Tejraj Choridia (HUF), CHENNAI V. ACIT, CHENNAI

ITSSA 32/CHNY/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9123 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-04-2013
• Assessment Year: misc
• Appeal Filed On: 11-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Block assessment
• Section: 147

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI. BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT & SHRI S.S. GODARA, JUDICIAL MEMBER I.T(SS).A. NO.28/MDS/2012 BLOCK ASSESSMENT PERIOD: ENDING 07.06.2000 LATE SHRI TEJRAJ CHORDIA, C/O CNGSN & ASSOCIATES, CAS, NO. 22, VIJAYARAGHAVA ROAD, T. NAGAR, CHENNAI 17. [PAN:AADPC4420B] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE III (3), CHENNAI (APPELLANT) (RESPONDENT) I.T(SS).A. NO.29/MDS/2012 BLOCK ASSESSMENT PERIOD: ENDING 07.06.2000 NIRU DEVI, C/O CNGSN & ASSOCIATES, CAS, NO. 22, VIJAYARAGHAVA ROAD, T. NAGAR, CHENNAI 17. [PAN: AA DPC4423C ] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE III (3), CHENNAI (APPELLANT) (RESPONDENT) I.T(SS).A. NO.30/MDS/2012 BLOCK ASSESSMENT PERIOD: ENDING 07.06.2000 ABHA DEVI, C/O CNGSN & ASSOCIATES, CAS, NO. 22, VIJAYARAGHAVA ROAD, T. NAGAR, CHENNAI 17. [PAN: AADPC4422D] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE III (3), CHENNAI (APPELLANT) (RESPONDENT) I.T(SS).A. NO.31/MDS/2012 BLOC K ASSESSMENT PERIOD: ENDING 07.06.2000 DEEPAK CHORDIA, C/O CNGSN & ASSOCIATES, CAS, NO. 22, VIJAYARAGHAVA ROAD, T. NAGAR, CHENNAI 17. [PAN: AADPC4218M] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE III (3), CHENNAI (APPELLANT) (RESPONDENT) I.T I.TI.T I.T(SS) (SS) (SS) (SS).A. .A..A. .A. NO NONO NOS SS S. .. .28 TO 33 28 TO 33 28 TO 33 28 TO 33/M/ /M/ /M/ /M/1 11 12 22 2 2 I.T(SS).A. NO.32/MDS/2012 BLOCK ASSESSMENT PERIOD: ENDING 07.06.2000 LATE TEJRAJ CHORDIA (HUF) C/O CNGSN & ASSOCIATES, CAS, NO. 22, VIJAYARAGHAVA ROAD, T. NAGAR, CHENNAI 17. [PAN: AA AHT0612B ] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE III (3), CHENNAI (APPELLANT) (RESPONDENT) I.T(SS).A. NO.33/MDS/2012 BLOCK ASSESSMENT PERIOD: ENDING 07.06.2000 T. LOONCHAND CHORDIA, C/O CNGSN & ASSOCIATES, CAS, NO. 22, VIJAYARAGHAVA ROAD, T. NAGAR, CHENNAI 17. [PAN: AABPL2950P] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE III (3), CHENNAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B. RAMAKRISHNAN, C.A. RESPONDENT BY : SHRI N. MADHAVAN, JCIT DATE OF HEARING : 10.04.2013 DATE OF PRONOUNCEMENT : 16.04.2013 ORDER PER S.S. GODARA, JUDICIAL MEMBER THIS BATCH OF SIX APPEALS FILED BY DIFFERENT ASSES SEES, FOR BLOCK ASSESSMENT PERIOD ENDING 07.06.2000 IMPUGNS CONFIRM ATION OF PENALTIES BY THE COMMISSIONER OF INCOME TAX (APPEALS) II, CHENNA I VIDE ORDERS ALL DATED 31.08.2012, IN ITA NOS. 9/10-11, 12/10-11, 11/10-11 , 08/10-11, 10/10-11 AND 07/10-11 RESPECTIVELY; UNDER SECTION 158BFA(2) OF THE INCOME TAX ACT 1961 [IN SHORT THE ACT]. I.T I.TI.T I.T(SS) (SS) (SS) (SS).A. .A..A. .A. NO NONO NOS SS S. .. .28 TO 33 28 TO 33 28 TO 33 28 TO 33/M/ /M/ /M/ /M/1 11 12 22 2 3 2. BRIEF FACTS COMMON TO ALL CASES ARE THAT ON 07. 06.2000, THERE WAS A SEARCH IN CASE OF ONE SHRI RANGROOPCHAND CHORDIA. ON THE BASIS OF ALLEGED INCRIMINATING MATERIAL FOUND REGARDING THE PRESENT ASSESSEES, NOTICES UNDER SECTION 158BD OF THE ACT STOOD ISSUED TO THEM. IT EMERGES THAT THE ASSESSEES BEFORE US ARE FATHER, SISTER-IN-LAW, SIST ER-IN-LAW, NEPHEW, HUF AND BROTHER OF THE SEARCHED ASSESSEE, RESPECTIVEL Y. IT FURTHER TRANSPIRES FROM A PERUSAL OF THE CASE FILE IN I.T.(SS)A. NO. 2 8/MDS/2012 THAT THE ASSESSEE NAMELY SHRI TEJRAJ CHORDIA HAD DIED WELL B EFORE PASSING OF THE ASSESSMENT ORDER. 3. IN PROCEEDINGS IN CONSEQUENCE TO 158BD NOTICES ABOVE SAID, THE ASSESSING OFFICER FINALIZED ASSESSMENTS IN THE CASE S OF ALL ASSESSEES/ APPELLANTS. UNDISPUTEDLY, IN ALL THESE CASES, ADDIT IONS, INTER ALIA, PERTAINING TO UNDISCLOSED RENT RECEIPTS TO THE TUNE OF ` .5,64,839, ` .6,37,473/-, ` .6,54,473/-, ` .65,505/-, ` .12,84,040/- AND ` .2,75,100/- RESPECTIVELY, WERE MADE. IT IS FURTHER EVIDENT THAT THE ADDITIONS AFOR ESAID ALSO STAND CONFIRMED UPTO THE TRIBUNAL. 4. IN PENALTY PROCEEDINGS AGAINST ALL ASSESSEES, IT TRANSPIRES THAT THE ASSESSING OFFICER WAS OF THE OPINION THAT BUT FOR SEARCH, THE RENTAL INCOME FROM DIFFERENT HOUSING PROJECTS COULD NOT HAVE BEEN UNEARTHED. BY TERMING THE ACT OF THE ASSESSEES CONCEALMENT IN DIFFERENT PENALTY ORDERS UNDER CHALLENGE, HE IMPOSED PENALTIES OF ` .4.00 LAKHS, 4.50 LAKHS, ` .4.60 LAKHS, I.T I.TI.T I.T(SS) (SS) (SS) (SS).A. .A..A. .A. NO NONO NOS SS S. .. .28 TO 33 28 TO 33 28 TO 33 28 TO 33/M/ /M/ /M/ /M/1 11 12 22 2 4 ` .50,000/-, ` .9,10,000/- AND ` .2.00 LAKHS; RESPECTIVELY. THE CIT(A) HAS ALSO CONFIRMED THE PENALTIES ORDERS. THESE LEAVES ALL THE ASSESSEES/APPELLANTS AGGRIEVED . 5. IN THE COURSE OF HEARING, THE AR REPRESENTING I N CASE OF LATE TEJRAJ CHORDIA IN I.T.(SS)A. NO. 28/MDS/2012 VEHEMENTLY AR GUED THAT THE PENALTY HAS BEEN WRONGLY IMPOSED IN THE CASE OF AN ASSESSEE , WHO DIED BEFORE FINALIZATION OF ASSESSMENT (SUPRA). HIS FURTHER CON TENTION IN ALL CASES IS THAT THE WORD SHALL IN THE RELEVANT STATUTORY PROVISIO N PRESCRIBING PENALTY UNDER SECTION 158BFA(2) CONTAINING THE WORD SHALL HAS T O BE READ AS MAY. HE ALSO SUBMITS THAT ON MERITS AS WELL, IT IS NOT THE CASE OF CONCEALMENT, BUT ONLY A CASE OF PARTIAL NON-DISCLOSURE OF INCOME AFT ER SURVEY FOLLOWED BY ASSESSMENTS UNDER SECTION 147 OF THE ACT. TO BUTT RESS HIS SUBMISSIONS IN I.T.(SS)A NO. 28/MDS/2012, HE PLACES RELIANCE ON TH E CASE LAW OF [2006] 154 TAXMAN 34 (DELHI) (MAG.) ITO V. V.P. SHARMA IN IT A PPEAL NO. 1501(DELHI) (M) 2005. REGARDING OTHER CASES, HE CITES CATENA OF FOLLOWING CASE LAW AND PRAYS FOR ACCEPTANCE OF THE APPEALS: 1. HINDUSTAN STEEL LTD. VS. STATE OF ORISSA [83 I TR 26 (SC)] 2. CIT VS. DODSAL LTD. [312 ITR 112 (BOM)] 3. SHRI A. RAKESH KUMAR JAIN VS. ACIT [2008-TOIL-1 05-ITAT-MAD] 4. CH. SURESH REDDY VS. ACIT [120 ITD 428 (CHENNAI) ] 5. SMT. MALA DAYANITHI VS. DCIT [91 ITD 46 (BANG.)] 6. CIT VS. NEMICHAND [344 ITR 495 (KAR.)/[2011] [23 7 CTR 535 (KAR.)] APPROVING THE ITAT DECISION IN NEMICHAND VS. AC IT(INVESTIGATION) [93 TTJ (BANG) 564]. I.T I.TI.T I.T(SS) (SS) (SS) (SS).A. .A..A. .A. NO NONO NOS SS S. .. .28 TO 33 28 TO 33 28 TO 33 28 TO 33/M/ /M/ /M/ /M/1 11 12 22 2 5 6. THE REVENUE CHOOSES TO DRAW STRONG SUPPORT FROM THE ORDERS UNDER CHALLENGE PASSED BY THE CIT(A) AND PRAYS FOR CONFIR MING THE PENALTIES IN QUESTION. 7. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE FILES. AS ALREADY STATED HEREINABOVE, IN I.T.(SS)A. NO. 28/MDS/2012, THE UNDISPUTED FACTUAL POSITION IS THAT THE ASSESSEE NAMELY LATE TEJRAJ CH ORDIA HAD DIED WELL BEFORE THE FINALIZATION OF THE IMPUGNED ASSESSMENT. ON THE ISSUE OF LEGALITY, THE ASSESSEES ARGUMENT BEFORE US IS THAT THE CIT(A ) HAS WRONGLY CONFIRMED THE PENALTY IMPOSED ON HIS L/RS. AFTER PERUSING THE CASE LAW CITED OF ITO V. V.P. SHARMA (SUPRA), WE FIND THAT ASSESSEES CONTEN TION ABOVE SAID DESERVES ACCEPTANCE AS THE COORDINATE BENCH HOLDS T HAT THE RELEVANT STATUTORY PROVISION I.E. 159(2)(B) OF THE ACT DOE S NOT INCLUDE PENALTY PROCEEDINGS. ACCORDINGLY, WE DELETE THE PENALTY ON THE VERY ISSUE OF LEGALITY ITSELF. 8. NOW, WE COME TO OTHER APPEALS. IN THESE CASES, WE FIND THAT THE ADDITIONS IN QUESTION HAVE BEEN MADE REGARDING RENT AL INCOME ALLEGEDLY NOT DISCLOSED BY THE ASSESSEES. THE CONCURRENT FINDING OF THE ASSESSING OFFICER AS WELL AS CIT(A) IS THAT BUT FOR SEARCH, THE UND ISCLOSED INCOME WOULD NOT HAVE BEEN SEEN THE LIGHT OF THE DAY AND ASSESSEES ACT AMOUNTS TO CONCEALMENT EXIGIBLE TO PENALTY PROVISIONS. IN THIS REGARD, WE FIND THAT IN I.T.(SS) A NOS. 29, 30 AND 32/MDS/2012, THE TAX LIA BILITY HAD BEEN COMPUTED IN VIEW OF THE GROSS AMOUNT WITHOUT TAKING INTO CON SIDERATION THE DISCLOSED I.T I.TI.T I.T(SS) (SS) (SS) (SS).A. .A..A. .A. NO NONO NOS SS S. .. .28 TO 33 28 TO 33 28 TO 33 28 TO 33/M/ /M/ /M/ /M/1 11 12 22 2 6 INCOME SEPARATELY; WHEREAS, IN I.T.(SS)A. NOS. 31 A ND 33/MDS/2012, DURING THE RELEVANT PERIOD, THE TOTAL INCOME OF THE ASSESS EES DID NOT EXCEED THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX. THE ASSESSEES HAD ALSO FILED THEIR RESPECTIVE TABULATIONS BEFORE THE LOWER APPELLATE A UTHORITY WHICH HAVE NOWHERE BEEN SPECIFICALLY NEGATED BY THE CIT(A). TH EREFORE, WE HOLD THAT THE PRESENT CASES DO NOT FALL UNDER THE CATEGORY OF CONCEALMENT LEADING TO NON-DISCLOSURE OF INCOME. IN OTHER WORDS, WE HOLD T HAT ASSESSEES HAVE NOT CONCEALED ANY INCOME SO AS TO INVITE PENALTY. HENCE , REITERATING THE SETTLED LAW THAT EVERY ADDITION DOES NOT IPSO FACTO RESULTS IN CONCEALMENT OF INCOME AND ALSO THAT PENALTY AND ASSESSMENT PROCEEDINGS AR E ALTOGETHER DIFFERENT, WE DELETE THE PENALTIES UNDER CHALLENGE. 9. CONSEQUENTLY, ALL THE APPEALS ARE ALLOWED. ORDER PRONOUNCED ON TUESDAY, THE 16 TH OF APRIL, 2013 AT CHENNAI. SD/ - SD/ - (DR. O.K. NARAYANAN) VICE-PRESIDENT (S.S. GODARA) JUDICIAL MEMBER CHENNAI, DATED, THE 16.04.2013 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.