Shri Ashok Arjandas Makhijani, Godhra V. The Dy. CIT, Central Circle-1, Baroda

ITSSA 310/AHD/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3368 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 01-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., , BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER SL. NO(S) IT(SS)A NO(S) ASSESSMENT YEAR(S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 310/AHD/2014 2005-06 SHRI ASHOK ARJANDAS MAKHIJANI 7,8,9, VARDHMAN SOCIETY NR.SHUKLA SOCIETY POLICE CHOWKI NO.8 PRABHA ROAD GODHRA 389 001 PAN: ACLPM 1244 R DY.CIT CENTRAL CIRCLE-1, AAYAKAR BHAWAN RACE COURSE CIRCLE VADODARA- 390 007 2. 311/AHD/2014 2006-07 -DO-ASSESSEE -DO-REVENUE 3. 312/AHD/2014 2007-08 -DO-ASSESSEE -DO-REVENUE 4. 313/AHD/2014 2008-09 -DO-ASSESSEE -DO-REVENUE 5. 314/AHD/2014 2009-10 -DO-ASSESSEE -DO-REVENUE !'#$ / APPELLANT BY : -NONE- &'#'$ / RESPONDENT BY : SHRI K. MADHUSUDAN, SR.DR ()'* / DATE OF HEARING 22/09/2017 +,-'* / DATE OF PRONOUNCEMENT 27/ 09 /2017 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE ABOVE CAPTIONED BUNCH OF FIVE APPEALS CONCERN ING VARIOUS ASSESSMENT YEARS RELATE TO THE SAME ASSESSEE AGAINS T THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV, AHMEDA BAD [CIT(A) IN IT(SS)A NOS.310 TO 314/AHD/201 4 ASHOK ARJANDAS MAKHIJANI VS. DCIT AYS 2005-06, 06-07, 07-08, 08-09&09-10 - 3 - UNDER S.139(1) OF THE ACT FOR ALL THE ASSESSMENT Y EARS AND DECLARED VARIED INCOME. AFTER THE SEARCH ACTION, THE ASSESS EE FILED FRESH RETURN OF INCOME IN RESPONSE TO STATUTORY NOTICES ISSUED UNDE R S.153A OF THE ACT FOR ALL THESE ASSESSMENT YEARS. THE ASSESSEE DISCL OSED ADDITIONAL INCOME FOR ALL THE ASSESSMENT YEARS IN THE RETURNS FILED U NDER S.153A OF THE ACT. THE VARIED INCOME SO DECLARED BY THE ASSESSEE IN DI FFERENT ASSESSMENT YEARS IN APPEALS AND ASSESSED INCOME IS TABULATED H EREUNDER. AY RETURNED INCOME U/S.139(1) RETURNED INCOME U/S.153A ADDITIONAL INCOME DECLARED U/S.153A ADDITIONS MADE U/S.153A INCOME ASSESSED U/S.153A 2005-06 62,270 7,53,820 6,91,550 45,750 7,99,570 2006-07 62,270 27,04,190 26,41,920 1,20,000 28,24,190 2007-08 - 24,51,910 24,51,910 92,000 25,43,910 2008-09 45,006 11,60,850 11,11,844 1,45,000 13,05,850 2009-10 51,807 8,01,450 7,49,643 1,40,000 9,41,450 THE ASSESSMENT WAS FINALIZED UNDER S.153A OF THE A CT R.W.S. 143(3) OF THE ACT FOR ALL THE ASSESSMENT YEARS. TH E ASSESSING OFFICER (AO) IMPOSED PENALTY UNDER S.271(1)(C) OF THE ACT O N THE DIFFERENTIAL INCOME ASSESSED UNDER S.153A AND RETURNED UNDER S.1 39(1) OF THE ACT. THE CIT(A) CONFIRMED THE IMPOSITION OF PENALTY MADE BY THE AO BY TAKING NOTE OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT. IT(SS)A NOS.310 TO 314/AHD/201 4 ASHOK ARJANDAS MAKHIJANI VS. DCIT AYS 2005-06, 06-07, 07-08, 08-09&09-10 - 5 - THE OTHER HAND CLAIMS THAT ADDITIONAL INCOME INCLUD ED IN THE ROI UNDER S.153A DO NOT IGNITE PROVISIONS OF S.271(1)(C) OF T HE ACT. 10. WE NOTICE THAT THE IDENTICAL ISSUE HAS BEEN DEALT WITH IN GREAT LENGTH BY COORDINATE BENCH IN THE CASE OF VIJAY K. SHAH I N IT(SS)A NOS.54 TO 57/AHD/2014 FOR AYS 2003-04 TO 2006-07, ORDER DATED 13/04/2017. THE RELEVANT PARA DEALING WITH THE ISSUE IS SELF-EXPL ANATORY AND THUS IS REPRODUCED HEREWITH. 9. NOTWITHSTANDING THAT THE ISSUE IS AFFIRMED IN FAVOUR OF THE ASSESSEE IN THE GIVEN FACTS OF THE CASE, WE ARE EQUALLY INCLINED TO DWELL UPON THE CARDINAL PLEA RAISED ON BEHALF OF THE ASSESSEE FOR THE PROPOSITION THAT AS SOON AS RETURN IS FILED UNDER S.153A, THE IMPOSITION OF PENALTY OR OTHERWISE HAS TO BE SEEN ONLY WITH REFERENCE TO THE RETURN FILED UNDER S.153A AND RETURN FILED EARL IER UNDER S.139 PRIOR TO SEARCH SHOWING LESSER QUANTUM OF INCOME FADES INTO INSIGNI FICANCE IN ALL CIRCUMSTANCES. FOR THIS PROPOSITION, THE DECISION OF THE HONBLE GUJAR AT HIGH COURT IN KIRIT DAHYABHAI PATEL VS. ACIT (2015) 280 CTR 216 (GUJ.) WAS HEAVIL Y RELIED UPON IN THE COURSE OF HEARING. IN ESSENCE THUS, IT IS THE CASE OF THE AS SESSEE THAT INCOME DISCOVERED AS A RESULT OF SEARCH AND INCLUDED IN THE RETURN FILED U NDER S.153A IN POST SEARCH PROCEEDINGS ARE NOT SUSCEPTIBLE TO PENALTY UNDER S. 271(1)(C) OF THE ACT AT ALL NOTWITHSTANDING EXPLANATION-5 SUBSISTING IN STATUTE AT THE RELEVANT TIME. 9.1. WE STRAIGHT AWAY RECKON THAT SUCH SWEEPING PROPOSITION DOES NOT FIND ANY SEMBLANCE OF ACCEPTABILITY. AS NOTED EARLIER, EXP LANATION-5 TO SECTION 271(1)(C) SPECIFICALLY ADDRESSES THE AFORESAID SITUATION WHER E IT IS SPECIFICALLY PROVIDED THAT NOTWITHSTANDING THE FACT THAT UNDISCLOSED INCOME FO UND AS A RESULT OF SEARCH WAS DECLARED IN THE RETURN OF INCOME FURNISHED AFTER TH E DATE OF SEARCH, THE ASSESSEE SHALL BE DEEMED TO FALL WITHIN THE SWEEP OF SECTION 271(1 )(C) UNLESS THE ASSESSEE IS COVERED BY EXIT ROUTE PROVIDED IN THE EXPLANATION-5 ITSEL F. THUS, THE AFORESAID PROPOSITION CANVASSED BY THE ASSESSEE THAT ONCE THE RETURN IS F ILED BY THE ASSESSEE AFTER THE SEARCH IN RESPONSE TO NOTICE ISSUED UNDER S.153A INCLUDING UNDISCLOSED INCOME DISCOVERED IN THE COURSE OF SEARCH, THE ASSESSEE GETS INDEFEASIBL E RIGHT TO SHUN AWAY PENALTY PROCEEDINGS ON SUCH UNDISCLOSED INCOME IS SQUARELY AT LOGGERHEADS WITH DEEMING FICTION CREATED UNDER EXPLANATION-5 FOR THIS PURPOS E. NEEDLESS TO SAY, THIS GENERIC IT(SS)A NOS.310 TO 314/AHD/201 4 ASHOK ARJANDAS MAKHIJANI VS. DCIT AYS 2005-06, 06-07, 07-08, 08-09&09-10 - 7 - THUS, ON NUANCED AND CONTEXTUAL ANALYSIS OF THE JUD GEMENT RENDERED BY THE HONBLE GUJARAT HIGH COURT IN APPEAL UNDER S.260A OF THE AC T, IT IS DIFFICULT TO RECKON THE CASE MADE OUT BY THE ASSESSEE THAT ADDITIONAL INCOM E DECLARED IN THE POST SEARCH RETURNS WOULD BE ENTITLED TO IMMUNITY FROM PENALTY IN A SWEEPING MANNER REGARDLESS OF THE SATISFACTION OF CONDITIONS AS PROVIDED FOR I TS NON-APPLICABILITY AS ENUMERATED UNDER CLAUSE(2) OF EXPLANATION-5. 9.4. NEEDLESS TO SAY, SENTENCES USED WHILE RENDE RING A JUDGMENT CANNOT BE READ IN ISOLATION AND THEIR PURPORT AND CONTENTS ARE DERIVE D FROM THEIR CONTEXT. AS NOTED, THE LAW IS CODIFIED FOR APPLICABILITY OF PENALTY IN SEARCH CASES. THE LEGISLATURE HAS MADE CONSCIOUS DISTINCTION BETWEEN THE CASES WHERE THE RETURN OF INCOME HAS ALREADY BEEN FILED PRIOR TO SEARCH QUA THE CASES WHERE THE RETURN IS YET TO BE FILED AND HAS PUT THEM ON A DIFFERENT PEDESTAL. IT IS TRITE LAW THA T A JUDGEMENT CANNOT BE READ OUT OF CONTEXT IN WHICH THE QUESTION AROSE FOR DECISION I N THAT CASE. IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OUT A WORD OR A SENTENCE FR OM THE JUDGMENT OF A COURT DIVORCED FROM THE CONTEXT OF THE QUESTION IN CONSID ERATION AND TO TREAT IT TO BE THE COMPLETE LAW DECLARED BY THE COURT. A JUDGMENT MUS T BE READ AS A WHOLE AND THE OBSERVATIONS FROM THE JUDGMENT HAVE TO BE CONSIDERE D IN THE LIGHT OF QUESTIONS WHICH WERE PRESENTED BEFORE THE COURT. A DECISION OF THE COURT TAKES ITS COLOUR FROM ITS QUESTION IN WHICH IT IS RENDERED AS ENUMERATED IN C IT VS. SUN ENGINEERING WORKS PVT.LTD. (1992) 198 ITR 297 (SC). THUS, CONTEXT HO LDS THE KEY AND THE DECISION OF THE COURT HAS TO BE READ IN THE CONTEXT OF THE FACTS IN VOLVED THEREIN AND NOT ON THE BASIS OF WHAT LOGICALLY FLOWS THERE FROM. A STRAY SENTEN CE CANNOT BE ALLOWED TO BE PUT INTO SERVICE TO DRAW A MEANING WHICH WAS NEVER PROBABLY MEANT BY THE AUTHOR HIMSELF. A JUDGMENT IS NOT TO BE READ AS STATUTE. THUS, IN THE LIGHT OF QUESTION FRAMED FOR DECISION BY HONBLE GUJARAT HIGH COURT, WE ARE INCL INED TO HOLD THAT THE ABSTRACT PROPOSITION OF NON-APPLICABILITY OF PENALTY PROCEED INGS IN ALL CIRCUMSTANCES (WHEREVER UNDISCLOSED INCOME HAS BEEN INCLUDED IN T HE RETURN FILED POST-SEARCH) IS SINGULARLY MISPLACED AND IS NOT SUPPORTED BY THE FA CTUAL CONTEXT IN WHICH THE DECISION IN KIRIT DAHYABHAI PATEL(SUPRA) WAS RENDERED. 11. IN VIEW OF THE AFORESAID DELIBERATION, WE DO NO T FIND ANY MERIT IN THE PERSPECTIVE OF THE ASSESSEE BEFORE LOWER AUTHOR ITIES IN SO FAR AS LEGAL POSITION ON THE IMPOSITION OF PENALTY IS CONCERNED. THE ASSESSEE IS THUS REQUIRED TO DEMONSTRATE MITIGATING CIRCUMSTANCES FO R NON-APPLICATION OF S.271(1)(C) R.W.S. EXPLANATION 5A ON FACTS TO ESCAP E ITS MISCHIEF. MERE IT(SS)A NOS.310 TO 314/AHD/201 4 ASHOK ARJANDAS MAKHIJANI VS. DCIT AYS 2005-06, 06-07, 07-08, 08-09&09-10 - 9 - DOCUMENTS AND FACTS ETC. THESE DOCUMENTS ETC. WERE CONFRONTED TO THE ASSESSEE AND ESCAPED INCOME WAS UNEARTHED. 13. IT IS ALSO BORN OUT FROM THE RECORD THAT ASSES SEE HAS CONCEDED THE UNDISCLOSED INCOME IN THE STATEMENT RECORDED ON OAT H UNDER S.132(4) OF THE ACT. AS EMBODIED IN S.132(4), THE EXAMINATIO N OF PERSON IN RESPECT OF BOOKS, DOCUMENTS, MONEY, BULLION, JEWELLERY OR O THER VALUABLE ARTICLES OR THINGS ETC. IS A PIECE OF EVIDENCE AND IS CAPABL E OF BEING USED AGAINST THE ASSESSEE IN INCOME TAX PROCEEDINGS THEREAFTER. THUS S.132(4) EMBODIES STATUTORY PRESUMPTION WHICH IS OF REBUTTAB LE NATURE. THE UNDERSTANDING ABOUT THE TRUE POSITION AND STATE OF AFFAIRS IN STATEMENT UNDER S.132(4) IS NOT SHOWN TO BE SUCCESSFULLY RETR ACTED. THUS, THE DEPOSITION MADE ON OATH UNDER S.132(4) HOLDS THE FI ELD. IT IS NOWHERE BORNE OUT FROM RECORD BEFORE US THAT AMOUNT CONCEDE D AS UNDISCLOSED INCOME WAS GIVEN IN VACUUM OR IN RECKLESS MANNER AN D CIRCUMSTANCES FOR DOING SO, IF ANY. THE ESTOPPELS RAISED ON ADMITTE D FACTS REMAINED UNREBUTTED AND ON THE CONTRARY WAS FURTHER RATIFIED IN THE ROI FILED UNDER S.153A OF THE ACT. WE DO NOT SEE ANY RATIONALE IN NOT TAKING INTO ACCOUNT THE INCOME SO CONCEDED IN SUCH CIRCUMSTANCES FOR T HE PURPOSES OF PENALTY PROCEEDINGS UNDER S.271(1)(C) WHICH ARE CIV IL IN NATURE AND IS A REMEDY FOR POSSIBLE LOSS OF REVENUE. IN VIEW OF T HE AFORESAID DISCUSSION, WE ARE OF THE CONSIDERED VIEW THAT RECOURSE TO EXPL ANATION 5A COULD BE IT(SS)A NOS.310 TO 314/AHD/201 4 ASHOK ARJANDAS MAKHIJANI VS. DCIT AYS 2005-06, 06-07, 07-08, 08-09&09-10 - 11 - ! ' / COPY OF THE ORDER FORWARDED TO : 1. !'# / THE APPELLANT 2. &'# / THE RESPONDENT. 3. 012* 3* / CONCERNED CIT 4. 3* ( ! ) / THE CIT(A)- 5. 67*(12 , !!12- , !0 / DR, ITAT, AHMEDABAD 6. 9) / GUARD FILE. / BY ORDER, &6** //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 22.9.17 (DICTATION-PAD 1 - PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22.7.17 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.27.9.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.9.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER