M/s. Parivar Television Pvt.Ltd., Surat V. The Addl.CIT., CentralRange, Baroda

ITSSA 124/AHD/2006

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7734 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-02-2012
• Assessment Year: misc
• Appeal Filed On: 22-05-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R N VEPARI
• Keywords: Initiation of penalty proceedings
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.(SS). NO.124 / AHD/2006 (BLOCK PERIOD 1.4.1995 TO 19.12.2001 M/S. PARIVAR TELEVISION PVT. LTD., PARAG APARTMENT, GANIBHAI DAHIWALA MARG, MOMNAWAD, GOPIPURA, SURAT VS. ADDL. CIT, CENTRAL RANGE, BARODA PAN/GIR NO. : AABCP5942J (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI R N VEPARI, AR RESPONDENT BY: SHRI MUDIT NAGPAL, SR. DR DATE OF HEARING: 06.02.2012 DATE OF PRONOUNCEMENT: 29.02.2012 O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JM:- THIS IS ASSESSEES APPEAL WHICH IS EMANATED FROM T HE ORDER OF LD. CIT(A) IV, AHMEDABAD DATED 24.03.2006. THE ASSESSE E HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: (1) THE LEARNED COMMISSIONER OF INCOME-TAX ( APPEALS) ERRED IN DISCUSSING APPEAL AND CONFIRMING PENALTY OF RS.2 ,79,47,694/-. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, PENALTY OUGHT TO BE DELETED. (3) THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) ERRED IN NOT PROVIDING COPIES OF BANK STATEMENTS ON WHICH THE ADDITIONAL COMMISSIONER OF INCOME-TAX (APPEALS) RELIED. (4) THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS) FURTHER ERRED IN NOT CONSIDERING FOLLOWING GROUNDS TAKEN AG AINST PENALTY. (A) SUPREME COURT JUDGEMENT IN CASE OF CHAMUN DI GRANITES PVT. LTD. [255-ITR-258] AND V.O. TRACTOR EXPORT V/S . TARAPORE & I.T.A.NO. 124 /AHD/2006 2 CO. [AIR 1970 SC 1168] AND PARA 32(2) OF CIRCULAR D ATED 06.07.1984. CIRCULAR NO.387 OF 06.07.1984 (B) VARIOUS JUDGMENTS BROUGHT TO THE NOTICE. (C) BONAFIDES HAVING BEEN ESTABLISHED AND NUM BER OF CASES WHERE AMOUNTS HAVE BEEN RECEIVED BY CHEQUES. (5) THE APPELLANT THEREFORE, SUBMITS THAT THE PENALTY MAY BE DELETED. (6) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR VARY ANY OF THE GROUNDS OF APPEAL. 2. THE APPELLANT HAS ALSO RAISED AN ADDITIONAL GROU ND OF APPEAL WHICH IS REPRODUCED BELOW:- PENALTY U/S 271D IS REQUIRED TO BE DELETED AS THE PROCEEDINGS WERE NOT INITIATED IN THE COURSE OF ASSESSMENT PROCEEDIN GS AND THAT THERE IS NO MENTION ABOUT SUCH DEFAULT IN THE ASSESSMENT ORDER. 3. IN SUPPORT OF THE ADDITIONAL GROUND, LD. D.R. MR . R. N. VEPARI HAS PLEADED THAT THE ASSESSMENT ORDER U/S 158 BC READ W ITH SECTION 158 BG/144 FOR THE BLOCK PERIOD 01.04.1995 TO 19.12.200 1 WAS PASSED ON 31.12.2003. HOWEVER, THE IMPUGNED PENALTY ORDER U/ S 271D WAS DECIDED ON 20.06.2005. IN THE ASSESSMENT ORDER, THERE WAS NO MENTION OF ANY DEFAULT OR INITIATION OF PENALTY PROCEEDINGS U/S 27 1D OF THE INCOME TAX ACT, 1961. LD. A.R. HAS THEREFORE, PLEADED THAT DU E TO THE ABSENCE OF ANY REFERENCE OF INITIATION OF PENALTY PROCEEDINGS IN T HE ASSESSMENT ORDER TANTAMOUNT TO A SERIOUS DEFAULT FOR LEVY OF PENALTY . HE HAS ALSO REFERRED THAT IN THE PENALTY ORDER U/S 271D ITSELF A REFERE NCE WAS RECEIVED BY THE A.O. DATED 14.05.2004 FOR INITIATION OF PENALTY P ROCEEDINGS U/S 271D OF THE INCOME TAX ACT, 1961. THIS ITSELF HAS PROVED T HAT THE PENALTY PROCEEDINGS U/S 271D WERE INITIATED MUCH AFTER THE COMPLETION OF THE ASSESSMENT PROCEEDINGS IN THE YEAR 2003. HE HAS PL ACED RELIANCE ON THE CASE OF RAJENDRA KUMAR SOMANI AS REPORTED IN 125 IT R 756 (DEL.). I.T.A.NO. 124 /AHD/2006 3 4. FROM THE SIDE OF THE REVENUE, LD. D.R. MR. MUDIT NAGPAL APPEARED AND INFORMED THAT AS PER THE PROVISION OF SECTION 2 71D OF THE INCOME TAX ACT, 1961, THERE IS NO SUCH REQUIREMENT FOR INITIAT ION OF PENALTY PROCEEDINGS DURING THE COURSE OF ASSESSMENT. HE A LSO DRAWN OUR ATTENTION TO THE LANGUAGE OF SECTION 271(1) OF THE INCOME TAX ACT, 1961 WHEREIN THE STATUTE HAS PRESCRIBED THAT IF THE A.O. IS IN THE COURSE OF ANY PROCEEDING IS SATISFIED THAT ANY PERSON HAS DEFAULT FOR CONCEALMENT OF INCOME OR COMPLIANCE OF CERTAIN NOTICE AS REFERRED THEREIN, THEN DIRECTED TO PAY BY WAY OF PENALTY BY PASSING A PENALTY ORDER . LD. D.R. HAS THEREFORE PLEADED THAT THERE IS NO SUCH REQUIREMENT IN SECTION 271D OF THE INCOME TAX ACT, 1961. 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES A FTER ADMITTING THE ADDITIONAL GROUND BEING A LEGAL GROUND AND ARISING FROM THE FACTS AVAILABLE ON RECORD, WE HEREBY DISMISS THE SAME. A S PER THE LANGUAGE OF SECTION 271D OF THE INCOME TAX ACT, 1961, THE STATU TE HAS NOWHERE MENTIONED THAT IF A PERSON TAKES AND ACCEPT ANY LOA N OR DEPOSIT IN CONTRAVENTION TO THE PROVISIONS OF SECTION 269SS, H E SHALL BE LIABLE TO PAY BY WAY OF PENALTY A SUM EQUAL TO THE AMOUNT OF LOAN AND DEPOSIT SO TAKEN OR ACCEPTED. AS PER THIS LANGUAGE, THERE IS NO REQ UIREMENT THAT A REVENUE OFFICER SHALL TAKE STEPS DURING THE COURSE OF PROCE EDINGS. THIS REQUIREMENT OF INITIATION DURING THE COURSE OF PROC EEDING IS PRESCRIBED ONLY IN SECTION 271(1) OF THE INCOME TAX ACT, 1961. WE HAVE ALSO EXAMINED THE CITED DECISION OF RAJENDRA KUMAR SOMAN I (SUPRA) AND HAVE NOTED THAT THE SECTION UNDER WHICH THE MATTER OF PE NALTY WAS AGITATED WAS 271(1)(A) OF THE INCOME TAX ACT, 1961, WHICH MEANS THAT THE CITED DECISION WAS PASSED BY HONBLE DELHI HIGH COURT IN THE LIGHT OF THE PROVISIONS OF SECTION 271(1) OF THE INCOME TAX ACT, 1961, WHERE THE I.T.A.NO. 124 /AHD/2006 4 REQUIREMENT IS OF PENALTY PROCEEDINGS TO BE INITIAT ED IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT. BECAUSE OF THIS APPAREN T AND BASIC DISTINCTION BETWEEN THE TWO SECTIONS, WE HEREBY DISMISS THIS AD DITIONAL GROUND. 6. FROM THE SIDE OF THE APPELLANT, ANOTHER ADDITION AL GROUND HAS ALSO BEEN RAISED THAT THE PENALTY WAS LEVIED AFTER THE L APSE OF MANY YEARS THEREFORE, BARRED BY LIMITATION AND BAD IN LAW. TH E LD. A.R. HAS INFORMED THAT SINCE ADMITTEDLY, THE ASSESSMENT ORDE R WAS PASSED IN THE YEAR 2003 AND THE PENALTY ORDER WAS PASSED IN THE Y EAR 2005, THEREFORE, THERE WAS UNDUE DELAY IN PASSING THE PENALTY ORDER HENCE, SHOULD BE HELD AS BAD IN LAW. IN SUPPORT OF THIS CONTENTION, HE A LSO PLACED RELIANCE ON THE DECISION RENDERED IN THE CASE OF SHARDA EDUCATIONAL TRUST AS REPORTED IN 99 TTJ 212 AND ALSO THE DECISION OF RAJENDRA KUMAR SOMANI (SUPRA). 7. FROM THE SIDE OF THE REVENUE, LD. D.R. HAS PLEAD ED THAT THERE IS NO LEGAL REQUIREMENT TO PASS AN ORDER U/S 271D WITHIN A SPECIFIED TIME PERIOD. AS PER HIS ARGUMENT, SINCE THE STATUTE DOE S NOT PRESCRIBE ANY TIME LIMITATION, THEREFORE, THE ADDITIONAL GROUND DESERV ES TO BE DISMISSED. LD. D.R. HAS PLACED RELIANCE ON THE DECISION RENDERED I N THE CASE OF DEWAN CHAND AMRITLAL AS REPORTED IN 98 TTJ 947 (CHD.) (SB ). LD. D.R. HAS ALSO PLACED RELIANCE ON THE DECISION RENDERED IN THE CAS E OF ACIT VS VINMAN FINANCE AND LEASING LTD. AS REPORTED IN 115 ITD 115 (3 RD MEMBER) (YZAG). 8. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES A T THE OUTSET WAS PLACED ON RECORD THE ADMISSION OF THIS ADDITIONAL G ROUND BEING LEGAL IN NATURE BY WAY OF NTPC AS REPORTED IN 229 ITR 383 (S .C.). AS FAR AS THE FACTS OF THE CASE ARE CONCERNED, IT IS WORTH TO MEN TION THAT THE DELAY OF ABOUT TWO YEARS CANNOT BE HELD AS INORDINATE DELAY. THE ASSESSMENT WAS COMPLETED ON 31.12.2003 AND THE IMPUGNED PENALTY WA S IMPOSED ON I.T.A.NO. 124 /AHD/2006 5 20.06.2005. LD. D.R. HAS DRAWN OUR ATTENTION ON AN IMPORTANT FACT THAT THE ASSESSMENT WAS MADE BY DCIT, CENTRAL CIRCLE-I, BARODA. HOWEVER, AS PER THE PROCEDURAL REQUIREMENT, THE PENALTY WAS IMPOSED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, CENTRAL RANG E, BARODA. BEFORE IMPOSING THE PENALTY, CERTAIN DETAILS WERE CALLED F OR FROM THE OFFICE OF DCIT AND AS IS EVIDENT FROM PARA 3 OF THE PENALTY O RDER, THE DCIT, CENTRAL CIRCLE I, BARODA HAS FURNISHED THE LIST O F LOANS. BECAUSE OF THIS INTERNAL CORRESPONDENCE BETWEEN THE TWO OFFICES, TH ERE COULD BE A POSSIBILITY OF DELAY IN TAKING DECISION ON PENALIZI NG THE ASSESSEE. ANOTHER ASPECT HAS ALSO BEEN NOTED BY US THAT SEVER AL ADJOURNMENTS WERE SOUGHT BY THE ASSESSEE. IN FACT, AFTER THE COMPLET ION OF THE ASSESSMENT IN THE MONTH OF DECEMBER 2003, A REFERENCE WAS RECEIVE D BY THE ADDITIONAL COMMISSIONER OF INCOME TAX FROM THE OFFICE OF DCIT IN THE MONTH OF MAY 2004. THEREFORE, AS FAR AS THE REVENUE IS CONC ERNED, THE ACTION WAS TAKEN WITHIN A FEW MONTHS AFTER THE COMPLETION OF T HE ASSESSMENT ORDER. SUCH A DELAY CANNOT BE HELD AS AN INORDINATE DELAY. AS FAR AS THE DECISION IN THE CASE OF SHARDA EDUCATIONAL TRUST (SUPRA) IS CONCERNED, THE FACTS ALTOGETHER ARE DIFFERENT BECAUSE NO RETURN WAS FURN ISHED NOR ANY ASSESSMENT WAS MADE AND THE PROCEEDINGS WERE INITIA TED AFTER A LAPSE OF A PERIOD OF MORE THAN 7 YEARS. UNDER THOSE CIRCUMSTA NCES, WHEN THERE WAS NO ASSESSMENT WAS MADE AND THE PENALTY PROCEEDINGS WERE INITIATED AFTER A LAPSE OF SEVEN YEAS, A FAVOURABLE VIEW WAS TAKEN BY THE RESPECTED COORDINATE BENCH. THE RESPECTED BENCH HAS TAKEN T HE TOTALITY OF THE CIRCUMSTANCES OF THAT CASE AFTER ANALYZING FEW ANOT HER IMPORTANT FACTS THAT OTHERWISE ALSO THE TRANSACTION WAS GENUINE AND THAT THE TRANSACTION IN QUESTION WAS NEITHER A LOAN NOR A DEPOSIT BECAUSE T HE TRANSACTED AMOUNT WAS RECEIVED FROM THE TRUSTEES. UNDER THOSE OVER A LL CIRCUMSTANCES, A I.T.A.NO. 124 /AHD/2006 6 FAVOURABLE VIEW WAS TAKEN. HOWEVER, IN THE PRESENT APPEAL, THE FACTS ARE ALTOGETHER DIFFERENT. RATHER THE DECISIONS CITED F ORM THE SIDE OF THE REVENUE, ARE RELEVANT AND CLOSE TO THE ISSUE IN HAN D HENCE, FOLLOWING THE SAME, THIS ADDITIONAL GROUND IS ALSO HEREBY DISMISS ED. 9. AS FAR AS THE GROUNDS RAISED ON MERIT, AS ARE RE PRODUCED ABOVE ARE CONCERNED, WE HAVE BEEN INFORMED THAT THE ASSESSEE HAS INFORMED TO THE 1 ST APPELLATE AUTHORITY THAT ALL THE TRANSACTIONS WERE NOT IN CASH BUT SOME OF THEM WERE ALSO THROUGH CHEQUES. DURING REMAND P ROCEEDING AS WELL, THE ASSESSEE HAS CLAIMED THAT THERE WAS BANK TRANSA CTIONS AND ALSO PRODUCED FEW STATEMENTS. OUT OF THE FOUR BANK STAT EMENTS ONLY TWO WERE AVAILABLE LAND THOSE BANK STATEMENTS WERE FURNISHED . REST OF THE BANK STATEMENTS WERE NOT AVIALABLE AT THAT TIME. SUCH D ELAY IN FURNISHING THE BANK STATEMENTS WAS TREATED BY LD. CIT(A) AS A SYST EMATIC AVOIDANCE OF THE PROCEEDINGS. LD. CIT(A) HAS NOT APPRECIATED TH E MERITS OF THE CASE AND PRIMARILY BECAUSE OF NON FURNISHING OF BANK STA TEMENTS. IN SUMMARY MANNER, FRAMING OF LEVY OF PENALTY IN THE FOLLOWING MANNER:- THE SUBMISSION OF THE APPELLANT, REMAND REPORT AND SUBMISSION MADE THEREON ARE DULY CONSIDERED. AS CAN BE SEEN FR OM THE ABOVE THAT THE APPELLANT HAD BEEN SYSTEMATICALLY SI NCERE IN AVOIDING THE PROCEEDINGS BY BLAMING THE ASSESSING O FFICER, INITIALLY FOR NOT PROVIDING THE SEIZED MATERIAL AND THEN NOT PROVIDING WITH THE BANK STATEMENTS. I FIND IT REALL Y FUNNY AND ABSURD THAT THE APPELLANT IS ASKING THE DEPARTMENT TO FURNISH THE BANK STATEMENTS, WHICH THE APPELLANT OUGHT TO HAVE, AS THESE ACCOUNTS ARE BEING MAINTAINED OR HAVE BEEN MAINTAIN ED BY HIM WITH THESE BANKS. THE SOLE PURPOSE OF THE APPELLA NT IS TO AVOID PROCEEDINGS, ON SOME OR THE OTHER PRETEXT. HOWEVE R, AS CAN BE SEEN FROM THE SUBMISSION OF THE APPELLANT THAT IT S CLAIM THAT ALL THE TRANSACTIONS NOTED DOWN IN THE SEIZ ED MATERIAL ARE NOT IN CASH. IN FACT, THERE ARE LOANS WHICH ARE BY CHEQUE THROUGH THE ABOVE MENTIONED BANK ACCOUNTS. HOWEVER, DESP ITE OF SUFFICIENT OPPORTUNITIES GRANTED TO IT SINCE, ISSUANCE OF SHOW I.T.A.NO. 124 /AHD/2006 7 CAUSE NOTICE BY THE ADDL. CIT FOR IMPOSING THE PENA LTY U/S.271D, TILL THE DATE OF FINALIZING THIS APPEAL, THE APPELLANT HAS FAILED TO PIN-POINT EVEN A SINGLE TRANSACTION WHICH IS THROUGH BANKING CHANNEL I.E. NOT IN CONTRAVENTION WITH THE PROVISIONS OF SECTION 269SS OF THE ACT, HENCE I DO NOT SEE ANY RE ASON TO INTERFERE WITH THE FINDING OF THE A.O. THE PENALTY SO LEVIED U/S 271D, AMOUNTING TO RS.2,79,47,694/- IS THUS CONFIRM ED. 10. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES AN D IN THE LIGHT OF CERTAIN EVIDENCES IN THE FROM OF BANK STATEMENTS WH ICH WERE NOW THE ASSESSEE WANTED TO FURNISH, WE DEEM IT PROPER TO RE STORE THE ENTIRE ISSUE BACK TO THE STAGE OF LD. CIT(A) TO DECIDE AFRESH AS PER LAW. THERE IS ONE MORE REASON FOR RESTORING TO THIS ISSUE BACK TO THE STAGE BECAUSE, AS PER THE IMPUGNED ASSESSMENT ORDER, THERE WAS AN ADDITIO N OF RS.45,46,500/- WHICH WAS TAKEN IN THE HANDS OF THE ASSESSEE AS UNE XPLAINED CREDIT AND THIS AMOUNT HAS BEEN SUSTAINED IN THE 2 ND APPEAL AS STATED BY LD. A.R., THEREFORE, WHETHER IT IS TO B E HELD AS LOAN OR DEP OSIT IN THE HANDS OF THE ASSESSEE FOR THE PURPOSE OF LEVY OF PENALTY U/S 271 D, HAS TO BE EXAMINED AFRESH. WITH THESE DIRECTIONS ON MERIT, THE ISSUE IS BEING RESTORED BACK FOR FRESH ADJUDICATION BY LD. CIT(A), NEEDLESS TO S AY AFTER PROVIDING ADEQUATE O9PORUTNITY OF BEING HEARD TO BOTH THE SID ES, WE HEREBY ALLOW THE RESPECTIVE GROUNDS ONLY FOR STATISTICAL PURPOSE S. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 12. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (A. K. GARODIA) (MUKUL KUMAR SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER SP I.T.A.NO. 124 /AHD/2006 8 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 10/2 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13/2.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 29/2 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.29/2 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 29/2/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .