ACIT, Kannur V. C. Sabira, Kannur

ITSSA 55/COCH/2008

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8157 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 19-04-2012
• Assessment Year: misc
• Appeal Filed On: 18-07-2008
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: V P MOHANDAS
• Keywords: Search and seizure; Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM IT(SS)A 55/COCH/2008 BLOCK PERIOD : 1997-98 TO 2002-03 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-2(1), KANNUR. VS. C.SABIRA, PROP. MANZOOR HOSPITAL, P.O. MANIKKOTH, KANHANGAD. [PAN:AJJPS 8451K] (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR ASSESSEE BY SHRI V.P. MOHANDAS, ADV. DATE OF HEARING 19/04/2012 DATE OF PRONOUNCEMENT 01/06/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE O RDER DATED 14-03-2008 PASSED BY THE LD. CIT(A)-I, KOCHI AND IT RELATES T O THE BLOCK PERIOD FROM 1997-98 TO 2002-03. 2. THE REVENUE IS ASSAILING THE DECISION OF THE LD. CIT(A) IN DELETING THE PENALTY OF RS. 5,87,052/- LEVIED U/S. 158BFA(2) OF THE ACT. 3. THE FACTS RELATING TO THE SAME ARE STATED IN BRIEF. THE ASSESSEE IS THE PROPRIETRIX OF MANZOOR HOSPITAL, KANHANGAD. THE DEPARTMENT CON DUCTED SEARCH AND SEIZURE OPERATIONS U/S. 132 OF THE ACT IN THE HANDS OF THE ASSESSEE AND THE BLOCK ASSESSMENT WAS COMPLETED ON A TOTAL UNDISCLOSED INCOME OF RS. 3,30,96,980/-. THE ASSESSEE CARRIED THE MATTER IN APPEAL AND THE UNDISCLOSED IN COME WAS REDUCED TO RS. 72,09,228/- IN THE APPELLATE PROCEEDINGS. THEREAFT ER, THE ASSESSING OFFICER INITIATED I.T.(SS)A.NO. 55/COCH/2008 2 PENALTY PROCEEDINGS U/S. 158BFA(2) OF THE ACT AND L EVIED A MINIMUM PENALTY OF RS.5,87,052/- ON THE DIFFERENCE BETWEEN THE ASSESSE D INCOME AND THE RETURNED INCOME AMOUNTING TO RS. 9,31,828/-. THE ASSESSEE CHALLENG ED THE PENALTY ORDER IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) DELETED THE PENALTY WITH THE FOLLOWING OBSERVATIONS:- I HAVE CONSIDERED THE ARGUMENTS OF THE APPELLANT, PERUSED THE ASSESSMENT ORDER AND OTHER RECORDS THAT ARE MADE AV AILABLE BEFORE ME. IT IS NOTICED THAT AS STATED BY THE APPELLANT THE D IFFERENCE IN THE ASSESSED INCOME AND THE RETURNED INCOME HAS ARISEN ONLY AS A RESULT OF CERTAIN DISALLOWANCES THAT WERE MADE BY THE ASSESSI NG OFFICER IN THE COURSE OF ASSESSMENT. IT IS NOT THE CASE OF THE AS SESSING OFFICER ALSO THAT THE PARTICULARS REGARDING THE ADDITION THAT WE RE EFFECTED BY HIM WERE NOT AT ALL AVAILABLE IN THE RETURN OF INCOME F ILED BY THE APPELLANT AND IT IS ONLY DUE TO THE DIFFERENT TREATMENT THAT SUCH ADDITIONS WERE MADE. IT IS SETTLED LAW THAT WHILE IMPOSING A PENAL TY FOR CONCEALMENT OF INCOME IT SHOULD BE CONCLUSIVELY PROVED BEYOND D OUBT THAT THE ASSESSEE HAS WILFULLY CONCEALED THE PARTICULARS OF HIS INCOME BY FILING INCORRECT PARTICULARS OR BY OFFERING AN EXPLANATION KNOWINGLY THAT IT IS A FALSE ONE. HERE IT CAN BE SEEN THAT NO SUCH CASE HA S BEEN ESTABLISHED AGAINST THE APPELLANT. IN FACT AT THE ORIGINAL ASS ESSMENT STAGE THERE WAS NO INTIMATION OF PENALTY AT ALL, WHICH GOES TO PROVE THE CASE OF THE APPELLANT. IN THIS PARTICULAR CASE I DO NOT FIND THAT BOTH THE SE COMPONENTS WHICH SHOULD EXIST FOR IMPOSING PENALTY HENCE THE IMPOSIT ION OF THE PRESENT PENALTY U/S. 158BFA(2) DOES NOT APPEAR TO BE PROPER IN THE EYES OF LAW. CONSIDERING ALL THE FACTS OF THE CASE AND CIRCUMSTA NCES THAT LEAD TO THE ADDITION WHICH IS THE BASIS FOR PENALTY NOW LEVIED AND ALSO IN THE LIGHT OF THE VARIOUS JUDICIAL DECISIONS IN THIS REGARD I HOLD THE IMPOSITION OF PENALTY OF RS.5,87,052/- U/S. 158BFA(2) OF THE ACT IN THE HANDS OF THE APPELLANT DESERVES TO BE CANCELLED AND IT IS ORDERE D ACCORDINGLY. 4. THE LD. D.R POINTED OUT THAT THE FIRST APPELL ATE AUTHORITY HAS DELETED THE PENALTY MAINLY ON THE GROUND THAT THE AO DID NOT CONCLUSIVE LY PROVE THAT THERE WAS WILFUL CONCEALMENT ON THE PART OF THE ASSESSEE. BY PLACIN G RELIANCE ON THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS REPORTED IN 306 ITR 277 AND IN THE CASE OF CIT VS. ATUL MOHAN BINDAL (317 ITR 1), THE LD D.R SUBMITTED THAT THERE IS NO REQUI REMENT OF PROVING WILFUL CONCEALMENT I.T.(SS)A.NO. 55/COCH/2008 3 AND THE LD CIT(A) HAS GRANTED RELIEF ON WRONG PROPO SITION OF LAW. ON THE CONTRARY, THE LD A.R SUPPORTED THE ORDER OF LD CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREF ULLY PERUSED THE RECORD. WE NOTICE THAT THE DETAILS OF ADDITIONS THAT WERE SUSTAINED I N THE APPELLATE PROCEEDINGS WERE NOT BROUGHT OUT ON RECORD EITHER BY TAX AUTHORITIES OR BY THE ASSESSEE. THOUGH THE LD CIT(A) HAS MADE A PASSING REFERENCE ABOUT THE ADDIT IONS, HE ALSO DID NOT FURNISH THE DETAILS OF THE ADDITIONS AND THEIR EXIGIBILITY TO P ENALTY. AS SUBMITTED BY LD D.R, WE ALSO NOTICE THAT THE LD CIT(A) HAS DELETED PENALTY ON A LEGAL POINT, I.E., MENS REA OR WILFUL CONCEALMENT, WHICH HAS BEEN DECLARED AS NOT REQUIRE D IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS SUPRA. HENCE, WE HAVE NO OTHER OPTION BUT TO SET ASIDE THE ORDER OF LD CIT(A). HOWEVER, IN THE INTEREST OF NATURAL JUS TICE, WE ARE OF THE VIEW THAT THE APPEAL SHOULD BE DISPOSED OF ON MERITS. SINCE THE LD CIT(A) HAS NOT DECIDED THE APPEAL ON MERITS, WE RESTORE THE APPEAL TO HIS FILE WITH THE DIRECTION TO DISPOSE IT ON MERITS. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 01 -06-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 1ST JUNE, 2012 GJ COPY TO: 1. C.SABIRA, PROP. MANZOOR HOSPITAL, P.O. MANIKKOTH , KANHANGAD. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -2(1), KANNUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, KANNUR. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN