Appeal Details
Counselvise Citation
[2012] 119 COUNSELVISE.COM (IT) 7425 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-03-2012
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
28-03-2012
Assessment Year
2005-2006
Appeal Filed On
16-05-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 903/MDS/2011 (ASSESSMENT YEAR : 2005-06) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(1), CHENNAI - 600 034 . (APPELLANT) V. M/S S.M.J. ASSOCIATES, 6/1, NAHAR DRIVE, MAHARANI CHINNAMMA ROAD, ALWARPET, CHENNAI - 600 018. PAN : ABEFS5590G (RESPONDENT) APPELLANT BY : SHRI B. NANDHA KUMAR, JCIT RESPONDENT BY : SHRI T. BANUSEKAR DATE OF HEARING : 28.03.2012 DATE OF PRONOUNCEMENT : 28.03.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, ITS GRIEVANC E IS THAT CIT(APPEALS) DELETED THE PENALTY OF ` 22,45,680/- LEVIED ON ASSESSEE UNDER SECTION 271(1)(C) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SHORT FACTS APROPOS ARE THAT THERE WAS A SEARCH IN THE PREMISES OF ONE SHRI SUBHASH CHAND NAHAR ON 26.10.2005. DUR ING THE COURSE I.T.A. NO. 903/MDS/11 2 OF SUCH SEARCH, IT SEEMS, MATERIAL RELATING TO ASSE SSEE WAS SEIZED. NOTICE WAS ISSUED ON ASSESSEE UNDER SECTION 153A(A) READ WITH SECTION 153C OF THE ACT ON 15.10.2007, FOR FILING A RETURN. HOWEVER, PRIOR TO ISSUE OF SUCH A NOTICE, ASSESSEE HAD ALREA DY FILED ITS REGULAR RETURN OF IMPUGNED ASSESSMENT YEAR ON 30.8.2006 DEC LARING AN INCOME OF ` 61,36,994/-. NEVERTHELESS, PURSUANT TO NOTICE UN DER SECTION 153A(A), ASSESSEE ONCE AGAIN FILED RETURN O F INCOME FOR SAME ASSESSMENT YEAR ON 19.12.2007 DECLARING THE SA ME INCOME AS RETURNED EARLIER. ASSESSMENT WAS THEREAFTER COMPLE TED ACCEPTING THE RETURN. ASSESSING OFFICER CHOSE TO INITIATE PROCEE DINGS FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. AS PER THE ASSESSEE, IT HAD FILED VOLUNTARILY AND THAT TOO WITHIN THE TIME PERIOD ALLOWED UNDER THE ACT AND IN THE SUBSEQUENT RETURN FILED PURSUANT TO SEARCH PROCEEDINGS, IT RETURNED THE SAME INCOME. THERE WA S NO CHANGE IN THE INCOME WHATSOEVER AND INCOME RETURNED WAS ACCEP TED. THEREFORE, ACCORDING TO ASSESSEE, LEVY OF PENALTY W AS NOT WARRANTED. ASSESSING OFFICER WAS NOT IMPRESSED. ACCORDING TO HIM, IT WAS TRUE THAT DATE FOR FILING RETURN WAS NOT OVER AND ASSESS EE HAD FILED ITS RETURN PRIOR TO LAST DATE. BUT, NEVERTHELESS, ACCO RDING TO HIM, NO REGULAR BOOKS WERE FOUND DURING THE SEARCH PROCEEDI NGS AND AS ON THE DATE OF SEARCH, THERE WERE NO RETURNS FILED BY THE ASSESSEE EVEN I.T.A. NO. 903/MDS/11 3 FOR EARLIER YEARS. IN OTHER WORDS, ACCORDING TO HI M, REGULAR RETURN FOR THE IMPUGNED ASSESSMENT YEAR WAS FILED BY THE ASSES SEE, CONSEQUENT TO SEARCH ACTION. BUT FOR THE SEARCH, A SSESSEE WOULD NOT HAVE RETURNED THE AMOUNTS IN ITS RETURN OF INCOME. A.O. THUS WAS OF THE OPINION THAT PROVISIONS OF SECTION 271(1)(C) WE RE ATTRACTED AND PENALTY WAS LEVIED ACCORDINGLY AT MINIMUM RATE WHIC H CAME TO ` 22,45,680/-. 3. BEFORE LD. CIT(APPEALS), ARGUMENT OF THE ASSESSE E WAS THAT IT HAD FILED ITS RETURN BEFORE DUE DATE, RETURNED INCO ME WAS ACCEPTED AND THERE WAS NO CASE FOR LEVY OF PENALTY. LD. CIT (APPEALS) WAS APPRECIATIVE OF THESE CONTENTIONS. HE DELETED THE PENALTY LEVIED. 4. NOW BEFORE US, LEARNED D.R., STRONGLY ASSAILING THE ORDER OF LD. CIT(APPEALS), SUBMITTED THAT BUT FOR SEARCH, ASSESS EE WOULD NOT HAVE FILED ITS RETURN OF INCOME. ACCORDING TO HIM, PRIOR TO SEARCH, ASSESSEE HAD NEVER FILED ITS RETURN OF INCOME. THE REFORE, THE PROBABILITY WAS THAT ASSESSEE WOULD NOT HAVE FILED ANY SUCH RETURN IF THE SEARCH HAD NOT TAKEN PLACE. LEVY OF PENALTY WA S THEREFORE, ACCORDING TO HIM, PERFECTLY JUSTIFIED. I.T.A. NO. 903/MDS/11 4 5. PER CONTRA, LEARNED A.R. SUPPORTED THE ORDER OF LD. CIT(APPEALS). 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THE SEARCH WAS CONDUCTED ON 26.10.2005 NOT ON THE A SSESSEE BUT ON ONE SHRI SUBHASH CHAND NAHAR. ASSESSING OFFICER HAD SPECIFICALLY NOTED THAT ASSESSEE-FIRM WAS FORMED ON 1.8.2003 AND WAS, FOR ALL PURPOSES, DISSOLVED ON 1.4.2005. IF T HE ASSESSEE WAS FORMED ON 1.5.2003, ITS FIRST PREVIOUS YEAR WOULD H AVE COME TO 31.3.2004 AND THE FIRST ASSESSMENT YEAR WHEN IT COU LD HAVE FILED THE RETURN OF INCOME WAS ASSESSMENT YEAR 2004-05 WHICH IS THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. MAY BE THE ASSESSEE HAD NEVER FILED RETURN FOR THAT YEAR, BUT IT HAD FILED THE RETURN OF INCOME FOR IMPUGNED ASSESSMENT YEAR ON 26.10.2005. THE RETURN ED INCOME WAS ` 61,36,994/-. NO DOUBT, IT WAS AFTER THE DATE OF S EARCH ON 30.8.2006, BUT NEVERTHELESS, IT WAS WELL WITHIN THE TIME PERIOD ALLOWED FOR FILING RETURN FOR THE IMPUGNED ASSESSMENT YEAR. SUBSEQUENTLY, PURSUANT TO NOTICE UNDER SECTION 153A(A) READ WITH SECTION 153C OF THE ACT, ASSESSEE HAD AGAIN FILED A RETURN OF INCOM E AND RETURNED INCOME WAS VERY SAME. THE RETURNED INCOME WAS ACCE PTED AS SUCH. IN THE FACE OF SUCH FACTS, WE ARE UNABLE TO UNDERST AND HOW I.T.A. NO. 903/MDS/11 5 CONCEALMENT CAN BE FASTENED ON THE ASSESSEE, WHEN T HE ASSESSEE HAD FILED ITS REGULAR RETURN WITHIN THE TIME ALLOWE D. JUST BECAUSE THE RETURN WAS NOT FILED FOR ONE YEAR PRIOR TO IMPUGNED ASSESSMENT YEAR, WOULD NOT BE A REASON TO LEVY PENALTY FOR THE IMPUG NED ASSESSMENT YEAR. ESPECIALLY SO, SINCE THE SEARCH ITSELF WAS N OT IN ITS PREMISES BUT IN SOMEBODY ELSES PREMISES. LD. CIT(APPEALS) WAS JUSTIFIED IN DELETING THE PENALTY. NO INTERFERENCE IS CALLED FO R IN THE ORDER OF LD. CIT(APPEALS). 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 28 TH MARCH, 2012. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 28 TH MARCH, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)- (4) CIT, (5) D.R. (6) GUARD FILE
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