The ACIT, Central Circle-2, Surat V. Shri Naranbhai M.Hirpara, Surat

ITSSA 269/AHD/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0143 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-06-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Assessee Lawyers: M K PATEL
• Keywords: Income from undisclosed sources; Search and seizure; Revised return
• Section: 143(3); 153A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHAR AT, J.M.) I.T(SS). A. NO. 269 /AHD/2011 (ASSESSMENT YEAR: 2006-07) THE ACIT, CENTRAL CIRCLE-2, SURAT V/S SHRI NARANBHAI M. HIRPARA 310, HARIDWAR APARTMENT, MODI MOHOLLO, A.K. ROAD, SURAT (APPELLANT) (RESPONDENT) PAN: ABPPH 2904Q APPELLANT BY : SHRI O.P. BATHEJA, SR. D.R . RESPONDENT BY : SHRI M.K. PATEL, A.R. ( )/ ORDER DATE OF HEARING : 12-06-2014 DATE OF PRONOUNCEMENT : 27 -06-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-II, AHMEDABAD DATED 04-01.2011 FOR A.Y. 2006-07. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. A SEARCH AND SEIZURE ACTION IN CASE OF ASSESSEE WAS CONDUCTED ON 07.03.2006. THEREAFTER ASSESSEE FILED HIS RETURN O F INCOME FOR A.Y. 06- 07 ON 10.08.2007 DECLARING TOTAL INCOME OF RS. 14,1 2,650/- AND SUBSEQUENTLY THE ASSESSMENT WAS FRAMED UNDER SECTIO N 143(3) READ WITH ITA NO 269/AHD/2011 . A.Y. 2006- 07 2 SECTION 153A VIDE ORDER DATED 31.10.2007 AND THE TO TAL INCOME WAS DETERMINED AT RS. 14,96,650/-. A.O NOTICED THAT DU RING THE COURSE OF SEARCH AND SEIZURE OPERATION, ASSESSEE HAD ADMITTED TO UNACCOUNTED INCOME OF RS. 13,50,000/- BUT HOWEVER IN THE RETURN OF INCOME FOR A.Y. 06-07, ASSESSEE HAD OFFERED ONLY 13,00,000/- FOR T AXATION AND THUS THERE WAS A SHORTFALL OF RS. 50,000/- AND HE ACCORDINGLY ADDED THE DIFFERENCE OF RS. 50,000/- TO THE INCOME. ON THE UNACCOUNTED INCO ME OF RS. 13.50 LACS, A.O VIDE ORDER DATED 30.04.2008 LEVIED PENALTY 271( 1)(C) OF RS. 3,98,310/-. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE DELETED THE PENALTY BY HOLDING AS UNDER:- 3. THE APPELLANT HAS SUBMITTED THAT HE OFFERED THE INCOME OF RS. 13,00,000/- IN THE RETURN OF INCOME FILED ON 31.03.2007. AS HE WAS NOT SUPPLIED THE COP Y OF THE STATEMENT RECORDED DURING THE SEARCH, HE INADVERTENTLY MADE A MISTAKE OF DISCLOSING ONLY RS. 13,00,000/-. HOWEVER, WHEN REALIZED, HE REVISED HIS STATEMENT OF TOTAL INCOME AND PAID INCOME-TAX OF RS .22,991/- ON 10.08.2007 IN RESPECT OF BALANCE INCOME OF RS.50,000/- AND ALSO FILED THE REVISED CA LCULATION BEFORE THE ASSESSING OFFICER ON 13.08.200 7 OFFERING THE TOTAL UNDISCLOSED INCOME OF RS. 13,50, 000/-. THE REVISED CALCULATION SHOWED GROSS INCOME OF RS.14,62,410/- INCLUDING DISCLOSED INCOME OF RS. 13,50,000/- AND AFTER DEDUCTION U/S.80C FOR RS.49,759/-, THE NET INCOME WAS RS. 14,12,650/- WHI CH THE ASSESSING OFFICER HAS ACCEPTED IN THE ASSESSMENT AS INCOME AS PER STATEMENT OF INCOME. HO WEVER, HE AGAIN MADE ADDITION OF RS,50,000/- AND ALSO LEVIED PENALTY U/S.271(1) WHICH IS NOT JU STIFIED HENCE, THE PENALTY SHOULD BE DELETED. THE APPELLANT HAS RELIED ON THE DECISION OF HON'BLE GUJ ARAT HIGH COURT IN THE CASE OF MAHENDRA C.SHAH VS CIT 299 ITR 305 IN WHICH IT IS HELD THAT WHEN THE A SSESSEE FILED REVISED RETURN OF INCOME BEFORE THE ASSESSMENT IS COMPLETED OFFERING THE INCOME DISCLOS ED U/S. 132(4) AND PAID THE TAX, THERE WOULD BE SUFFICIENT COMPLIANCE FOR EXCEPTION PROVIDED UNDER EXPLANATION 5 TO SECTION 271(1) OF THE IT. ACT. 4. I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS. I AGREE WITH THE APPELLANT'S VIEWS. THE APPELLANT HAS FILED THE REVISED COMPUTATION OF INCOME ON 13.0 8.2007 OFFERING THE TOTAL DISCLOSED INCOME OF RS.13,50,000/- AND PAID THE TAX THEREON. HENCE, AS PER DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF MAHENDRA C. SHAH VS CIT 299 ITR 305, THE-AP PELLANT IS ENTITLED TO EXCEPTION PROVIDED UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE I.T. ACT AND THE PENALTY IS NOT LEVIABLE. ACCORDINGLY, THE PENALTY IS DELETED. ITA NO 269/AHD/2011 . A.Y. 2006- 07 3 4. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, LD. D.R. RELIED ON THE ORDER OF A.O. THE LD. D.R. ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF ASHOK KUMAR GUPTA VS. CIT (2006) 287 ITR 376 (P & H). ON THE OTHER HAND LD. A .R. REITERATED THE SUBMISSIONS MADE BEFORE CIT(A). HE FURTHER SUBMITTE D THAT INADVERTENTLY AMOUNT OF RS. 13,00,000/- WAS DISCLOSED INSTEAD OF RS. 13.5 LAC BUT ON REALISING THE MISTAKE, ASSESSEE REVISED THE STATEME NT OF TOTAL INCOME AND ALSO PAID THE TAX AND THE REVISED CALCULATION WAS F ILED BEFORE A.O ON 13.08.2007 I.E. BEFORE THE FINALIZATION OF ASSESSME NT. HE FURTHER SUBMITTED THAT THE NET INCOME SUBMITTED BY THE ASSE SSEE HAS ALSO BEEN ACCEPTED BY THE A.O. HE ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF MAHENDRA C. SHAH VS. CIT 299 ITR 305. HE THUS SU PPORTED THE ORDER OF CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, ASSESSEE DISCLOSED UNACCOUNTED INCOME OF RS. 13,50,000/- BUT IN THE RETURN OF INCOME INITIALLY ASSESSEE OFFERED ONLY 13,00,000/- BUT SUBSEQUENTLY FILED THE REVISED TOTAL INCOME BY INCL UDING THE DIFFERENCE OF RS. 50,000/- AND ALSO PAID TAXES ON THE DIFFERENCE AMOUNT. THE SUBMISSION OF THE ASSESSEE THAT HE HAD FILED THE RE VISED TOTAL INCOME WHICH INCLUDED THE AMOUNT OF RS. 50,000/- BEFORE TH E FINALIZATION OF ASSESSMENT AND HAD ALSO PAID TAX THEREON HAS NOT BE EN CONTROVERTED BY REVENUE. WE FIND THAT LD. CIT(A) RELYING ON THE DEC ISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF MAHENDRA C . SHAH VS. CIT (SUPRA) DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. ITA NO 269/AHD/2011 . A.Y. 2006- 07 4 7. BEFORE US L.D D.R. HAS NOT BEEN BROUGHT ANY CONTRAR Y BINDING DECISION OF JURISDICTIONAL HIGH COURT OR APEX COURT IN ITS SUPP ORT. IN VIEW OF THE AFORESAID FACTS AND FOLLOWING THE DECISION OF JURIS DICTIONAL HIGH COURT WHICH HAS BEEN RELIED BY CIT(A) AND WHICH IS BINDIN G ON US, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND TH US THIS GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 27 - 06 - 2014. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD