Sh. Ramesh Mittal, Panchkula V. ACIT, Chandigarh

ITA 995/CHANDI/2014

• Counselvise Citation: 99521514 RSA 2014
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-07-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 11-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT ITA NO.995/CHD/2014 ASSESSMENT YEAR:2004-05 SH. RAMESH MITTAL, VS. ACIT HOUSE NO. 515 CENTRAL CIRCLE II SECTOR 16, PANCHKULA, CHANDIGARH PAN NO. AFSPM4366A (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SACHIN JAIN RESPONDENT BY : SH. S.K.MITTAL DATE OF HEARING : 16/07/2015 DATE OF PRONOUNCEMENT : 23/07/2015 ORDER PER H.L.KARWA, VP THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE LD. CIT(A)(CENTRAL), GURGAON DT. 03/09/2014 FOR THE ASSESSMENT YEAR 2004-05. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APP EAL: 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDIN G THE PENALTY U/S 271(1)(C) OF THE I.T. ACT AMOUNTING TO RS. 51,112/- 2. THAT WITHOUT PREJUDICE TO ABOVE GROUND OF APPEAL , THE APPELLANT DISPUTES THE QUANTUM OF PENALTY. 3. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION , DELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH OPERA TION UNDER SECTION 132(1) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT) WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 16/01/2009.IN RESPONSE TO NOTICE U/S 153A, THE ASSESSEE FILED HIS RETURN D ECLARING AN INCOME OF RS. 78,810/-.ASSESSMENT WAS FRAMED AT AN INCOME OF RS.2 ,57,040/- ON 25-08-2011 AFTER MAKING ADDITIONS ON ACCOUNT OF UND ISCLOSED SALARY & INTEREST EARNED BY THE ASSESSEE FROM VARIOUS FIRMS. PENALTY PROCEEDINGS WERE INITIATED ON THE ADDITIONS MADE .PENALTY ORDER WAS PASSED ON 29-03-2012 LEVYING A PENALTY OF RS. 51,112/- ,BEING 100% OF THE TAX SOUGHT TO BE EVADED ON THE UNDISCLOSED INCOME, SINCE AS P ER THE A.O THE ASSESSEE FAILED TO GIVE ANY REASON FOR THE SAME WH ICH AMOUNTED TO CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. 4. BEFORE LD. CIT(A), THE ASSESSEE PLEADED THAT TH ERE WAS NO DELIBERATE CONCEALMENT AND THE DIFFERENCE WAS ONLY ON ACCOUNT OF ERROR IN FILING OF RETURN. THE ASSESSEE STATED THAT HE H AD INFACT FILED A RETURN UNDER SECTION 139(1) INCLUDING THE ABOVE INCOME AND HAD ALSO PAID TAXES ON THE SAME BUT HAD ERRONEOUSLY FAILED TO DISCLOSE THE SAME IN THE RETURN FILED UNDER SECTION 153A. HE FURTHER PLEADED THAT HE HAD NOT CLAIMED ANY REFUND OF THE TAXES PAID UNDER SECTION 139(1), IN THE RETURN FILED UNDER SECTION 153A. 5. THE CIT(A) UPHELD THE LEVY OF PENALTY ON THE GR OUND THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME VIS-A VIS THE RETURN FILED U/S 153A.HE STATED THAT THE SAME WERE DETECTED ONLY FRO M PERUSAL OF THE CAPITAL ACCOUNT OF THE ASSESSEE DURING ASSESSMENT P ROCEEDINGS.THE CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE THAT THE RETURN U/S 153A WAS ERRONEOUSLY FILED SINCE,AS PER THE CIT(A), IT W AS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCES AND WAS ALSO NOT DISCLOSED IN THE STATEMENT OF FACTS FILED BEFORE HIM. 6. SHRI. SACHIN JAIN A.R OF THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE CIT(A) AND ALSO FILED A COPY OF THE RETURN SUBMITTED BY THE ASSESSEE U/S 139(1) OF THE INCOME TAX ACT,1961. ON THE OTHER HAND SH. S.K. MITTAL LD. D.R PLACED RELIANCE ON THE ORDER OF THE CIT(A). 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE DOCUMENTS AVAILABLE ON RECORDS. IT IS NOT IN DISPUT E THAT THE ASSESSEE HAD ORIGINALLY FILED HIS RETURN UNDER SECTION 139(1), ON 31/10/04, DECLARING AN INCOME OF RS. 1,78,230/- , WHICH INCLUDED THE FOLL OWING : INTEREST AS PARTNER FROM MITTAL COAL CO. RS. 43, 603/- SALARY AS PARTNER FROM MATTEL COAL CO. RS. 24,00 0/- TOTAL RS. 67,603/- INTEREST AS PARTNER FROM MITTAL POULTRY FARM RS. 4008/- SALARY AS PARTNER FROM MITTAL POULTRY FARM RS. 48 ,000/- TOTAL RS. 52008/- INTEREST AS PARTNER FROM SAHARA POULTRY FARM RS. 58,916/- RS. 1,78,527/- 8. THIS FACT IS BORNE OUT FROM THE COPY OF ITR FIL ED U/S 139(1) PRODUCED BEFORE THE BENCH, AND WHICH IS ALSO PART OF THE DE PARTMENTAL RECORDS.THEREAFTER A RETURN WAS FILED BY THE ASSESS EE UNDER SECTION 153A ON 06/08/2009, IN PURSUANCE TO SEARCH CONDUCTED ON 16/01/2009, DECLARING AN INCOME OF RS. 78,810/- AND OMITTING TO DISCLOSE THE INCOME SHOWN IN THE RETURN FILED EARLIER U/S 139(1). 9. THE ONLY ISSUE BEFORE US IS WHETHER IN THE PRES ENT CIRCUMSTANCES PENALTY CAN BE LEVIED U/S 271(1)(C) FOR CONCEALING PARTICULARS OF INCOME IN THE RETURN FILED U/S 153A, BUT WHICH WERE ACTUA LLY DISCLOSED IN THE RETURN OF INCOME FILED U/S 139(1) AND DUE TAXES ALSO PAID THEREON. 10. SECTION 271(1)(C) PROVIDES THAT IF THE AO IS S ATISFIED THAT THE ASSESSE HAS CONCEALED THE PARTICULARS OF THE INCOME OR FURN ISHED INACCURATE PARTICULARS OF INCOME, HE MAY DIRECT THE PERSON TO PAY THE PENALTY. EXPL.1 TO SEC 271(1)(C) STATES THAT WHERE IN RESPECT OF AN Y MATERIAL FACT THE ASSEESEE EITHER FAILS TO OFFER AN EXPLANATION OR GI VES A FALSE OR UNSUBSTANTIATED EXPLANATION IT SHALL BE TREATED AS CONCEALING PARTICULARS OF INCOME AND SHALL BE LIABLE TO PENALTY. 11. IN THE PRESENT CASE, THE EXPLANATION OFFERED B Y THE ASSESSED THAT HE HAD INADVERTENTLY FAILED TO DISCLOSE HIS INCOME FRO M FIRMS, IN HIS RETURN ,APPEARS TO BE VALID IN THE LIGHT OF THE FAC T THAT HE HAD ALREADY DISCLOSED AND PAID TAXES ON THESE INCOMES IN HIS RE TURN FILED U/S 139(1).THE FACT THAT HE HAS NOT CLAIMED ANY REFUND OF THE TAXE S ALREADY PAID ALSO ADDS WEIGHT TO HIS EXPLANATION AND PROVES HIS BONA FIDES.IN FACT THE INCOME ALLEGEDLY CONCEALED IN THE RETURN UNDER SECT ION 153A STOOD ALREADY DISCLOSED IN THE RETURN FILED UNDER SECTION 139(1) MADE BEFORE THE DATE OF SEARCH. 12. THEREFORE TAKING INTO ACCOUNT THE ENTIRE CONSP ECTUS OF THE CASE IT IS HELD THAT THERE WAS NO CONCEALMENT OF INCOME OR FUR NISHING OF INACCURATE PARTICULARS OF INCOME TO JUSTIFY THE LEVY OF PENALT Y U/S 271(C) OF THE INCOME TAX ACT ,1961. ACCORDINGLY, I CANCEL THE PENALTY OF RS. 51,112/- IMPOSED BY THE A.O AND CONFIRMED BY THE CIT(A). 13. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/07/2015 SD/- (H.L. KARWA) VICE PRESIDENT DATED: 23/07/2015 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR