SHRI HARIOM R. CHOUDHARY, Nagpur V. ACIT-CENTRAL-CIRCLE-1(2), Nagpur

ITA 79/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1582 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 14-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: HIMESH DEMBLE
• Section: 153A; 132

Judgement Text

1 ITA NOS.79,80 & 81/NAG/2014. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NOS.79, 80 & 81/NAG/2014 ASSESSMENT YEARS : 2002 - 03, 2003 - 4&2004 - 05. SHRI HARIOM R. CHOUDHARY, ASSTT. COMMISSIONER OF NAGPUR. VS. INCOME - TAX, CENTRAL CIR. - 1(2), PAN ABNPC2484J NAGPUR. APPELLANT. RESPONDENT. APPELLANT BY : SHRI HIMESH DEMBLE. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 13 - 11 - 2015. DATE OF PRONOUNCEMENT : 17 TH NOV., 2015. O R D E R THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST LEVY OF PENALTY U/S 271(1)(C) OF THE I.T. ACT BY THE LEARNED CIT(APPEALS) FOR ASSESSMENT YEARS 2002 - 03, 2003 - 04 AND 2004 - 05 RESPECTIVELY. 2. IN THIS CASE FOLLOWING PENALTIES U/S 271(1)(C) HAVE BEEN CONFIRMED BY THE LEARNED CIT(APPEALS) : ASSTT. YEAR 2002 - 03 : RS.76,500/ - ASSTT. YEAR 2003 - 04 : RS. 22,050/ - ASSTT. YEAR 2004 - 05 : RS.2,15,699/ - 3. IN THIS CASE ASSESSMENT WAS FRAMED U/S 153A OF THE I.T. ACT PURSUANT TO S EARCH U/S 132 OF THE I.T. ACT. THE ASSESSEE HAS ALREADY FILED ORIGINAL RETURNS FOR ALL THE ABOVE YEARS. HOWEVER, NOTICE WAS ISSUED U/S 153A PURSUANT TO THE SEARCH OPERATION. THE EARLIER RETURNS WERE ALREADY P ROCESSED BY THE REVENUE BEFORE THE DATE OF SEAR CH, HENCE THIS IS NOT A CASE OF ABATED ASSESSMENT. THE 2 ITA NOS.79,80 & 81/NAG/2014. ASSESSEE HAS ALSO RAISED A PLEA BEFORE THE LEARNED CIT(APPEALS) THAT IN VIEW OF ASSESSMENT U/S 153A IS BAD IN LAW, HOWEVER, THE SAID GROUND WAS DISMISSED BY THE LEARNED CIT(APPEALS) IN THE QUANTUM PR OCEEDINGS ON THE GROUND THAT NO SUBMISSION WAS MADE BY THE ASSESSEE ON THAT GROUND. AS REGARDS THE MERITS OF THE CASE THE ADDITION WAS MADE BY NOTING THAT THERE WAS DEPOSIT OF AMOUNT IN THE ASSESSEES BANK ACCOUNT FROM CERTAIN PERSONS IN THESE YEARS AS FOLLOWS: ASSTT. YEAR 2002 - 03 RS.2,50,000/ - FROM GANESH BUILDES. ASSTT. YEAR 2003 - 04 RS.70,000/ - FROM NAVAL AGRAWAL. ASSTT. YEAR 2004 - 05 RS.4,12,500/ - FROM VASUDEO MA LU . ADDITION W AS MADE DUE TO LACK OF CONFIRMATION. 4. ANOTHER ISSUE FOR LEVY OF PENALTY IN ASSESSMENT YEAR 2004 - 05 WAS ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN OF RS.2,31,442/ - . THIS ADDITION HAS ALSO RESULTED FROM EXAMINATION OF THE BANK STATEMENT. FROM THAT IT W AS DISCOVERED THAT THE ASSESSEE HAS DONE TRANSACTION IN LAND AND THE SHORT TERM CAPITAL GAIN RESULTING THEREFROM WAS NOT OFFERED FOR TAXATION. AS REGARDS THE QUANTUM OF ADDITION ON ACCOUNT OF AMOUNT RECEIVED FROM VARIOUS PERSONS THE ASSESSEE HAS NOT PRES SED FOR THIS GROUND. HENCE LEARNED CIT(APPEALS) HAS DISMISSED THE ASSESSEES APPEALS AGAINST THOSE ADDITIONS WHILE ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN WAS CONFIRMED BY THE LEARNED CIT(APPEALS). 5. AGAINST THE ABOVE ORDER OF LEARNED CIT(APPEALS) CONFIRMING A LEVY OF PENALTY, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT FIRSTLY IN THIS CASE THE ASSESSMENT U/S 153A WAS BAD IN LAW. AS THE ADDITIONS HAVE BEEN MADE WITHOUT ANY REFERENCE TO MATERIALS FOUND IN SEARCH AND ASSESSMENT FOR THOSE YEARS WERE NON ABATED ASSESSMENTS AS THE ASSESSEES RETURNS HAD EARLIER ALREADY BEEN FILED AND PROCESSED. HENCE LEARNED COUNSEL SUBMITTED THAT ON THE ANVIL OF ITAT S PECIAL BENCH DECISION IN 3 ITA NOS.79,80 & 81/NAG/2014. THE CASE OF ALL CARGO GLOBAL LOGISTICS WHICH HAS ALREADY BEEN APPROVED BY HONBLE HIGH COURT, THE ADDITION ON THESE ACCOUNT IS NOT SUSTAINABLE. FURTHER LEARNED COUNSEL SUBMITTED THAT THE AMOUNT OF LOANS/CREDITS WERE RECEIVED BY CHEQUES, THE ASSESSEE COULD NOT COMPLY WITH THE REQUEST OF CONFIRMATION FROM THE REVENUE AUTHORITIES BECAUSE SEVEN YEARS HAD ELAPSED FROM THE DATE OF TRANSACTION AND THE ASSESSEES RELATIONSHIP WITH THE PARTIES WAS NOT CORDIAL. 7. PER CONTRA LEARNED D.R. RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 8. I FIND CONSIDERABLE COGENCY IN THE ASSESSEES SUBMISSION AS ABOVE. ADMITTEDLY THESE ADDITIONS HAVE BEEN MADE DEHORSE ANY MATERIAL IS FOUND IN SEARCH. ASSESSMENT YEARS INVOLVED ARE NON ABATED ASSESSMENT YE ARS. HENCE ADMITTEDLY ADDITIONS IN THIS CASE ARE NOT IN ACCORDANCE WITH THE LAW LAID DOWN IN THE CASE OF ALL CARGO GLOBAL LOGISTIC AS ABOVE. THE SAID GROUND WAS DULY RAISED BEFORE THE LEARNED CIT(APPEALS). BUT HE HAS NOT ADJUDICATED THE SAME ON THE GROUND THAT THE ASSESSEE HAS NOT MADE ANY SUBMISSION BEFORE HIM. FURTHER MORE I FIND THAT AS REGARDS THE LOANS TAKEN, THE SAME WERE ADDED ONLY ON THE BASIS THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVIDE CONFIRMATION THEREOF. NO ENQUIRY HAS BEEN MADE BY THE REV ENUE AUTHORITIES. ASSESSEES SUBMISSION WAS THAT THESE AMOUNTS WERE RECEIVED BY CHEQUES AND AFTER SEVEN YEARS OF THE TRANSACTION IT WAS DIFFICULT FOR THE ASSESSEE TO OBTAIN CONFIRMATIONS THEREOF. 9. NOW I EXAMINE THE ABOVE SAID FACTUAL BACKGROUND IN THE LIGHT OF SECTION 271(1)(C) OF THE I.T. ACT. SECTION 271(1)(C) MANDATES LEVY OF PENALTY FOR CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS. IN MY CONSIDERED OPINION, THE ASSESSEE CANNOT BE CONSIDE RED TO HAVE COMMITTED ANY DEFAULT WARRANTING THE INVITATION OF RIGOURS OF PENALTY U/S 271(1)(C) OF THE I.T. ACT. IN THIS REGARD I ALSO PLACE RELIANCE UPON THE DECISION OF HONBLE APEX COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA 83 ITR 2 6 FOR THE PROPOSITION THAT PENALTY CANNOT BE LEVIED UNLESS THE ASSESSEES CONDUCT HAS BEEN FOUND TO BE CONTUMACIOUS. FURTHER MORE IT WAS EXPOUNDED THAT FOR TECHNICAL AND VENIAL 4 ITA NOS.79,80 & 81/NAG/2014. BREACH THE PENALTY MAY BE WAIVED. IN MY CONSIDERED OPINION, THE ABOVE EXPOSIT ION DULY APPLIES ON THE FACTS OF THIS CASE. ACCORDINGLY IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT, I SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. 10. IN THE RESULT, THESE APPEALS FILED BY THE ASSESSEE STAND ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF NOV., 2015. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 17 TH NOV., 2015. COPY FORWARDED TO : 1. SHRI HARIOM R. CHOUDHARY, PLOT NO. 2, GHATATE LAYOUT CIVIL LINES, NAGPUR. , 2. A .C.I.T., CENTRAL CIRCLE - 1(2), NAGPUR. 3. C.I.T. (APPEALS) - I II, NAGPUR. 4. C.I.T. NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR