Shri Kirtilal Nagardas Shah, Palanpur V. The Dy.CIT.,Cent.Circe-1(1), Ahmedabad

ITSSA 171/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0518 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-01-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S N DIVETIA
• Keywords: Source of fund
• Section: 143(3); 5(2); 153A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD 0 0 , 0 0 , BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI N.S. SAINI , ACCOUNTANT MEMBER ./ IT (SS) A NO S . 171, 173 & 174 / AHD/ 201 1 [ [ / ASSESSMENT YEAR: 2001 - 02, 2003 - 04, 2004 - 05 RE PECTIVELY KIRTILAL NAGARDAS SHAH, 4, KALYAN SOCIETY, NANSROVAR ROAD, PALANPUR, DIST : BANASKANTHA PAN : AIMPS 2897 P VS DCIT, CENTRAL CIRCLE 1(1) AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE(S) BY : SHRI S.N. DIVETIA, AR REVENUE BY : SHRI B.L. YADAV, SR. DR. / DATE OF HEARING : 1 3 / 01 /201 5 / DATE OF PRONOUNCEMENT: 16 /01/2015 / O R D E R PER BENCH : THE S E ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THREE SEPARATE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS) - I, AHMEDABAD , ALL DATED 25 . 11 .201 0 FOR ASSESSMENT YEARS 2001 - 02, 2003 - 04 AND 2004 - 05 . 2. THE COMMON GROUND OF APPEAL TAKEN BY THE ASSESSEE IN ALL THESE APPEALS IS THAT THE CIT(A) ERRED IN UPHOLDING THE LEVY OF PENALTY OF RS.71,960/ - IN ASSESSMENT YEAR 2001 - 02, RS.3,70,130/ - IN ASSESSMENT YEAR 2003 - 04 AND RS. 11,55,600/ - IN ASSESSMENT YEAR 2004 - 05. 3. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE FACTS IN ALL THE SE THREE APPEALS, EXCEPT CHANGE IN FIGURES, ARE IDENTICAL; IT(SS)A NOS 171, 173 & 174/ AHD / 2011 - KIRTILAL NAGARDAS SHAH VS. DCIT FOR AY 2001 - 02, 03 - 04 & 04 - 05 2 THEREFORE, HE IS MAKING THE SUBMISSIONS IN ASSESSMENT YEAR 2001 - 02 WHICH SHOULD BE TAKEN AS SUBMISSIONS OF THE ASSESSEE IN THE OTHER ASSESSMENT YEARS ALSO. 4. IN THE ASSESSMENT YEAR 2001 - 02, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT T H E ASSESSEE IS AN INDIVIDUAL AND H E IS A DIRECTOR IN ARIHANT PUMPS PVT. LTD AND HIS SOURCES OF INCOME ARE SALARY, INTEREST, CAPITAL GAINS , ETC. A SEARCH U/S. 132(2 ) OF THE ACT WAS CARRIED OUT IN AROMA GROUP ON 1.11.2006 , WHEREIN THE RESIDENTIAL PREMISES OF THE ASSESSEE WERE ALSO COVERED. DURING THE COURSE OF SEARCH , VARIOUS INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM VARIOUS PREMISES AND STATEMENT OF THE ASSESSEE WAS RECORDED WHEREIN HE MADE DISCLOSURE OF ADDITIONAL INCOME. THEREAFTER, A NOTICE U/S.153A WAS ISSUED ON 25.4.2008 IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN OF INCOME ON 23.12.2008 DECLARING TOTAL INCOME OF RS.7,14,770 / - WHICH INCLUDED, INTER ALIA , AN ADDITIONAL INCOME OF RS.2,05,000 / - . THE ASSESSING OFFICER COMPLETED ASSESSMENT U / S .153A R . W . S . 143(3) ON 31.12.2008 ON THE TOTAL INCOME OF RS.7,14,770 / - WITHOUT ANY FURTHER ADDITION . HOWEVER, PEN ALTY PROCEEDINGS U/S. 271(1)(C) WERE INITIATED. THE ASSESS EE FILED DETAILED REPLY BY LETTERS DATED 24.6.2009 CONTENDING THAT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT WERE NOT APPLICABLE IN VIEW OF THE IMMUNITY ALLOWED UNDER EXPL ANATION 5 OF SAID SUB - SECTION AND SEC.271AAA. HOWEVER, THE ASSESSING OFFICER REJ ECTED THE EXPLANATION SUBMITTED BY THE ASSESSEE AND LEVIED PENALTY OF RS.71,960 / - . BEING AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL TO CIT(A) WHO HAS CONFIRMED THE IMPUGNED PENALTY RE LYING UPON THE DECISION OF ITAT, AHMEDABAD BENCH IN THE CASE OF KIRIT DA YABHAI PATEL & OTHERS (125 TTJ AHD (TM) 145) . IT IS ALSO OBSERVED BY THE CIT(A) THAT THE DISCLOSURE WAS NOT VOLUNTARY BUT AFTER THE SEARCH ACTION AND EVEN DECLARATION MADE IN THE RETURN FILED IN RESPONSE TO NOTICE U/S. 1 53A WOULD NOT GIVE IMMUNITY TO THE ASSESSEE . IT(SS)A NOS 171, 173 & 174/ AHD / 2011 - KIRTILAL NAGARDAS SHAH VS. DCIT FOR AY 2001 - 02, 03 - 04 & 04 - 05 3 5 . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ALSO SUBMITTED THAT THE CIT(A) HAS RELIED ON THE DECISION OF THIRD MEMBER OF AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. KIRIT DAHYABHAI PATEL (2009) 121 ITD 159 (AHD) (TM), WHEREIN I T WAS HELD THAT WHERE R ETURNS WERE FILED BY THE ASSESSEE AFTER THE SEARCH IN RESPONSE TO NOTICES ISSUED U/S 153A, THE ADDITIONAL INCOME DECLARED IN THESE RETURNS DO NOT FALL UNDER THE CATEGORY OF THE RETURN MENTIONED IN EXPLANATION 5(2) TO SECTION 271(1)(C ) ; THEREFORE, THE ASSESSEE IS NOT ENTITLED TO THE IMMUNITY FROM PENALTY AND CONFIRMED THE LEVY OF PENALTY BY THE ASSESSING OFFICER FOR ALL THE YEARS UNDER APPEAL S . HE FILED BEFORE US A COPY OF THE ORDER OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRI T DAHYABHAI PATEL VS. ACIT , REPORTED IN 2015 (1) TMI 201, AND SUBMITTED THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA) HAS BEEN REVERSED BY THE HONBLE GUJARAT HIGH COURT , HENCE IT WAS HIS SUBMISSION THAT THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN ALL THE YEARS UNDER CONSIDERATION IS LIABLE TO BE DELETED. 6 . THE DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE THAT , IN THE INSTANT CASE , THE PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIED OF RS.71,960/ - IN ASSESSMENT YEAR 2001 - 02, RS.3,70,130/ - IN ASSESSMENT YEAR 2003 - 04 A ND RS.11,55,600/ - IN ASSESSMENT YEAR 2004 - 05 ON THE GROUND THAT THE ASSESSEE HAD SHOWN UNDISCLOSED INCOME IN THE RETURN OF INCOME FILED PURS UANT TO THE NOTICE ISSUED U/S 153A OF THE ACT. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER R ELYING ON THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. KIRIT DAHYABHAI PATEL (SUPRA ). WE FIND IT(SS)A NOS 171, 173 & 174/ AHD / 2011 - KIRTILAL NAGARDAS SHAH VS. DCIT FOR AY 2001 - 02, 03 - 04 & 04 - 05 4 THAT THE HONBLE GUJARAT HIGH COURT IN A VERY RECENT DECISION DATED 03.12.2014 HAS REVERSED THE ORDER OF THE TRIBUNAL IN THE CASE OF KIRTI D AHYABHAI PATEL (SUPRA) AND WHILE DOING SO , HELD AS UNDER: - VALIDITY OF RESTORATION OF PENALTY MADE BY TRIBUNAL - AVAILABILITY OF BENEFIT OF EXPLANATION 5 - WHETHER THE TRIBUNAL WAS RIGHT IN RESTORING THE PENALTY IMPOSED U/S 271(1)(C) HOLDING THAT BENEFIT UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT WOULD BE AVAILABLE ONLY FOR PERIOD WHERE DUE DATE FOR FILING THE RETURN U/S 139(1) OF THE ACT HAD NOT EXPIRED - HELD THAT: - IN COMMISSIONER OF INCOME - TAX VERSUS SDV. CHANDRU [2003 (12) TMI 40 - MADRAS HI GH COURT] IT HAS BEEN HELD THAT IN A CASE WHERE THE ASS E SSEE HAD NOT DISCLOSED HIS INCOME IN THE RETURNS FILED FOR THE PREVIOUS YEAR WHICH HAVE ENDED PRIOR TO THE DATE OF THE SEARCH AND, IN THE STATEMENT GIVEN U/ X 132(4) THE ASSESSEE ADMITTED THE RECEIPT O F UNDISCLOSED INCOME FOR THOSE YEARS AND ALSO SPECIFIED THE MANNER IN WHICH SUCH INCOME HAD BEEN DERIVED AND THEREAFTER PAYS THE TAX ON THAT UNDISCLOSED INCOME WITH INTEREST, THEN SUCH UNDISCLOSED INCOME WOULD GET IMMUNISED FROM THE LEVY OF PENALTY. ALSO IN COMMISSIONER INCOME TAX, BILASPUR CG. VERSUS SHRI ABDUL RASHID [2013 (5) TMI 328 - CHATTISGARH HIGH COURT] IT HAS BEEN HELD THAT IN ORDER TO GET THE BENEFIT OF IMMUNITY UNDER CLAUSE(2) OF EXPLANATIONS TO SECTION 271(1)(C) OF THE INCOME TAX ACT, IT IS NOT NECESSARY TO FILE THE RETURN BEFORE THE DUE DATE PROVIDED THAT THE ASSESSEE HAD MADE A STATEMENT, DURING THE SEARCH AND EXPLAINED THE MANNER IN WHICH THE SURRENDERED AMOUNT WAS DERIVED, AND PAID TAX AS WELL AS INTEREST ON THE SURRENDERED AMOUNT - THE VIEW TAKEN BY THE TRIBUNAL IS ERRONEOUS - THE ASSESSEES HAD SATISFIED ALL THE CONDITIONS WHICH ARE REQUIRED FOR CLAIMING IMMUNITY FROM PAYMENT OF PENALTY U/S 271(1) - THE PROVISION DOES NOT SPECIFY ANY TIME LIMIT DURING WHICH THE AFORESAID AMOUNT I.E. THE AMOU NT OF PENALTY WITH INTEREST HAS TO BE PAID - WHEN THE ASSESSEES HAVE PAID THE ENTIRE AMOUNT WITH INTEREST, THE AO OUGHT TO HAVE GRANTED THEM IMMUNITY AVAILABLE U/S 271(1)(C) - RELYING UPON ASSISTANT COMMISSIONER OF INCOME TAX, UDAIPUR VERSUS M/S. GEBILAL K ANHAIALAL HUF, THROUGH KARTA, UDAIPUR [2012 (9) TMI 297 - SUPREME COURT] - THE PENALTY U/S 271(1)(C) CANNOT BE LEVIED ON THE INCOME SHOWN IN THE RETURN FILED UNDER SECTION 153A - THE ORDER OF THE TRIBUNAL IS SET ASIDE - DECIDED IN FAVOUR OF ASSESSEE. IT(SS)A NOS 171, 173 & 174/ AHD / 2011 - KIRTILAL NAGARDAS SHAH VS. DCIT FOR AY 2001 - 02, 03 - 04 & 04 - 05 5 8 . RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRTI DAHYABHAI PATEL (SUPRA) , WE SET ASIDE THE ORDERS OF THE CIT(A) AND DELETE THE LEVY OF PENALTY OF RS.71,960/ - IN ASSESSMENT YEAR 2001 - 02, RS.3,70,130/ - IN ASSE SSMENT YEAR 2003 - 04 AND RS.11,55,600/ - IN ASSESSMENT YEAR 2004 - 05. THUS, THE SE APPEALS OF THE ASSESSEE IN ALL THE YEARS UNDER APPEAL S ARE ALLOWED. 9. IN THE RESULT, THE APPEAL S FILED BY THE ASSESSEE IN ALL THE THREE ASSESSMENT YEARS ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON F R I D A Y , THE 1 6 T H OF JANUARY , 201 5 AT AHMEDABAD. SD/ - SD/ - ( G.C. GUPTA ) VICE PRESIDENT ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 1 6 / 01 /201 5 *BIJU T , PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - I , AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. [ / GUARD FILE . / BY ORDER, T R U E COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD