DILIP H. CHHABRIA, MUMBAI V. ACIT (INV.) 7(1), MUMBAI

ITSSA 23/MUM/2012

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1025 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-02-2015
• Assessment Year: misc
• Appeal Filed On: 13-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R N VASANI
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . , , BEFORE SHRI D. MANMOHAN , VP AND SHRI S ANJAY ARORA, AM IT(SS)A NO. 23/MUM/2012 ( /BLOCK PERIOD : 01.04.1987 TO 18.12.1997 ) DILIP H. CHHABRIA 21, SANJAY PLAZA, A. B. NAIR RD., SILVER BEACH JUHU, MUMBAI - 400 049 / VS. DY. CIT - 8(1) AAYKAR BHAWAN, M. K. MARG, MUMBAI - 400 020 ./ ./ PAN/GIR NO. ADCPS 0642 D ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI SUBHASH S. SHETTY & SHRI R. N. VASANI / RESPONDENT BY : SHRI SANJAY PUNGLIA / DATE OF HEARING : 19.05.2015 / DATE OF PRONOUNCEMENT : 19 .08.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 16, MUMBAI (CIT(A) FOR SHORT) DATED 10.05.2012 , DISMISSING THE A SSESSEES APPEAL CHALLENGING THE CONFIRMATION OF PENALTY UNDER SECTION 158B F(2) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOLLOWING THE ASSESSEES BLOCK ASSESSMENT U/S. 158BC OF THE ACT . 2 IT(SS)A NO.23/MUM/2012 ( BP: 01.04.1987 TO 18.12.1997 ) DILIP H. CHHABRIA VS. DY. CIT 2. THE BACKGROUND FACTS OF THE CASE ARE THAT ASSESSMENT U /S.158BC OF THE ACT (FOR THE BLOCK PERIOD COMMENCING 01.04.19 8 7 TO THE DATE OF SEARCH, I.E., 18.12.19 9 7) WAS COMPLETED ON 31.01.2001 AT AN UNDISCLOSED INCOME OF ` . 58,18,970/ - , AS AGAINST A RETURN ED UNDISCLOSED INCOME OF ` .10 LACS. THE MATTER TRAVELLED UP TO THE T RIBUNAL , WHICH CONFIRMED THE ADDITION AT ` .10 LACS ON A FINDING OF REPETITIVE ADDITIONS VIDE ITS O RDER DATED 31.01.2006 (IN IT(SS)A NO S . 61 AND 75/MUM/2001/COPY ON RECORD). NOTICE U/S.158BFA(2), FOR THE LEVY OF PENALTY THERE - UNDER, WAS ACCORDINGLY ISSUED ON 20.02 .2007. T HE ASSESSEE, IN RESPONSE, RELIE D ON THE SAID ORDER BY THE TRIBUNAL, STATING THAT THE ADDITION AS FINALLY SUSTAINED WAS UNDER THE PECULIAR CIRCUMSTANCES OF THE CASE AND , ACCORDINGLY , SHOULD NOT ATTRACT PENALTY U/S.158BFA(2). I N APPEAL, T HE ASSESSEE, RELYING ON THE TRIBUNALS ORDER IN THE QUANTUM PROCEEDINGS, THE LD. CIT(A) REPRODUCED THE RELEVANT PART THEREOF (PARA 10), TO HOLD, AFTER ANALYZING THE SAME, THAT IT WAS COMPLETELY INCORRECT TO SAY THAT THE ADDITION AS FINALLY SUSTAINED BY THE TRIBUNAL HAD NO RELEVA NCE WITH THE MATERIAL ON RECORD OR THE EVIDENCES GATHERED DURING THE COURSE OF SEARCH . O N THE CONTRARY, THE ADDITION UPHELD BY THE TRIBUNAL PROVED THE ASSESSEE TO HAVE NOT DISCLOSED HIS FULL INCOME EVEN IN THE SEARCH PROCEEDINGS. ALL THAT IT HAD DONE WAS T O ELIMINATE THE ADDITIONS THAT HAD A MULTIPLIER OR A REPETITIVE EFFECT. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE, THOUGH RAISING THE LEGAL GROUND QUA THE TIME LIM ITATION FOR THE INITIATION OF THE PENALTY PROCEEDINGS (VIDE GROUND NO. 1) , DID NOT PRESS THE SAME DURING HEARING, SO THAT THE SAME IS DISMISSED AS NOT PRESSED. ON MERITS, WE MAY BEGIN BY REPRODUCING THE RELEVANT SECTION , AS UNDER: LEVY OF INTEREST AND PE NALTY IN CERTAIN CASES. 158BFA. (1) .. (2) THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) IN THE COURSE OF ANY PROCEEDINGS UNDER THIS CHAPTER, MAY DIRECT THAT A PERSON SHALL 3 IT(SS)A NO.23/MUM/2012 ( BP: 01.04.1987 TO 18.12.1997 ) DILIP H. CHHABRIA VS. DY. CIT PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THAN THE AMOUNT OF TA X LEVIABLE BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SO LEVIABLE IN RESPECT OF THE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER UNDER CLAUSE ( C ) OF SECTION 158BC : 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 PAID IS FURNISHED ALONG WITH THE RETURN; AND ( IV ) AN APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN : PROVIDED FURTHER THAT THE PROVISIONS OF THE PRECEDING PROVISO SHALL NOT APPLY WHERE THE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER IS IN EXCESS OF THE INCOME SHOWN IN THE RETURN AND IN SUCH CASES THE PENALTY SHALL BE IMPOSED ON THAT PORTION OF UNDISCLOSED INCOME DETERMINED WHICH IS IN EXCESS OF THE AMOUNT OF UNDISC LOSED INCOME SHOWN IN THE RETURN. THE ASSESSEES SOLE CASE, ADVERTING OUR ATTENTION TO PARAS 10 AND 11 OF THE TRIBUNALS ORDER SUPRA, WAS THAT THE ADDITION AS SUSTAINED WAS ON AN ESTIMATE BASIS , AND WHICH C OULD NOT THEREFORE BE SUBJECT TO PENALTY . WE ARE COMPLETELY UNABLE TO APPRECIATE THE ASSESSEES CASE. THE ADDITION (OR DISALLOWANCE) IN ANY ASSESSMENT COULD ONLY BE ON THE BASIS OF SOME MATERIAL/EVIDENCE, LEST IT IS ILLEGAL , UNABLE TO STAND THE TEST OF JUDICIAL SCRUTINY. FURTHER, ASSESSMENT UNDER CHAPTE R XIV - B O F THE ACT IS ONLY OF UNDISCLOSED INCOME, I.E., WHICH IS NOT OR WOULD NOT HAVE BEEN , BUT FOR A SEARCH OR REQUISITION , DISCLOSED TO THE REVENUE. IN FACT, THE VERY ASS UMPTION OF JURISDICTION FOR ASSESSMENT OF SUCH INCOME IS BASED ON DISCOVERY OF MATE RIAL INDICATING SUCH INCOME OF THE ASSESSEE , OR EVIDENCE RELATABLE THERETO . ALL THAT THE TRIBUNAL HA S D O NE I S T O ELIMINATE THE ADDITION /S THAT HAD THE EFFECT OF IN FLAT ING THE QUANTUM OF THE ASSESSED INCOME SUPERFLUOUSLY , I.E., WHICH I S NOT BACKED BY ANY IN DEPENDENT MATERIAL - NOTHING 4 IT(SS)A NO.23/MUM/2012 ( BP: 01.04.1987 TO 18.12.1997 ) DILIP H. CHHABRIA VS. DY. CIT MORE AND NOTHING LESS. RATHER, AS OBSERVED DURING HEARING, THE TRIBUNAL HAD NOT PROCEEDED IN A MATHEMATICAL FASHION , GIVING A SPECIFIC FINDING QUA EACH SEPARATE ADDITION DELETED , EVEN AS THE REVENUE HAD TABULATED EACH ADDITION C OMPRISING THE ASSESSED INCOME SEPARATELY . IN FACT, IT IS CONSCIOUS OF THE SAME , EXPLAINING ITS ELF BY STATING (AT PARA 11 OF ITS ORDER) OF RESTRICTING THE ADDITION TO A REASONABLE SUM OF ` .10 LACS. TO THEREFORE RE AD ITS ORDER TO MEAN THAT THE ADDITION AS SU STAINED WAS BASED ON NO MATERIAL WOULD BE A COMPLETE MISREADING OF, OR MISCONSTRUING , ITS ORDER. THE LAW IN THE MATTER IS PATENTLY CLEAR AND THE ONUS TO SHOW THAT HE WAS ENTITLED TO A RELIEF HIGHER THAN THAT ALLOWED BY THE TRIBUNAL IS SQUARELY ON THE ASSESS EE. THE INGR E DIENTS OF THE PENAL PROVISION, WHICH , AS ITS READING WOULD SHOW, IS STRICT, ARE SATISFIED, AND N O CASE FOR NON - IMPOSITION OF THE PENALTY HAS BEEN MADE OUT. THE SAME COULD ONLY BE BY LEADING EVIDENCE OR EVEN FURNISHING AN EXPLANATION , EXHIBITING OR ESTABLISHING ITS CASE O N FACTS. MERELY MAKING A BALD ASSERTION OF THE ASSESSMENT BEING BASED ON AN ESTIMATE , WHICH IS DE HORS THE MATERIAL ON RECORD, WOULD NOT ASSIST THE ASSESSEE . FOR THE SAME REASON S, RELIANCE ON CASE LAW, WHICH WE HAVE OTHERWISE PERUSED, W OULD BE OF LITTLE CO NSEQUENCE. WE DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 19 , 201 5 SD/ - SD/ - ( D. MANMOHAN ) (S ANJAY ARORA) / VICE PRESIDENT / A CCOUNTANT MEMBER MUMBAI ; DATED : 19 . 0 8 .201 5 . . ./ ROSHANI , SR. PS 5 IT(SS)A NO.23/MUM/2012 ( BP: 01.04.1987 TO 18.12.1997 ) DILIP H. CHHABRIA VS. DY. CIT / COPY OF THE ORDER FORWARDED TO : 1. / T HE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI