M/s. Sheetal Developers, Ahmedabad V. The ACIT.,Cent.Circle-1, Surat

ITSSA 268/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0682 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 07-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Keywords: Income from undisclosed sources; Question of law; Benefit of exemption
• Section: 5(2); 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G. D. AGARWAL , VICE PRESIDENT AND SHRI S.S. GODARA JUDICIAL MEMBER IT (SS) A NO . 268 /AHD/20 1 1 A. Y . 200 6 - 0 7 M/S. SHEETAL DEVELOPERS H.S. SHAH COMPOUND, SILVASSA, SURAT. PAN: ABBFS 6670A VS ACIT , CENTRAL CIRCLE - 1, SURAT . (APPELLANT) (RESPONDENT) REVENUE BY : SHRI DINESH SINGH , SR.D.R. ASSESSEE(S) BY : SHRI TEJ SHAH , A.R. / DATE OF HEARING : 1 6 / 0 4 /201 5 / DATE OF PRONOUNCEMENT: 24 / 04 /201 5 / O R D E R PER: S. S. GODARA , JUDICIAL MEMBER THIS ASSESSEE S A PPEAL FOR A.Y.200 6 - 0 7 ARISE S FROM ORDER OF CIT (A) - I I , AHM EDABAD DATED 0 6 . 0 1 .20 1 1 IN CASE NO. C C.1/ 78 /0 9 - 10 CONFIRMING PENALTY OF RS. 1,00,980 / - , IN PROCEEDINGS U/S. 271(1)(C) OF THE INCOME TAX ACT , IN SHORT THE ACT . 2. THE ASSESSEE - FIRM IS ENGAGED IN CONSTRUCTION BUSINESS. THE DEPARTMENT CARRIED OUT A SEARCH IN THE PREMISES OF M/S. MAHENDRA KATARIA GROUP AND ALSO IN CASE OF ASSESSEE S PARTNER ON 27.12.2006. IT RECORDED HIS STATEMENT U/S.132(4). THE ITA NO. 26 8 AHD /20 1 1 M/S. SHEETAL DEVELOPERS. FOR A.Y. 20 0 6 - 0 7 - 2 - ASSESSEE APPEARS TO HAVE SURRENDERED AN UNACCOUNTED INCOME OF RS.3 LAC THEREIN. THIS CULMINATED IN ISSUANCE OF A SECTION 153C NOTICE ON 15.09.2008. 3. THE ASSESSEE FILED ITS RETURN ON 17.10.2008 DECLARING TOTAL INCOME OF RS.4,58,452/ - . THIS WAS FOLLOWED BY A REVISED ONE DATED 23.10.2008 STATING ADDITIONAL INCOME OF RS.3 LAC S . THE ASSESSING OFFICER COMPLETED CONSEQ UENTIAL ASSESSMENT ON 26.12.2006 ACCEPTING THE ASSESSEE S INCOME DECLARED . HE ALSO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT ALLEGING CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS . 4. IN PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED THA T NO ADDITION WAS MADE IN THE COURSE OF THE ASSESSMENT AND S OUGHT TO U/S. 271(1)(C) EXPLANATION 5 . THE ASSESSING OFFICER REJECTED BOTH THE ABOVE STATED PLEAS IN A DETAILED PENALTY ORDER DATED 29.06.2009. HE OBSERVED THAT THE ASSESSEE HAD COME FORWARD WITH THE AFORESAID UNACCOUNTED INCOME OF RS.3 LAC BECAUSE OF THE SEARCH ONLY AND NOT OTHERWISE. HE WAS TREAT ED ITS CONDUCT CONDUCT AS CONCEALMENT OF INCOME U/S.271(1)(C) AND IMPOSED IMPUGNED PENALTY OF RS.1,00,980/ - . 5. THE CIT(A) AFFIRMS THE ASSESSING OFFIC ER S ACTION AS UNDER: ITA NO. 26 8 AHD /20 1 1 M/S. SHEETAL DEVELOPERS. FOR A.Y. 20 0 6 - 0 7 - 3 - 4. I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS. I DO NOT AGREE WITH THE APPELLANT'S VIEW. THE HON'BLE ITAT AHMEDABAD BENCH IN THE CASE OF ACIT VS KIRIT DAYABHAI PATEL, IN ITA NO.2344/AHD/2007 FOR A.Y.2002 - 03 AND IN THE CASE OF SH RI RAJESH A. PATEL IN ITA NO.2345,2346,2348&2389/AHD/2007 FOR A.YS.98 - 99, 99 - 2000, 2001 - 02 & 2002 - 03 DATED 25/06/2009 [GIVEN BY SHRI R.V. EASWAR VICE PRESIDENT AND. THIRD MEMBER], HAVE, CONSIDERED THE POINT OF APPLICABILITY OF EXPLANATION 5 TO SECTION 271( 1)(C) FOR THE YEARS EARLIER TO THE YEAR OF SEARCH. THE HON'BLE MEMBER DID NOT APPROVE THE DECISION OF MADRAS HIGH COURT IN THE CASE OF CIT VS S .D.V.CHANDRU 266 ITR 175 AND RAJASTHAN HIGH COURT DECISION IN THE CASE OF CIT VS KANHAIYALAL 299 ITR 19 AND ORDER OF THE ALLAHABAD BENCH OF ITAT IN THE CASE OF SHYAM BIRI WORKS P. LTD. VS ACIT 70 TTJ 880. INSTEAD THE MEMBER HAVE FOLLOWED THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF SHERATON APPEARALS VS ACIT 256 ITR 20 AND ITAT AHMEDABAD BENCH IN THE CASE OF RUPE SH GODHIDAS PATEL 309 ITR (AT) 271 AND HELD THAT BENEFIT OF EXPLANATION 5(2) TO SECTION 271(1) (C) IS CONFINED TO THE YEAR IN RESPECT OF WHICH THE DUE DATE FOR FILING THE RETURN IS YET TO COME BUT THE BENEFIT IS NOT AVAILABLE TO EARLIER YEARS WHERE DUE DATE TO FILE THE RETURN OF INCOME U/S.139(1) HAS EXPIRED. AS THE DECISION OF HON'BLE ITAT AHMEDABAD [THIRD MEMBER] IS BINDING THE SAME IS BEING FOLLOWED. ACCORDINGLY, IT IS HELD THAT THE APPELLANT IS NOT ENTITLED TO THE BENEFIT OF EXEMPTION UNDER EXPLANATION 5(2) TO SECTION 271(1) (C) OF THE I.T. ACT AND PENALTY IS LEVIABLE. HENCE, THE ACTION OF THE ASSESSING OFFICER IS UPHELD AND THE PENALTY IS CONFIRMED. THE ASSESSEE IS IN APPEAL IN THIS BACKDROP OF FACTS . 6 . WE HAVE HEARD BOTH SIDES. RECORDS PERUSED. THE RE IS NO DISPUTE ON FACTS NARRATED HEREINABOVE. THE ASSESSEE HAD FILED ITS POST SEARCH RETURN ADMITTING ADDITIONAL INCOME . I TS UNACCOUNTED INCOME STANDS ACCEPTED IN THE COURSE OF ASSESSMENT. THE ASSESSEE HAS CLAIMED IMMUNITY U/S.271(1)(C) EXPLANATION 5 . TH E LOWER APPELLATE AUTHORITY RELIES UPON THE HON BLE THIRD MEMBER ORDER AND OTHER JUDICIAL PRECEDENTS EXTRACT ED HEREINABOVE. THE ASSESSEE PRODUCES BEFORE US COPY OF HON BLE JURISDICTIONAL HIGH ITA NO. 26 8 AHD /20 1 1 M/S. SHEETAL DEVELOPERS. FOR A.Y. 20 0 6 - 0 7 - 4 - COURT S ORDER IN THE VERY CASE OF KIRIT DAHYABHAI PATEL VS. ACIT (TAX APPEAL NO.1181 TO 1185 OF 2010) OVERRULING THE THIRD MEMBER S DECISION AS UNDER: 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF CASE AND ALSO CONSIDERING THE DECISIONS RELIED UPON BY LEARNED SENIOR ADVOCATE FOR THE APPELLANT, WE ARE OF THE CONSIDERE D OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL IS ERRONEOUS. THE CIT(A) RIGHTLY HELD THAT IT IS NOT RELEVANT WHETHER ANY RETURN OF INCOME WAS FILED BY THE ASSESSEE PRIOR TO THE DATE OF SEARCH AND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETURN OF INCOME. IN VIEW OF SPECIFIC PROVISION OF SECTION 153A OF THE I.T. ACT, THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153(A) OF THE I.T. ACT IS TO BE CONSIDERED AS RETURN FILED UNDER SECTION 139 OF THE ACT, AS THE ASSESSING OFFICER HAS MADE ASSESSM ENT ON THE SAID RETURN AND THEREFORE, THE RETURN IS TO BE CONSIDERED FOR THE PURPOSE OF PENALTY UNDER SECTION 271(L)(C ) OF THE J.T. ACT AND THE PENALTY IS TO BE LEVIED ON THE INCOME ASSESSED OVER AND ABOVE THE INCOME RETURNED UNDER SECTION 153A, IF ANY. 14. FURTHER, IN THE PRESENT C ASE, IT APPEARS FROM THE RECORD THAT THE ASSESSEES HAD SATISFIED ALL THE CONDITIONS WHICH ARE REQUIRED FOR CLAIMING IMMUNITY FROM PAYMENT OF PENALTY UNDER SECTION 271(1) OF THE ACT. THE PROVISION DOES NOT SPECIFY ANY TIME LIMI T DURING WHICH THE AFORESAID AMOUNT I.E. THE AMOUNT OF PENALTY WITH INTEREST HAS TO BE PAID. ADMITTEDLY WHEN THE A ISSESSEES HEREIN HAVE PAID THE ENTIRE AMOUNT WITH INTEREST, THE ASSESSING OFFICER OUGHT TO HAVE GRANTED THEM IMMUNITY AVAILABLE UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT. 15. THE DECISION RELIED UPON BY LEARNED ADVOCATE FOR THE RESPONDENT WILL NOT APPLY TO THE FACTS OF THE PRESENT CASE. 16. IN VIEW OF THE AFORESAID FACTS OF THE CASE AND ALSO THE PRINCIPLE LAID DOWN IN THE DECISIONS RELIED UPON BY THE LEARNED SENIOR COUNSEL FOR THE APPELLANT MORE PARTICULARLY THE PRIN C IPLE LAID DOWN IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. GEBILAL KANHAILAL (SUPRA) AND COMMISSIONER OF INCOME TAX VS. ABDUL RASHID (SUPRA), WE ARE OF THE CONSIDE RED OPINION THAT THE PENAL TY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT CANNOT BE LEVIED ON THE INCOME SHOWN IN THE RETURN FILED UNDER SECTION 153 OF THE I.T. ACT. 17. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF S.D.V. CHANDU (SUPRA), WE ARE OF THE OPINION THAT THE APPELLANT IS ITA NO. 26 8 AHD /20 1 1 M/S. SHEETAL DEVELOPERS. FOR A.Y. 20 0 6 - 0 7 - 5 - ENTITLED TO THE BENE F IT OF TH E PROVISIONS OF EXPLANATION 5(2) TO SECTION 271(1)(C) OF THE INCOME TAX ACT. 18. FOR THE FOREGOING REASONS, THE PRESE NT APPEALS STAND ALLOWED. THE ORDER OF THE TRIBUNAL IS QUASHED AND SET ASIDE. CONSEQUENTLY, THE ORDER OF THE CIT(A) IS RESTORED. THE QUESTION OF LAW INVOLVED IN THIS APPEALS IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE REVENUE DOES NOT POINT OUT ANY DISTINCTION ON FACTS. IN THESE CIRCUMSTANCES, WE HOLD IN TUNE WITH THE HON BLE JURISDICTIONAL HIGH COURT VIEW THAT WHEN THE ASSESSEE FILED ITS POST SEARCH RETURN AND THE INCOME THEREIN HAS BEEN ACCEPTED , THE IMPUGNED PENALTY COULD HAVE B EEN LEVIED BY THE ASSESSING AUTHORITY AND AFFIRMED IN THE LOWER APPELLATE ORDER. T HE ASSESSE E S SUBSTANTIVE GROUNDS SUCCEED. 7 . THE ASSESSEE S APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 24 APRIL, 2014 AT AHMEDABAD. SD/ - SD/ - ( G. D. AGARWAL ) ( S.S. GODARA ) VICE PRESIDENT JUDICIAL MEMBER AHMEDABAD; DATED 24 / 0 4 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . S / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . ITA NO. 26 8 AHD /20 1 1 M/S. SHEETAL DEVELOPERS. FOR A.Y. 20 0 6 - 0 7 - 6 - / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD