ITO (Central)-1, Nashik V. Late Amritsingh Jagdishsingh Bindra, Nashik

ITA 96/PUN/2013

• Counselvise Citation: 9624514 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 09-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PRAVEENA
• Keywords: Business income; Search and seizure
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.96/PN/2013 (A.Y: 2005-06) ITO (CENTRAL)-1, NASHIK APPELLANT VS. LATE AMRITSINGH JAGDISHSINGH BINDRA AMRITVILLA, NASHIK-PUNE ROAD, NASHIK ROAD, NASHIK THROUGH LEGAL HEIR SHRI JAGDISHSINGH AMRITSINGH BINDRA PAN: AIUPB3841N RESPONDENT APPELLANT BY : SMT. S. PRAV EENA RESPONDENT BY : SHRI M.K. KULKARNI DATE OF HEARING: 31.07.2014 DATE OF ORDER : 31.07.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-I, NASHIK, D ATED 10.10.2012 FOR A.Y. 2005-06 ON THE FOLLOWING GROUND S. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD.CIT(A) ERRED IN DELETING PENALTY LEVIED UNDER SE CTION 271(1)(C) AMOUNTING TO RS.3,50,405/- WITHOUT APPREC IATING THAT THE ASSESSEE FAILED TO OFFER ANY EXPLANATION R EGARDING THE DIFFERENCE IN INCOME RETURN VIDE RETURN FILED U NDER SECTION 153A OF THE ACT AT RS.4,02,520/- AND RS.14,23,310/- RESPECTIVELY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN NOT APPRECIATIN G THAT THE ADDITIONAL INCOME OF RS.10,20,790/- WAS OFFERED ONL Y IN THE RETURN FILED UNDER SECTION 153 A ON SPECIFIC ISSUE OF UNEXPLAINED INCOME ON THE BASIS OF INCRIMINATING MA TERIAL. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN NOT APPRECIATIN G THE FACT 2 ITA NO.96 OF 13 LATE AMRITSINGH JAGDISHSINGH THAT BUT FOR THE SEARCH OPERATIONS THE ASSESSEE WOU LD NOT HAVE OFFERED ADDITIONAL INCOME IN THE RETURN FILED UNDER SECTION 153A WHICH IS EVIDENCED BY HIS FAILURE TO OFFER THE SAID ADDITIONAL INCOME IN THE RETURN FILED UNDER SE CTION 139. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE EASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN IGNORING THE DE CISION OF JURISDICTIONAL TRIBUNAL IN THE GROUP CASES OF THAKK AR AND KALANTRI GROUP IN APPEAL NOS. 911 TO 930/PN/2009 A ND 1006 TO 1008 /PN/2009 DATED 10.02.2010 WHICH WAS AS DIRECT DECISIONS. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY, D ELETE AMEND ANY OF THE GROUNDS, AS PER THE CIRCUMSTANCES OF THE CASE. 6. THE APPELLANT LEAVE TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE ITS CASE AS OCCASION MAY DEMAND. 2. THE ASSESSEE WAS AN INDIVIDUAL AND EARNED INCOME FROM TRANSPORT, HOUSE PROPERTY, CAPITAL GAIN AND INCOME FROM OTHER SOURCES. THE ASSESSEE EXPIRED ON 11.09.2012 AND TH IS APPEAL IS BEING DECIDED AGAINST HIS LEGAL HEIR SHRI JAGDISHSI NGH AMRITSINGH BINDRA. THE ASSESSEE FILED ORIGINAL RETURN OF INCOM E DECLARING TOTAL INCOME OF RS.4,02,515/- ON 29.03.2004. A SEA RCH ACTION U/S 132(1) OF THE I.T. ACT, 1961 WAS CONDUCTED BY T HE I.T. DEPARTMENT ON 15.03.2007 IN THE BINDRA GROUP OF CAS ES AT NASHIK ROAD, NASHIK. THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE GROUP WERE ALSO COVERED. THE ASSESSEE FILED A RETURN OF INCOME DECLARING TOTAL INCOME OF RS.14,23,313/- ON 20.09.2007 U/S 153A OF THE ACT. THE DIFFERENCE IN THE RETURNED INCOME AND INCOME U/S 153A IS MAINLY ON ACCOUNT OF BUSINESS INCOME AND PARTLY ON A/C OF CAPITAL GAINS. THE ASS ESSING OFFICER ASSESSED THE INCOME OF THE ASSESSEE AT RS.14,23,313 /- WITHOUT MAKING ANY ADDITION TO THE INCOME RETURNED U/S 153A OF THE ACT. THE ASSESSING OFFICER IMPOSED A PENALTY OF RS.3,50, 405/- ON ACCOUNT OF DIFFERENCE IN INCOME RETURNED U/S 153A A ND THE INCOME RETURNED FILED U/S 139(1) OF THE ACT. 3 ITA NO.96 OF 13 LATE AMRITSINGH JAGDISHSINGH 3. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AU THORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAS GRAN TED RELIEF TO THE ASSESSEE. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE, INTER ALIA, SUBMITTED THAT THE CIT(A) ERRE D IN DELETING PENALTY LEVIED UNDER SECTION 271(1)(C) AMOUNTING TO RS. 3,50,405/- WITHOUT APPRECIATING THAT THE ASSESSEE F AILED TO OFFER ANY EXPLANATION REGARDING THE DIFFERENCE IN INCOME RETURN VIDE RETURN FILED UNDER SECTION 153A OF THE ACT AT RS.4, 02,520/- AND RS.14,23,310/- RESPECTIVELY. THE CIT(A) ERRED IN N OT APPRECIATING THAT THE ADDITIONAL INCOME OF RS.10,20,790/- WAS OF FERED ONLY IN THE RETURN FILED UNDER SECTION 153A ON SPECIFIC ISS UE OF UNEXPLAINED INCOME ON THE BASIS OF INCRIMINATING MA TERIAL. IT IS ONLY SUBSEQUENT TO THE SEARCH THAT THE ADDITIONAL I NCOME IN RETURN FILED U/S 153A, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY IN QUESTION. ACCORDINGLY, THE ORDER OF CIT (A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE DECISION OF CIT(A) AND PLACED RELIANCE OF SOME CASE LAWS TO SUP PORT THE SAME. 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD, WE FIND THAT THE ASSESSING OFFICER HAS IMPO SED THE PENALTY BY INVOKING EXPLANATION-5 TO SECTION 271(1) (C) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE SAME IS REPRODUCED AS UNDER: 'EXPLANATION 5- WHERE IN THE COURSE OF SEARCH INITI ATED U/S. 132 BEFORE THE 1 ST DAY OF JUNE 2007], THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLAN ATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOL LY OR IN PART) HIS INCOME- (A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE TH E DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHERE SUCH RETURN 4 ITA NO.96 OF 13 LATE AMRITSINGH JAGDISHSINGH HAS BEEN FURNISHED BEFORE THE SAID DATE, SUCH INCOM E HAS NOT BEEN DECLARED THEREIN. 4.1 IN THE CASE UNDER APPEAL NO MONEY, BULLION, JEW ELLERY OR OTHER VALUABLE ARTICLE WAS INVOLVED BUT THE ASSESSE E HAS VOLUNTARILY DECLARED THE ADDITIONAL INCOME ON ACCOU NT OF BUSINESS INCOME AND CAPITAL GAINS AS ADDITIONAL INC OME IN THE RETURN FILED U/S 153A. IN THIS CASE, THERE IS NO D IRECT LINKAGE BROUGHT ON RECORD WITH REFERENCE TO ANY OF THE SPEC IFIED SEIZED MATERIALS, SO AS TO ESTABLISH THE CHARGE FOR WHICH THE PENALTY HAS BEEN LEVIED. IN THE ASSESSMENT ORDER U/S 271(1)(C) , THE ASSESSING OFFICER HAS RECORDED THE FOLLOWING FINDING: 'THE INCOME RETURNED U/S 153A IS MORE THAN THE INCO ME SHOWN IN THE RETURN FILED U/S 139(1). THIS INCREASE D INCOME HAS COME TO NOTICE ONLY BECAUSE OF SEARCH ACTION U/ S 132(1) OF THE I.T. ACT, 1961. THUS THE ASSESSEE HAS CONCEA LED THE INCOME. HENCE PENALTY PROCEEDINGS AS PER EXPLANATIO N-5 BELOW THE SECTION 271(1)(C) WERE INITIATED IN THE A SSESSMENT PROCEEDINGS. 4.2 THEREFORE, THE PENALTY PROCEEDINGS WERE INITIAT ED BUT IN APPEAL, IT WAS FOUND BY THE CIT(A) THAT THERE WAS N O DIRECT LINKAGE WITH REFERENCE TO THE SEIZED MATERIAL AND T HE ADDITIONAL INCOME DECLARED IN THE RETURN U/S 153A ON ACCOUNT O F BUSINESS INCOME AND CAPITAL GAINS INCOME HAS BEEN ESTABLISHE D. THEREFORE, THE CIT(A) HELD THAT THIS EXPLANATION-5 IS NOT APPLICABLE TO THE CASE UNDER APPEAL. WE FIND THAT THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SHAH, (2008) 299 ITR 305 (GUJ) HAS HELD THAT IN VIEW OF T HE FACTS OF THE CASE THE ASSESSEE IS NOT REQUIRED TO SPECIFY THE MA NNER IN WHICH THE INCOME HAS BEEN EARNED IN STATEMENT U/S.132(4) OF THE ACT. 4.3 WE ALSO FIND THAT THE STAND OF THE ASSESSEE HAS BEEN THAT HE HAS EARNED INCOME FROM TRANSPORT AND CAPITAL GAIN A ND HE HAS ESTABLISHED THE MANNER IN WHICH THE INCOME RETURN F ILED U/S.153A OF THE ACT. THE ASSESSEE HAS ALSO PAID TA XES ON THE 5 ITA NO.96 OF 13 LATE AMRITSINGH JAGDISHSINGH INCOME RETURNED U/S 153A. THE MANNER OF EARNING TH E INCOME IS TRANSPORT BUSINESS INCOME AND CAPITAL GAINS. 4.4 WE FIND IN THE CASE OF ACIT VS. GEBILAL KANHAIA HLAL (HUF) (2012) 348 ITR 561(SC), THE HONBLE SUPREME COURT H AS HELD THAT ON SEARCH AND SEIZURE OPERATIONS, ASSETS AND I NCRIMINATING DOCUMENTS WERE SEIZED FROM ASSESSEES PREMISES DE SPITE, KARTAS STATEMENT U/S.132(4) SURRENDERING AN AMOUNT OF RS.42,32,000/-, ASSESSEE CHOSE NOT TO FILE ITS RETU RN ON INCOME ON DUE DATE I.E. 31 ST JULY, 1987 ASSESSEE WAS DENIED BENEFIT OF IMMUNITY UNDER CLAUSE (2) OF EXPLANATION 5 TO SECTI ON 271(1)(C) FOR ITS FAILURE TO FILE RETURN OF INCOME PAY TAX TH EREON. THE HONBLE SUPREME COURT HAS HELD THAT FOR CLAIMING IM MUNITY FROM PAYMENT OF PAYMENT OF PENALTY UNDER CLAUSE (2) OF E XPLANATION 5 TO SECTION 271(1)(C), THREE CONDITIONS HAVE TO BE S ATISFIED BY ASSESSEE. FIRSTLY, THE ASSESSEE MUST MAKE A STATEMENT U/S.132 (4) IN COURSE OF SEARCH STATING THAT UNACCOUNTED ASSETS AN D INCRIMINATING DOCUMENTS FOUND FROM HIS POSSESSION D URING THE SEARCH HAVE BEEN ACQUIRED OUT OF HIS INCOME, WH ICH HAS NOT BEEN DISCLOSED IN RETURN OF INCOME TO BE FURNIS HED BEFORE EXPIRY OF TIME SPECIFIED IN SECTION 139(1) SUCH STATEMENT WAS MADE BY KARTA DURING SEARCH WHICH CONCLUDED ON 01.08.1987. SECONDLY, ASSESSEE SHOULD SPECIFY IN HIS STATEMENT U/S.132(4), MANNER IN WHICH SUCH INCOME STOOD DERIV ED SECOND CONDITION WAS ALSO SATISFIED BY THE KARTA. THIRDLY, ASSESSEE HAS TO PAY TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH UNDISCLOSED INCOME HOWEVER, AS NO TIME LIMIT FOR PAYMENT OF SUCH TAX STOOD PRESCRIBED UNDE R CLAUSE (2), THIRD CONDITION ALSO STOOD FULFILLED ASSESSEE HAS PAID TAX WITH INTEREST UP TO DATE OF PAYMENT. THEREFORE, AS SESSEE WAS ENTITLED TO IMMUNITY UNDER CLAUSE (2) OF EXPLAN ATION 5 TO SECTION 271(1)(C). ACCORDINGLY, APPEAL WAS DISM ISSED AND THE HONBLE HIGH COURT ORDER OF GRANTING RELIEF TO THE ASSESSEE WAS UPHELD. 6 ITA NO.96 OF 13 LATE AMRITSINGH JAGDISHSINGH 4.5 WE ALSO FIND THAT ITAT, PUNE B BENCH IN THE C ASE OF SMT. PRAMILA D. ASHTEKAR & ORS. VS ITO (2013) 154 TTJ (P UNE)(UO) 46 HAS HELD THAT EXPLANATION-3 TO SECTION 271(1)(C) CA NNOT BE APPLIED IN CASES, WHEN THE RETURN WAS FILED IN RESP ONSE TO NOTICE U/S.153A WHERE THE RETURNED INCOME AND INCOME ASSES SED WERE THE SAME, NO PENALTY COULD BE LEVIED U/S 271(1)(C) OF THE ACT. 4.6 IN VIEW OF ABOVE LEGAL DISCUSSION, THE CIT(A) W AS JUSTIFIED IN DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICE R. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FR OM OUR SIDE. WE UPHOLD THE SAME. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 31 ST OF JULY, 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 31 ST JULY, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I, NASHIK 4) THE CIT-I, NASHIK 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE