Shri Mehmoodbhai P.Jamdar, Bharuch V. The Income Tax Officer,Ward-4, Bharuch

ITSSA 353/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1815 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-07-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 08-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITHA V NAIR
• Section: 132; 271(1)(c); 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER . / IT(SS)A.NO.353/AHD/2014 [ [ / ASSTT. YEAR: 2005-06 SHRI MEHMOOD P. JAMADAR DANDIA BAZAR BHARUCH. PAN : ACAPJ 5828 P. VS. ITO, WARD-4 BHARUCH. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI B.T.THAKKAR, WRITTEN SUBMISSIONS REVENUE BY : SMT.SMITHA V. NAIR, SR.DR / DATE OF HEARING : 14/11/2018 / DATE OF PRONOUNCEMENT: 14/11/2018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A) -VI, BARODA DATED 13.8.2014 PASSED FOR THE ASSTT.YEAR 2005-06. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN CONFIRMING PENALTY OF RS.26,870/- IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 WAS CARRIED OUT IN THE CASE OF JAMADAR GROUP OF CASES ON 17.1.2007. NOTICE UNDER SECTION 153A WAS ISSUED AND SERVED UPON THE ASSESSEE ON 5.11.2007 AND IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 13.32008 DECLARING TOTAL IT(SS)A NO.353/AHD/2014 2 INCOME AT RS.1,74,874/- IN THE ASSTT.YEAR 2005-06. IT IS PERTINENT TO OBSERVE THAT IN THIS YEAR THAT ORIGINAL RETURN WAS FILED UNDER SECTION 139(1) AND INCOME OF RS.40,400/- WAS DECLARED BY THE ASSESSEE. THE LD.AO HAS PASSED ASSESSMENT ORDER UNDER SECTION 153A(B) R.W. SECTION 143(3) OF THE ACT. HE DETERMINED TAXABLE INCOME AT RS.2,10,870/-. HE MADE ADDITION OF RS.36,000/- ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS. THE LD.AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT, AND ULTIMATELY IMPOSED PENALTY OF RS.26,870/- VIDE ORDER DATED 23.3.2011. THE CASE OF THE AO WAS THAT THE ASSESSEE HAS ORIGINALLY DECLARED INCOME AT RS.40,400/- UNDER SECTION 139(1) WHICH WAS REVISED TO RS.1,74,874/-. THUS, THERE WAS A DIFFERENCE OF RS.1,34,474/-. IN THE OPINION OF THE AO, IT IS TO BE CONSTRUED THAT THE ASSESSEE HAS CONCEALED INCOME TO THE EXTENT OF RS.1,34,474/- OR HE HAS FURNISHED INACCURATE PARTICULARS OF THE INCOME TO THE ABOVE EXTENT WHILE FILING ORIGINAL RETURN. 4. DISSATISFIED WITH THE LEVY OF PENALTY, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A) WHO CONFIRMED THE PEANLTY BY FOLLOWING THIRD MEMBER DECISION OF THE ITAT IN THE CASE OF ACIT VS. KIRIT DAHYABHAI PATEL, 121 ITD 159 (AHD)(TM). THE LD.CIT(A) DID NOT DISCUSS THE ISSUE IN DETAILS AND HE SIMPLY FOLLOWED THE JUDGMENT AND CONFIRMED THE PENALTY. 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT THIS DECISION OF THE ITAT IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA) HAS BEEN REVERSED BY THE HONBLE GUJARAT HIGH COURT AND HE HAS PLACED ON RECORD DECISION OF THE HONBLE GUJARAT HIGH COURT RENDERED IN TAX APPEAL NO.1181 OF 2010 AND OTHERS IN THE CASE OF KIRIT DAHYABHAI PATEL VS. ACIT. ON THE STRENGTH OF THIS DECISION, HE SUBMITTED THAT PENALTY IS NOT IMPOSABLE UPON THE ASSESSEE. ON THE OTHER HAND, THE LD.DR RELIED UPON ORDERS OF THE REVENUE AUTHORITIES. SHE CONTENDED THAT THERE IS A DIFFERENCE BETWEEN THE INCOME DECLARED UNDER SECTION IT(SS)A NO.353/AHD/2014 3 139(1) VIS--VIS RETURNED FILED IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE ACT. ACCORDING TO THE LD.DR, HAD THE REVENUE NOT CARRIED OUT SEARCH, THE ASSESSEE WOULD HAVE NOT DISCLOSED THE INCOME OF RS.1,34,474/-. 6. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GONE THROUGH THE RECORD CAREFULLY. SEARCH IN THE PRESENT CASE WAS CONDUCTED ON 17.1.2007. THEREFORE, EXPLANATION -5 TO SECTION 271(1)(C) IS ATTRACTED IN THE PRESENT CASE. WE DEEM IT APPROPRIATE TO TAKE NOTE OF THE EXPLANATION 5. EXPLANATION 5: WHERE IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 BEFORE THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME, (A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHERE SUCH RETURN HAS BEEN FURNISHED BEFORE THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED THEREIN ; OR (B) FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFTER THE DATE OF THE SEARCH, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH, 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 INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME UNLESS, XXXX XXXX XXXX 7. A PERUSAL OF THE ABOVE WOULD INDICATE THAT IF DURING THE COURSE OF SEARCH THE ASSESSEE IS FOUND TO BE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING WHOLE OR IN PART OF HIS INCOME FOR ANY PREVIOUS YEAR, WHICH HAS BEEN ENDED BEFORE THE DATE OF THE SEARCH, BUT THE RETURN OF IT(SS)A NO.353/AHD/2014 4 INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE, OR WHERE SUCH RETURN HAS BEEN FURNISHED BEFORE THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED OR FILED IN PREVIOUS YEAR, WHICH IS ENDED ON OR AFTER THE DATE OF THE SEARCH, THEN NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH, HE SHALL FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) BE DEEMED TO HAVE CONCEALED PARTICULARS OF SUCH INCOME. THE MOOT QUESTION IS THAT DURING THE COURSE OF SEARCH ASSESSEE SHOULD BE FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY. IT IS NOT THE DIFFERENTIAL AMOUNT BETWEEN THE RETURN FILED UNDER SECTION 139(1) VIS--VIS RETURN FILED IN RESPONSE TO THE NOTICE UNDER SECTION 153A. THE RETURN CAN BE FILED ON AN ENHANCED AMOUNT VOLUNTARILY WITHOUT UNEARTHING ANY MONEY, BULLION, JEWELLERY ETC. UNLESS FRESH INCOME IS REVISED IN A RETURN FILED IN RESPONSE TO THE NOTICE UNDER SECTION 153A, REPRESENTING DISCLOSURE OF ANY MONEY, BULLION, JEWELLERY ETC. DURING THE COURSE OF SEARCH, THE ASSESSEE CANNOT BE DEEMED TO HAVE CONCEALED PARTICULARS OF INCOME. IN THE PRESENT CASE, THE AO FAILED TO MAKE REFERENCE TO ANY EVIDENCE, WHICH WERE COLLECTED DURING THE COURSE OF SEARCH EXHIBITING THE FACT THAT THE ASSESSEE WAS POSSESSING MONEY, BULLION JEWELLERY ETC. THUS, THE ASSESSEE DOES NOT DESERVES TO BE VISITED WITH PENALTY. WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE PENALTY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 14 TH NOVEMBER, 2018 AT SURAT. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER SURAT: DATED 14/11/2018