The ACIT, Central Circle-2(2), Ahmedabad V. Jamanbhai Laljibhai Patel, Ahmedabad

ITSSA 244/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9090 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-03-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 15-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Keywords: Document seized; Revised return; Documents seized
• Section: 5(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R.MEENA, ACCOUNTANT MEMBER ./ I.T(SS).A. NOS.244 & 245/AHD/2010 ( % & '& / ASSESSMENT YEARS : 2003-04 & 2006-07) ACIT CENTRAL CIRCLE-2(2) AHMEDABAD % / VS. JAMANBHAI LALJIBHAI PATEL C-96 VIKRAMADITYA SOCIETY BAJRANGDAS ASHRAM THAKKARBAPA NAGAR AHMEDABAD ./ ./ PAN/GIR NO. : ABCPP 1857 B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI RAHUL KUMAR SR.D.R. / RESPONDENT BY : SHRI GAURAV NAHTA, A.R. / DATE OF HEARING : 21/03/2013 !'# / DATE OF PRONOUNCEMENT : 30/4/13 $% / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : REVENUE IS IN APPEALS EMANATING FROM A CONSOLIDATED ORDER OF LD.CIT(APPEALS)-III AHMEDABAD DATED 08/12/2009. F OR AY 2006- 07, PENALTY LEVIED U/S.271(1)(C) AMOUNTED TO RS.5,5 3,654/- AND FOR AY 2003-04, PENALTY WAS LEVIED OF RS.4,27,896/-. IT(SS)A NOS.244 & 245/AHD/2010 ACIT VS. JAMANBHAI LALJIBHAI PATEL ASST.YEARS - 2003-04 & 2006-07 - 2 - 2. FACTS AS EMERGED FROM THE CORRESPONDING ASSESSME NT ORDER PASSED U/S.153A R.W.S.143(3) OF THE ACT DATED 29.12 .2008 FOR AY 2003-04 WERE THAT A SEARCH U/S.132 WAS CARRIED OUT ON THE GROUP OF SOHAM ON 10.5.2006. THE AO HAS ALSO NOTED THAT IN RESPONSE TO A NOTICE U/S.153A OF THE ACT, A RETURN WAS FILED DECL ARING TOTAL INCOME OF RS.16,53,070/-. THE IMPUGNED ASSESSMENT HAS AL SO BEEN COMPLETED ON THE FIGURE OF THE SAID RETURNED INCOME . 2.1. WHILE LEVYING THE PENALTY U/S.271(1)(C), IT WA S HELD THAT ALTHOUGH THE INCOME WAS OFFERED IN THE RETURN OF IN COME, BUT IT WAS ONLY AFTER THE SEARCH WAS CONDUCTED. THE ASSESSEE HAS INTRODUCED UNACCOUNTED CASH WHICH WAS DETECTED DURING THE COUR SE OF SEARCH. ACCORDING TO AO, THE ASSESSEE HAD NOT ADMITTED ANY INCOME IN HIS STATEMENT RECORDED, NOR HE HAS SPECIFIED THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS EARNED. THE AMOUNT WAS OFF ERED ONLY IN THE RETURN OF INCOME FILED, THEREFORE, THE JUDGEMEN TS RELIED UPON WERE NOT APPLICABLE ON THE ASSESSEE. THE AO HAS F URTHER CLARIFIED THAT THE TWO CONDITIONS MENTIONED IN EXPLANATION-5 TO SECTION 271(1)(C) WAS NOT FULFILLED. BEING AGGRIEVED, THE MATTER WAS CARRIED BEFORE THE LD.CIT(A). 3. BEFORE LD.CIT(A), IT WAS PLEADED THAT AS PER QUE STION NO.28, THE ASSESSEE HAS ANSWERED AT THE TIME OF STATEMENT RECORDED ON 14.06.2006 THAT ON ACCOUNT OF LOOSE-PAPERS FOUND, READY TO PAY TAX. IT(SS)A NOS.244 & 245/AHD/2010 ACIT VS. JAMANBHAI LALJIBHAI PATEL ASST.YEARS - 2003-04 & 2006-07 - 3 - THE ASSESSEES CONTENTION WAS THAT THE ASSESSEE HAS EXPRESSED HIS WILLINGNESS TO MAKE THE DISCLOSURE AND TO PAY THE T AX. AFTER CONSIDERING FEW CASE-LAWS, LD.CIT(A) HAS DELETED TH E PENALTY IN THE FOLLOWING MANNER:- 7. THE CONTENTIONS/DETAILS ON RECORD, THE FACTS I N THE CASE OF APPELLANT AND THE JUDICIAL DECISION CITED/OBTAINED THUS FAR, WERE CAREFULLY CONSIDERED. IT IS SEEN THAT CONCEAL MENT WAS ADMITTED IN THE RETURN FILED U/S.153A, INDEPENDENT INQUIRY TO PROVE CONCEALMENT OR MENS REA WAS NOT A NECESSARY REQUIREMENT. THE GUJARAT HIGH COURT IN CASE OF CIT V. MAHENDRA SHAH [2008] 299 ITR 305 HAS HELD THAT TO S EEK BENEFIT OF IMMUNITY UNDER THE SECOND EXCEPTION {IN EXPLANATION 5 TO S. 271(1)(C)}, THE ASSESSEE IS PRI MARILY REQUIRED TO SHOW THAT THERE IS A DECLARATION AS REG ARDS INCOME AND SUCH INCOME HAS NOT BEEN DISCLOSED TILL THE DAT E OF SEARCH. FURTHER WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHORIZED OFFICER IT IS INCUMBENT UPON THE AUTHORI ZED OFFICE TO EXPLAIN THE PROVISIONS OF EXPLANATION 5 IN ITS ENTI RETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OFFICER CANNO T STOP SHORT A AT PARTICULAR STAGE SO AS TO PERMIT THE REV ENUE TO TAKE ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. IT ALS O FELT THAT WHEN THE STATEMENT IS RECORDED IN QUESTION / ANSWER FORM, THERE WOULD BE NO OCCASION FOR AN ASSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT FORMAT STIPULATED BY THE PRO VISIONS, CONSIDERING THE SETTING IN WHICH SUCH STATEMENT IS BEING RECORDED, AS NOTED BY THE ALLAHABAD HIGH COURT IN C ASE OF CIT VS. RADHAKISHAN GOYAL [2005] 278 ITR 454. SECO NDLY CONSIDERING THE SOCIAL ENVIRONMENT IT IS NOT POSSIB LE TO EXPECT FROM AN ASSESSEE, WHETHER LITERATE OR ILLITERATE, T O BE SPECIFIC AND TO THE POINT REGARDING THE CONDITION STIPULATED BY THE SECOND EXCEPTION WHILE MAKING STATEMENT U/S.132(4). EVEN IF THE STATEMENT DOES NOT SPECIFIED THE MANNER IN WHIC H THE IT(SS)A NOS.244 & 245/AHD/2010 ACIT VS. JAMANBHAI LALJIBHAI PATEL ASST.YEARS - 2003-04 & 2006-07 - 4 - INCOME IS DERIVED, IF THE INCOME IS DECLARED AND TA X THEREON PAID. (BEFORE THE ASSESSMENT WAS COMPLETED), THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER D ENIAL OF THE BENEFIT. THUS THE CRUCIAL REQUIREMENT, FOR AVA ILING THE BENEFIT OF IMMUNITY UNDER CLAUSE 2 OF EXPLANATION 5 IS THE STATEMENT U/S.132(4). THE APPELLANT HAD NOT SPECIF ICALLY DENIED SUCH ADMISSION OF UNDISCLOSED INCOME IN HIS STATEMENT. IT HAS BEEN HELD BY THE HIGH COURT (MADRAS) IN CASE OF SDV CHANDRU, 266 ITR 175 THAT PARA 2 OF EXPLANATION 5, DOES NOT MAKE ANY DISTINCTION BETWEEN THE PREVIOUS YEAR WHIC H HAS ENDED BEFORE THE DATE OF SEARCH AND THE PREVIOUS YE AR WHICH TO END ON OR AFTER THE DATE OF SEARCH AND THEREFORE WHEN THE ASSESSEE FILED THE RETURN FOR EARLIER YEARS, ADMITT ING A LARGE INCOME AND ALSO PAY TAX TOGETHER WITH INTEREST AFTE R HIS STATEMENT WAS RECORDED U/S.132(4), HE WAS ENTITLED TO IMMUNITY UNDER EXPLANATION 5 TO S.271(1)(C) AND PEN ALTY WAS NOT LIABLE FOR ALL THESE YEARS. THIS VIEW HAS BEEN REITERATED BY THE RAJASTHAN HIGH COURT IN CASE OF CIT VS. KANHAIY ALAL (2008), 299 ITR 19 AND THE ALLAHABAD BENCH OF ITAT IN CASE OF SHYAM BIRI WORKS, 70 TTJ 880. SHRI NARENDRA, AS THE PERSON MAINTAINING THE ACCOUNTS OF THE FAMILY ALSO AND ACTING FOR HIMSELF AND ON BEHALF OF HIS FAMILY MEMBERS, IN HIS STATEMENT U/S.132(4) HAD ADMITTED TO UNDISCLOSED IN COME AND EXPLAINED ITS SOURCE AND OFFERED TO PAY TAX (PAID SUBSEQUENTLY). THUS ON A HOLISTIC CONSIDERATION OF THE CONTENTIONS/SUBMISSIONS/DETAILS/JUDICIAL DECISIONS, IT IS HELD THAT THE BENEFIT OF EXPLANATION 5(2) TO S.271(1)(C) CANNOT BE DENIED TO THE APPELLANT. IN THESE FACTS AND CIRCUM STANCES THE PENALTY IMPOSED BY THE AO FOR THE AFOREMENTIONED AS SESSMENT YEARS IS NOT SUSTAINABLE. IT IS THEREFORE CANCELLE D. IT(SS)A NOS.244 & 245/AHD/2010 ACIT VS. JAMANBHAI LALJIBHAI PATEL ASST.YEARS - 2003-04 & 2006-07 - 5 - 4. AT THE OUTSET, WE HAVE BEEN INFORMED THAT EVEN F OR AY 2006- 07 IN AN IDENTICAL MANNER, PENALTY WAS LEVIED, HOWE VER IT WAS DELETED ON THE SAME LINES AS IT WAS DELETED FOR AY 2003-04. 5. NOW BEFORE US, A DECISION OF ITAT A BENCH AHME DABAD PRONOUNCED IN THE CASE OF SHRI PRABHUDAS PATEL BEAR ING IT(SS) NO.203/AHD/2010 FOR AY 2003-04 DATED 13/01/2012 IS REFERRED, WHEREIN THE PENALTY WAS DELETED AS FOLLOWS:- 4. THE SECTION 153A(1) PROVIDED FURTHER THAT ASSE SSMENT WHICH ARE PENDING ON THE DATE OF INITIATION OF SEAR CH SHALL ABATE. IN THE CASE UNDER CONSIDERATION, THERE IS N O PENDING ASSESSMENT, THEREFORE, SAME IS NOT ABATE FOR THE PU RPOSE OF MAKING SEARCH ASSESSMENT IN THE LIGHT OF PROVISIONS U/S.153A OF THE ACT. THE REQUIREMENT OF PENALTY U/S.271(1)( C) AS PER THE LAW LAID DOWN IN THE CASE OF APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) IS TO BE CONSIDERED IN THE LIGHT OF RETURN FILED BY THE ASSESSEE IN RESPONSE TO NOTI CE U/S.153A OF THE ACT. THE ASSESSMENT WAS MADE BY THE AO ON TH E BASIS OF ADMISSION OF ASSESSEE AND NOT ON BASIS OF ANY MATER IAL FOUND DURING THE COURSE OF SEARCH. THEREFORE, THE CASE U NDER CONSIDERATION, IS NOT THE CASE THAT THE ASSESSEE HA S FURNISHED INACCURATE PARTICULARS OR CONCEALED ANY PARTICULARS OF INCOME IN THE RETURN OF INCOME FILED U/S.153A OF THE ACT. WHEN THERE IS NO SUCH FINDING IN RESPECT OF RETURN FILED BY TH E ASSESSEE IN RESPONSE TO NOTICE U/S.153A WE FIND THAT PENALTY U/ S.271(1)(C) CANNOT BE LEVIED. WE THEREFORE, CANCEL THE PENALTY OF RS.78,750/- LEVIED U/S.271(1)(C). IT(SS)A NOS.244 & 245/AHD/2010 ACIT VS. JAMANBHAI LALJIBHAI PATEL ASST.YEARS - 2003-04 & 2006-07 - 6 - 5.1. AN ANOTHER ORDER OF THE TRIBUNAL, ITAT D BEN CH AHMEDABAD IN THE CASE OF ALPESH R.LAKHANI FOR AYS 2 001-02, 2002-03 AND 2006-07 BEARING IT(SS) NOS.156, 157 & 1 58/AHD/2010 ORDER DATED 24.05.2012 HAS ALSO BEEN CITED, WHEREIN VIDE PARAGRAPH NO.5 THE RESPECTED COORDINATE BENCH HAS DELETED THE PENALTY AS FOLLOWS:- 5. LD.D.R. COULD NOT POINT OUT ANY DIFFERENCE IN THE FACTS IN THE PRESENT CASE AND THEREFORE, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THE PRESENT CASE. MOREOVER , BEFORE LD.CIT(A), RELIANCE WAS PLACED BY THE LD.A.R. ON TH E JUDGMENT OF HONBLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF SURESH CHANDRA BANSAL AS REPORTED IN 223 CT R 128 (CAL.) AND THE RELEVANT PORTION OF THE JUDGMENT HAS BEEN REPRODUCED BY LD.CIT(A) ON PAGE 4 OF HIS ORDER. AS PER THE SAME, IF THE ADDITIONAL INCOME OFFERED BY THE ASSES SEE IN THE REVISED RETURN U/S.153A, AFTER THE SEARCH HAD BEEN ACCEPTED IN ITS ENTIRETY WITHOUT DETAILED DISCUSSION OF THE SEI ZED DOCUMENTS AND WITHOUT MAKING ANY ATTEMPT TO OBTAIN EXPLANATIO N OF THE ASSESSEE, PENALTY U/S.271(1)(C) IS NOT LEVIABLE. I N THE PRESENT CASE ALSO, WE FIND THAT AS PER THE ASSESSMENT ORDER IN ALL THESE THREE YEARS, INCOME DISCLOSED BY THE ASSESSEE IN TH E RETURN OF INCOME FILED U/S.153A WAS ACCEPTED BY THE A.O. WITH OUT ANY DISCUSSION OF SEIZED DOCUMENTS AND WITHOUT MAKING A NY ATTEMPT TO OBTAIN THE EXPLANATION OF THE ASSESSEE. HENCE, THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACT S IN THE CASE OF SURESH CHANDRA BANSAL (SUPRA) AND, THEREFORE, BY RE SPECTFULLY FOLLOWING THE TRIBUNAL DECISION AND THE JUDGEMENT O F HONBLE CALCUTTA HIGH COURT, WE HOLD THAT IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, PENALTY U/S.271( 1)(C) IS NOT JUSTIFIED. WE THEREFORE, DELETE THE PENALTY IN ALL THE THREE YEARS. IT(SS)A NOS.244 & 245/AHD/2010 ACIT VS. JAMANBHAI LALJIBHAI PATEL ASST.YEARS - 2003-04 & 2006-07 - 7 - 5.2. THE PRELIMINARY CONTENTION OF THE ASSESSEE IS THAT ON IDENTICAL FACTS IN OTHER GROUP CASES, THE TRIBUNAL HAS CONSIS TENTLY TAKEN A VIEW IN FAVOUR OF THE ASSESSEE, HENCE THOSE DECISIONS SH OULD BE APPLIED MUTATIS MUTANDIS ON THE FACTS OF THE CASE TO AFFIRM THE DELETION OF PENALTIES IN QUESTION IN ASSESSEES OWN CASE AS WEL L. CONSIDERING THE OVERALL THE CIRCUMSTANCES OF THE CASE, WE FIND NO REASON TO DEVIATE FROM THE FINDINGS OF THE RESPECTED COORDINA TE BENCHES, HENCE ON THE SAME LINES, HEREBY AFFIRM THE DELETION IN BOTH THE YEARS. 6. IN THE RESULT, REVENUES APPEALS ARE HEREBY DISM ISSED. SD/- SD/- ( &..'# ) ( ' ' ( ) $ )* $ ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30 / 4 /2013 &.., .*../ T.C. NAIR, SR. PS ') * +,- .'-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. , -. / / CONCERNED CIT 4. / () / THE CIT(A)-III, AHMEDABAD 5. 234 **-., -.#, 5'$,$ / DR, ITAT, AHMEDABAD 6. 467 8 / GUARD FILE. ')% / BY ORDER, 2 * //TRUE COPY// // 0 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD