DCIT, UDAIPUR V. Shri Babu Lal Motawat, UDAIPUR

ITA 93/JODH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78139 (ITAT-JODHPUR)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Keywords: Search and seizure; Initiation of penalty proceedings; Revised return
• Section: 143(3); 142(1); 139(5); 131; 246; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 93/JU/2014 ASSESSMENT YEAR: 2009-10 THE D.C.I.T VS. SHRI BABU LAL MOTAWAT CENTRAL CIRCLE - 1 5, SHANTIVAN BEDLA ROAD UDAIPUR UDAIPUR PAN NO. ABGPM 0658 R (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : DR. DEEPAK SEHGAL, CIT-DR DATE OF HEARING : 05.05.2014 DATE OF PRONOUNCEMENT : 07.05.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE FOR A.Y 2009-2010 AND EMANATES FROM THE ORDER OF THE CIT(A) , CENTRAL, JAIPUR, DATED 27.12.2013 PASSED U/S 271AAA OF THE INCOME-TAX ACT, 1961 ['THE ACT', FOR SHORT]. 2 2. THE SOLE ISSUE RAISED IN THIS APPEAL IS REGARDIN G THE DELETION OF PENALTY OF RS. 46,00,000/- LEVIED U/S 271AAA OF TH E ACT BY THE A.O WHEN CONDITIONS LAID DOWN IN SUB-SECTION(2) OF SECT ION 271AAA OF THE ACT HAVE NOT BEEN FULFILLED BY THE ASSESSEE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED ON 3.9.2008 AT THE BU SINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE DURING WHICH I NCRIMINATING EVIDENCE WERE GATHERED. CONSEQUENTLY, THE ASSESSEE FILED RETURN ON 17.8.2010 DECLARING TOTAL INCOME AT RS. 4,53,97, 080/- U/S 143(3) OF THE ACT ON 16.12.2010. CONSEQUENTLY, PENALTY U/ S 271AAA OF THE ACT WAS INITIATED AND ORDER WAS PASSED ON 11.3.2013 VIDE WHICH PENALTY OF RS. 46 LAKHS WAS IMPOSED. AGGRIEVED, TH E ASSESSEE WENT BEFORE THE LD. CIT(A) WHO HAS DELETED THIS PENALTY. THE REVENUE HAS COME IN APPEAL BEFORE THE APPELLATE TRIBUNAL AG AINST THIS DELETION OF PENALTY. 4. WE HAVE HEARD THE LD. D.R. AT LENGTH. IN FACT, THE ISSUE INVOLVED IN THIS APPEAL IS VERY SIMPLE AND CO VERED BY 3 NUMEROUS DECISIONS TAKEN BY THIS BENCH AS WELL AS A LMOST ALL THE BENCHES THROUGHOUT INDIA AND EVEN BY THE JU DGMENT OF THE JURISDICTIONAL HIGH COURT. THEREFORE, BY DE CIDING THIS APPEAL EX PARTE, NO INJUSTICE IS CAUSED TO ANY PARTY. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. D.R . AND CAREFULLY PERUSING THE ENTIRE MATERIAL ON RECORD, W E HAVE FOUND THAT DURING SEARCH, THE ASSESSEE MADE A STATE MENT U/S 132(4) OF THE ACT AND SUBSEQUENTLY, HIS STATEME NT U/S 131 OF THE ACT WAS ALSO RECORDED. WHEN THE ASSESSE E WAS CONFRONTED WITH INCRIMINATING EVIDENCE, THE ASSESSE E MADE SURRENDER WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT . HOWEVER, THE PENALTY WAS INITIATED AND IMPOSED BECA USE HE COULD NOT EXPLAIN THE MANNER IN WHICH THE UNDISC LOSED INCOME HAD BEEN DERIVED BY HIM. IN FACT, THE TRANS ACTIONS WHICH COULD NOT BE VERIFIED FROM THE REGULAR BOOKS OF ACCOUNT OF ASSESSEES BUSINESS WERE SURRENDERED BY HIM. IT IS A FACT THAT THE A.O. HAS ADMITTED THIS SURREN DER ON THE BASIS OF ASSESSEES BUSINESS ACTIVITY BEING CAR RIED ON BY HIM. THERE IS NO SPECIFIC FINDING OR EVIDENCE W ITH 4 REFERENCE TO THE SEIZED MATERIAL OR IN THE STATEMEN T FROM WHICH CONTRARY VIEW CAN BE TAKEN. ON SIMILAR FACTS , THE CUTTACK BENCH OF THE ITAT WHILE DECIDING THE CASE O F PRAMOD KUMAR JAIN REPORTED IN [2012] 77 DTR 244, WH ICH HAS ALSO BEEN RELIED UPON BY THE LD. CIT(A), HAS TA KEN A VIEW THAT THERE IS NO PRESCRIBED METHOD TO INDICATE THE MANNER IN WHICH INCOME WAS GENERATED WHEN THE DEFINITION OF UNDISCLOSED INCOME HAS BEEN DEFINED IN THE ACT ITSELF WHEN NO INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENTED EITHER WHOLLY OR PARTLY WHICH ONUS LA Y UPON THE ASSESSEE STOOD DISCHARGED. THEREFORE, LEVY OF PENALTY U/S 271AAA OF THE ACT HAS BEEN CORRECTLY DELETED BY THE LD. CIT(A). 6. WE HAVE FURTHER FOUND THAT THIS ISSUE STANDS COV ERED AGAINST THE REVENUE BY THE ITAT JODHPUR BENCH IN TH E CASE OF THE DY. CIT VS. SHRI MANSOOR ALI HITAWALA ITA N O. 530/JU/2013 DECIDED ON 05.03.014 FOR A.Y. 2010-11 WHEREIN AT PARA 8 THE TRIBUNAL HAS HELD AS UNDER: 5 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE INCLINED TO GO ALONGWITH THE LD. CIT(A). IT IS TRU E THAT INITIATION AND IMPOSITION OF PENALTY U/S 271AAA OF THE ACT ARISES ONLY IN SEARCH CASES. IT IS ALSO A LEGAL FACT THAT THE ASSESSEE CAN SEEK EXONERATION FROM THE PENALTY U/S 271AAA OF THE ACT. THEREFORE, NATURALLY THE DISCLOSURE HAS TO BE MADE CONSEQUENT UPON THE SEARCH CONDUCTED U/S 132 OF THE ACT. BUT WHEN THE ASSESSEE FULFILLS THE CONDITIONS OF SUB-SECTION (2) OF SECTION 271AAA OF THE ACT, HE IS ENTITLED TO BENEFIT OF THIS PROVISIO N. BUT THE ASSESSEE HAS OFFERED UNDISCLOSED INCOME OF RS. 1,10,18,966/- IN HIS ORIGINAL RETURN FILED FOR A.Y. 2010-11 AGAINST THE ACTUAL UNDISCLOSED INCOME OF RS. 1,27,91,718/-. THE REVISED RETURN ADMITTED COMPLETE UNDISCLOSED INCOME OF RS. 1,27,91,718/- WAS FILED BEFORE THE A.O. ISSUED NOTICE U/S 142(1) AND WITHIN THE TIME LIMIT PRESCRIBED U/S 139(5) OF THE ACT. THUS, IT IS FOUND THAT THE ASSESSEE HAS DISCLOSED THE ENTIRE UNDISCLOSED INCOME AND HAS OFFERED IT FOR TAXATION. THE ASSESSEE HAS ALSO EXPLAINED THE UNDISCLOSED INCOME WAS EARNED FROM HIS BUSINESS ALONGWITH PROVIDING DETAILS OF PROJECT S COMPLETED/INCOMPLETE WHILE REPLYING TO QUESTION NO. 3 OF HIS STATEMENT RECORDED U/S 132(4) OF THE ACT. COPY OF THIS STATEMENT IS PLACED AT PAGE 16 O F THE PAPER BOOK. WE ARE SATISFIED THAT THE ASSESSEE HAS EXPLAINED THE MODUS OF EARNING THIS INCOME IN 6 HIS STATEMENT EITHER U/S 132(4) AND 131 OF THE ACT. IT IS TRUE THAT NO SPECIFIC MANNER OF DISCLOSING TH E UNDISCLOSED INCOME IS PROVIDED IN THE ACT. THEREFORE, ONLY ON THIS ULTRA TECHNICAL POINT, PENALTY U/S 271AAA OF THE ACT CANNOT BE IMPOSED. IN THIS REGARD, DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RADHA KISHAN GOEL [2006] 152 TAXMAN 290 [ALL] AND THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SHAH [2008] 172 TAXMAN 58 [GUJ] ARE RELEVANT. MOREOVER, FROM THE STATEMENTS, WE HAVE OBSERVED THAT THE AUTHORIZED OFFICER HAS NOT SPECIFICALLY ASKED TO THE ASSESSEE DURING SUCH PROCEEDINGS ABOUT THE MANNER IN WHICH THE ASSESSEE HAS EARNED UNDISCLOSED INCOME. REGARDING OBSERVATION OF THE A.O. THAT THE ASSESSEE SHOULD HAVE APPEALED AGAINST THE INITIATION OF PENALTY PROCEEDINGS, THERE IS NO SUCH PROVISION U/S 246 (1) TO FILE APPEAL AGAINST SUCH INITIATION OF PENALTY PROCEEDINGS. ALSO THE A.O. WITHOUT MAKING FURTHER ADDITION ASSESSED THE INCOME AT RETURNED INCOME IN THE ASSESSMENT ORDER. THUS, THE OBSERVATION OF THE A.O. THAT THE ASSESSEE HAD INTENTIONALLY EVADED TAX IS BASED ON INCORRECT FACTS. ACCORDINGLY,, WE FIND FORCE IN THE OBSERVATIONS OF THE LD. CIT(A) AND THEREFORE, CONFIRM HIS FINDINGS. WE DO NOT FIND MERIT IN THE GROUNDS RAISED IN THIS APPEAL WHICH AR E LIABLE TO BE DISMISSED. 7 THEREFORE, WE DO NOT FIND MERIT IN THE GROUND RAISE D IN THIS APPEAL BY THE REVENUE AND DISMISS THE SAME BY RESPE CTFULLY FOLLOWING THE ABOVE TRIBUNAL ORDER DATED 05.03.2014 [SUPRA]. ACCORDINGLY, WE CANNOT ALLOW THIS APPEAL OF THE REV ENUE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 07 TH MAY, 2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07 TH MAY, 2014 VL/- COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR ASSISTANT REGISTRAR ITAT, JODHPUR