M/s. Shivam Developers, Baroda V. The Dy.CIT, Central Circle-2, Baroda

ITSSA 328/AHD/2014

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3609 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 05-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Document seized; Documents seized; Bonafide mistake
• Section: 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE, SHRI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER IT(SS)A NO. 328/AHD/2014 (ASSESSMENT YEAR : 2010-11) M/S. SHIVAM DEVELOPERS, 3, TRIVENI PARK SOCIETY, B/H. MANJEET NAGAR, MANJALPUR, BARODA-390011 APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, BARODA RESPONDENT PAN: ABNFS8789G / BY ASSESSEE : SHRI MUKUND BAKSHI, A.R. / BY REVENUE : SHRI MUDIT NAGPAL, SR. D.R. /DATE OF HEARING : 09.02.2018 /DATE OF PRONOUNCEMENT : 20.03.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2010-11 ARISES FROM THE CIT(A)- IV, AHMEDABADS ORDER DATED 20.05.2014 IN CASE NO. CIT(A)-IV/184/BRD/CC- 2/13-14, AFFIRMING ASSESSING OFFICERS ACTION IMPOS ING PENALTY OF RS.2,39,500/-, IN PROCEEDINGS U/S.271(1)(C) OF THE INCOME TAX ACT, 19 61; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE ADVERT TO THE RELEVANT FACTS FIRST. THIS ASS ESSEE FIRM IS ENGAGED IN CONSTRUCTION AND DEVELOPMENT BUSINESS. IT HAD FILE D ITS ORIGINAL RETURN OF INCOME ON 10.09.2010 STATING AN AMOUNT OF RS.1,68,110/- AS TH E RELEVANT PREVIOUS YEAR INCOME. THE DEPARTMENT THEREAFTER CONDUCTED THE SEARCH IN Q UESTION ON 25.10.2010 IN M/S. IT(SS)A NO. 328/AHD/14 [M/S. SHIVAM DEVELOPERS VS. DCIT] A.Y. 2010-11 - 2 - DARSHANAM GROUP OF CASES INCLUDING THE PRESENT ASSE SSEE. ONE SHRI SUNIL AGRAWAL; ACTED AS THE KEY PERSON OF GROUP, GOT RECORDED HIS SEARCH STATEMENT MAKING DISCLOSURE OF RS.20CRORES ON THE ENTIRE GROUPS UND ISCLOSED INCOME GENERATED FROM ITS BUSINESS ACTIVITY. PAGE 2 OF THE CIT(A)S ORDE R UNDER CHALLENGE CONTAINS EXTRACT OF THE ABOVE STATEMENT. IT IS EVIDENT THERE FROM S HRI AGRAWALS DECLARATION CAME ON THE BASIS OF SEIZED MATERIAL FROM SEARCHED PREMISES . THE SAME INCLUDED CHEQUE AND CASH COMPONENT OF VARIOUS PROPERTIES SOLD. THIS FO LLOWED SEARCHED GROUPS TAXATION IN-CHARGE SHRI DILIP H. AGRAWALS STATEMEN T DATED 08.02.2011 GIVING ADVICE ASSESSEE-WISE AND YEAR-WISE BREAK UP OF THE ABOVE DISCLOSURE AMOUNTING TO RS.20CRORES. THIS SEARCHED GROUP COMPRISED OF SIX ENTITIES INCLUDING THE PRESENT TAX PAYER. THE ASSESSEES UNDISCLOSED INCOME IN THE IM PUGNED ASSESSMENT YEAR CAME TO BE RS.7.75LACS IN THE NATURE OF MONEY RECEIPTS FROM VARIOUS CUSTOMERS. ALL THIS CULMINATED IN INITIATION OF SECTION 153A LOWER PROC EEDINGS VIDE NOTICE DATED 07.03.2011 AS SERVED ON 09.03.2011. THE ASSESSEE T HEN FILED ITS POST RETURN ON 24.05.2011 STATING INCOME OF RS.9,43,110/- AGAINST THE EARLIER ONE INDICATING THE INCOME OF RS.1,68,110/-. THIS INCREASE WAS TO THE EXTENT OF RS.7.75LACS ON MONEY RECEIPTS ADMITTED IN SEARCH STATEMENT. THE ASSESSI NG OFFICER ACCEPTED THE SAID RETURN IN HIS ASSESSMENT ORDER DATED 28.03.2017. H E THEREAFTER INITIATED THE INSTANT PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT ALLEGI NG CONCEALMENT AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. QUANTUM PROCEEDI NGS ACCORDINGLY ATTAINED FINALITY AT THIS STAGE. 3. WE NOW PROCEED TO THE IMPUGNED PENALTY PROCEEDIN GS. THE ASSESSEE DOES NOT APPEAR TO HAVE FILED ANY REPLY AS EVIDENT FROM PENALTY ORDER DATED 26.0.2013. THIS MADE THE ASSESSING OFFICER TO PLACE A HEAVY RE LIANCE ON THE ABOVE QUANTUM DEVELOPMENTS INCLUDING SEARCH IN QUESTION A DETAILE D DISCUSSION ON THE INTERPLAY BETWEEN SECTION 271(1)(C) AND SECTION 271AAA PENALT Y PROCEEDINGS DRAWING A FINE DISTINCTION THEREIN TO CONCLUDE THAT THE ASSESSEES FAILURE IN NOT INCLUDING THE ABOVE ADDITIONAL INCOME OF RS.7.75LACS IN ITS ORIGINAL RE TURN FILED U/S.139(I) OF THE ACT FOLLOWED BY THE SEARCH AND SEARCH STATEMENT ATTRACT ED SECTION 271(1)(C) EXPLANATION 5A OF THE ACT RENDERING IT A CLEAR CUT CASE OF CONC EALMENT OF INCOME. HE THUS IMPOSED THE IMPUGNED PENALTY OF RS.2,39,500/-. THE CIT(A)S ORDER UNDER IT(SS)A NO. 328/AHD/14 [M/S. SHIVAM DEVELOPERS VS. DCIT] A.Y. 2010-11 - 3 - CHALLENGE DISCUSSES ALL THE RELEVANT FACTS AS WELL AS LAW TO CONFIRM THE IMPUGNED PENALTY WITH THE FOLLOWING PRECISE REASONING: 9. IN VIEW OF THE ABOVE DISCUSSION, IT IS SUMMED U P AS UNDER: (I) THE APPELLANT HAS DISCLOSED UNACCOUNTED INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT ON THE BASIS OF THE INCRIMINATING SEIZED MATERIAL. THIS UNACCOUNTED INCOME WAS NOT OFFERED F OR TAXATION IN THE RETURNS FILED U/S 139 OF THE ACT BEFORE THE DATE OF SEARCH AND TH E APPELLANT HAS FAILED TO ESTABLISH THAT SUCH OMISSION WAS A BONAFIDE MISTAKE AND NOT D ELIBERATE. (II) SUCH DISCLOSURE OF UNACCOUNTED INCOME IS NOT VOLUNTARY. IT IS ON ACCOUNT OF THE SEARCH AND ON THE BASIS OF SCRUTINY OF SEIZED M ATERIAL, UNACCOUNTED INCOME HAS BEEN DISCLOSED. (III) RETURN FILED IN RESPONSE TO NOTICE U/S 153A / 153C OF THE ACT, DISCLOSING UNACCOUNTED INCOME, SUBSEQUENT TO THE DATE OF SEARC H WITH A VIEW TO PRE-EMPT ANY ACTION BY THE DEPARTMENT ON THE BASIS OF SEIZED MAT ERIAL CANNOT ABSOLVE THE APPELLANT FROM THE RIGOUR OF PENALTY U/S 271(1)(C) OF THE ACT READ WITH EXPLANATION 5A. (IV) EXPLANATION 5A TO SECTION 271(1)(C) IS SQUAREL Y APPLICABLE IRRESPECTIVE OF THE NATURE OT INCOME, WHETHER REGULAR OR OTHERWISE, IN RESPECT OF SUCH INCOME SUBSEQUENTLY DISCLOSED IN THE RETURN FILED IN RESPO NSE TO NOTICE U/S 153A OF THE ACT IN VIEW OF NOTWITHSTANDING CLAUSE OF EXPLANATION 5A . (V) EVEN IF IT IS ASSUMED THAT EXPLANATION 5A IS NO T APPLICABLE, ONCE THERE IS A DIFFERENCE IN RETURNED / ASSESSED INCOME AS PER SEC TION 153A / 153C OF THE ACT AND RETURNED INCOME AS PER RETURN ORIGINALLY FILED U/S 139 OF THE ACT OR IS A DISCLOSURE OF INCOME IN RESPONSE TO NOTICE U/S 153A / 153C OF THE ACT, THE ONUS IS ON THE ASSESSES TO PROVE THAT THE FAILURE TO FILE HIS CORR ECT RETURN OF INCOME WAS NOT DUE TO FRAUD OR NEGLECT [K. P. MADHUSUDHANAN V. CIT [2001] 251ITR 99 (SC)]. (VI) THE RETURNED INCOME FILED IN RESPONSE TO NOTIC E U/S 153A OF THE ACT DISCLOSING UNACCOUNTED INCOME SUBSEQUENT TO THE DAT E OF SEARCH CLEARLY PROVES THE FACT THAT THE OMISSION AT THE TIME OF FILING ORIGIN AL RETURN OR OF NOT FILING ORIGINAL RETURN U/S 139 OF THE ACT BEFORE THE DATE OF SEARCH EVEN THOUGH THE DUE DATE HAD ALREADY EXPIRED WAS DELIBERATE AND CONSCIOUS SINCE THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE OMISSION IN THE ORIGINAL RETURN OR TO FILE THE ORIGINAL RETURN WAS ON ACCOUNT OF ANY BONAFIDE INADVERTENCE OR MISTAKE. (VII) THE PROCEEDINGS U/S 153A / 153C CANNOT BE EQU ATED WITH AN AMNESTY SCHEME PROVIDING IMMUNITY FROM PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IRRESPECTIVE OF APPLICABILITY OF EXPLANATION 5A OR OTHERWISE. (VIII) ONCE RETURN OF INCOME IS FILED IN RESPONSE T O NOTICE U/S 153A / 153C OF THE ACT, ONLY PENDING ASSESSMENT OR REASSESSMENT PROCEE DINGS DO ABATE AND NOT ALL THE PAST ACTIONS. TO HOLD OTHERWISE WILL LEAD TO ABSURD ITY WHICH CANNOT BE ACCEPTED [K. GOVINDAN & SONS VS. CIT (2001) 247 ITR 192 (SC)]. IT(SS)A NO. 328/AHD/14 [M/S. SHIVAM DEVELOPERS VS. DCIT] A.Y. 2010-11 - 4 - 10. IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED OP INION THAT THE APPELLANT HAS CONCEALED THE PARTICULARS OF INCOME IN RESPECT OF A DDITIONAL INCOME DISCLOSED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT AND IS, THEREFORE, LIABLE TO PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, PENA LTY LEVIED BY THE A.O U/S 271(1)(C) AT AROUND THE MINIMUM RATE OF 100% OF TAX SOUGHT TO BE EVADED IS HEREBY CONFIRMED. 4. LEARNED AUTHORIZED REPRESENTATIVE VEHEMENTLY CON TENDS DURING THE COURSE OF HEARING BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AS WELL AS ON FACTS IN LEVYING THE IMPUGNED PENALTY. HE EMPHASIZES THAT THE ASSES SEES POST SEARCH RETURN FILED IN SECTION 153A PROCEEDINGS DECLARING ADDITIONAL INCOM E OF RS.7.75LACS STOOD ACCEPTED WITHOUT ANY ADDITION BEING MADE THEREIN. LEARNED COUNSEL PLEADS THAT SUCH A RETURN IS TO BE TREATED AS THE ONE U/S.139( 1) OF THE ACT AS PER HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN KIRIT DAYAB HAI PATEL VS. ACIT (2015) 280 CTR 216 (GUJ) AND (2017) 79 TAXMANN.COM96 (DELHI) P CIT VS. NEERAJ JINDAL HOLDING THAT THE IMPUGNED PENAL PROVISION IS NOT AT TRACTED IN SUCH A CASE. LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND CITES A CO-ORDINATE BENCHS ORDER IN IT(SS)A NO.54/AHD/2014 DATED 13.04.2017 IN VIJAY K. SHAH GROUP OF CASES THAT THERE IS NO SUCH RULE THAT THE SECTION 271(1)(C) DO ES NOT APPLY IN CASE OF ANY ADDITIONAL INCOME DECLARED IN A POST SEARCH RETURN. IT HOWEVER EMERGES THEREFROM THAT ALL THE SAID JUDICIAL PRECEDENTS INVOLVE SECTI ON 271(1)(C) EXPLANATION 5 CASES AS THE SEARCH(ES) THEREIN HAD BEEN CONDUCTED BEFORE 01 /06/2007 AS AGAINST THE IMPUGNED SEARCH IN THE INSTANT CASE DATED 25.10.201 0. IT THUS TRANSPIRES THAT THE ABOVE JUDICIAL PRONOUNCEMENT QUOTED FROM BOTH THE S IDES DO NOT APPLY IN THE INSTANT APPEAL. THE ABOVE EXPLANATION 5A MAKES IT CLEAR TH AT IT CONTAINS A NON OBSTANTE CLAUSE THAT IF AN ASSESSEE IS FOUND TO BE OWNER OF ANY MONEY, BULLION, JWELLERY OR OTHER VALUABLE ARTICLES OR THINGS (ASSETS) HAS ACQU IRED BY UTILIZATION OF HIS INCOME FOR ANY PREVIOUS YEAR ENDING BEFORE OR ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTION REPRESENT ING HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEARS BEFORE SEARCH AND HE H AS FURNISHED RETURN BEFORE THE SEARCH NOT DECLARING THE SAID INCOME THEREIN, HE IS DEEMED TO HAVE CONCEALED THE ABOVE INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME NOTWITHSTANDING THE FACT THAT SUCH INCOME IS DECLARED IN POST SEARC H RETURN. WE THUS ARE OF THE VIEW THAT THE ABOVE JUDICIAL PRECEDENTS DO NOT HELP ASSE SSEES GRIEVANCE SINCE COVERED BY IT(SS)A NO. 328/AHD/14 [M/S. SHIVAM DEVELOPERS VS. DCIT] A.Y. 2010-11 - 5 - THE ABOVE NON OBSTANTE STATUTORY CLAUSE ENSHRINED I N SECTION 271(1)(C) EXPLANATION 5A OF THE ACT. 5. LEARNED COUNSEL LASTLY SUBMITS THAT THE AUTHORIZ ED BELOW NOWHERE SPECIFY THE NATURE OF ASSETS AS PER SECTION 271(1)(C) EXPLA NATION 5A (A) & (B) CLAUSES. WE FIND NO SUBSTANCE IN THIS LATTER PLEA AS WELL. THE RE IS NO DISPUTE THAT THE ABOVE FORMER CLAUSE (A) APPLIES IN CASE OF MONEY, BULLION , JEWELLERY OR OTHER VALUABLE ARTICLES OR THINGS. IT IS EVIDENT THAT THERE IS NO SUCH CATEGORY OF ASSETS FOUND DURING THE COURSE OF SEARCH. IT IS RATHER A CASE ATTRACTE D THE LATTER CLAUSE OF ANY INCOME PASSED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHE R DOCUMENTS OR TRANSACTION OF CLAUSE(B) WHICH APPLIES IN FACTS OF THE INSTANT CAS E SINCE SHRI AGRAWALS SEARCH STATEMENT IS FOUND TO BE BASED ON SEIZED DOCUMENTS INDICATING THE ASSESSEE TO HAVE COLLECTED ON MONEY RECEIPTS IN ADDITION TO CHEQUE C OMPONENT. WE THUS CONCLUDE THAT BOTH THE LOWER AUTHORITIES HAVE RIGHTLY LEVIED THE IMPUGNED PENALTY OF RS.2,39,500/- IN LIGHT OF THE FACTS AND CIRCUMSTANC ES OF THE INSTANT CASE. 6. THIS ASSESSEES APPEAL IS DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 20 TH DAY OF MARCH, 2018.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIA L MEMBER AHMEDABAD: DATED 20/03/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )* + ,--. . /0 / DR, ITAT, AHMEDABAD 1 + 23 / GUARD FILE. BY ORDER / . // . /0