Dy Commissioner of Income-tax 1(1), RAIPUR (CG) V. Shri Kamal Chand jain, RAIPUR (CG)

ITSSA 2/BIL/2012

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1192 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 21-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Assessee Lawyers: AMIT MALOO
• Keywords: Search and seizure
• Section: 132

Judgement Text

1 , RAIPUR IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BEFORE S/SHRI MUKUL KR. SHRAWAT (JM) & SHAMIM YAHYA (AM) ./ I.T(SS).A. NO.01/BLPR/2012 BLOCK PERIOD: 1.4.1995 TO 21.2.2012 DCIT, - 1(1), CENTRAL REVENUE BUILDING, CIVIL LINE, RAIPUR (CG) / VS. LALIT KUMAR JAIN, C/O. M/S. LAL GANGA BUILDERS, M.G.ROAD, RAIPUR ./ ./PAN/GIR NO. : ACIPJ 2301 H ( /APPELLANT ) .. ( / RESPONDENT ) C.O.NO.12/BLPR/2012 (ARISING OUT OF ( ./ I.T(SS).A. NO.01 /BLPR/2012) BLOCK PERIOD: 1.4.1995 TO 21.2.2012 LALIT KUMAR JAIN, C/O. M/S. LAL GANGA BUILDERS, M.G.ROAD, RAIPUR / VS. DCIT, - 1(1), CENTRAL REVENUE BUILDING, CIVIL LINE, RAIPUR (CG) ./ ./PAN/GIR NO. : ACIPJ 2301 H ( /APPELLANT ) .. ( / RESPONDENT ) ./ I.T(SS).A. NO.02/BLPR/2012 BLOCK PERIOD: 1.4.1995 TO 21.2.2012 DCIT, - 1(1), CENTRAL REVENUE BUILDING, CIVIL LINE, RAIPUR (CG) / VS. KAMAL CHAND JAIN, C/O. M/S. LAL GANGA BUILDERS, M.G.ROAD, RAIPUR ./ ./PAN/GIR NO. : ACIPJ 2300 G ( /APPELLANT ) .. ( / RESPONDENT ) C.O.NO.13/BLPR/2012(ARISING OUT OF ( ./ I.T(SS).A. NO.02/BLPR /2012 ) BLOCK PERIOD: 1.4.1995 TO 21.2.2012 2 KAMAL CHAND JAIN, C/O. M/S. LAL GANGA BUILDERS, M.G.ROAD, RAIPUR / VS. DCIT, - 1(1), CENTRAL REVENUE BUILDING, CIVIL LINE, RAIPUR (CG) ./ ./PAN/GIR NO. : ACIPJ 2300 G ( /APPELLANT ) .. ( / RESPONDENT ) ./ I.T(SS).A. NO.03/BLPR/2012 BLOCK PERIOD: 1.4.1995 TO 21.2.2012 DCIT, - 1(1), CENTRAL REVENUE BUILDING, CIVIL LINE, RAIPUR (CG) / VS. ASHOK KUMAR JAIN, C/O. M/S. LAL GANGA BUILDERS, M.G.ROAD, RAIPUR ./ ./PAN/GIR NO. : ACIPJ 2229 K ( /APPELLANT ) .. ( / RESPONDENT ) C.O.NO.14/BLPR/2012 (ARISING OUT OF ./ I.T(SS).A. NO.03/BLPR/2012 BLOCK PERIOD: 1.4.1995 TO 21.2.2012 ASHOK KUMAR JAIN, C/O. M/S. LAL GANGA BUILDERS, M.G.ROAD, RAIPUR ) / VS. DCIT, - 1(1), CENTRAL REVENUE BUILDING, CIVIL LINE, RAIPUR (CG) ./ ./PAN/GIR NO. : ACIPJ 2229 K ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SH. S.K.MEENA CROSS OBJECTOR BY: : SH AMIT MALOO / DATE OF HEARING 14 - 10 - 2015 / DATE OF PRONOUNCEMENT : - 10 - 2015 / O R D E R PER BENCH: 3 THESE APPEALS FILED B Y THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE EMANATE OUT OF RESPECTIVE ORDERS OF THE LD CIT(A) IN RESPECT OF SEPARATE ASSESSES. SINCE FACTS ARE IDENTICAL AND THE PENALTY IS BASED UPON SAME SEARCH, WE HAVE HEARD THESE APPEALS A ND CROSS OBJECTIONS AND DISPOSE OFF THEM BY THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. 2. THE COMMON GROUND RAISED BY THE REVENUE IN ALL THESE APPEALS IS AS UNDER: WHETHER IN LAW AND ON FACTS & CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.4,59,000/ - , LEVIED U/S.158BFA(2) OF THE I.,T.ACT , 1961 BY TREATING IT AT PAR WITH PENALTY U/S.271(1)(C), THE SCOPE OF WHICH IS DIFFERENT. 3. THE COMMON GROUND RAISED BY THE ASSESSEE IN ALL THESE CROSS OBJECTION IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TIME LIMITATION AVAIL ABLE U/S.158BFA(3) FOR LEVY OF PENALTY HAD ALREADY EXPIRED AND, THEREFORE, THE AO ERRED IN IMPOSING PENALTY U/S.158BFA(2) AND LD CIT(A) ERRED IN CONFIRMING THE SAME. THE LEVY OF PENALTY IS UNJUSTIFIED, UNWARRANTED AND UNCALLED FOR. 4 . SINCE THE FACTS AR E IDENTICAL, WE ADJUDICATE THE ISSUE WITH FACTS & FIGURES FROM THE APPEAL IN IT(SS) A NO.01/BLPR/2012 AND THE DECISION WILL APPLY MUTATIS - MUTANDIS TO OTHER APPEALS. 5 . BRIEFLY STATED THE FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE OPERATION U/S.132 OF TH E INCOME TAX ACT, WAS CONDUCTED IN THE BUSINESS AND RESIDENTIAL PREMISES OF PATWA 4 GROUP OF CASES, WHICH THE ASSESSEE WAS A MEMBER AND IN THE COURSE OF SEARCH AN AMOUNT OF RS.30,00,000/ - WAS OFFERED AS UNDISCLOSED INCOME IN THE STATEMENT RECORD U/S.132(4). HOWEVER, THE SAME WAS NOT FOUND OFFERED IN THE RETURN OF INCOME. THE GROUP HAS 4 PERSONS NAMELY SHRI HUKUM CHAND JAIN (FATHER), SHRI KAMAL CHAND JAIN, SHRI ASHOK KUMAR JAIN, SHRI LALIK KUMAR JAIN (THREE SONS). AGAINST THE UNDISCLOSED INCOME OFFERED AT R S.30,00,000/ - , THE AO ADDED RS.7,50,000/ - EACH IN THE ABOVE FOUR CASES AND COMPUTED THE TOTAL UNDISCLOSED INCOME AFTER SETTING OFF THE AMOUNT UNDISCLOSED INCOME OFFERED BY THE ASSESSES.. THESE ADDITIONS WERE DELETED IN ALL THE CASE BY THE CIT(A) AND THE I TAT HAS CONFIRMED THE ORDER. IN REVENUE APPEAL, FILED U/S.260A OF THE ACT, THE HONBLE CHHATTISHGARH HIGH COURT HAS RESTORED THE ORDER OF THE AO VIDE ITS ORDER IN ITA NO.18 & 20,21,22 OF 2006. THEREFORE, THE AO LEVIED PENALTY OF RS.4,59,000/ - U/S. 158BFA (2). 6 . UPON ASSESSEES APPEAL, THE LD CIT(A) DELETED THE PENALTY BY HOLDING AS UNDER: I HAVE GONE THROUGH THE OBSERVATIONS OF THE AO AND SUBMISSIONS OF THE APPELLANT. THE AO MADE THE ADDITION ON THE BASIS OF STATEMENT RECORDED U/S.132(4) AND THE SAME WA S CONFIRMED BY THE HONBLE HIGH COURT MAINLY FOR THE REASON THAT THE APPELLANT FAILED TO DISCHARGE THE BURDEN OF PROVING THAT THE STATEMENT WAS OBTAINED UNDER COERCION OR INTIMIDATION. THE FACT OF NON - AVAILABILITY OF SOME CORROBORATIVE MATERIAL WAS NOT EX AMINED BY THE HONBLE HIGH COURT. THE APPELLANTS CONTENTION THAT DESPITE EXTENSIVE SEARCH, THE DEPARTMENT DID NOT COME ACROSS WITH ANY MATERIAL TO PROVE POSITIVE CONCEALMENT ALSO SUPPORTS HIS CASE. IT IS TRITE LAW THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE DIFFERENT AND IN ORDER TO IMPOSE PENALTY, EXISTENCE OF STRONGER EVIDENCE IS NECESSARY. IT IS ALSO TRITE LAW THAT PENALTY IS NOT AN AUTOMATIC FALL OUT OF UPHOLDING OF ADDITION MADE BY THE AO. THE CASE LAWS RELIED UPON BY THE APPELLANT SPE CIFICALLY OF HARAKARAN DAS VED PAL (SUPRA), I AM OF THE CONSIDERED OPINION THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY. ACCORDINGLY, THE PENALTY ORDER IS CANCELLED AND THE APPEAL IS ALLOWED ON THESE GROUNDS 5 7 . AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL BEFORE US. 8 . AT THE TIME OF HEARING, LD DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ADDITION IN THIS CASE HAS BEEN CONFIRMED BY THE HONBLE CHHATTISHGARH HIGH COURT. THE ADDITION WAS MADE BASED UPON ASSESSEES STATEMENT RECORDED UN DER SECTION 132(4) OF THE ACT. H ENCE, LD D.R. SUBMITTED THAT THE AO HAS RIGHTLY LEVIED THE PENALTY IN THIS CASE. HE SUBMITTED THAT THE ORDER OF THE AO SHOULD BE RESTORED. 9 . PER CONTRA, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITION IN THIS CASE HAS BEEN MADE SOLELY BASED UPON THE STATEMENT RECORDED U/S.132( 4) OF THE ACT. HE SUBMITTED THAT THE REVENUE HAS NOT BROUGHT ON RECORD ANY CORROBORATIVE MATERIAL TO SUPPORT THAT ANY UNDISCLOSED INCOME WAS DISCOVERED FROM THE ASSESSEE. LD COUNSEL SUBMITTED THAT DEHORS A NY CORROBORATIVE MATE RIAL, THE LD CIT(A) AND ITAT HAD DELETED THE ADDITION, HOWEVER, THE HONBLE HIGH COURT HAS RESTORED THE ADDITION MADE BY THE AO ON THE GROUND THAT BOTH THE AUTHORITIES HAVE NOT RECORDED A FINDING THAT THE STATEMENT UNDER SECTION 132 (4) WAS OBTAINED UNDER COERCION . LD COUNSEL FURTHER SUBMITTED THAT THE HONBLE HIGH COURT HAS ALSO DRAWN ADVERSE INFERENCE ON THE GROUND THAT THE ASSESSEE HAD NOT PROPERLY RETRACTED AND FILED COMPLAINT REGARDING COERCIVE ACTION, IF ANY, TAKEN IN OBTAINING ST ATEMENT. IN THE LIGHT OF THIS, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT PROCEEDINGS ARE DIFFERENT FROM PENALTY PROCEEDINGS. HE SUBMITTED THAT THE GROUND ON WHICH THE ADDITION HAS BEEN RESTORED BY THE HONBLE HIGH COURT CANNOT LEAD TO CON CLUSION THAT THERE HA S BEEN CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT DEHORS ANY CORROBORATIVE MATERIAL BROUGHT ON RECORD IN SUPPORT OF THE 6 STATEMENT OBTAINED DURING SEARCH, P ENALTY CANNOT BE LEVIED. LD COUNSEL PLACED RELIANCE UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. HARKARAN DAS VED PAL (2009) 222 CTR 438 FOR THE PROPOSITION THAT NO PENALTY U/S.158BFA(2) CAN BE IMPOSED WHEN THERE IS A SURRENDER AN D THE UNDISCLOSED INCOME IS COMPUTED MERELY ON THE BASIS OF SUCH SURRENDER. HENCE, LD COUNSEL PLEADED THAT SINCE THE DECISION OF HONBLE DELHI HIGH COURT IS SQUARELY APPLICABLE ON THE FACTS OF THIS CASE, THE LEVY OF PENALTY HAS RIGHTLY BEEN DELETED BY THE LD CIT(A). LD COUNSEL ALSO SUBMITTED THAT THE SLP AGAINST THE DECISION OF THE HONBLE HIGH COURT IN THE CASE OF ASSESSEE HAS BEEN ADMITTED BY THE HONBLE APEX COURT. 10 . WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE RECORD OF THE CASE . AS PER THE ADMITTED FACTS OF THE CASE, THE ADDITION HAS BEEN MADE ON THE BASIS OF STATEMENT OBTAINED FROM THE ASSESSEE U/S.132(4) OF THE ACT. THE COMPUTATION OF UNDISCLOSED INCOME BY THE AO IS ALSO ON THE BASIS OF STATEMENT/SURRENDER BY THE ASSESSEE. NO MATERIAL CORROBORATING THE SAID UNDISCLOSED INCOME HAS BEEN BROUGHT ON RECORD BY THE REVENUE. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, IT CANNOT BE SAID THAT THE CONDUCT OF THE ASSESSEE WAS CONTUMACIOUS SO AS TO WARRANT LEVY OF PENALTY U/S.158BFA(2). SECTION 158BFA(2) READS AS UNDER: THE AO OR THE CIT(A) IN THE COURSE OF ANY PROCEEDINGS UNDER THIS CHAPTER, MAY DIRECT THAT A PERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THAN THE AMOUNT OF TAX LEVIABLE BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SO LEVIABLE IN RESPECT OF THE UNDISCLOSED INCOME DETERMINED BY THE AO UNDER CLAUSE (C) OF SECTION 158BC: 7 PROVIDED THAT NO ORDER IMPOSING PENALTY SHALL BE MADE IN RESPECT OF A PERSON IF - (I) SUCH PERSON HAS FURNISHED A RETURN UNDER CLAUSE (A) OF SECTION 158BC; (II) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HAS BEEN PAID, OR IF THE ASSETS SEIZED CONSIST OF MONEY, THE ASSESSEE OFFERS THE MONEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYABLE; (III) EVIDENCE OF TAX P AID IS FURNISHED ALONGWITH THE RETURN AND; (IV) AN APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN. 11 . ON A BARE READING OF ABOVE SECTION, IT IS CLEAR THAT LEVY OF PENALTY U/S.158BFA IS NOT MANDATORY OR AUTOMATI C. THE ASSESSING AUTHORITY HAS BEEN GIVEN DISCRETION TO LEVY PENALTY BY USING WORD MAY IN THE SECTI ON. THE PROVISO PROVIDES THAT IF TAX PAYABLE ON THE BASIS OF RETURN IS ALREADY PAID, PENALTY CANNOT BE LEVIABLE. ADMITTEDLY, IN THIS CASE, THE ASSESSEE HAS NOT SUBMITTED THE AMOUNT INVOLVED IN THE RETURN OF INCOME BUT THIS CANNOT L EAD TO THE CONCLUSION THAT LEVY OF PENALTY IS AUTOMATIC OR MANDATORY. IN THIS REGARD, THE HONBLE DELHI HIGH COURT IN THE CASE OF HARK ARAN DAS VED PAL (SUPRA) APPLIES ON THE FA CTS OF THIS CASE. IN THIS CASE ALSO, THE COMPUTATION OF INCOME IS SOLELY BASED UPON THE SURRENDER/STATEMENT BUT NO CORROBORATIVE EVIDENCE IS THERE SUPPORTING THE CONCEALMENT OR FURNISHING UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. HENCE, IN THE LIG HT OF THIS CASE LAW, PENALTY IN THIS CASE IS NOT LEVIABLE. FURTHERMORE , THE HONBLE APEX COURT IN TH E CASE OF HINDUSTAN STEELS LTD VS STATE OF ORISSA , 83 ITR 26 (SC) HAS HELD THAT UNLESS THE CONDUCT OF THE ASSESSE E IS CONTUMACIOUS OR DISHONEST , LEVY OF PENALTY IS NOT SUSTAINABLE. WE FIND THAT THE RATIO OF THIS DECISION IS SQUARELY APPLICABLE HERE. THE CONDUCT OF THE ASSESSEE HAS NOT BEEN CONTUMACIOUS AND AS SUCH THE LD CIT(A) HAS RIGHTLY DELETED THE PENALTY OF RS.4,59,000/ - . IN THE BACKDROP OF AFORESAID DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) TO INTERFERE. 8 1 2 . IN THE CROSS OBJECTION, THE ASSESSEE HAS AGITATED THAT LEVY OF PENALTY IS TIME BARRED. SINCE, WE HAVE ALREADY DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE ON MERITS, THE ADJUDICATION OF THE CROSS OBJECTION IS ONLY OF ACADEMIC INTEREST, HENCE, WE A RE NOT INCLINED TO ENGAGE INTO SAME. HENCE, CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. 1 3 . IN THE RESULT, ALL THE APPEALS FILED BY THE REV ENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 /10/2015. . SD/ - SD/ - ( MUKUL KR SHRWAT) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER RAIPUR, DATED 15 / 10/2015 . . ./ PARIDA , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANTS: DCIT - 1(1), CENTRAL REVENUE BUILDING, CIVIL LINE, RAIPUR. 2. / THE CROSS OBJECTORS CONCERNED. 3. ( ) / THE CIT(A) - RAIPUR 4. / CIT , RAIPUR 5. , , / DR, ITAT, RAIPUR 6. / GUARD FILE. / BY ORDER, //TRUE COPY// AR,ITAT, RAIPUR