Shri Prafulbhai G.Patel, Ahmedabad V. The Dy.CIT.,Cent.Circle-1(1), Ahmedabad

ITSSA 574/AHD/2012

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1795 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-04-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 03-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOMUGYAN PAL
• Keywords: Document seized; Documents seized
• Section: 143(3); 153A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER SL. NO(S) IT (SS) A NO(S) ASSESSMENT YEAR(S) APPEAL(S) B Y APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 574/AHD/2012 2002 - 03 SHRI PRAFULBHAI G.PATEL 27, RAGHUKUL BUNGLOWS BHUYANGDEV, SOLA ROAD AHMEDABAD PAN ABCPP 4796 R THE D CIT CENTRAL CIRCLE-1(1) AHMEDABAD 2. 575/AHD/2012 2003 - 04 - DO - - DO - 3. 576/AHD/2012 2004 - 05 - DO - - DO - 4. 577/AHD/2012 2006 - 07 - DO - - DO - ASSESSEE BY : MS. URVASHI SHODHAN, AR REVENUE BY : MS.SOMUGYAN PAL SR.DR / DATE OF HEARING 13/04/2016 / DATE OF PRONOUNCEMENT 03/05/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER: THIS BUNCH OF FOUR APPEALS BY THE SAME ASSESSEE IN IT(SS)A NOS.574 TO 577/AHD/2012 ARE DIRECTED SEPARATE ORDER S OF THE COMMISSIONER OF INCOME TAX(APPEALS)-I AHMEDABAD (CIT(A) IN SHORT) DATED 23/10/2012PERTAINING TO ASSESSMENT YEARS (AYS ) 2002-03, 2003- 04, 2004-05 & 2006-07 RESPECTIVELY. SINCE COMMON I SSUES (EXCEPT QUANTUM) AND FACTS ARE INVOLVED IN THESE APPEALS, T HESE ARE BEING IT(SS)A NOS.574 TO 577/AHD/2012 FOR AYS 2002-03, 2003-04 2004-05 & 2006-07 RESPECTI VELY SHRI PRAFULBHAI G.PATEL VS. DCIT - 2 - DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE APPEAL, I.E. ASSESSEES APPEAL IN IT(SS)A NO.574/AHD/2012 AS A LEAD CASE. 2.1. BRIEFLY STATED FACTS AS CULLED OUT FROM THE MA TERIAL ON RECORD AS UNDER: A SEARCH OPERATION U/S.132(1) OF THE ACT WAS CONDU CTED IN THE CASES OF SANJAY RSHAH & MEGHMANI GROUP ON 22/09/200 5 AND VARIOUS DOCUMENTS/BOOKS OF ACCOUNT/OTHER VALUABLE ARTICLES/ OTHER THINGS WERE FOUND AND SEIZED FROM THE VARIOUS PREMISES COVERED U/S.132(1) AND 133(1A) OF THE ACT. THE DOCUMENTS SEIZED DURING T HE COURSE OF SEARCH, ALSO RELATED TO PAYMENTS OF SALARY, BONUS, ETC. MAD E BY THE ASSESSEE. THEREFORE, IN VIEW OF THE PROVISION OF SECTION 153C (1) OF THE I.T.ACT, PROCEEDINGS U/S.153C R.W.S. 153A OF THE ACT WAS IN ITIATED AGAINST THE ASSESSEE BY ISSUING NOTICE U/S.153C R.W.S.153A OF THE ACT ON 05/04/2006 WHICH WAS DULY SERVED UPON THE ASSESSEE BY SPEED P OST. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED RETURN OF INCOME FOR AY 2002-03 ON 30/04/2007 DECLARING TOTAL INCOME AT RS.2,02,304/-. THEREAFTER, ASSESSMENT WAS FRAMED U/S.153C RWS 143(3) OF THE AC T VIDE ORDER DATED 30/09/2008 AND TOTAL INCOME WAS DETERMINED AT RS.4 ,49,304/- AFTER MAKING ADDITION OF RS.2,47,000/- ON ACCOUNT OF UNAC COUNTED RECEIPTS AS IT(SS)A NOS.574 TO 577/AHD/2012 FOR AYS 2002-03, 2003-04 2004-05 & 2006-07 RESPECTI VELY SHRI PRAFULBHAI G.PATEL VS. DCIT - 3 - PER SEIZED DOCUMENTS. ON THE ADDITION OF RS.2,47,0 00/- MADE ON ACCOUNT OF UNACCOUNTED SALARY, BONUS, ETC., THE AO VIDE ORD ER DATED 30/03/2011 HELD THAT THE ASSESSEE HAD FURNISHED INACCURATE PA RTICULARS OF INCOME THEREBY CONCEALED THE PARTICULARS OF INCOME AND THE REBY LIABLE FOR PENALTY U/S.271(1)(C) OF THE ACT AND LEVIED PENALTY OF RS.41,400/-. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE CARR IED THE MATTER BEFORE THE CIT(A), WHO VIDE ORDER DATED 23/10/2012, IN APP EAL NO.CIT(A)- I/CC.1(1)87/2011-12 UPHELD THE PENALTY LEVIED BY TH E AO BY HOLDING AS UNDER:- 13. CAREFUL READING OF THE ABOVE SHOWS THAT THE P RINCIPLES LAID DOWN IN THE SAID DECISION FOR GRANTING RELIEF TO TH E ASSESSEE FROM PENALTY WAS THAT IF THE ADDITION IS MADE ON THE BAS IS OF DISCLOSURE MADE BEFORE THE SETTLEMENT COMMISSION FOR WHICH THE RE IS NO OTHER MATERIAL OR BASIS FOR THE INCOME DECLARED AND IT WA S AN ADHOC DECLARATION THEN THE SAME CANNOT BE A BASIS FOR LEV Y OF PENALTY. IN THE CASE OF THE APPELLANT, FROM A PERUSAL OF THE AP PELLATE ORDER AND THE ASSESSMENT ORDER U/S.143(3) READ WITH S.153C IT IS SEEN THAT THE ADDITION WERE MADE BASED ON DATA FOUND ON THE PEN D RIVE WHEN WAS RECOVERED DURING THE COURSE OF SEARCH. ON THE BASIS DATA ON THE PEN DRIVE IF ADDITION WARE MADE THEN IT IS CLEA R THAT THE ADDITIONAL INCOME DECLARED BY THE APPELLANT BEFORE THE SETTLEMENT COMMISSION WOULD EVEN OTHERWISE HAVE COME TO THE KN OWLEDGE OF THE DEPARTMENT/ IN VIEW OF THE ABOVE THE RATIO OF THE DECISION OF THE HONBLE ITAT, MUMBAI WOULD NOT BE APPLICABLE FO R THIS YEAR. THE ADDITION INCOME OFFERED FOR THIS YEAR CANNOT BE CONSIDERED AS VOLUNTARY DISCLOSURE. IN FACT IN THE INSTANT CASE THE ADDITION IS IT(SS)A NOS.574 TO 577/AHD/2012 FOR AYS 2002-03, 2003-04 2004-05 & 2006-07 RESPECTI VELY SHRI PRAFULBHAI G.PATEL VS. DCIT - 4 - BASED O MATERIAL FOUND AS A RESULT OF SEARCH. IN S UCH A CASE THE LEVY OF PENALTY IS JUSTIFIED. 3. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASS ESSEE IS IN APPEAL(S) BEFORE US. THE ASSESSEE HAS RAISED THE F OLLOWING COMMON GROUNDS OF APPEAL:- 1. IN LAWS AND ON FACTS AS WELL AS IN THE CIRCUMST ANCES OF THE APPELLANTS CASE, THE LEARNED CIT(APPEALS) HAS GRO SSLY ERRED IN DISMISSING GROUND NO.1 OF THE APPELLANTS APPEAL CH ALLENGING THE VALIDITY OF THE PENALTY ORDER IMPUGNED BEFORE HI ON THE GROUND THAT IT HAD BEEN PASSED IN TOTAL DISREGARD TO THE FACT THAT THE APPELLANTS APPLICATION FOR GRANTING IMMUNITY FROM PENALTY U/S. 273AA WAS STILL PENDING BEFORE THE HONBLE COMMISSIONER OF INCOME T AX. 2. WITHOUT PREJUDICE TO THE FOREGOING, IN LAW AND ON FACTS AS WELL AS IN THE CIRCUMSTANCES OF THE CASE OF THE APPLICANT, THE LEARNED CIT(APPEALS) HAS GROSSLY ERRED IN SUSTAINING PENALT Y OF RS.41,400/- LEVIED UNDER SECTION 271(1)(C) VIDE ORDER IMPUGNED BEFORE HIM WHEN HE OUGHT TO HAVE DELETED THE SAME. 3. WITHOUT PREJUDICE TO FOREGOING, THE ORDER UNDER SECTION 271(1)(C) IS VOID, I VIEW OF THE FACT THAT ASSUMPTION OF JURISDI CTION BY THE ASSESSING OFFICER UNDER SEC. 153C VOID AND ILLEGAL. 4. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AM END AND/OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 4. AT THE OUTSET, THE LD.AR SUBMITTED THAT ON IDENT ICAL FACTS AND ARISING OUT OF SAME SEARCH, ADDITION WERE MADE IN C ASE OF ALKESH PATEL IT(SS)A NOS.574 TO 577/AHD/2012 FOR AYS 2002-03, 2003-04 2004-05 & 2006-07 RESPECTI VELY SHRI PRAFULBHAI G.PATEL VS. DCIT - 5 - AND ON THOSE ADDITIONS SIMILAR PENALTY U/S.271(1)(C ) OF THE ACT WAS LEVIED BY AO. WHEN THE MATTER WAS CARRIED BEFORE TRIBUNAL, THE COORDINATE BENCH OF TRIBUNAL IN APPEAL BEARING IT(SS)A NOS./57 9 & 580/AHD/2012 FOR AYS 2002-03 & 2003-04 BY ORDER DATED 29/01/2016 DELETED THE PENALTY. SHE ALSO PLACED ON RECORD A COPY OF THE AFORESAID ORDER. SHE THEREFORE SUBMITTED THAT SINCE THE FACTS OF THE PRE SENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE OF ALKESH M.PATEL(SUPRA), THE REFORE FOLLOWING THE DECISION OF THE COORDINATE BENCH OF TRIBUNAL IN THE CASE OF ALKESH PATEL (SUPRA) THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT DESERVES TO BE DELETED. ON THE OTHER HAND, LD.DR SUPPORTED THE ORDERS OF TH E AUTHORITIES BELOW AND PLACED RELIANCE ON THE DECISION OF HONBLE APEX CO URT IN THE CASE OF MAK DATA (P.)LTD. REPORTED AT (2013) 38 TAXMANN.COM 448 (SC). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW AND CASE-LAW RELIED UPON BY THE PARTIES. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO LEVY OF PENALTY U/S.271(1)(C) OF THE ACT ON THE ADDITIONS M ADE WHILE FRAMING THE ASSESSMENT U/S.153C OF THE ACT. WE FIND THAT THE C OORDINATE BENCH OF TRIBUNAL THE CASE OF ALKESH PTEL IN IT(SS)A NOS.57 9 & 580/AHD/12 FOR AYS 2002-03 & 2003-04 VIDE NO.29/01/2016 ON IDENTICAL F ACTS AND ON SIMILAR ADDITION MADE ARISING OUT OF THE SAME SEARCH, HAD DELETED THE PENALTY BY OBSERVING AS UNDER:- IT(SS)A NOS.574 TO 577/AHD/2012 FOR AYS 2002-03, 2003-04 2004-05 & 2006-07 RESPECTI VELY SHRI PRAFULBHAI G.PATEL VS. DCIT - 6 - 6. WE HAVE HEARD RIVAL CONTENTIONS. RELEVANT FAC TS SET OUT HEREINABOVE ARE NOT REPEATED FOR THE SAKE OF BREVIT Y. THERE IS NO DISPUTE THAT ASSESSEE AS WELL AS HIS EMPLOYER HAVE BEEN STATING THAT THIS UNDISCLOSED INCOME IS IN FACT AN EXPENDITURE LIMIT ALLOWED TO BE INCURRED TO THE RESPECTIVE EMPLOYEES. THERE IS NO E VIDENCE QUOTED IN THE SHAPE OF INCRIMINATING MATERIAL OR OTHERWISE WHICH COULD PROVE THAT ASSESSEE'S EMPLOYER HAS NOT BOOKED THE CORRESPONDIN G SUM AS EXPENDITURE IN ITS-ACCOUNTS MAINTAINED. THE ASSESSE E'S CASE IS THAT HE HAS SPENT THE IMPUGNED SUMS FOR THE PURPOSE OF THE BUSINESS OF HIS EMPLOYER. HE FAILS TO SUBSTANTIATE THE SAME. T HIS HAS LED TO ASSESSMENT OF THE-IMPUGNED SUM IN HIS HANDS AS UNDI SCLOSED INCOME. WE REITERATE THAT HE ALREADY ADMITTED THE SAME AS I NCOME BEFORE THE SETTLEMENT COMMISSION. THE REVENUE STRONGLY DRAWS SUPPORT FROM THIS ACTION. THERE CAN HARDLY BE ANY DISPUTE ABOUT THE S ETTLED LEGAL POSITION THAT QUANTUM AND PENALTY PROCEEDINGS STAND ON DIFFE RENT FOOTING AND EACH AND EVERY ADDITION OF UNDISCLOSED INCOME DOES NOT LEAD TO IMPOSITION OF PENALTY. WE OBSERVE IN THESE FACTS AN D CIRCUMSTANCE THAT WE ARE DEALING WITH A TAX STATUTE WHEREIN LEVY OF P ENALTY BY INVOKING A PENAL PROVISION AFTER FINALIZATION OF QUANTUM IS NO T AUTOMATIC. WE VIEW THE CASE FROM THIS ANGLE AND HOLD THAT THE PRESENT ONE IS AN INSTANCE WHERE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE HIS EXPLANATION OF HAVING SPENT THE IMPUGNED EXPENDITURE LIMIT F OR HIS EMPLOYER COMPANY FOR THE PURPOSE OF THE BUSINESS AND ALSO T HE REVENUE HAS FAILED TO REFER TO THE EMPLOYER'S BOOKS SO AS TO NE GATE THE SAME BY HOLDING THAT THE VERY SUMS HAVE NOT BEEN CLAIMED AS EXPENDITURE. WE REITERATE: THAT THIS IS A PENALTY CASE LIABLE TO BE STRICTLY INTERPRETED. THIS FACTUAL POSITION LEADS US TO A CONCLUSION THAT THE AUTHORITIES BELOW HAVE WRONGLY IMPOSED THE IMPUGNED PENALTY OF RS. 11,010/ - U/S.271 (1)(C) OF THE ACT. THE SAME STANDS DELETED. IT(SS)A 579/AHD/2 012 IS ACCEPTED. 5.1. BEFORE US, REVENUE HAS NOT BEEN POINTED OUT A NY DIFFERENCE ON THE FACTS OF THE PRESENT CASE AND THE CASE OF ALKESH PATEL NO R HAS PLACED ANY CONTRARY MATERIAL ON RECORD. TAKING A CONSISTENT VIEW AND P LACING RELIANCE ON THE IT(SS)A NOS.574 TO 577/AHD/2012 FOR AYS 2002-03, 2003-04 2004-05 & 2006-07 RESPECTI VELY SHRI PRAFULBHAI G.PATEL VS. DCIT - 7 - DECISION OF THE COORDINATE BENCH AND FOR SIMILAR RE ASONS, WE ALLOW THE APPEAL OF THE ASSESSEE IN IT(SS)A NO.574/AHD/2012 FOR AY 2 002-03. 6. NOW, WE TAKE UP THE REMAINING ASSESSEES APPEALS IN IT(SS)A NOS.575, 576 & 577/AHD/2012 FOR AYS 2003-04, 2004-0 5 & 2006-07 RESPECTIVELY. 7. LD.REPRESENTATIVES OF THE PARTIES HAVE ADVANCED THEIR ARGUMENTS AS WERE ADVANCED IN IT(SS)A N.574/AHD/2012(SUPRA). A FTER HEARING THE RIVAL SUBMISSIONS, PERUSING THE MATERIAL AVAILABLE ON RECORD AND GOING THROUGH THE ORDERS OF THE AUTHORITIES BELOW, SINCE IDENTICAL ISSUE HAS BEEN DECIDED BY US IN ASSESSEES OWN APPEAL IN IT(SS)A NO.574/AHD/2012(SUPRA), WHEREIN WE HAVE ALLOWED THE APPEAL OF THE ASSESSEE, WE THEREFORE, TAKING A CONSISTENT VIEW IN THESE YEARS ALSO, WE HEREBY ALLOW ALL THE APPEALS OF THE ASSESSEE. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. SD/- SD/- ( S.S. GODARA ) ( ANIL CHATURVEDI ) JUDICIAL MEMBER AC COUNTNAT MEMBER PLACE : AHMEDABAD; DATE : 03/05/2016 .. ,.../ T.C. NAIR, SR. PS IT(SS)A NOS.574 TO 577/AHD/2012 FOR AYS 2002-03, 2003-04 2004-05 & 2006-07 RESPECTI VELY SHRI PRAFULBHAI G.PATEL VS. DCIT - 8 - ! ' / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. $%$&' ( / CONCERNED CIT 4. ( ( ) / THE CIT(A)-I, AHMEDABAD 5. +,-'&' , &' , % / DR, ITAT, AHMEDABAD 6. -01 / GUARD FILE. / BY ORDER, //TRUE COPY// S / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 19.4.16 (DICTATION-PAD 7+ PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 20.4.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.3.5.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 3.5.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER