The ACIT, Circle-6, Ahmedabad V. Shri M. B. Chandran(HUF), Ahmedabad

ITSSA 472/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9227 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-07-2013
• Assessment Year: misc
• Appeal Filed On: 04-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J P JANAID
• Keywords: Unexplained investment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER IT(SS)A NO. 472/AHD/2010 A.Y: 1989-90 TO 1998-99 ACIT, CIRCLE-6, AHMEDABAD. VS SHRI M.B. CHANDRAN, 77, VARDHAMAN NAGAR, GHATLODIA, AHMEDABAD (REVENUE) (ASSESSEE) REVENUE BY : SHRI J.P. JANAID, SR.D.R. ASSESSEE(S) BY : NONE / // / DATE OF HEARING : 30/07/2013 / DATE OF PRONOUNCEMENT: 31/07/2013 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE EMANATING F ROM THE ORDER OF LEARNED CIT(A)-XI, AHMEDABAD, DATED 02.02.2010. THE GROUNDS RAISED BY THE REVENUE ARE REPRODUCED BELOW: 1. THE LEARNED CIT(A)-XI, AHMEDABAD HAS ERRED IN LAW A ND ON FACTS IN CANCELING THE PENALTY OF RS.2,00,460/- LEVIED U/S. 158BFA(II) OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A)-XI AHMEDABAD OUGHT T O HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 2. THE FACTS IN BRIEF AS EMERGED FROM THE CORRESPON DING PENALTY ORDER PASSED UNDER SECTION 158BFA(2) DATED 26.11.2007 AND THE ASSESSMENT ORDER PASSED UNDER SECTION 158BC DATED 31.10.2001 W ERE THAT A SEARCH WAS CARRIED OUT ON THE ASSESSEE ON 21.10.1999. IN C ONSEQUENCE THEREUPON, A NOTICE UNDER SECTION 158BC WAS ISSUED AND IN RESPONSE THE ASSESSEE HAS FURNISHED A RETURN ON 13.12.2000 DISCL OSING NIL INCOME IT(SS)A NO.472/AHD /2010 ITO VS. SRI M.B. CHANDRAN A.Y. 1989-90 TO 1998-99 - 2 - FOR THE SAID BLOCK PERIOD. AS PER THE ASSESSMENT OR DER PASSED UNDER SECTION 158BC THE TOTAL INCOME WAS ASSESSED AT RS.3 ,83,520/- AGAINST THE NIL INCOME RETURN. THE ADDITIONS MADE IN THE SAID IMPUGNED ASSESSMENT ORDER WERE AS UNDER:- 1. FIXED DEPOSIT WITH PUNJAB NATIONAL BANK IN THE NAME OF APPELLANT AND HIS WIFE. RS. 49 ,420/-. 2. DEPOSIT IN CASH ON 28/11/95 IN THE APPELLANTS ACCOUNT WITH CORPORATION BAN RS. 90,000/- 3. DEPOSIT IN MINOR CHILDS NAME MADE ON 14/1/92 WITH CENTRAL BANK OF INDIA RS. 15,000/- 4. DEPOSIT IN CASH ON 22/11/91 IN THE APPELLANTS ACCOUNT WITH CORPORATION BANK RS. 40,000/- 5. DEPOSIT IN CASH ON 29/07/95 IN THE APPELLANTS ACCOUNT WITH CORPORATION BANK RS. 64,100/- 6. UNEXPLAINED INVESTMENT IN THE RENOVATION OF HOUSE AT KERALA RS. 1,25,000/- 3. AT THE OUTSET, WE HAVE BEEN INFORMED THAT THE AD DITIONS AS PER SERIAL NO.1 WAS DELETED BY LEARNED CIT(A), VIDE ORD ER DATED 09.07.2002. THE ADDITIONS AS PER SERIAL NOS.2 AND 3 WERE DELETE D BY RESPECTED CO- ORDINATE BENCH C ITAT, AHMEDABAD, VIDE ORDER DATE D 24.4.2009 BEARING ITA NO. IT(SS) NO.269/AHD/2002. BECAUSE OF THE SAID FACTUAL POSITION WHEN THE PART RELIEF WAS GRANTED BY THE AP PELLATE AUTHORITIES, THE LEARNED CIT(A) HAS PROCEEDED WITH THE OBSERVATION T HAT THE ADDITIONS REMAINED SUSTAINED WERE AS PER SERIAL NOS. 4, 5 AND 6 TOTALING TO RS.2,29,110/-. ON THE SAID AMOUNT, THE PENALTY WAS WORKED OUT @ 60% AT RS.1,37,460/-. IN RESPECT OF THE ADDITIONS SUSTAINE D OF RS.40,000/- AND RS.64,100/-., THE OBSERVATION OF THE LEARNED CIT(A) WAS THAT THE CASH IT(SS)A NO.472/AHD /2010 ITO VS. SRI M.B. CHANDRAN A.Y. 1989-90 TO 1998-99 - 3 - DEPOSITS WERE MADE ON 22.11.1991 AND 29.7.1995, RES PECTIVELY, IN THE ACCOUNT MAINTAINED WITH CORPORATION BANK. THERE WAS NO EVIDENCE IN SUPPORT OF THE SOURCE OF THOSE DEPOSITS. A CERTIFIC ATE OF VILLAGE PANCHAYAT WAS FOUND TO BE VAGUE, HENCE, NOT ACCEPTED BY THE T RIBUNAL. LEARNED CIT(A) WAS OF THE VIEW THAT THE DEPOSITS REPRESENTE D A MEAGER QUANTUM WHICH WAS NOT SUPPORTED BY EVIDENCE DUE TO LONG LAP SE OF TIME. HENCE, CONSIDERING THE TOTALITY OF THESE CIRCUMSTANCES HEL D THAT RIGOUR OF PENALTY WOULD NOT ATTRACT HENCE, DIRECTED THE AO TO DELETE THE PENALTY. 3.1 IN RESPECT OF THE REMAINING AMOUNT OF RS.1,25,0 00/-, APPEARING AT SERIAL NO.6, THE OBSERVATION OF THE LEARNED CIT(A) WAS THAT AMOUNT REPRESENTED AN UNEXPLAINED INVESTMENT IN THE RENOVA TION OF HOUSE SITUATED AT KERALA. RATHER THE ASSESSEE HAS MENTION ED IN A STATEMENT RECORDED UNDER SECTION 132(4) OF THE IT ACT THAT TH E IMPUGNED AMOUNT WAS SPENT IN THE YEAR 1995 TOWARDS REPAIR OF THE HO USE. ACCORDING TO THE LEARNED CIT(A), THE AO HAD NOT CARRIED OUT ANY INQU IRY AND THE CORRECT PERIOD OF INVESTMENT, THEREFORE, IN HIS CONSIDERED OPINION PENALTY WAS NOT EXIGIBLE ON THE ASSESSEE. BEING AGGRIEVED THE REVEN UE IS BEFORE US. 4. BEFORE WE PROCEED FURTHER, IT IS WORTH TO MENTIO N THAT THIS APPEAL WAS FIXED ON NUMBER OF OCCASIONS IN THE PAST. AS PE R THE ENTRIES RECORDED ON THE ORDER-SHEET, WE HAVE NOTED THAT ON 5 TH OF FEBRUARY, 2013 THIS CASE WAS FIXED FOR HEARING BUT NONE HAD APPEARED FROM TH E SIDE OF THE RESPONDENT ASSESSEE. LIKEWISE ON 25.3.2013, 13.5.20 13, 17.6.2013 NONE HAD APPEARED FROM THE SIDE OF THE ASSESSEE. EVEN TO DAY BEFORE US NONE HAD APPEARED ALTHOUGH THE NOTICE OF HEARING WAS DUL Y SERVED ON THE ASSESSEE. CONSIDERING THE NON CO-OPERATIVE BEHAVIOU R OF THE ASSESSEE AND IT(SS)A NO.472/AHD /2010 ITO VS. SRI M.B. CHANDRAN A.Y. 1989-90 TO 1998-99 - 4 - THE ISSUE BEING TRIFLE IN NATURE WE HAVE DECIDED TO PROCEED EX-PARTE QUA THE ASSESSEE, BUT AFTER HEARING LEARNED DR WHO HAS SUPPORTED THE LEVY OF PENALTY. 5. BEFORE US FROM THE SIDE OF THE REVENUE TWO DECIS IONS OF HONBLE GUJARAT HIGH COURT HAVE BEEN CITED AS FOLLOWS:- (I) KANDOI BHOGILAL MULCHAND VS. DCIT AS REPORTED I N (2012) 248 CTR (GUJ) 80. (II) CIT VS. BECHARBHAI P. PARMAR AS REPORTED IN 24 8 CTR (GUJ) 86. 5.1 THE HONBLE COURT HAS EXPRESSED THAT PENALTY PROCEEDINGS UNDER SECTION 158BFA(2) WOULD ARISE WHERE THE AO HA D ASSESSED INCOME FOR THE BLOCK PERIOD IN EXCESS OF THE INCOME DECLARED BY THE ASSESSEE; TRIBUNAL WAS RIGHT IN CONFIRMING THE PENA LTY LEVIED UNDER SECTION 158BFA(2) IN RESPECT OF ADDITION TOWARDS UN ACCOUNTED INCOME CONFIRMED BY THE TRIBUNAL IN QUANTUM APPEAL (REPRODUCED FROM THE CONCLUSION). THE COURT HAS ALSO OBSERVED T HAT PENALTY UNDER SECTION 158BFA(2) IS NOT MANDATORY BUT DISCRETIONAR Y IN CHARACTER; HOWEVER, TRIBUNAL COMMITTED A GRAVE ERROR IN INTERF ERING WITH THE PENALTIES IMPOSED BY THE AO AND CONFIRMED BY THE CI T(A), BY APPLYING THE CONCEPT OF CONCEALMENT AS APPLICABLE U NDER SECTION 271(1)(C) WHICH IS NOT APPLICABLE FOR PENALTY UNDER SECTION 158BFA(2) . IT WAS EXPLAINED IN THE AFORESAID ORDER THAT THE CONCEPT OF PROVING CONCEALMENT OF INCOME CAN NOWHERE BE TRACED IN SECTION 158BA(2). THE PENALTY ENVISAGED AND IMPOSABLE U/S 2 51(1)(C) IS DIFFERENT FROM THE ONE THAT CAN BE IMPOSED U/S. 158 BFA. THE CONCEPT OF ONUS ON THE REVENUE TO PROVE CONCEALMENT CANNOT BE IMPORTED WHILE IT(SS)A NO.472/AHD /2010 ITO VS. SRI M.B. CHANDRAN A.Y. 1989-90 TO 1998-99 - 5 - CONSIDERING THE QUESTION OF PENALTY U/S. 158BFA(2). BECAUSE OF THESE REASONS WE ARE OF THE VIEW THAT LEARNED CIT(A) HAS NOT APPRECIATED THE SAID PROVISIONS OF SECTION 158BFA(2) IN ITS RIGHT P ERSPECTIVE. IT APPEARS THAT THE CASE LAWS IN THIS REGARD WERE NOT AVAILABL E TO LEARNED CIT(A). HENCE, IN OUR CONSIDERED OPINION THE MATTER IS REQU IRED TO BE RE- EXAMINED AFRESH IN THE LIGHT OF THE PRECEDENT CITED AS ALSO THE FACTS OF THE CASE. RESULTANTLY, THE GROUND RAISED BY THE REVENUE MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSE. SD/- SD/- ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDIC IAL MEMBER AHMEDABAD; DATED 31 /07/2013 PRABHAT KR. KESARWANI, SR. P.S. TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD