Jagdish Manilal Patel, Surat V. Deputy Commissioner of Income Tax, Central Circle-4, , Surat

ITA 80/SRT/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4612 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 07-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Keywords: Business income; Income from undisclosed sources; Deemed to accrue or arise in india
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NO.80/SRT/2018 (AY 2013-14) (H EARING IN VIRTUAL COURT) SHRI JAGDISH MANILAL PATEL, D-5, SOMNATH SOCIETY, NR. SOMNATH MAHADEV TEMPLE, PARLE POINT, SURAT -395007. ALSO AT C-5, SOMNATH MAHADEV SOCIETY, NEAR RARGAM SHOPPING COMLEX, UMARA, SURAT, 395007. E-MAIL [e-mail] PH. 9824122144 PAN : ABBPP 1131 H VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, SURAT. APPLICANT RESPONDENT ASSESSEE BY SHRI VARTIK CHOKSI AR REVENUE BY MS. ANUPAMA SINGLA SR.DR DATE OF HEARING 24.05.2021 DATE OF PRONOUNCEMENT 24.05.2021 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, SURAT DATED 05.12.2017 FOR THE ASSESSMENT YEAR (AY) 2013-14. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN DISMISSING THE APPEAL WITHOUT ADJUDICATION THE GROUNDS ON MERITS THEREBY CONVENIENTLY IGNORING ALL THE FACTS AND EVIDENCES THAT WERE FORMING PART OF THE RECORDS BEFORE HIM. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED BY CONFIRMING THE PENALTY OF RS. 49,52,145/- LEVIED UNDER SECTION 271AAB OF THE INCOME TAX ACT. THE PENALTY LEVIED UNDER SECTION 271AAB OF THE ACT DESERVES TO BE DELETED. 2.2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN APPRECIATING THAT THE LEVY OF PENALTY IN THE ABSENCE OF DIRECTION TO LEVY PENALTY FOR THE INCOME OFFERED UNDER SECTION 45(3) OF THE ACT IN BAD IN LAW AND DESERVES TO BE DELETED. ITA NO.80/SRT/2018 SHRI JAGDISH MANILAL PATEL (AY 2013-14) 2 2.3 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN APPRECIATING THAT THE DEEMED CAPITAL GAIN OF RS.4,50,00,000/- OFFERED TO TAX UNDER SECTION 45(3) OF THE ACT IS NOT UNACCOUNTED INCOME UNEARTHED DURING THE COURSE OF SEARCH PROCEEDING AND HENCE LEVY OF PENALTY UNDER SECTION 271AAB OF THE ACT IS BAD IN LAW AND SHOULD GET DELETED. 2.4 ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN APPRECIATING THE FACT THAT THERE CANNOT BE QUESTION OF LEVY OF PENALTY FOR DEEMED INCOME. THERE CANNOT BE FICTION UPON FICTION. HENCE PENALTY LEVIED FOR THE DEEMED GAIN DESERVES TO BE DELETED. 3. THE APPELLANT FURTHER CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ALL OR ANY OF THE GROUNDS OF APPEAL HEREIN AND TO SUBMIT SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE APPEAL HEARING. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH ACTION WAS CARRIED OUT ON THE ASSESSEE GROUP 27.12.2012. DURING THE SEARCH THE ASSESSEE ACCEPTED UNACCOUNTED INCOME OF RS. 4.50 CRORE AND LONG TERM CAPITAL GAIN OF RS. 45,21,450/-. THE ASSESSEE FILED RETURN OF INCOME FOR THIS ASSESSMENT YEAR ON 30.09.2013 SHOWING TOTAL INCOME OF RS.4,75,13,000/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 19.01.2015. THE ASSESSING OFFICER(AO) WHILE PASSING THE ASSESSMENT ORDER INITIATED PENALTY UNDER SECTION 271AAB OF THE ACT BY TAKING VIEW THAT DURING THE SEARCH ACTION ASSESSEE ACCEPTED UNACCOUNTED INCOME OF RS.4.50 CRORE IN RESPECT OF LTCG OF RS.45,21,450/-. THE ASSESSEE DECLARED / ACCEPTED THE INCOME OVER AND ABOVE, THE REGULAR BUSINESS INCOME. THE AO WHILE PASSING THE ASSESSMENT ORDER, INITIATED PENALTY UNDER SECTION 271AAB OF THE ACT AND LEVIED THE PENALTY OF RS.49,52,145/- BEING 10 % OF THE INCOME OFFERED DURING THE SEARCH ACTION. ON APPEAL BEFORE THE LD.CIT(A), THE ACTION OF AO WAS UPHELD. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 3. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD. SENIOR DEPARTMENTAL REPRESENTATIVE (SR.DR) FOR THE ITA NO.80/SRT/2018 SHRI JAGDISH MANILAL PATEL (AY 2013-14) 3 REVENUE. THE LD.AR OF THE ASSESSEE SUBMITS THAT BEFORE THE LD.CIT(A), THE ASSESSEE FILED A STATEMENT OF FACT EXPLAINING THE ENTIRE FACT OF THE CASE. THE LD.CIT(A) HAS NOT APPRECIATED THOSE FACTS NOR REFERRED THE STATEMENT OF FACT FILED BEFORE HIM IN THE ORDER. THE LD. AR FOR THE ASSESSEE SUBMITS THAT HE HAS GOOD CASE ON MERIT AND IS LIKELY TO SUBMIT AND AS HIS CASE IS COVERED BY VARIOUS DECISIONS REFERRED IN THE STATEMENT OF FACTS FILED BEFORE THE LD.CIT(A). THE LD. CIT(A) PASSED THE ORDER EX-PARTY AND WITHOUT SERVING NOTICE ON THE ASSESSEE. 4. AT THE TIME OF HEARING, WE FIND THAT LD. CIT(A) IN HIS ORDER RECORDED THAT THE ASSESSEE DID NOT MAKE ANY COMPLIANCE TO VARIOUS SHOW CAUSE NOTICES ISSUED TO THE ASSESSEE AS RECORDED IN PARA 5 OF THE IMPUGNED ORDER. THE LD.AR FOR THE ASSESSEE INSTEAD OF MAKING PROPER EXPLANATION TRIED TO TAKE LAME EXCUSES THAT THE ADDRESS OF THE ASSESSEE WAS CHANGED. WE FURTHER CONFRONTED THE FACTS, IF SUCH CHANGED ADDRESS WAS MENTIONED IN FORM 35 (APPEAL FORM BEFORE CIT(A)) OR NOT. NO SATISFACTORY ANSWER WAS GIVEN BY THE LD.AR FOR THE ASSESSEE, EXCEPT TO PLEAD THAT THE ADDRESS OF THE ASSESSEE WAS CHANGED. FURTHER, WE FIND THAT THE ASSESSEE HAS NOT FILED COPY OF FORM 35 ON RECORD. WE FURTHER FIND THAT ASSESSEE HAS MENTIONED SIMILAR ADDRESS ON GROUNDS OF APPEAL, WHICH IS MENTIONED ON THE ORDER OF LD CIT(A). HOWEVER, ON FORM 36 [APPEAL FORM BEFORE THE TRIBUNAL] THE ASSESSEE WRITTEN A DIFFERENT ADDRESS. DURING THE COURSE OF HIS SUBMISSIONS THE LD.AR OF THE ASSESSEE UNDERTOOK TO FURNISH THE LATEST AND CORRECT ADDRESS OF THE ASSESSEE ALONG WITH EMAIL, TELEPHONE NUMBER OF ASSESSEE FOR FUTURE PURPOSES AND NOT TO MAKE DEFAULT IN ATTENDING THE HEARING BEFORE LOWER ITA NO.80/SRT/2018 SHRI JAGDISH MANILAL PATEL (AY 2013-14) 4 AUTHORITIES. THE LD.AR FOR THE ASSESSEE PRAYED THAT THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO REPRESENT HIS CASE BEFORE THE LD.CIT(A). THE LD.AR FURTHER SUBMITS THAT THE LD.CIT(A) PASSED THE EX-PARTE ORDER WITHOUT DISCUSSING THE MERITS OF THE CASE. THE LD.AR FOR THE ASSESSEE AGAIN RETREATED THAT NO OPPORTUNITY OF HEARING WAS GIVEN TO THE ASSESSEE. THE ASSESSEE HAS GOOD CASE ON MERIT AND IS LIKELY TO SUCCEED IF HE IS GIVEN OPPORTUNITY. 5. ON THE OTHER HAND, THE SR.DR FOR THE REVENUE SUBMITS THAT THE ASSESSEE WAS GIVEN AMPLE OPPORTUNITY AS RECORDED IN PARA 5 OF THE ORDER PASSED BY THE LD.CIT(A). THE ASSESSEE FAILED TO COMPLY WITH THE NOTICES ISSUED BY THE LD.CIT(A). THE LD.CIT(A) LEFT WITH NO OPTION, EXCEPT TO PROCEED TO DECIDE THE ISSUE AND IN ABSENCE OF ANY EVIDENCE OR EXPLANATION AFFIRM THE ACTION OF AO. IN ALTERNATIVE SUBMISSION, THE LD.SR.DR FOR THE REVENUE SUBMITS THAT IN CASE THE HONBLE TRIBUNAL IS DEEM APPROPRIATE, THE ASSESSEE BE DIRECTED TO BE VIGILANT AND NOT TO DEFAULT IN ATTENDING THE PROCEEDINGS AND TO WASTE THE TIME OF PUBLIC AUTHORITIES/LD.CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES. WE HAVE NOTED THAT ASSESSEE DID NOT MAKE ANY COMPLIANCE TO VARIOUS SHOW CAUSE NOTICES ISSUED BY THE LD.CIT(A) AS RECORDED IN PARA 5 OF THE IMPUGNED ORDER. THE LD.CIT(A) CONFIRMED THE ACTION OF AO BY TAKING VIEW THAT THERE IS NON-COMPLIANCE ON THE PART OF THE ASSESSEE. BEFORE, US THE LD. AR FOR THE ASSESSEE UNDERTOOK TO BE VIGILANT AND TO APPEAL BEFORE THE LD. CIT(A). WE, INSTEAD OF GOING INTO CONTROVERSY, WHETHER THE ASSESSEE DEFAULTED IN ATTENDING THE PROCEEDINGS ITA NO.80/SRT/2018 SHRI JAGDISH MANILAL PATEL (AY 2013-14) 5 BEFORE THE LD.CIT(A). WE FIND THAT THE ORDER OF THE LD.CIT(A) IS NOT IN ACCORDANCE WITH MANDATE OF SECTION 250(6) OF THE INCOME TAX ACT. SECTION 250(6) OF THE ACT MANDATES THAT THE LD. CIT(A) WHILE DECIDING THE APPEAL IS REQUIRED TO PASS ORDER ON POINTS OF DETERMINATION (GROUNDS OF APPEALS), DECISION THEREIN ON AND REASONS FOR SUCH DECISION. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPEAL OF THE ASSESSEE IS RESTORED BACK TO THE FILE OF THE LD.CIT(A) TO DECIDE ALL THE GROUNDS OF APPEAL ON MERIT IN ACCORDANCE WITH LAW. THE ASSESSEE IS DIRECTED TO APPEAR BEFORE THE LD.CIT(A) AS AND WHEN THE DATE OF HEARING AND TO PROVIDE ALL NECESSARY EVIDENCE AND INFORMATION WITHOUT ANY FURTHER DELAY AND NOT TO SEEK THE ADJOURNMENT WITHOUT ANY VALID REASONS. ACCORDINGLY THE GROUNDS OF APPEAL BY ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER ANNOUNCED ON 24 TH MAY 2021 AT THE TIME OF HEARING IN VIRTUAL COURT HEARING. SD/- SD/- (DR ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 24/05/2021 / SGR COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GUARD FILE BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, ITAT, SURAT