Sri A Narsing Rao, Hyderabad V. ACIT, Hyderabad

ITSSA 17/HYD/2010

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8415 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-03-2011
• Assessment Year: misc
• Appeal Filed On: 11-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R BALA NAIK
• Assessee Lawyers: M V JOSHI
• Keywords: Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER IT(SS)A NO.17/HYD/2010 : BLOCK PERIOD FROM 1.4.1988 TO 11.2.1999 SHRI A.NARSING RAO, HYDERABAD (PAN ADDPA 9594 R ) VS ASSTT. COMMISSIONER OF INCOME- TAX, CIRCLE 4(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.V.JOSHI RESPONDENT BY : SHRI R. BALA NAIK O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE BLOCK PERIOD FROM 1.4.1988 TO 11.2.1999, IS DIRECTED AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME-TAX(APPEALS). 2. THERE IS A DELAY OF 106 DAYS IN FILING THE PRES ENT APPEAL BEFORE THE TRIBUNAL. ASSESSEE HAS FILED AN AFFIDAVI T EXPLAINING THE REASONS FOR THE DELAY IN FILING THE APPEAL BEFORE T HE TRIBUNAL. WE HAVE HEARD THE PARTIES ON THE ISSUE OF CONDONATION OF DELAY IN PRESENTING THE APPEAL BEFORE THE TRIBUNAL. AFTER CO NSIDERING THE CONTENTS OF THE AFFIDAVIT DATED 11.10.2010 FILED BY THE ASSESSEE, WE HOLD THAT IT IS A FIT CASE FOR CONDONATION OF DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL AND THE SAME IS ACCORDINGLY CON DONED. IT(SS)A NO.17/H/2010 SHRI A.NARSING RAO, HYDERABAD 2 3. THE ONLY ISSUE IN THIS APPEAL IS REGARDING VALI DITY OF PENALTY IMPOSED UNDER S.158BFA AMOUNTING TO RS.3,58 ,441 FOR THE BLOCK PERIOD. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SEARCH UNDER S.132 OF THE ACT ON THE PR EMISES OF THE ASSESSEE ON 11.2.1999 AND NO ITEM OF CONCEALMENT OF INCOME WAS FOUND BY THE DEPARTMENT. ADDITION TO THE INCOME DEC LARED IN THE BLOCK RETURN WAS MADE ON ACCOUNT OF HOUSEHOLD EXPEN SES AND EXPENDITURE ON MARRIAGE ESTIMATED BY THE ASSESSING OFFICER AND THE SAME WAS PARTLY CONFIRMED ON APPEAL BY THE TRIBUNAL IN THE QUANTUM CASE OF THE ASSESSEE. HE SUBMITTED THAT THE PENALT Y PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE DIFFERENT AND MERELY BEC AUSE CERTAIN ADDITION HAS BEEN SUSTAINED IN THE QUANTUM APPEAL O F THE ASSESSEE BY THE TRIBUNAL, IT COULD NOT BE SAID THAT THE ASSE SSEE SHOULD BE MADE LIABLE FOR PENALTY UNDER S.158BFA OF THE ACT. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPP OSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSE SSEE. HE SUBMITTED THAT THE MATERIAL WAS FOUND AT THE TIME O F SEARCH AND THEREFORE ADDITION MADE ON ACCOUNT OF HOUSEHOLD EXP ENDITURE AND EXPENDITURE ON MARRIAGE WAS SUSTAINED BY THE TRIBUN AL. THE ASSESSEES EXPLANATION IN THIS REGARD WAS NOT BONA FIDE AND THE ASSESSEE WOULD NOT HAVE COME OUT WITH THE TRUTH, HA D THERE BEEN NO SEARCH OPERATION CONDUCTED BY THE DEPARTMENT. HE R ELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND HAVE PERUSED THE ORDERS OF THE ASSESSING OFFICER AN D THE CIT(A). WE FIND THAT THERE WAS SEARCH OPERATION IN THE CASE OF THE ASSESSEE UNDER S.132 OF THE ACT ON 11.2.1999 AT THE RESIDENT IAL AS WELL IT(SS)A NO.17/H/2010 SHRI A.NARSING RAO, HYDERABAD 3 BUSINESS PREMISES OF THE ASSESSEE. ASSESSEE HAS FIL ED BLOCK RETURN DECLARING AN INCOME OF RS.3,23,584. BLOCK ASSESSMEN T WAS COMPLETED ON TOTAL UNDISCLOSED INCOME OF RS.14,38,246 BY MAKI NG ADDITIONS OF RS.8,65,000 TOWARDS HOUSEHOLD EXPENDITURE AND RS.2 LAKHS TOWARDS EXPENDITURE ON CHILDRENS MARRIAGE. THE SAID ADDITI ONS WERE REDUCED BY THE CIT(A) AND THE SAME WERE FURTHER REDUCED BY THE TRIBUNAL IN APPEAL. THE EXPLANATION OF THE ASSESSEE WAS THAT TH E HOUSEHOLD EXPENDITURE AND EXPENDITURE ON MARRIAGE WERE MET OU T OF THE AMOUNT OF RS.10,65,000 ADMITTED DURING THE EARLIER SEARCH CONDUCTED ON THE ASSESSEES PREMISES ON 9.1.1986 AN 5.2.1986 AND AVAILABLE WITH THE ASSESSEE. THIS CONTENTION WAS REJECTED B Y THE DEPARTMENT ON THE GROUND THAT THE SAID AMOUNT RELATING TO EARL IER SEARCHES WOULD NOT HAVE BEEN AVAILABLE WITH THE ASSESSEE FOR SUCH A LONG TIME. WE FIND THAT THE FACTS OF THE CASE MAY JUSTIFY THE CON FIRMATION OF THE ADDITION MADE ON ACCOUNT OF HUMAN PROBABILITIES. T HIS SEEM TO BE NOT SUFFICIENT TO VISIT THE ASSESSEE WITH PENALTY U NDER S.158BFA OF THE ACT. THE REVENUE HAS NOT POINTED OUT ANY OTHER EXP ENDITURE OR INVESTMENT MADE BY THE ASSESSEE OUT OF THE AMOUNT O F RS.10,65,000 ADMITTED DURING THE EARLIER SEARCH OPERATIONS CONDU CTED ON THE ASSESSEES PREMISES ON 9.1.1986 AND 5.2.1986. THE A SSESSEE HAS FURTHER EXPLAINED THAT THESE AMOUNTS WERE VERY MUCH AVAILABLE WITH HIM AND WERE LYING WITH ITS TRADE DEBTORS AND WHEN EVER MONEY WAS REQUIRED FOR HIS DOMESTIC EXPENSES AND OTHER EXPENS ES, HE COLLECTED THE REQUIRED AMOUNTS FROM THE SAID TRADE DEBTORS. ASSESSEE HAS FILED AN EXPLANATION WHICH COULD NOT BE SAID TO BE WITHOUT ANY BASIS OR FOUNDATION. IT IS NOW WELL SETTLED THAT ASSESSM ENT AND PENALTY PROCEEDINGS ARE DIFFERENT. IN THE FACTS OF THE CAS E, WE HOLD THAT WHILE THE FACTS OF THE CASE MAY JUSTIFY THE ADDITION IN THE QUANTUM CASE OF THE ASSESSEE, THE SAME ARE NOT SUFFICIENT TO IMPOSE PENALTY ON THE IT(SS)A NO.17/H/2010 SHRI A.NARSING RAO, HYDERABAD 4 ASSESSEE UNDER S.158 BFA, WHICH IS ACCORDINGLY CANC ELLED AND THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 8.4.2011 SD/- SD/- (AKBER BASHA) ( G.C. G UPTA) A CCOUNTANT MEMBER V ICE PRESIDENT DATED THE 8TH APRIL, 2011 COPY FORWARDED TO: 1. SHRI A.NARSING RAO, 3-5-170/1, NARAYANAGUDA, HYD ERABAD 2. ASST. COMMISSIONER OF INCOME - TAX CIRCLE 4(1) HYDERABAD 3. CIT (A) - V , HYDERABAD. 4. COMMISSIONER OF INCOME - TAX I V , HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S