Shri Anvarali G.Varteji, Bhavnagar V. The ACIT.,Cent.Circle-1(4), Ahmedabad

ITSSA 345/AHD/2012

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3620 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-08-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 16-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Keywords: Retrospective amendment; Revised return
• Section: 143(3); 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) IT(SS)A. NOS: 345 & 346/AHD/2012 (ASSESSMENT YEARS: 2006-07 & 2007-08) ANVARALII G VARTEJI, 1 ST FLOOR, DAULAT NIVAS, AKA CINEMA ROAD, OPP. HOTEL MAUSAM, BHAVNAGAR- 364001 V/S THE ASST. CIT, CENTRAL CIRCLE-1(4), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ABBPV5131H APPELLANT BY: SHRI TUSHAR P. HEMANI & P.B. PARMAR RESPONDENT BY: SHRI KEYUR PATEL, SR. D.R. ( )/ ORDER DATE OF HEARING : 07 -02-201 8 DATE OF PRONOUNCEMENT : 12 -02-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. IT(SS)A NOS. 345 & 346/AHD/2012 ARE TWO SEPARATE AP PEALS BY THE ASSESSEE PREFERRED AGAINST THE COMMON ORDER OF THE LD. CIT(A )-I, AHMEDABAD DATED 29.06.2012 PERTAINING TO A.Y. 2006-07 & 2007-08. IT(SS)A NOS. 345 & 346/AHD/2012 . A.YS.2006-07 & 2007-08 2 2. SINCE THE GRIEVANCE IS COMMON IN BOTH THE YEARS, BO TH THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER F OR THE SAKE OF CONVENIENCE. 3. THE COMMON GRIEVANCE IN BOTH THE APPEALS RELATE TO THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT, THOUGH QUANTUM MAY DIFFER. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE R ETURN OF INCOME FOR A.Y. 2006- 07 WAS FILED ON 28.10.2010 DECLARING TOTAL INCOME A T RS. 6,79,370/- WHICH INCLUDED DISCLOSURE OF RS. 4.50 LACS. THE RETURN OF INCOME FOR A.Y. 2007-08 WAS FILED ON 28.10.2010 DECLARING TOTAL INCOME AT RS. 8 4,42,960/- WHICH INCLUDED DISCLOSURE OF RS. 82 LACS. 5. THE ASSESSMENT OF BOTH THE YEARS WERE FRAMED U/S. 1 53A R.W.S. 143(3) OF THE ACT AND THE RETURNED INCOME WAS ACCEPTED AND ASSESS ED AS SUCH. 6. PENALTY U/S. 271(1)(C) WAS LEVIED IN BOTH THE YEARS ON THE GROUND THAT THE INCOME WAS DISCLOSED ONLY AFTER SEARCH U/S. 132 AND THE INCOME DISCLOSED WAS A RESULT OF SEARCH. 7. WHEN THE MATTER WAS AGITATED BEFORE THE LD. CIT(A), THE LD. CIT(A) CONFIRMED THE LEVY OF PENALTY ON THE GROUND THAT THE APPELLAN T HAD EARLIER FILED RETURN OF INCOME BEFORE THE DATE OF SEARCH IN WHICH THE INCOM E DISCLOSED DURING THE SEARCH HAD NOT BEEN SHOWN AND THEREFORE EXPLANATION 5A BELOW TO SECTION 271(1)(C) OF THE ACT SQUARELY APPLY. IT(SS)A NOS. 345 & 346/AHD/2012 . A.YS.2006-07 & 2007-08 3 8. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT THE REVENUE AUTHORITIES HAVE INVOKED THE AMENDED EXPLANTING 5A TO SECTION 271(1)(C) OF THE ACT WHEREAS THE PRE-AMENDED EXPLANATION 5A APPL Y ON THE FACTS OF THE CASE. THE LD. COUNSEL RELIED UPON THE DECISION OF T HE CO-ORDINATE BENCH IN THE CASE OF SMT. NIRMALABEN PRAKASHBHAI SHAH AND OTHERS IN IT(SS)A NOS. 471 TO 474/AHD/2013 AND PRAYED FOR THE DELETION OF THE PEN ALTY. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE A.O. AN D RELIED UPON THE DECISION OF THE TRIBUNAL AHMEDABAD BENCH IN THE CASE OF MAH ENDRA R. GUPTA 38 TAXMANN.COM 391. 9. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE RETURNED INC OME FILED PURSUANT TO THE NOTICE U/S. 153A OF THE ACT WAS ACCEPTED AS SUCH. T HUS, IT CAN BE SAFELY CONCLUDED THAT THERE IS NO DIFFERENCE BETWEEN THE I NCOME RETURNED PURSUANT TO NOTICE U/S. 153A AND THE INCOME ASSESSED. THE APPEL LANTS DECLARED THE ENTIRE UNDISCLOSED INCOME IN THE RESPECTIVE RETURN FILED I N RESPONSE TO THE NOTICE U/S. 153A WHICH WAS ACCEPTED IN THE RESPECTIVE ASSESSMEN T YEARS BY THE A.O. 10. IT IS CLEAR THAT WHEN THE APPELLANTS HAVE FILED REV ISED RETURNS AFTER SEARCH HAS BEEN CONDUCTED AND SUCH REVISED RETURN HAS BEEN ACC EPTED BY THE A.O. THEN MERELY BY VIRTUE OF THE FACT THAT SUCH RETURN SHOWE D A HIGHER INCOME, PENALTY U/S. 271(1)(C) CANNOT BE AUTOMATICALLY IMPOSED. 11. SECTION 153A STARTS WITH A NON-OBSTANTE CLAUSE NO TWITHSTANDING ANYTHING CONTAINED IN SECTION 139-, IT IS CLEAR THAT THE RE VISED RETURN FILED U/S. 153A TAKES THE PLACE OF THE ORIGINAL RETURN U/S. 139, FO R THE PURPOSES OF ALL OTHER PROVISIONS OF THE ACT. THEREFORE, THE POSITION THAT EMERGES FROM THE PERUSAL OF IT(SS)A NOS. 345 & 346/AHD/2012 . A.YS.2006-07 & 2007-08 4 SECTION 153A (1)(A) IS THAT ONCE THE ASSESSEE FILES A REVISED RETURN U/S. 153A, FOR ALL OTHER PROVISIONS OF THE ACT, THE REVISED RE TURN WILL BE TREATED AS THE ORIGINAL RETURN FILED U/S. 139 OF THE ACT. OUR VIE W IS FORTIFIED BY THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF KIRIT DAHYABHAI PATEL 280 CTR 216 WHEREIN THE HONBLE HIGH COURT HAS HELD THA T IN VIEW OF SPECIFIC PROVISIONS OF SECTION 153A OF THE ACT, THE RETURN O F INCOME FILED IN RESPONSE TO NOTICE U/S. 153A OF THE ACT IS TO BE CONSIDERED AS RETURN FILED U/S. 139 OF THE ACT, AS THE A.O. HAS MADE ASSESSMENT ON THE SAI D RETURN AND, THEREFORE, THE RETURN IS TO BE CONSIDERED FOR THE PURPOSE OF PENAL TY U/S. 271(1)(C) OF THE ACT AND THE PENALTY IS TO BE LEVIED ON THE INCOME ASSES SED OVER AND ABOVE. THE INCOME RETURNED U/S. 153A, IF ANY. 12. NOW THE ONLY QUESTION WHICH NEEDS SPECIAL ATTENTION IS EXPLANATION 5A INSERTED TO SECTION 271(1)(C) OF THE ACT AND THE SA ME READS AS UNDER:- EXPLANATION 5A,-- WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING (HEREINAFTER IN THIS EXPLANATION REFERRED TO AS ASS ETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PR EVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOU NTS OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEA R, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN D ECLARED THEREIN, OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SU CH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, IT(SS)A NOS. 345 & 346/AHD/2012 . A.YS.2006-07 & 2007-08 5 THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB SEC TION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.' 13. THE ABOVE EXPLANATION 5A WAS SUBSTITUTED BY THE FIN ANCE (NO 2) ACT 2009 WITH RETROSPECTIVE EFFECT FROM 01.06.2007 AND PRIOR TO ITS SUBSTITUTION EXPLANATION 5A READ AS UNDER:- EXPLANATION 5A,-- WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING (HEREINAFTER IN THIS EXPLANATION REFERRED TO AS ASS ETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PR EVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOU NTS OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEA R, WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH AND T HE DUE DATE FOR FILING THE RETURN OF INCOME FOR SUCH YEAR HAS EXPIRED AND THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS D ECLARED BY HIM AND ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEA RCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB- SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 14. A COMPARATIVE PERUSAL OF THE PRE-AMENDED AND POST-A MENDED EXPLANATION 5A WOULD SHOW THAT THE FOLLOWING CLAUSE IS MISSING IN THE PRE-AMENDED EXPLANATION 5A- (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR IT(SS)A NOS. 345 & 346/AHD/2012 . A.YS.2006-07 & 2007-08 6 15. THE PENALTY HAS BEEN LEVIED WHILE DRAWING SUPPORT FROM THE AMENDED EXPLANATION 5A (SUPRA). HOWEVER, IT IS THE SAY OF T HE LD. COUNSEL THAT PRE- AMENDED PROVISION IS APPLICABLE ON THE FACTS OF THE CASE AS THE SEARCH IN THIS CASE TOOK PLACE ON 05.02.2009 AND THE AMENDMENT HAV E BEEN BROUGHT BY THE FINANCE ACT (NO. 2) OF 2009. 16. THE CO-ORDINATE BENCH IN THE CASE OF NUKALA RAMAKRI SHNA ELURU (SUPRA) HAS CONSIDERED THIS ISSUE AT LENGTH AND THE RELEVANT PA RT READS AS UNDER:- THE PRE-AMENDED PROVISIONS OF EXPLANATION 5A IS AP PLICABLE TO A NON FILER ASSESSEES, WHERE THE ASSESSEES IS NOT FILED RETUR N OF INCOME BEFORE THE SEARCH AND ALSO NOT DISCLOSED THE UNDISCLOSED INCOME IN TH E RETURN OF INCOME. THE AMENDED PROVISION OF EXPLANATION 5A, WHICH IS BROUG HT INTO THE STATUTE BY THE FINANCE ACT 2009, (WHICH WAS RECEIVED ASCENT OF PRE SIDENT ON 13.08.2009) IS APPLICABLE TO BOTH FILERS AND NON-FILERS OF RETURNS . IN THE PRESENT CASE ON HAND, THE LAW APPLICABLE AS ON THE DATE OF SEARCH, WHICH WAS PRE-AMENDED PROVISIONS OF EXPLANATION 5A, AS PER WHICH NO PENALTY CAN BE LEVI ABLE, IN CASE THE ASSESSEE HAS FILED RETURN OF INCOME U/S 139(1) OF THE ACT BEFORE THE DATE OF SEARCH, WHETHER OR NOT UNDISCLOSED INCOME IS DISCLOSED IN THE SAID RET URN. ADMITTEDLY IN THIS CASE, THE SEARCH IS TAKEN PLACE ON 16.11.2007. THE ASSESSEE H AS FILED RETURN OF INCOME U/S 153A OF THE ACT U/S 30.1.2009. BOTH ORIGINAL RETURN U/S 139(1) OF THE ACT AND THE REVISED RETURN U/S 153A OF THE ACT HAVE BEEN FILED BEFORE THE AMENDED PROVISIONS WERE BROUGHT INTO THE STATUTE (WHICH WAS RECEIVED A SCENT OF PRESIDENT ON 13.8.2009). THEREFORE, WE ARE OF THE VIEW THAT THE AMENDED PROVISIONS OF EXPLANATION 5A OF SECTION 271(L)(C) OF THE ACT IS N OT APPLICABLE IN THE INSTANT CASE. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE PENAL TY LEVIED U/S 271(L)(C) OF THE ACT, FOR THE ASSESSMENT YEAR 2005-06, 2006-07 & 200 7-08. IT(SS)A NOS. 345 & 346/AHD/2012 . A.YS.2006-07 & 2007-08 7 17. RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH, WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO D ELETE THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT IN THE CASES OF ALL THE CAPTIO NED APPELLANTS. ORDER PRONOUNCED IN OPEN COURT ON 12 - 02- 20 18 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 12/02/2018 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,AHME DABAD