ACIT CIR 23(2), MUMBAI V. KIRAN DHANJI BHEDA . L/H OF LATE SMT. JAYWANT D. BHEDA, MUMBAI

ITSSA 25/MUM/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9630 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 12-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C LALKA
• Assessee Lawyers: S J SINGH
• Keywords: Search and seizure; Document seized; Block assessment; Revised return; Documents seized
• Section: 132

Judgement Text

, , ,, , INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A BENCH. . .. . . .. . , ,, , / !'# !'# !'# !'# , ' ' ' ' BEFORE S/SH. B.R. MITTAL, JUDICIAL MEMBER & RAJENDR A, ACCOUNTANT MEMBER $ $$ $. .. .! !! !. .. . / IT(SS)A 25/MUM/2012 , .BLOCK PERIOD - -- - 1 988-89 TO 1998- 199 9 ACIT CIR 23(2) BUILDING C-10, 2 ND FLOOR, R.NO. 207, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI- 400051 VS KIRAN DHANJI BHEDA, L/H OF LATE SMT. JAYWANTI D. BHEDA, 7 THEM ASHISH, V.P.ROAD, MULUND(W) MUMBAI-400080 PAN: AAFPB0261M ( &' / APPELLANT) ( ()&' / RESPONDENT) *+$ *+$ *+$ *+$ , , , , ' '' ' / APPELLANT BY : SHRI S.J.SINGH ! - , ' / REVENUE BY : SHRI G.C. LALKA * * * * - -- - $. $. $. $. / DATE OF HEARING : 07-11-2013 /01 - $. / DATE OF PRONOUNCEMENT : 27-11-2013 * * * * , 1961 - -- - 254 )1( ' '' ' $2$ $2$ $2$ $2$ '3 '3 '3 '3 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM: CHALLENGING THE ORDER DATED 06.06.2012 OF CIT(A)-33 ,MUMBAI,ASSESSING OFFICER (AO) HAS FILED FOLLOWING GROUNDS OF APPEAL: 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW WHETHER THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO CONSIDER THE REV ISED RETURN OF INCOME FILED BY THE ASSESSEE U/S 158BC FOR THE PURPOSE OF CALCULATION OF PENALTY U/S 158BFA(2) OF THE I.T. ACT, 1961 AND FURTHER IGNORING THAT THERE ARE NO PROVISIONS IN I.T. ACT F OR FILING REVISED I.T. RETURN IN BLOCK ASSESSMENT PROCEEDINGS U/S 158BC. 2.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE REVISED RETURN FILED WAS VOLUNTARY, IGNORING THE FACT THAT THE ASSESSEE FILED RETURN OF INCOME FOR UNDISCLOSED INCOME ONLY AFTER THE SEARCH ACTION U/S 132 OF THE I.T. ACT, 1961. . 3.WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE A.O. TO REDUCE THE PENAL TY LEVIABLE U/S 158BFA(2) FROM 150% TO 100% OF THE TAX SOUGHT TO BE EVADED WITHOUT GIVING ANY BASI S OR REASONS FOR DOING SO. THE APPELLANT CRAVES TO ADD, TO AMEND, ALTER, SUBST ITUTE OR MODIFY ANY OF THE ABOVE GROUND OR ADD A FRESH GROUND AS AND WHEN FOUND NECESSARY EITHER B EFORE OR AT THE TIME OF HEARING. BRIEF FACTS OF THE CASE. 2 .A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CONDUCTED IN THE APPELLANTS CASE ON 17.10.1997. BLOCK ASSESSMENT PROCEEDINGS U/S 158BC WERE COMPLETED BY THE AO VIDE HIS ORDER DATED 29.10.1999, THE UNDISCLOSED INCOME OF THE ASS ESSEE AT RS. 13.15 LACS FOR THE BLOCK PERIOD, AO ALSO INITIATED PENALTY PROCEEDINGS U/S 158BFA(2) OF THE ACT. 2 IT(SS)A 25/MUM/2012 KIRAN DHANJI BHEDA . 2.1. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA) AGAINST THE QUANTUM ORDER.VIDE HIS ORDER DATED 13.12.2002,HE PARTLY ALL OWED THE APPEAL OF THE ASSESSEE.AO CHALLENGED THE ORDER OF THE FAA BEFORE THE TRIBUNAL.ITAT DISMI SSED THE APPEAL FILED BY THE AO VIDE ITS ORDER DATED 21.11.2006, WHILE COMPLETING BLOCK ASSESSMENT PROCEEDINGS,AS ST ATED EARLIER,AO ASSESSED THE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE DIFFERENCE ASSESSMEN T YEARS AT RS.13.15 LACS.OUT OF THE VARIOUS ADDITIONS MADE, AO TOOK FOLLOWING TWO ITEMS FOR THE PURPOSE OF LEVY OF PENALTY; I)UNDISCLOSED INVESTMENT IN GOLD & DIAMOND JEWELER( RS. 3,86,961/-) II)UNDISCLOSED INCOME SHOWN IN THE REVISED STATEMEN T (RS. 34,649/-). AFTER RECEIVING THE ORDER OF THE TRIBUNAL,AN OPPORT UNITY WAS GIVEN TO THE ASSESSEE BY THE AO REQUIRING THE ASSESSEE TO EXPLAIN /FILE WRITTEN SUB MISSION IN CONNECTION WITH THE COMPLETION OF PENALTY PROCEEDINGS U/S.158BFA(2) OF THE ACT.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, AO LEVIED PENALTY OF RS. 8,36,457/- U/S. 158BFA. 2.2. ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA.IT WAS SUBMITTED BY THE ASSESSEE THAT AO HAD ERRED IN LEVYING PENALTY @ 150% WITHOUT APPRECIATIN G THE FACT THAT THE RETURN WAS REVISED ONLY ON RECEIPT OF COPIES OF SEARCH MATERIAL,THAT THE ADDIT ION SUSTAINED BY THE FAA IN QUANTUM APPEAL WERE IN DISPUTE BEFORE THE TRIBUNAL, THAT AS A CONS EQUENCE OF SEARCH ASSESSEE HAD FILED A RETURN OF INCOME OF RS. 1.70 LACS FOR THE BLOCK PERIOD, THAT LATERON SHE REVISED HER INCOME TO RS. 5.54 LACS, THAT THE AO HAD MADE VARIOUS ADDITIONS AND ASSESSED THE INCOME AT RS. 13.15 LACS, THAT FAA HAD GIVEN RELIEF TO THE ASSESSEE WITH REGARD TO CERTAIN ADDITIONS,THAT AS A RESULT THEREOF AO HAD COMPUTED THE INCOME OF THE ASSESSEE AT RS.9.29 LACS ,THAT ASSESSEE GOT THE COPIES OF THE SEIZED DOCUMENTS DURING THE BLOCK PROCEEDINGS ONLY.AFTER C ONSIDERING THE ORDER PASSED BY THE ITAT MUMBAI IN THE CASE OF KIRAN DHANJI BHEDA IN ITA(SS) NO.123/MUM/2002 DATED 02.06.2005, FAA HELD THAT ASSESSEE HAD FILED RETURN FOR BLOCK P ERIOD ON 19.11.1998 DECLARING UNDISCLOSED INCOME AT RS.1.70 LACS, THAT AFTER RECEIPT OF COPIE S OF SEIZED DOCUMENTS ASSESSEE FILED A LETTER ON 04.10.1999 REVISING COMPUTATION OF UNDISCLOSED INCO ME OF RS. 5.54 LACS, THAT AS PER THE PROVISIONS OF SECTION 158BC REVISED RETURN OF INCOME COULD NOT BE FILED, THAT BY LEVYING PENALTY U/S 158 BFA(2),AO HAD CONSIDERED THE AMOUNT REVISED BY THE ASSESSEE IN THE RETURN OF INCOME FILED ON 04.10.1999,THAT ACTION OF THE AO OF LEVYING PENALTY ON THE REVISED INCOME COULD NOT BE UPHELD, THAT ASSESSEE HAD VOLUNTARILY SURRENDERED UNDISCLOS ED INCOME IN THE REVISED RETURN FILED FOR THE BLOCK PERIOD,THAT AO HAD NOT EXPRESSED ANY DISSATIS FACTION ON THIS ISSUE, THAT ASSESSEE HAD CLEARLY GIVEN THE REASONS FOR FILING THE RETURN FOR THE BLO CK PERIOD, IT COULD NOT BE SAID THAT ASSESSEE HAD DELIBERATELY AND KNOWINGLY FILED INACCURATE INFORMA TION AND PARTICULARS TO CONCEAL ITS UNDISCLOSED INCOME, THAT PENALTY U/S.158BFA(2) WAS OPTIONAL AND NOT MANDATORY,THAT AO WAS REQUIRED TO EXAMINE THE TOTALITY OF CIRCUMSTANCES AND ONLY THEN HAD TO LEVY PENALTY, THAT IN THE CASE UNDER CONSIDERATION RECORD SHOWED THAT AO HAD NOT DEDUCTE D ADDITIONAL INCOME, THAT PENALTY HAS BEEN LEVIED FOR THE REVISED RETURN FILED BY THE ASSESSEE ,THAT ASSESSEE HAD COOPERATED WITH THE DEPARTMENT.FAA DIRECTED THE AO TO RECALCULATE THE P ENALTY IN CASE OF THE ASSESSEE BY GIVING BENEFIT OF AMOUNT OF RS.5.54 LACS TO THE ASSESSEE I NSTEAD OF RS. 1.70 LACS.SHE FURTHER DIRECTED THE AO TO CALCULATE THE PENALTY @ 100% TAX ON UNDISCLOS ED INCOME. 2.3. BEFORE US,AUTHORISED REPRESENTATIVE(AR)SUBMITTED TH AT SIMILAR ISSUE WAS DECIDED BY THE A BENCH OF ITAT,MUMBAI VIDE ITS ORDER DATED 2.06.2005 IN THE CASE OF THE SON OF THE ASSESSEE,THAT FACTS OF BOTH THE CASES WERE IDENTICAL.DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE FAA. 2.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT IN THE CASE OF THE SON OF THE ASSESSEE SIMILAR ISSUE WAS D ECIDED BY THE A BENCH OF MUMBAI ITAT,AS UNDER : 3 IT(SS)A 25/MUM/2012 KIRAN DHANJI BHEDA . 6.AFTER HEARING RIVAL SUBMISSIONS WE ARE OF THE VIE W THAT THE PENALTY AMOUNT SHOULD BE WORKED OUT AFTER REDUCING THE AMOUNT OF THE REVISED RETURN FROM THE FINALLY ASSESSED INCOME. THE COPIES OF THE SEIZED DOCUMENTS WERE NOT SUPPLIED TO THE ASSES SEE AND THE ORIGINAL RETURN WAS FILED WITHOUT THE EXAMINATION OF THE SAID DOCUMENTS. HOWEVER, THE ASSESSEE REVISED THE RETURN AFTER THE SAID DOCUMENTS WERE SUPPLIED TO HIM AND PAID THE TAXES A CCORDINGLY. THE REVISED RETURN MAY NOT HAVE BEEN CONSIDERED FOR THE PURPOSE OF MAKING THE ASSES SMENT BUT THE CONDUCT OF THE ASSESSEE AFTER THE COPIES OF SEIZED DOCUMENTS WERE RECEIVED SHOWS THAT THE UNDISCLOSED INCOME DECLARED BY HIM WAS RS.6,50,000/-THE INTENT AND THE SPIRIT OF SECTION 1 58BFA(2) IS TO IMPOSE THE PENALTY ON THE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFI CER WHICH IS IN EXCESS OF THE INCOME SHOWN IN THE RETURN.IN VIEW OF THE ABOVE DISCUSSION, THE ASS ESSING OFFICER IS DIRECTED TO RECOMPUTED THE PENALTY PAYABLE U/S. 158BFA(2) AFTER REDUCING THE A MOUNT OF REVISED RETURN FROM THE FINALLY ASSESSED UNDISCLOSED INCOME. 7.IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. WE FIND THAT FACTS OF BOTH THE CASES ARE IDENTICAL, THEREFORE,FOLLOWING THE DECISION OF KIRAN D BHEDA(SUPRA)WE DECIDED EFFECTIVE GROUND OF APPEAL A GAINST THE AO. AS A RESULT,APPEAL FILED BY THE AO STANDS DISM ISSED. + $4 *+$ . 5 6 - 2 * !7 - !$ 89 . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER,2013 . '3 - /01 ' : ;* 27 * * * * , 2013 0 - 2 < SD/- SD/- ( . = = = = . . B.R.MITTAL) ( !'# !'# !'# !'# / RAJENDRA) / JUDICIAL MEMBER ' ' ' ' /ACCOUNTANT MEMBER / MUMBAI, ;* /DATE: 27.11.2013 SK '3 '3 '3 '3 - -- - ($> ($> ($> ($> ?'>1$ ?'>1$ ?'>1$ ?'>1$ / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 3. THE CONCERNED CIT (A) / @ A , 4. THE CONCERNED CIT / @ A 5. DR A BENCH, ITAT, MUMBAI / >B2 ($* , ,, , , . . . 6. GUARD FILE/ 2 C )>$ )>$ )>$ )>$ ($ ($($ ($ //TRUE COPY// '3* / BY ORDER, D / 8 ! DY./ASST. REGISTRAR , /ITAT, MUMBAI