Smt. Kundan N.Shah L/h of Late Narendra V.Shah, Valsad V. The Dy.CIT.,Cent.Circle-2, Surat

ITSSA 561/AHD/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8749 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 16-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADIP KR MAJUMDAR
• Assessee Lawyers: S N DIVETIA
• Keywords: Income from undisclosed sources; Document seized; Principle of natural justice; Documents seized
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCO UNTANT MEMBER LATE SHRI NARENDRA V. SHAH, L/H SMT. KUNDAN N. SHAH (APPELLANT) PAN NO. ACOPS2909Q VS. DCIT, CENTRAL CIRCLE 2, SURAT (RESPONDENT) REVENUE BY : SRI PRADIP KR. MAJUMDAR, SR. D.R. ASSESSEE BY : SRI S.N. DIVETIA, A.R. DATE OF HEARING : 13-02-2013 DATE OF PRONOUNCEMENT : 22-02-2013 / ORDER PER : D.K TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL ARISING OUT FROM THE ORDER OF LD. CIT(A)- II, AHMEDABAD DATED 13/09/2012. 2. DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE F ILED MODIFIED GROUNDS OF APPEALS WHICH READ AS UNDER:- IT(SS)A NO. 561/AHD/2012 A.Y.:-2008-09 IT(SS)A NO. 561/AHD/2012 A.Y. 2008-09 PAGE NO NARENDA V. SHAH VS. DCIT 2 1.1 THE ORDER PASSED U/S. 250 ON 13-09-2012 FOR A. Y. 208-09 BY CIT(A)-II, ABAD, CONFIRMING THE PENALTY OF RS. 14, 16,484/- LEVIED U/S 271(1)(C) BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGA INST THE PRINCIPLES OF NATURAL JUSTICE. 2.1 THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT TH E PENALTY LEVIED U/S 271(1)(C) BY A.O. IN RESPECT OF THE DISCLOSED I NCOME WAS WHOLLY ILLEGAL AND UNLAWFUL IN VIEW OF THE SATISFACTION RE ACHED DURING THE ASSESSMENT PROCEEDINGS TO INITIATE PENALTY PROCEEDI NGS U/S 271AAA. 3.1. THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN UPHOLDING THE PENALTY FOR RS. 14,16,484/- LEVIED U/ S 271(1)(C) BY A.O. 3.2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE PENALTY OF RS. 14,16,4 84/- LEVIED U/S 271(1)(C) BY A.O. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE DURING ASSESSMENT PROCEEDINGS OBSERVED THAT ASSESSEE HAS FILED RETURN OF INCOME O F RS. 36,82,591/- IN RESPONSE TO NOTICE OF HEARING U/S 153A OF THE ACT. IT WAS FURTHER OBSERVED THAT THE ASSESSING OFFICER DURING THE COURSE OF SEA RCH AS PER ENTRY FOUND IN PAGE NO. 5 AND 6 OF MATERIAL SEIZED VIDE ANNEXURE B S-1 AN AMOUNT OF RS. 92,42,000/- WAS ADVANCED BY THE ASSESSEE TO SHRI BH ARAT MALDE IN AN UNACCOUNTED MANNER. THE ASSESSEE ADMITTED THIS FAC T IN ANSWER TO QUESTION NO. 12 OF HIS STATEMENT RECORDED U/S 132(4) OF THE ACT AND DEPOSED THAT THIS TRANSACTION WAS LINKED TO PURCHASE AND DEVELOPMENT OF LAND AT SHANTINAGAR. THE ASSESSEE HAS ADMITTED UNACCOUNTED INCOME OF RS. 1,03,00,000/- TOWARDS SUCH TRANSACTIONS AND OUT OF SUCH AMOUNT, RS. 35,02 ,800/- HAS BEEN SHOWN IN A.Y. 2008-09. A SUM OF RS. 6,42,000/- HAS BEEN ADM ITTED IN RESPECT OF ABOVE TRANSACTION WHICH WAS IN ADDITION TO RS. 35,0 2,800/- BUT THE SAME WAS RETRACTED BY THE ASSESSEE ON UNTENABLE GROUND WHICH WAS REJECTED IN THE ASSESSMENT PROCEEDINGS AND THE ADDITION WAS MADE. FURTHER ON THE BASIS OF IT(SS)A NO. 561/AHD/2012 A.Y. 2008-09 PAGE NO NARENDA V. SHAH VS. DCIT 3 SEIZED DOCUMENTS, IT WAS FOUND THAT ASSESSEE HAS NO T FULLY DISCLOSED INCOME FROM CATERING BUSINESS AND THE ASSESSING OFFICER HA D DETERMINED SUCH AMOUNT AT RS 19,859/-. THE ASSESSING OFFICER INIT IATED PENALTY PROCEEDINGS U/S 271(1)(C) ON THESE THREE AMOUNTS BEING RS. 41,6 7,362/- (RS. 19,859+6,42,000+35,02,800). AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE ASSESSING OFFICER LEVIED PENALTY OF RS. 14,16,4 84/- U/S 271(1)(C). IN APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O. 4. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT IN THE ASSESSMENT ORDER, ASSESSING OFFICER WHILE MAKING AD DITION HAS NOT INITIATED PENALTY PROCEEDINGS IN RESPECT OF ADDITION OF RS. 6 ,42,000/- AND 35,02,800/- AND INITIATED PENALTY U/S 271(1)(C) PROCEEDINGS IN RESPECT OF ADDITION OF RS. 19,859/-ONLY, THEREFORE, PENALTY U/S 271(1)(C) OF T HE ACT CANNOT BE SUSTAINED IN RESPECT OF ADDITIONS OF 6,42,000/ AND 35,02,800 WHICH IS CLEAR FROM FOLLOWING LAST PARAGRAPH OF THE ASSESSMENT ORDER WH ICH READS AS UNDER:- ASSESSED UNDER SECTION 143(3) R.W.S. 153A OF THE I NCOME TAX ACT, 1961. GIVE DUE CREDIT FOR PREPAID TAXES, IF ANY, G IVEN AFTER PROPER VERIFICATION. ISSUE DEMAND NOTICE AND CHALLAN ACCO RDINGLY. INITIATE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IN RES PECT OF THE SALES NOT RECORDED AND ALSO PENALTY PROCEEDINGS U/S 271 A AA AS THE ASSESSEE HAS NOT SPECIFIED AND SUBSTANTIATED THE MA NNER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DERIVED. THIS ORDER IS ISSUED WITH THE PRIOR APPROVAL OF THE ADDL. CIT., CENTRAL RANGE, SU RAT, OBTAINED VIDE LETTER NO. SRT/ADDL.CIT/CR/153-D/1-7/NVS/10-11,DATE D. 31.12.2010 5. IT IS CLEAR FROM THE ABOVE THAT ASSESSING OFFICE R INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IN RESPECT OF ADDITION OF RS. 19,859/- (DUE TO SALES NOT RECORDED) ONLY. HE DID INITIATE PENALTY PROCEEDINGS U/S IT(SS)A NO. 561/AHD/2012 A.Y. 2008-09 PAGE NO NARENDA V. SHAH VS. DCIT 4 271AAA IN RESPECT OF UNDISCLOSED INCOME OF RS. 6,42 ,000/- AND RS. 35, 02,800/- ALSO BUT NEVER LEVIED PENALTY UNDER THAT S ECTION AND INSTEAD IMPOSED PENALTY U/S 271(1)(C) OF THE ACT. LAW IS W ELL SETTLED THAT FOR IMPOSING PENALTY U/S 271(1)(C). ASSESSING OFFICER S HOULD BE SATISFIED DURING THE ASSESSMENT PROCEEDINGS THAT ASSESSEE HAS CONCEA LED INCOME OR HAS FILED INACCURATE PARTICULARS OF INCOME FOR INITIATING PEN ALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. SINCE THERE IS NO SUCH SATIS FACTION IN THIS CASE, THE PENALTY IMPOSED U/S 271(1)(C) BY THE ASSESSING OFFI CER AND SUSTAINED BY LD. CIT(A) IN RESPECT OF ADDITIONS OF RS. 6,42,000/- AN D RS. 35,02,800/- IS NOT SUSTAINABLE IN LAW AND THE SAME IS HEREBY DELETED. HOWEVER, PENALTY IMPOSED ON THE ADDITIONS OF RS. 19,859/- IS HEREBY CONFIRMED. 6. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 22 /02/2013 A.K. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#