D.C.I.T Cir - 5,kolkata, Kolkata V. M/s J.P Nirman Pvt Ltd, Kolkata

ITA 883/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9386 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 06-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 19-04-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT KU KUREEL JCIT SRDR
• Keywords: Income from undisclosed sources
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM & DR. A.L.SAINI, AM ./ ITA NO.883/KOL/2013 ( / ASSESSMENT YEAR:2008-09) DCIT, CIR-5/KOL, P-7, CHOWRINGHEE SQUARE, KOLKATA-69 VS. M/S J.P.NIRMAN PVT. LTD., 19, R.N.MUKHERJEE ROAD, KOLKATA-700001 ./ ./PAN/GIR NO.: AABCJ 7666 H ( /APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI RAJAT KU. KUREEL, JCIT, SR-DR ASSESSEE BY : NONE / DATE OF HEARING : 21/12/2016 /DATE OF PRONOUNCEMENT 22/02/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAINI NG TO THE ASSESSMENT YEAR 2008-09, IS DIRECTED AGAINST THE OR DER PASSED BY LD. CIT(A)-VI, KOLKATA IN APPEAL NO.32/CIT(A)-VI/CIR-5/ 11-12/KOL, DATED 22.11.2012, WHICH IN TURN ARISES OUT OF AN ORDER PA SSED BY THE ASSESSING OFFICER (AO) UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961, (HEREINAFTER REFERRED TO AS THE ACT), DATED 27.05 .2011. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE A SURVEY U/S 133A OF THE I.T. ACT WAS CONDUCTED AT THE OFFICE PREMISE S OF THE ASSESSEE ON 14.01.2008 AND IT WAS FOUND THAT THE ASSESSEE HAD C ERTAIN TRANSACTIONS WHICH WERE OUT OF BOOKS. DURING THE COURSE OF ASSES SMENT IT WAS FOUND THAT THE ASSESSEE HAD DISCLOSED THE UNEXPLAINED INC OME/RECEIPTS AS OTHER INCOME IN THE PROFIT & LOSS ACCOUNT. THE CASH RECEI VED WAS ACTUALLY ON MONEY RECEIVED BY THE ASSESSEE FOR SALE OF FLATS TH E ASSESSEE DID NOT DISCLOSED THE UNACCOUNTED INCOME IN THE MANNER IN W HICH IT HAS BEEN ITA NO.883/13 M/S J.P.NIRMAN PVT. LTD. 2 EARNED. ACCORDINGLY PENALTY U/S 271(1)(C) WAS IMPOS ED BY THE ASSESSING OFFICER. 3.AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE FILE D AN APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE ORDER PASSED BY T HE AO OBSERVING THE FOLLOWINGS :- 12. THE ABOVE FACTS AND CIRCUMSTANCES WHERE THE APP ELLANT HAS DISCLOSED THE INCOME DURING SURVEY AND FILE THE RET URN ACCORDINGLY. THE INCOME HAS BEEN ACCEPTED WITHOUT VARIATION BY T HE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAS PHARMACEUTICALS (S UPRA) IN THE SIMILAR CIRCUMSTANCES HAS CANCELLED THE PENALTY BY HOLDING THAT THERE IS NO CONCEALMENT OR NON-DISCLOSURE AS THE AS SESSEE HAD MADE A COMPLETE DISCLOSURE IN THE INCOME TAX RETURN AND OFFERED THE SURRENDERED AMOUNT FOR THE PURPOSES OF TAX. IT IS NOT THE CASE OF FURNISHING INACCURATE PARTICULAR OF INCOME, AS IN T HE INCOME TAX RETURN, PARTICULARS OF INCOME HAVE BEEN DULY FURNIS HED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLECTED IN THE INCOME TAX RETURN. THE QUESTION IS WHETHER THE PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSEE OR NOT. NO DOUBT, THE DIS CREPANCIES WERE FOUND DURING THE SURVEY AND THIS HAD YIELDED I NCOME FROM THE ASSESSEE IN THE FORM OF AMOUNT SURRENDERED BY THE A SSESSEE. 13. AT PRESENT IN THE PENALTY PROCEEDINGS, THE MOOT QUESTION IS TO WHETHER THIS WOULD ATTRACT PENALTY UPON THE ASSE SSEE UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. IT UPHE LD IN THE FACTS AND NO PENALTY CAN BE IMPOSED UNLESS THE CONDITIONS STI PULATED IN THE SAID PROVISIONS ARE DULY AND UNAMBIGUOUSLY SATISFIE D. THEREFORE, IN THE FACTS AND CIRCUMSTANCES AND RELYING UPON THE JU DGMENTS OF THE VARIOUS APPELLATE AUTHORITIES AS DISCUSSED SUPRA AN D HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SAS PHARMACEUTICA LS, THE PENALTY OF RS.17,46,261/- IS DELETED. THE GROUND OF APPEAL NO.2,3&4 ARE ACCORDINGLY ALLOWED. 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- 1. THAT THE LD. CIT(A) HAS ERRED IN DELETING THE P ENALTY OF RS.17,46,261/- IMPOSED U/S 271(1)(C) STATING THAT N O PENALTY CAN BE IMPOSED UNLESS THE CONDITIONS STIPULATED IN THE PROVISIONS U/S 271(1)(C) ARE DULY AND UNAMBIGUOUSLY SATISFIED. 2. THAT THE LD. CIT(A) HAS ERRED IN RELYING UPON J UDGMENTS OF THE VARIOUS APPELLATE AUTHORITIES. IT IS IMPORTANT TO S TATE THAT THE INCOME OF RS.56,51,330/- WAS NOT FOUND TO BE REFLEC TED IN THE ITA NO.883/13 M/S J.P.NIRMAN PVT. LTD. 3 BOOKS OF ASSESSEE DURING THE COURSE OF SURVEY. THE TRANSACTIONS NOT RECORDED ON THE DAY OF SURVEY CANN OT BE CONSTRUED THAT THE PARTICULARS OF INCOME WAS DULY F URNISHED. 3. THAT THE APPELLANT CRABS LEAVE TO ADD, ALTER OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING OF THE APPEAL. 5. LD. DR FOR THE REVENUE HAS ALSO PRIMARILY RELIED ON THE FINDINGS OF THE AO WHICH WE HAVE ALREADY NOTED IN OUR EARLIE R PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. HOWEVER, FR OM THE ORDER OF THE LD CIT(A) WE NOTED THAT THE APPELLANT HAS DISCL OSED THE INCOME DURING SURVEY AND FILE THE RETURN ACCORDINGLY. THE INCOME HAS BEEN ACCEPTED WITHOUT VARIATION BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. WE OBSERVED FROM THE ORDER OF CIT(A) THAT THERE IS NO CONCEALMENT OR NON-DISCLOSURE AS THE AS SESSEE HAD MADE A COMPLETE DISCLOSURE IN THE INCOME TAX RETURN AND OFFERED THE SURRENDERED AMOUNT FOR THE PURPOSES OF TAX. IT IS N OT THE CASE OF FURNISHING INACCURATE PARTICULAR OF INCOME, AS IN T HE INCOME TAX RETURN, PARTICULARS OF INCOME HAVE BEEN DULY FURNIS HED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLECTED IN THE INCOME TAX RETURN. THE QUESTION IS WHETHER THE PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSEE OR NOT. NO DOUBT, THE DIS CREPANCIES WERE FOUND DURING THE SURVEY AND THIS HAD YIELDED INCOME FROM THE ASSESSEE IN THE FORM OF AMOUNT SURRENDERED BY THE A SSESSEE. THE LD CIT(A) WHILE DELETING THE PENALTY U/S 271 (1 ) (C ) OBSERVED THE FOLLOWING: ITA NO.883/13 M/S J.P.NIRMAN PVT. LTD. 4 7. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSESS ING OFFICER IN THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLA NT. THERE WAS A SURVEY OPERATION IN THE BUSINESS PREMISES OF THE APPELLANT AND THE APPELLANT HAD DECLARED AS AN AMOUNT OF RS.42,30 ,000/- AS ADDITIONAL INCOME ON SALE OF FLATS AND FURTHER EXCE SS CASH OF RS.9,17,825/-, THE SAME WAS DISCLOSED IN THE RETURN OF INCOME AND THE RETURNED INCOME OF RS.56,51,325/- WAS ACCEPTED WITHOUT ANY VARIATION BY THE ASSESSING OFFICER IN THE ASSESSMEN T ORDER PASSED U/S.143(3) DATED 29.11.2010. THEREFORE, THERE WAS N O VARIATION IN THE RETURNED INCOME AND ASSESSED INCOME. 8. THE APPELLANT HAS RELIED ON THE CASE OF HON'BLE HIGH COURT OF DELHI AT NEW DELHI IN THE CASE OF CIT VS. SAS PHARM ACEUTICALS IN ITA NO.1058 ON 2009 REPORTED IN 335 ITR 259 (DELHI) AND 244 CTR-51. THE HON'BLE HIGH COURT HAS HELD THAT IT IS NOT THE CASE OF FURNISHING INACCURATE PARTICULAR OF INCOME, AS IN T HE INCOME TAX RETURN, PARTICULARS OF INCOME HAVE BEEN DULY FURNIS HED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLECTED IN THE INCOME TAX RETURN. IT FURTHER HELD THAT THE QUESTION IS WHETHE R THE PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSEE OR NOT. NO DO UBT, THE DISCREPANCIES WERE FOUND DURING THE SURVEY. THIS HA S YIELD INCOME FROM THE ASSESSEE IN THE FORM OF AMOUNT SURRENDERED BY THE ASSESSEE. IT FURTHER HELD THAT IT NOT CONCERNED WIT H THE ASSESSMENT OF INCOME, BUT THE MOOT QUESTION IS TO WHETHER THIS WOULD ATTRACT PENALTY UPON THE ASSESSEE UNDER THE PROVISIONS OF S ECTION 271 (1 )(C) OF THE ACT. IT UPHELD IN THE FACTS THAT NO PEN ALTY CAN BE IMPOSED UNLESS THE CONDITIONS STIPULATED IN THE SAID PROVIS IONS ARE DULY AND UNAMBIGUOUSLY SATISFIED. IT OBSERVED AS UNDER:- 'AFTER CONSIDERING THE RESPECTIVE SUBMISSION OF THE LEARNED COUNSEL FOR THE PARTIES, WE ARE OF THE VIEW THAT TH E ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE HAS TO PREVAIL AS IT CARRIED SUBSTANTIAL WEIGHT. IT IS TO BE KEPT IN MIND THAT S ECTION 271(1)(C) OF THE ACT IS A PENAL PROVISION AND SUCH A PROVISIO N HAS TO BE STRICTLY CONSTRUED. UNLESS THE CASE FALLS WITHIN TH E FOUR-CORNERS OF THE SAID PROVISION, PENALTY CANNOT BE IMPOSED. SUB- SECTION (1) OF SECTION 271 STIPULATES CERTAIN CONTINGENCIES ON THE HAPPENING WHEREOF THE AO OR THE COMMISSIONER (APPEALS) MAY DI RECT PAYMENT OF PENALTY BY THE ASSESSEE. WE ARE CONCERNE D HEREWITH THE FUNDAMENTALITY PROVIDED IN CLAUSE (C) OF SECTIO N 271(1) OF THE ACT, WHICH AUTHORIZES IMPOSITION OF PENALTY WHE N THE AO IS SATISFIED THAT THE ASSESSEE HAS EITHER: (A) CONCEALED THE PARTICULARS OF HIS INCOME: OR (B) FURNISHED INACCURATE PARTICULARS OF SUCH INCOME . IT IS NOT THE CASE OF FURNISHING INACCURATE PARTICU LAR OF INCOME, AS IN THE INCOME TAX RETURN, PARTICULARS OF INCOME HAV E BEEN DULY FURNISHED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLECTED IN THE INCOME TAX RETURN. THE QUESTION IS WHETHER THE ITA NO.883/13 M/S J.P.NIRMAN PVT. LTD. 5 PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSE E OR NOT. IT WOULD DEPEND UPON THE ISSUE AS TO WHETHER THIS CONC EALMENT HAS REFERENCE TO THE INCOME TAX RETURN FILED BY THE ASSESSEE, VIZ., WHETHER CONCEALMENT IS TO BE FOUND IN THE INCOME TA X RETURN. WE MAY, FIRST OF ALL, REJECT THE CONTENTION OF THE LEARNED COUNSEL FOR THE REVENUE RELYING UPON THE EXPRESSION' IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT' OCCURRING IN SUB-SECTIO N (1) OF SECTION 271 OF THE ACT OF THE ACT AND CONTENDING T HAT EVEN DURING SURVEY WHEN IT WAS FOUND THAT THE ASSESSEE H AD CONCEALED THE PARTICULAR OF HAS INCOME, IT WOULD AM OUNT CONCEALMENT IN THE COURSE OF 'ANY PROCEEDINGS '. TH E WORDS 'IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT' ARE P REFACED BY THE SATISFACTION OF THE ACT OR THE COMMISSIONER OF INCO ME TAX (APPEALS). WHEN THE SURVEY IS CONDUCTED BY A SURVEY TEAM, THE QUESTION OF SATISFACTION OF AO OR COMMISSIONER (APP EALS) OR THE COMMISSIONER DOES NOT ARISE. WE HAVE TO KEEP IN MIN D THAT IT IS THE AO WHO INITIATED THE PENALTY PROCEEDINGS AND DI RECTED THE PAYMENT OF PENALTY. HE HAD NOT RECORDED ANY SATISFA CTION DURING THE COURSE OF SURVEY. DECISION TO INITIATE PENALTY PROCEEDINGS WAS TAKEN WHILE MAKING ASSESSMENT ORDER. IT IS, THU S, OBVIOUS THAT THE EXPRESSION IN THE COURSE OF ANY PROCEEDING S UNDER THIS ACT' CANNOT HAVE THE REFERENCE TO SURVEY PROCEEDING S, IN THIS CASE. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PARTICUL ARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME OR F URNISHING OF INACCURATE PARTICULAR OF INCOME BY THE ASSESSEE HAS TO BE IN THE INCOME TAX RETURN FIFED BY IT. THERE IS SUFFICIENT INDICATION OF THIS IN THE JUDGMENT OF THIS COURT IN THE CASE OF COMMISSIO NER OF INCOME TAX, DELHI-I VS. MOIHAN DAS HASSA NAND 141 I TR 203 AND IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA), TH E SUPREME COURT HAS CLINCHED THIS ASPECT, VIZ., THE ASSESSEE CAN FURNISH THE PARTICULARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UPON THE INCOME TAX RETURN FILED BY THE ASSESSEE. T HIS VIEW GETS SUPPORTED BY EXPLANATION-S AS WELL AS 5 AND 5A OF S ECTION 271 OF THE ACT AS CONTENDED BY THE LEARNED COUNSEL FOR THE RESPONDENT. NO DOUBT, THE DISCREPANCIES WERE FOUND DURING THE S URVEY. THIS HAS YIELD INCOME FROM THE ASSESSEE IN THE FORM OF A MOUNT SURRENDERED BY THE ASSESSEE. PRESENTLY. WE ARE NOT CONCERNED WITH THE ASSESSMENT OF INCOME, BUT THE MOOT QUESTIO N IS TO WHETHER THIS WOULD ATTRACT PENALTY UPON THE ASSESSE E UNDER THE PROVISIONS OF SECTION 271 (1)(C) OF THE ACT. OBVIOU SLY, NO PENALTY CAN BE IMPOSED UNLESS THE CONDITIONS STIPULATED IN THE SAID PROVISIONS ARE DULY AND UNAMBIGUOUSLY SATISFIED. SI NCE THE ASSESSEE WAS EXPOSED DURING SURVEY, MAY BE, IT WOUL D HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAID SURVEY. HOWEV ER, THERE CANNOT BE ANY PENALTY ONLY ON SURMISES, CONJECTURES AND POSSIBILITIES. SECTION 271(1)(C) OF THE ACT HAS TO BE CONSTRUED STRICTLY. UNLESS IT IS FOUND THAT THERE IS ACTUALLY CONCEALMENT OR ITA NO.883/13 M/S J.P.NIRMAN PVT. LTD. 6 NON-DISCLOSURE OF THE PARTICULARS OF INCOME, PENALT Y CANNOT BE IMPOSED. THERE IS NO SUCH CONCEALMENT OR NON- DISCL OSURE AS THE ASSESSEE HAD MADE A COMPLETE DISCLOSURE IN THE INCO ME TAX RETURN AND OFFERED THE SURRENDERED AMOUNT FOR THE P URPOSES OF TAX. 6. HAVING HEARD THE LD DR FOR THE REVENUE, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN T HE ORDER PASSED BY THE LD CIT (A). THE LD CIT(A) HAS RIGHTLY OBSERVED THAT THE APPELLANT HAS DISCLOSED THE INCOME DURING SURVEY AND FILE THE RET URN ACCORDINGLY. THE INCOME HAS BEEN ACCEPTED WITHOUT VARIATION BY THE A SSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, THERE IS NO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF I NCOME. WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD CIT(A), THEREFORE, WE, ACCORDINGLY CONFIRM THE ORDER PASSED BY THE LD CIT( A). 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22/0 2/2017. SD/ - (A.T.VARKEY) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 22/02/2017 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-DCIT, CIR-5, KOLKATA 2. / THE RESPONDENT.- M/S J.P.NIRMAN PVT. LTD. 3. 1 ( ) / THE CIT(A), KOLKATA. 4. 1 / CIT 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//