSHIP FIRMS , WHEREBY THE RETURN OF INCOME WAS THEREAFTER PREPARED, BUT THE SAME COULD NOT BE FILED AS HE COULD NOT ARRANGE FOR PAYMENT OF TAX DUE ON HIS INCOME WH ICH EXCEEDED RS.10 ITA 773/MUM/2014 5 LAKHS. FINALLY, THE RETURN WAS FILED ON 20 TH OCTOBER, 2010 DISCLOSING FULLY HIS INCOME FROM ALL THE SOURCES WHICH WAS ACCEPTED BY T HE A.O. WITHOUT MAKING ANY FURTHER ADDITION. IT WAS SUBMITTED THAT THE A.O . IMPOSED PENALTY U/S. 271(L)(C) OF THE ACT WITHOUT CONSIDERING THE FACTS WHICH LED TO THE DELAY IN FILING OF HIS RETURN OF INCOME, AND ARRIVED AT TH E CONCLUSION THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME. IT WAS SUBMITT ED THAT THE A.O. HAS WRONGLY RELIED UPON THE JUDGMENT IN THE CASE OF DR. MOHAMED ABDUL KHADIR [2003) 260 ITR 650 (MAD.) . IT WAS SUBMITTED THAT N O INCRIMINATING MATERIAL WAS FOUND WHICH RESULTED IN THE CONCEALMENT OF INCO ME. THE RETURN OF INCOME WAS ACCEPTED IN TOTO BY THE A.O. WITHOUT ANY ADDITI ONS BEING MADE BY THE AO. THE ASSESSEE SUBMITTED THAT THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE TO DELIBERATELY CONCEAL ANY INCOME OR NOT TO FILE THE RETURN OF INCOME. THERE WAS A REASONABLE CAUSE WHICH LED TO NON FILIN G OF THE RETURN WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE. THERE WAS NO IN TENTION TO CONCEAL HIS INCOME AS HE WAS ALWAYS FILING HIS RETURNS OF INCOM E IN TIME AND HE HAD GOT HIS TAX AUDIT CONDUCTED BEFORE THE DUE DATE OF FILI NG THE RETURN. THE ASSESSEE CONTENDED THAT THERE WAS NO INTENTION NOT TO FILE H IS TAX RETURN. THE ASSEESSEE HAS PLACED RELIANCE ON THE RECENT DECISIO N OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ITO V. GOPE M. ROCHLANI IN ITA NO.7737/MUM/ 2011 WHEREIN IT WAS HELD THAT THE WORDS 'DUE DATE' OCCURRING IN CLAUSE (B) OF EXPLANATION 5A TO SECTION 27L(1)(C) OF THE ACT ARE NOT TO BE READ AS 'DUE DATE PROVIDED IN SECTION 139(1)' BUT CAN VERY WELL BE IN FERRED TO MEAN THE DATE OF FILING THE RETURN OF INCOME U/S 139(4) OF THE ACT. THE ASSESSEE SUBMITTED THAT THE RETURN OF INCOME WAS FILED ON 20 TH OCTOBER, 2010, WHICH WAS WITHIN THE TIME PRESCRIBED U/S 139(4) OF THE ACT AND HENCE THE ASSESSEE WOULD GET THE BENEFIT UNDER CLAUSE (B) OF EXPLANATION 5A TO SECTI ON 271(1)(C) OF THE ACT. THE LD. CIT(A), HOWEVER, REJECTED THE CONTENTIONS OF TH E ASSESSEE AND HELD THAT MENS REA IS NO LONGER AN ESSENTIAL INGREDIENT FOR T HE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AS HELD BY THE HON'BLE APEX CO URT IN THE CASE OF UNION OF INDIA & ORS. V. DHARAMENDRA TEXTILE PROCESSORS & OR S., REPORTED IN 306 ITR ITA 773/MUM/2014 6 277 (SC). SECTION 271(L)(C) OF THE ACT INDICATES TH E ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR THE CONCEALMENT OR FOR GIVING INAC CURATE PARTICULARS OF INCOME WHILE FILING THE RETURN OF INCOME, THERE WAS NO NECESSITY OF PROVING MENS REA, AS PENALTY U/S 271(1)(C) OF THE ACT IS A CIVIL LIABILITY. FURTHER THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE CANNOT B E VOLUNTARY IN THE CASES OF THE FIRMS BUT CONSEQUENT TO THE SEARCH AND SEIZU RE OPERATION WHEREBY INCRIMINATING DOCUMENTS REGARDING UNACCOUNTED TRANS ACTIONS IN WHICH ASSESSEE IS ALSO A PARTNER WAS SEIZED. THE ASSESSE E HAS NOT FURNISHED ANY EVIDENCE BEFORE THE LD. CIT(A). NO EVIDENCE WAS BR OUGHT ON RECORD THAT PERSONAL ACCOUNT OF THE ASSESSEE CLAIMED TO HAVE BE EN DULY AUDITED BY 30 TH SEPTEMBER, 2008. THE LD. CIT(A) THUS IN NUTSHELL C ONCLUDED THAT THE PENALTY LEVIED BY THE A.O. U/S 271(1)(C) OF THE ACT AMOUNTI NG TO RS. 8,50,918/- IS QUITE JUSTIFIED IN VIEW OF THE FACT THAT THE ASSESS EES CASE IS FULLY COVERED BY EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT AND ACCORDINGLY THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE A.O. U/S 271(1) (C) OF THE ACT, VIDE APPELLATE ORDERS DATED 30.10.2013 PASSED BY LEARNED CIT(A). 7. AGGRIEVED BY THE APPELLATE ORDER DATED 30.10.201 3 PASSED BY THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. NONE APPEARED ON BEHALF OF THE ASSESSEE, HENCE, WE PROCEED TO DISPOSE OF THE APPEAL AFTER HEARING THE LD. D.R. AND MATERI AL AVAILABLE ON RECORD. 9. THE LD. D.R. SUBMITTED THAT NO RETURN OF INCOME WAS FILED BY THE ASSESSEE U/S 139(1) OF THE ACT. THE DUE DATE OF FI LING OF RETURN U/S 139(1) OF THE ACT WAS 30 TH SEPTEMBER, 2008. SEARCH AND SEIZURE OPERATION WAS CARRIED OUT U/S 132 OF THE ACT INCLUDING THE ASSESSEE ON 24 TH FEBRUARY, 2009 AND NOTICE WAS ISSUED U/S 143(2) OF THE ACT DATED 5 TH OCTOBER, 2009. PENALTY HAS BEEN RIGHTLY IMPOSED BY THE A.O. U/S 271(1)(C) OF T HE ACT. THE LD. D.R. SUBMITTED THAT DURING THE COURSE OF SEARCH, VARIOUS INCRIMINATING MATERIAL ITA 773/MUM/2014 7 WAS FOUND AND SEIZED. THERE WAS NO VOLUNTARY DISCL OSURES MADE BY THE ASSESSEE U/S 132(4) OF THE ACT. THE LD DR RELIED UP ON THE ORDERS OF LEARNED CIT(A). 10. WE HAVE HEARD THE LD. D.R. AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE IS RUNN ING PROPRIETARY CONCERNS M/S. RELIABLE SAND AND TIMBER TRADER AND RELIABLE C ARRIERS AND ALSO PARTNER IN DIFFERENT PARTNERSHIP FIRMS NAMELY M/S CHOICE CO NSTRUCTION CHEMICALS, M/S HICONS SYNDICATE, M/S NEETA DEVELOPERS, M/S M.K . SHELTER AND M/S SKYLINE BUILDERS. APART FROM THIS, THE ASSESEE ALS O DERIVED HOUSE PROPERTY INCOME, INCOME FROM OTHER SOURCES AND CAPITAL GAINS . IT IS THE CONTENTION OF THE ASSESSEE BEFORE AUTHORITIES BELOW THAT ACCOUNTS OF TWO OF THE PARTNERSHIP FIRMS NAMELY NEETA DEVELOPERS AND CHOICE CONSTRUCT ION CHEMICALS WERE NOT READY AND HENCE THE PROFIT COULD NOT BE DETERMINED AS THE ACCOUNTS OF THE FIRM WAS NOT FINALIZED. HENCE, THE ASSESSEE COULD NOT FILE THE RETURN OF INCOME IN TIME AS THE SHARE OF THE ASSESSEE FROM THE SAID FIRM COULD NOT BE DETERMINED . THE ASSESSEE SUBMITTED BEFORE AUTHORI TIES BELOW THAT THERE WAS SEVERE FINANCIAL CRUNCH DUE TO WHICH TAXES COULD NO T BE PAID IN TIME AND WHICH HAS LED TO THE NON-FILING OF RETURN IN TIME. THE ASSESSEE HAD BELATEDLY PAID THE TAXES ALONG WITH THE INTEREST, HOWEVER, EV IDENCE COULD NOT BE BROUGHT BEFORE THE LD. CIT(A) FOR PROVING FINANCIAL DIFFICU LTIES IN PAYMENT OF TAXES . THE AUTHORITIES BELOW HAVE INVOKED EXPLANATION 5A TO SE CTION 271(1)(C) OF THE ACT WHICH READS AS UNDER:- [EXPLANATION 5A. WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSE E IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME FOR ANY PR EVIOUS YEAR; OR ITA 773/MUM/2014 8 (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACT IONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEA R, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER C LAUSE (C) OF SUB- SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONC EALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME.] WE HAVE GONE THROUGH THE VARIOUS HEADS OF INCOME DE CLARED BY THE ASSESSEE WHICH MAINLY CONSISTS OF BUSINESS INCOME AND LONG T ERM CAPITAL GAIN ON SALE OF FLAT. NOW THE QUESTION ARISES WHETHER THE SAME CAN BE CATEGORIZED AS INCOME WHICH COULD HAVE BEEN DISCLOSED TO REVENUE O R NOT , HAD THE SEARCH NOT TAKEN PLACE . THE REVENUE HAS TAKEN A PLEA TH AT IT IS ONLY DUE TO THE SEARCH , THE ASSESSEE CAME FORWARD AND FILED RETURN OF INCOME AND PAID DUE TAXES. THE ASSESSEE HAD SUBMITTED THAT THE ACCOUNTS OF THE FIRMS IN WHICH THE ASSESSEE WAS PARTNER COULD NOT BE FINALIZED. THE C ONTENTION OF THE ASSESSEE IS THAT TAX AMOUNT COULD NOT BE PAID DUE TO NON-AVAILA BILITY OF FUNDS DUE TO FINANCIAL PROBLEMS FACED BY THE ASSESSEE AS THE ASS ESSEE COULD NOT ARRANGE FUNDS FOR PAYMENT OF TAXES IN TIME. THE EVIDENCE F OR DELAY IN FINALIZING OF TAX- AUDIT OF THESE TWO CONCERNS NAMELY NEETA DEVELOPERS AND CHOICE CONSTRUCTION CHEMICALS IN WHICH THE ASSESSEE WAS PA RTNER AND WHICH WAS HANDLED BY OTHER PARTNER COULD NOT BE BROUGHT ON RE CORD. IN OUR CONSIDERED VIEW AND IN THE INTEREST OF JUSTICE, WE ARE INCLINE D TO SET ASIDE AND RESTORE THIS MATTER TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJ UDICATION OF PENALTY U/S 271(1)(C) OF THE ACT DE NOVO ON MERITS AFTER VERIFI CATION WHETHER THE ITA 773/MUM/2014 9 CONTENTIONS/EXPLANATION OF THE ASSESSEE ARE BONAFID E OR NOT AND WHETHER THE SAME CONSTITUTE REASONABLE CAUSE FOR SAID FAILURE W ITHIN MANDATE OF SECTION 273 OF THE ACT, AS SECTION 271(1)(C) OF THE ACT IS SUBJECT TO SECTION 273 OF THE ACT . THE ASSESSEE IS DIRECTED TO APPEAR BEFORE TH E LD. CIT(A) AND SUBMIT ALL THE EVIDENCES TO SUBSTANTIATE HIS CLAIM AND TO EST ABLISH THAT THE CAUSE FOR FAILURE TO FILE RETURN OF INCOME AND PAY TAXES TO R EVENUE ARE BONAFIDE AND CONSTITUTE REASONABLE CAUSE WITH IN PARAMETERS OF S ECTION 271(1)(C) OF THE ACT READ WITH SECTION 273 OF THE ACT. WE ORDER ACCORDIN GLY. 11. IN THE RESULT, APPEAL FILED BY THE ASSESSEE I N ITA NO. 773/MUM/2014 FOR ASSESSMENT YEAR 2008-09 IS ALLOWED FOR STATISTI CAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2016. # $% &' 21-12-2016 ( ) SD/- SD/- (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 21-12-2016 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI H BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI