Banowari Lal Agarwalla Pvt. Ltd., Kolkata V. DCIT, Central Circle - VII, Kolkata, Kolkata

ITA 97/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74995 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 15-01-2010
• Court: TRIBUNAL
• Department Lawyers: K K DAS
• Assessee Lawyers: A K TIBREWAL
• Section: 153A; 139

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , . . . . ! ! ! ! /AND '' # $ % '' # $ % '' # $ % '' # $ % , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI GEORGE MATHAN, JM] !& !& !& !& / I.T.A NO. 97/KOL/2010 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2006-07 BANOWARI LAL AGARWALLA PVT. LTD. VS. DEPUTY COMM ISSIONER OF INCOME-TAX, (PAN: AACCB0089R) CENTRAL CIRCLE-VII, KOLKATA. (%, /APPELLANT ) (-.%,/ RESPONDENT ) DATE OF HEARING: 15.01.2014 DATE OF PRONOUNCEMENT: 31.01.2014 FOR THE APPELLANT: SHRI A. K. TIBREWAL, FCA FOR THE RESPONDENT: SHRI K. K. DAS, JCIT, SR. DR / ORDER PER SHRI P. K. BANSAL, AM: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), CENTRAL-I, KOLKATA DATED 09.11.2009 AGAINST THE SUSTENANCE OF PENALTY IMPOSED BY THE AO AMOUNTING TO RS.42,82,862/- U/S. 271(1)(C) OF THE INCOME-TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY CO NSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE ALONG WITH THE ORDERS OF THE TAXING AUT HORITIES BELOW. WE NOTED THAT THE AO HAS IMPOSED THE PENALTY U/S. 271(1)(C) OF THE ACT BY OB SERVING AS UNDER: IN THIS CASE DURING THE SEARCH SEIZURE PROCEEDINGS , CERTAIN INCRIMINATING DOCUMENTS/BOOKS OF ACCOUNTS WERE FOUND WHICH CLEARL Y REVEALS THAT THE ASSESSEE HAD EARNED INCOME WHCH WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED BY THE ASSESSEE U/S. 139( 1) WITH THE I.T. DEPARTMENT. ONLY AFTER THOSE INCRIMINATING DOCUMENTS, UNEXPLAINED JEWELLERY ETC. WERE UNEARTHED IN COURSE OF SEARCH A ND THE ASSESSEE WAS CONFRONTED WITH THE SAME, THE ASSESSEE HAD NO OTHER OPTION BUT TO M AKE DISCLOSURE OF INCOMES. HENCE IT IS OBVIOUS THAT THE INCOME FILED U/S. 153A WAS NOT DISCLOSED VOLUNTARILY BUT DIRECTLY RELATED TO THE SEARCH TOOK PLACE. HAD THE SEARCH NO T TAKEN PLACE, THE ASSESSEE WOULD HAVE NEVER COME OUT WITH THE DISCLOSURE. HENCE, BY NO STRETCH OF IMAGINATION IT CAN BE INFERRED THAT THE SO CALLED DISCLOSURE WAS VOLUNTA RY. THIS IS TO MENTION HERE THAT IN THE DISCLOSURE PETITION AS WELL AS IN COURSE OF PROCEED INGS U/S. 153A, THE ASSESSEE TOOK ADVANTAGE OF APPLICATION OF THE CASH FLOW ARISING O UT OF THE REVERSAL OF THE SHARE LOSS CLAIM IN THE RETURN U/S 139 TO EXPLAN THE INVESTME NTS ETC. DETECTED IN SEARCH. THE FACT THAT THE ASSESSEE HAD COME OUT WITH THE DI SCLOSURE DOES NEITHER MEAN THAT THE ASSESSEE HAD NOT CONCEALED ITS INCOME NOR DOES IT M EAN THAT THE DSCLOSURE WAS VOLUNTARY. THE DISCLOSURE WOULD HAVE BEEN DEEMED TO BE VOLUNTARY, HAD THE ASSESSEE 2 ITA NO.97/K/2010 BANOWARI LAL AGARWALLA PVT. LTD. , AY:2006-07 COME OUT WITH THE DISCLOSURE PRIOR TO SEARCH. AS SU CH THE ASSESSEES CONTENITION THAT THE INCOME DISCLOSED WAS VOLUNTARY AND THE PRAYER THAT THE PROCEEDING SHOULD BE DROPPED IS NOT ACCEPTED. MOREOVER, AS PER NEW EXPIANATION-5A TO SECTION 271( 1)(C), INSERTED BY THE FINANCE CT, 2007 W.E.F. 01.06.2007 THE ASSESSEE SHALL BE DEEMED TO HAVE FURNISHED NAACURATE PARTICULARS OF INCOMNE IN RESPECT OF THE PREVIOUS Y EAR ENDED BEFORE THE DATE OF SEARCH & DUE DATE EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN. THUS, IT MEANS THAT THE CASES OF ASSESSEE WHO FILED RETURN BEFORE THE DATE OF SEA RCH ARE COVERED BY THE MAIN SECTION. IN VIEW OF THE ABOVE, I AM SATISFIED THAT THIS IS A FIT CASE FOR IMPOSITION OF PENALTY U/S. 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME IN THE RETURN FILED U/S. 139 AND ACCORDINGLY, AN AMOUNT OF RS.42,82,872/- IS IMPOSED AS PENALTY U/S. 2711)(C) OF THE I. T. ACT 1961 AS CALCULATED BELOW: INCOME DISCLOSED RS. 1,42,76,242/- TAX @ 30% RS.42,82,872/- 100% OF THE TAX SOUGHT TO BE EVADED RS.42,82,872/ - 3. FROM THE ORDER OF THE AO, IT IS APPARENT THAT TH E AO HAS GIVEN A FINDING THAT EXPLANATION 5A HAS BEEN INSERTED W.E.F. 01.06.2007 IN THE CASE OF THE ASSESSEE IS NOT APPLICABLE AS THE ASSESSEE HAS FILED THE RETURN BEFORE THE DAT E OF THE SEARCH. THE AO IMPOSED THE PENALTY BY INVOKING THE MAIN PROVISION OF SECTION 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE IN THE RETURN FILED U/S. 139 OF THE ACT. WHEN THE MATTER WENT BEFORE THE CIT(A), WE NOTED THAT THE CIT(A) IN PARA 5 OF HIS ORDER TOOK THE VIEW THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY EXPLANA TION 5A TO SECTION 271(1)(C) OF THE ACT BUT THE CIT(A) DID NOT DEAL WITH THE SUBMISSION OF THE ASSESSEE THAT THE PROVISION OF SECTION 271(1)(C) OF THE ACT WAS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS THE ASSESSEE DID NOT FILE INACCURATE PARTICULARS OF INCOME AND THE CASE OF TH E ASSESSEE IS NOT A FAKE CASE WHERE THE PENALTY UNDER THE MAIN PROVISION OF SECTION 271(1)( C) OF THE ACT CAN BE IMPOSED. THE AO HAS NOT LEVIED PENALTY ON THE ASSESSEE BY INVOKING THE EXPLANATION 5A RATHER THE AO HAS GIVEN A CLEAR CUT FINDING THAT THE EXPLANATION 5A IS NOT AP PLICABLE IN THE CASE OF THE ASSESSEE. WE ALSO DO NOT AGREE WITH THE FINDING OF THE CIT(A) THAT TH E CASE OF THE ASSESSEE IS COVERED BY EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT. FR OM EXPLANATION 5A IT IS APPARENT WHERE THE ASSESSEE HAS FILED RETURN BEFORE THE DATE OF THE SE ARCH, THE EXPLANATION 5A WILL NOT APPLY. IT IS NOT DISPUTED BY THE REVENUE THAT IN THE CASE OF THE ASSESSEE THE RETURN HAS BEEN FILED BEFORE THE DATE OF THE SEARCH. SINCE THE CIT(A) HAS NOT DEALT WITH THE SUBMISSION OF THE ASSESSEE ON MERIT, WE, THEREFORE, IN THE INTEREST OF THE JUSTICE AND F AIR PLAY TO BOTH THE PARTIES SET ASIDE THE ORDER OF CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE CI T(A) WITH A DIRECTION THAT THE CIT(A) WILL REDECIDE THE APPEAL OF THE ASSESSEE AFTER GIVING A CLEAR CUT FINDING ON MERIT WHETHER THE MAIN 3 ITA NO.97/K/2010 BANOWARI LAL AGARWALLA PVT. LTD. , AY:2006-07 PROVISION OF SECTION 271(1)(C) OF THE ACT IS APPLIC ABLE IN THE CASE OF THE ASSESSEE OR, WHETHER THE ASSESSEE HAS NOT FILED INACCURATE PARTICULARS OF IN COME OR NOT. 4. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31.01.2 014 SD/- SD/- '' # $ % '' # $ % '' # $ % '' # $ % , , . . . . , (GEORGE MATHAN) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31ST JANUARY, 2014 PRONOUNCED BY SD/- (A. P. GEORGE) SD/- (G. MATHAN) AM JM /0 '1' '2 JD.(SR.P.S.) 3 -''4 54)6- COPY OF THE ORDER FORWARDED TO: 1 . %, / APPELLANT BANOWARI LAL AGARWALLA PVT. LTD., 234/3 A, A. J. C. BOSE ROAD, FMC FORTUNA, (UNIT A-7, 3 RD FLOOR), KOLKATA-700 020 2 -.%, / RESPONDENT DCIT, CENTRAL CIRCLE-VII, KOLKATA. 3 . ' ( )/ THE CIT(A), KOLKATA 4. 5. ' / CIT KOLKATA 4;'< -' / DR, KOLKATA BENCHES, KOLKATA .4 -'/ TRUE COPY, =/ BY ORDER, > !' /ASSTT. REGISTRAR .