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

ITSSA 172/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0514 (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: 2002-2003
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S N DIVETIA
• Section: 5(2); 153A; 2

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 . 17 2 , 17 5 & 17 6 / AHD/ 201 1 [ [ / ASSESSMENT YEAR: 200 2 - 0 3 , 200 5 - 0 6 , 200 6 - 0 7 RE S PECTIVELY KIRTILAL NAGARDAS SHAH, 4, KALYAN SOCIETY, M ANSROVAR 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 200 2 - 0 3 , 200 5 - 0 6 AND 200 6 - 0 7 . 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. 3,13,650 / - IN ASSESSMENT YEAR 200 2 - 0 3 , RS. 9,55,950 / - IN ASSESSMENT YEAR 200 5 - 0 6 AND RS.54,09,500/ - IN ASSESSMENT YEAR 200 6 - 0 7 . IT(SS)A NOS 17 2 , 17 5 & 1 76 / AHD / 2011 - KIRTILAL NAGARDAS SHAH VS. DCIT FOR AY 2002 - 03, 2005 - 06, 2006 - 07 2 3. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE FACTS IN ALL THE SE THREE APPEALS, EXCEPT CHANGE IN FIGURES, ARE IDENTICAL; THEREFORE, HE IS MAKING HIS SUBMISSIONS FOR ASSESSMENT YEAR 200 5 - 0 6 WHICH MAY BE TAKEN AS SUBMISSIONS OF THE ASSESSEE IN THE ASSESSMENT YEARS 2002 - 03 AND 2006 - 07 ALSO. 4. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT I N THE ASSESSMENT YEAR 200 5 - 0 6 , THE ASSESSING OFFICER LEVIED P ENALTY U/S 271(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE FILED RETURN OF INCOME PURSUANCE TO NOTICE U/S 153A OF THE ACT DECLARING TOTAL INCOME AT RS.33,31,260/ - WHICH INCLUDED THE ADDITIONAL INCOME OF RS.28,40,000/ - WHICH WAS DISCLOSED BY THE ASSESS EE AT THE TIME OF SEARCH ACTION. THEREFORE, THE ASSESSING OFFICER CONSIDERED THE ADDITIONAL INCOME OF RS.28,40,000/ - AS THE INCOME SOUGHT TO BE EVADED AND LEVIED PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED, AMOUNTING TO RS.9,55,950/ - . 5. SIMILARLY, IN ASSESSMENT YEAR 2006 - 07, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE FILED RETURN U/S 153A OF THE ACT DISCLOSING TOTAL INCOME AT RS.1,67,55,250/ - WHICH INCLUDED ADDITIONAL INCOME OF RS.1,60,71,000/ - DISCLOSED IN THE STATEMENT RECORDED U/S 1 32(4) OF THE INCOME - TAX ACT. HE TREATED THIS ADDITIONAL INCOME OF RS.1,60,71,000/ - AS A CONCEALED INCOME AND LEVIED PENALTY FOR CONCEALMENT AT RS.54,09,500/ - , BEING 100% OF THE TAX SOUGHT TO BE EVADED BY THE ASSESSEE. 6. SIMILARLY, IN ASSESSMENT YEAR 20 02 - 03, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE FILED RETURN OF INCOME U/S 153A OF THE ACT SHOWING TOTAL INCOME AT RS.13,95,630/ - WHICH INCLUDED ADDITIONAL INCOME OF RS.10,25,000/ - . THE ASSESSING OFFICER TREATED THE ADDITIONAL IT(SS)A NOS 17 2 , 17 5 & 1 76 / AHD / 2011 - KIRTILAL NAGARDAS SHAH VS. DCIT FOR AY 2002 - 03, 2005 - 06, 2006 - 07 3 INCOME OF RS.10,25,000/ - AS CONCEALMENT AND LEVIED PENALTY OF RS.3,13,650/ - , BEING 100% OF THE TAX SOUGHT TO BE EVADED. 7. ON APPEAL, THE CIT(A), FOLLOWING THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF KIRIT DAYABHAI PATEL & OTHERS (125 TTJ AHD (TM) 145) , CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 8 . 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 (2 009) 121 ITD 159 (AHD) (TM), WHEREIN IT 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 KIRIT 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. 9 . THE DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 10 . WE HAVE HEARD THE RI VAL 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.3,13,650/ - IN ASSESSMENT YEAR 2002 - 03, IT(SS)A NOS 17 2 , 17 5 & 1 76 / AHD / 2011 - KIRTILAL NAGARDAS SHAH VS. DCIT FOR AY 2002 - 03, 2005 - 06, 2006 - 07 4 R S.9,55,950/ - IN ASSESSMENT YEAR 2005 - 06 AND RS.54,09,500/ - IN ASSESSMENT YEAR 2006 - 07 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) CONFI RMED THE ACTION OF THE ASSESSING OFFICER RELYING ON THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. KIRIT DAHYABHAI PATEL (SUPRA ). WE FIND THAT THE HONBLE GUJARAT HIGH COURT IN A VERY RECENT DECISION DATED 03.12.2014 HAS REVERSED THE OR DER OF THE TRIBUNAL IN THE CASE OF KIRIT DAHYABHAI 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 HIGH 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 OF 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 INT EREST 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 DURIN G WHICH THE AFORESAID AMOUNT I.E. THE AMOUNT OF PENALTY WITH INTEREST HAS TO BE PAID - WHEN THE ASSESSEES HAVE PAID THE ENTIRE AMOUNT WITH IT(SS)A NOS 17 2 , 17 5 & 1 76 / AHD / 2011 - KIRTILAL NAGARDAS SHAH VS. DCIT FOR AY 2002 - 03, 2005 - 06, 2006 - 07 5 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 KANHAIALAL 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 AS IDE - DECIDED IN FAVOUR OF ASSESSEE. 11 . RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA) , WE SET ASIDE THE ORDERS OF THE CIT(A) AND DELETE THE LEVY OF PENALTY OF RS.3,13,650/ - IN A SSESSMENT YEAR 2002 - 03, RS.9,55,950/ - IN ASSESSMENT YEAR 2005 - 06 AND RS.54,09,500/ - IN ASSESSMENT YEAR 2006 - 07 . THUS, THE SE APPEALS OF THE ASSESSEE IN ALL THE YEARS UNDER APPEAL S ARE ALLOWED. 12 . 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, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD