Shri Maruti Landge, JAMNAGAR V. The Income Tax Officer, Ward 2 (2), JAMNAGAR

ITA 78/RJT/2008

• Counselvise Citation: 7824914 RSA 2008
• Duration Of Justice: 4 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-03-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 31-01-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: KALPESH DOSHI
• Keywords: Wrong claim; Revised return

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT . .. . . . . . , , , , . .. . . . . . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K . SRIVASTAVA, AM IT(SS)A NO. 78/RJT/2008 / ASSESSMENT YEAR 2004-05 SHRI MARUTI LANDGE V. ITO, WARD 2(2) 14, PRAPTI APPARTMENT JAMNAGAR 7 PATEL COLONY, JAMNAGAR. PAN: ABXPL2016P . DATE OF HEARING : 23-03-2012. DATE OF PRONOUNCEMENT : 04-05-2012. ASSESSEE BY: S HRI KALPESH DOSHI, CA REVENUE BY: SHRI M. K. SINGH, D.R / / / / ORDER . .. . . . . . / D. K. SRIVASTAVA: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 02-11-2007 BY WHICH HE HAS CONFIRMED PENALTY AMOUNTING TO RS.40,040/- IMPOSED BY THE ASSESSING OFFICER U/S.271(1)(C) OF THE INCOME-TAX ACT. 2. RETURN OF INCOME WAS FILED ORIGINALLY ON 08-10-2 004 RETURNING TOTAL INCOME AT RS.79,579/-. AFTER PROCESSING, THE RETURN WAS TAKEN UP FOR SCRUTINY AS A RESULT OF WHICH NOTICE U/S.143(3) WAS SERVED ON THE ASSESSEE ON 30-03-2005 AND NOTICE U/S.142(1) WAS SERVED UPON HIM ON 10-01-2206. DURIN G THE COURSE OF SCRUTINY, IT WAS EXPLAINED BEFORE THE A.O. THAT THE ASSESSEE WAS A CIVIL ENGINEER AND HAD RENDERED PROFESSIONAL/TECHNICAL SERVICES TO M/S. RE LIANCE ENGG. ASSOCIATES PVT. LTD. FOR WHICH HE HAD RECEIVED RETAINERSHIP FEES OF 2,36,419/-. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUC TION FOR A SUM OF RS.1,56,840/- TOWARDS EXPENDES IN HIS PROFIT AND LOSS ACCOUNT. ON THE BASIS OF INQUIRIES MADE BY HIM, THE ASSESSING OFFICER FOUND THAT M/S. RELIANCE ENGG. ASSOCIAATES PVT. LTD. HAD ALSO INCURRED EXPENDITURE OF RS.15,344/- FOR THE FA CILITIES PROVIDED BY THE SAID COMPANY TO THE ASSESSEE. THE ASSESSEE WAS CONFRONTE D WITH THE AFORESAID INFORMATION AND CALLED UPON TO EXPLAIN AS TO WHY TH E EXPENDITURE CLAIMED BY HIM IN THE PROFIT AND LOSS ACCOUNT SHOULD NOT BE DISALLOWE D. THE ASSESSEE DID NOT RESPOND TO THE AFORESAID SHOW CAUSE NOTICE ISSUED BY THE AO ON 23-01-2006. THE ASSESSEE HOWEVER FILED A REVISED RETURN ON 28-02-2006 RETURN ING TOTAL INCOME AT RS.2,37,250/- AND ALSO PAID TAX THEREON. RESULTANTLY, THE ASSESSI NG OFFICER ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.2,36,419/- AS AGAINST THE INCOME OF RS.79,579/- ORIGINALLY RETURNED BY THE ASSESSEE. IT IS WITH REF ERENCE TO THE AFORESAID ADDITION THAT THE AO INITIATED THE PROCEEDINGS FOR LEVY OF PENALT Y U/S.271(1)(C) OF THE INCOME-TAX ACT. IT(SS)A 78/20 08 2 3. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE ASSESSING OFFICER HAS IMPOSED THE PENALTY, WHICH, ON APPEAL, HAS BEEN CON FIRMED BY THE CIT(A) WITH THE FOLLOWING OBSERVATIONS:- 3.1 THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT IN THE CASE OF APPELLANT AT AN INCOME OF RS.2,36,41 9/- AS AGAINST THE RETURNED INCOME OF RS,79,5,79/-. THE APPELLANT HAD DECLARED RECEIPTS FROM PROFESSION/TECHNICAL SERVICE AND FILED FORM NO.16A OF THE ACT AND AGAINST THE SAID RECEIPTS CLAIMED EXPENSES OF RS.1,56,840/- IN HIS RETURN OF INCOME AS DEDUCTION AGAINST HIS PROFESSIONAL RECEIPTS. THE ASSESSING OFFICER HELD THAT NATURE OF JOB/PROFESSIONAL SERVICES RENDERED B Y THE APPELLANT DID NOT REQUIRE ANY EXTRA EXPENSES AND THAT THE EXPENSES CL AIMED ARE BOGUS AND ADDED THE SAME TO THE TOTAL INCOME OF THE APPELLANT AND INITIATED PENALTY PROCEEDINGS. DURING THE COURSE OF PENALTY PROCEEDIN GS, THE APPELLANT STATED THAT THERE WAS NO MALAFIDE INTENTION NOT TO FILE TH E PROPER RETURN AND THAT HE REVISED HIS RETURN OF INCOME FOLLOWING THE RECEIPT OF THE SCRUTINY NOTICE AND PAID TAX THEREON. HOWEVER, THE ASSESSING OFFICER RE JECTED THE EXPLANATION OF THE APPELLANT AND HELD THAT REVISION OF RETURN ON T HE PART OF THE ASSESSEE ITSELF SUGGESTS THAT THE ASSESSEE HAD KNOWINGLY CLAIMED EX PENSES WHICH WERE NEVER INCURRED AND THE RETURN WAS REVISED JUST TO A VOID THE PENALTY. THE A.R. OF THE APPELLANT DURING THE COURSE OF APPELLATE PRO CEEDINGS HAS MADE REFERENCE TO THE UNDERSIGNEDS ORDER DATED 30.07.20 07 IN THE CASE OF SHRI MANOJKUMAR SINGH. IT IS STATED THAT THE FACTS IN TH E SAID CASE ARE SIMILAR AND THE PENALTY LEVIED IN THE CASE OF SHRI MANOJKUMAR S INGH HAS BEEN DELETED. I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPELLAN T AND FIND THAT HE REVISED HIS RETURN OF INCOME ON 28.02.2006 WHEREIN HE DECLA RED TOTAL INCOME AT RS.2,37,250/- AND PAID TAX OF RS.29,519/- ON THE SA ID INCOME. IT IS ALSO SEEN THAT THE APPELLANT RECEIVED SHOW CAUSE NOTICE ON 23 .1.2006 AND ASSESSMENT ORDER U/S.143(3) OF THE ACT IS PASSED ON 27.02.2007 . THE APPELLANT HAS, THEREFORE, FILED REVISED RETURN OF INCOME DURING TH E COURSE OF ASSESSMENT PROCEEDINGS AND ONLY AFTER THE SHOW CAUSE NOTICE DA TED 23.01.2006 WAS RECEIVED BY HIM. AS THE APPELLANT FILED THE REVISED RETURN OF INCOME AFTER RECEIPT OF SHOW CAUSE NOTICE, IT IS APPARENT THAT T HE RETURN IS REVISED AFTER THE DETECTION OF WRONG CLAIM OF EXPENSES BY THE APPELLA NT AGAINST THE RECEIPTS, I.E. THE INCOME OF THE YEAR. THEREFORE, THE APPELLA NTS MENS-REA IN SO FAR AS FILING OF INACCURATE PARTICULARS OF INCOME AND CONC EALMENT OF INCOME IS CONCERNED, THE SAME IS ESTABLISHED BY THE FACT THAT THE APPELLANT HAS REVISED HIS RETURN OF INCOME ONLY AFTER THE RECEIPT OF THE SHOW CAUSE NOTICE FOR THE DISALLOWANCE OF THE CLAIM OF EXPENSES MADE IN THE R ETURN. I, THEREFORE, DO NOT FIND ANY JUSTIFICATION IN THE ARGUMENT OF THE APPEL LANT THAT THE RETURN WAS REVISED BEFORE THE COMPLETION OF THE ASSESSMENT. TH E ASSESSING OFFICER DETECTED THE CONCEALMENT DURING THE COURSE OF ASSES SMENT PROCEEDINGS AND ISSUED SHOW CAUSE NOTICE FOR DISALLOWANCE OF EXPENS ES AND ADDING THE SAME IT(SS)A 78/20 08 3 TO THE INCOME, IN RESPONSE TO WHICH THE APPELLANT R EVISED HIS RETURN OF INCOME. I, THEREFORE, HOLD THAT THE APPELLANT HAS C ONSCIOUSLY AND DELIBERATELY CONCEALED THE INCOME AND FILED INACCURATE PARTICULA RS OF INCOME DURING THE YEARS. THE PENALTY IMPOSED IS EXIGIBLE IN THIS CASE AND I UPHOLD THE PENALTY LEVIED BY THE ASSESSING OFFICER. IN SO FAR AS THE F ACTS IN THE CASE OF SHRI MANOJKUMAR SINGH ARE CONCERNED, THE SAME ARE DIFFER ENT. IN THE SAID CASE, I HAVE GIVEN FINDING THAT THE ASSESSING OFFICER HAS N OT ESTABLISHED AS TO HOW THE CLAIM OF CERTAIN EXPENSES FROM THE GROSS RECEIP TS WAS MADE WITH A PURPOSE TO CONCEAL THE INCOME WHEN FORM NO.16A WAS BEFORE HIM. IN THIS CASE THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE , CONSEQUENT TO WHICH ONLY THE ASSESSEE HAS REVISED HI RETURN OF INCOME, THEREFORE, ESTABLISHMENT OF CONCEAL INCOME WAS MADE BY THE ASSESSING OFFICE BY ISSUING SHOW CAUSE NOTICE AND THE FACT THAT THE REVISED RETURN OF INCO ME IS SAME AS THE INCOME ASSESSED, THE CONCEALMENT OF INCOME OF THE ASSESSEE IS ESTABLISHED. I, THEREFORE, UPHOLD THE PENALTY ORDER. THE PENALTY LE VIED OF RS.40,010/- IS CONFIRMED. 4. AGGRIEVED BY THE ORDER PASSED BY THE CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. IN SUPPORT OF APPEAL, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD ALWAYS ACT ED BONA-FIDE, WHICH WAS EVIDENT FROM THE FACT THAT THE ASSESSEE, ON REALIZI NG HIS MISTAKE, FILED A REVISED RETURN ON 28-02-2006 RETURNING TOTAL INCOME AT RS.2 ,37,250/- AND ALSO PAID TAX THEREON. IT WAS CONTENDED THAT THE LEVY OF PENALTY WAS DISCRETIONARY AND THEREFORE IT WAS NOT TO BE LEVIED IN EACH AND EVERY CASE ONLY BE CAUSE THE ASSESSEE HAS COMMITTED A MISTAKE. IN SUPPORT OF HIS SUBMISSIONS, HE HAS RELIED UPON THE DECISIONS IN M/S. FRIENDS LAND DEVELOPMENT CO., ITA NO.1208/RJT/2020; AND CIT V. SIDHARTH ENTERPRISES, 322 ITR 80 (P&H). 5. IN REPLY, THE LD. DEPARTMENTAL AUTHORITY SUPPORT ED THE ORDER PASSED BY THE CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES. THE ASSESSING OF FICER HAS GIVEN AMPLE REASONS TO ESTABLISH AS TO HOW THE CLAIM OF DEDUCTI ON FOR EXPENSES AS MADE BY THE ASSESSEE BEFORE HIM WAS FALSE. HE HAS ALSO GIVEN DE TAILED REASONS TO ESTABLISH THAT THE RETURN OF INCOME WAS REVISED BY THE ASSESSEE ON LY AFTER THE AO HAD MADE INQUIRIES TO ESTABLISH THE BOGUS NATURE OF EXPENSES CLAIMED BY THE ASSESSEE. THE CLAIM OF THE ASSESSEE FOR EXPENDITURE WAS NOT ONLY FALSE BUT WAS ALSO NOT SUBSTANTIATED BY HIM. HIS ACTION IN REVISING THE RE TURN OF INCOME WAS ALSO NOT BONA- FIDE FOR THE REASON THAT IT WAS DONE BY HIM ONLY AF TER THE A.O. HAD ISSUED A SHOW- CAUSE NOTICE AND THEREUPON THE ASSESSEE WAS LEFT WI TH NO OPTION EXCEPT TO ADMIT THE BOGUS NATURE OF EXPENDITURE CLAIMED BY HIM BY F ILING A REVISED RETURN. THE LD. CIT(A) HAS CORRECTLY APPRECIATED THE ENTIRE MATERIA L ON RECORD WHILE CONFIRMING THE IT(SS)A 78/20 08 4 PENALTY LEVIED BY THE AO. WE ARE IN COMPLETE AGREEM ENT WITH THE ORDER PASSED BY THE CIT(A) AND ALSO THE REASONING GIVEN BY HIM IN T HIS BEHALF. 7. THE DECISIONS RELIED UPON BY THE ASSESSEE ARE OF HO HELP TO HIM. IT IS NOT A CASE OF BONA-FIDE MISTAKE COMMITTED BY THE ASSESSEE BUT A CASE WHERE HE HAS MADE BOGUS CLAIM OF EXPENDITURE. ON BEING CONFRONTE D BY THE A.O. WITH THE MATERIALS COLLECTED BY HIM, HE WAS LEFT WITH NO ALT ERNATIVE EXCEPT TO REVISE THE RETURN OF INCOME. THE REVISION OF RETURN WAS THUS NOT MOTI VATED BY ANY BONA-FIDE CONSIDERATION. THE CASE OF THE ASSESSEE IS WELL-COV ERED BY EXPLANATION (1) TO SECTION 271(1)(C). 8. IN VIEW OF THE FOREGOING, THE APPEAL FILED BY TH E ASSESSEE IS DISMISSED. ) + 04-05-2012 . ) THIS ORDER PRONOUNCED IN OPEN COURT ON 04-05-2012 SD/- SD/- ( .. / T. K. SHARMA) ( .. / D. K. SRIVASTAVA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER +/ DATE 04-05-2012. /RAJKOT ) )) ) 12 12 12 12 32 32 32 32 / COPY OF ORDER FORWARDED TO:- 1. 6 / APPELLANT-.SHRI MARUTI LANDGE, JAMNAGAR. 2. 186 / RESPONDENT-. THE I.T.O., WARD 2(2), JAMNAGAR. 3. ; / CONCERNED CIT, JAMNAGAR 4. ;- / CIT (A), JAMNAGAR. 5. 2 1, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , ASTT. REGISTRAR/ , / ITAT, RAJKOT