Shree Sadguru Foods, Bharuch V. The ACIT.,Cent.Circle-2, Baroda

ITSSA 709/AHD/2010

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0509 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 12-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Income from undisclosed sources; Document seized; Revised return; Documents seized
• Section: 143(3); 153A; 132; 10; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER IT (SS) A NO . 708 & 709 /AHD/20 1 0 A. Y S . 2005 - 06, 200 6 - 0 7 SHREE SADGURU FOODS, 417/17, GIDC PHASE - II, BHAR UCH. PAN: AAWFS 5976P VS ACIT , CENTRAL CIRCLE - 2 , BARODA . (APPELLANT) (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR , SR. D.R. , ASSESSEE(S) BY : WRITTEN SUBMISSION / DATE OF HEARING : 2 7 / 01 /201 5 / DATE OF PRONOUNCEMENT: 30 / 01 /201 5 / O R D E R PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE PERTAINING TO ASSESSME NT YEARS 2005 - 06 AND 2006 - 07 AGAINST COMBINED ORDERS OF LEARNED CIT(A) - IV AHMEDABAD DATED 5 TH JULY, 2010 CONFIRMING THE PENALTY LEVIED U/S.271(1)(C) RESPECTIVELY OF RS.56,000/ - AND RS.6,57,000/ - FACTS IN BRIEF WERE THAT A SEARCH U/S.132 WAS CARRIED OUT IN THE CASE OF HARIYANI GROUP ON 17.01.2007 . C ONSEQUENCE THEREUPON , A NOTICE U/S.153A WAS ISSUED ON 30 TH NOVEMBER, 2007 AND IN COMPLIANCE THERETO THE ASSESSEE HAD FILED A RETURN OF INCOME FOR A.Y.2005 - 06 DECLARING INCOME OF RS.1,50,000/ - AGAINST NIL RETURN OR IGINALLY FILED AND FOR A.Y. 2006 - 07 AT RS.20,27,090/ - AGAINST ORIGINALLY RETURNED INCOME OF RS.77,089/ - . AN ASSESSMENT WAS MADE FOR BOTH THE YEARS U/S.153A(B) R.W.S. 143(3) BOTH IDENTICALLY DATED 24.12.2008 . T HE DECLARED INCOME WAS IT (SS) A NO S . 708 & 709 /AHD/201 0 SHREE SADGURU FOODS, BHARUCH VS. ACIT , CENTRAL CIRCLE - 2 , BARODA . FOR A.Y S . 2005 - 06 & 200 6 - 0 7 - 2 - ASSESSED WITHOUT ANY CHA NGE. FOR BOTH THE YEARS PENALTY U/S.271(1)(C) WAS LEVIED BY RESPECTIVE ORDERS BOTH DATED 30 TH OF JUNE, 2009. IT WAS HELD BY THE AO THAT SINCE THE ADDITIONAL INCOME WAS OFFERED BY THE ASSESSEE ONLY WHEN THE SEARCH WAS CONDUCTED , THEREFORE, THERE WAS CONCEAL MENT OF THAT INCOME BY THE ASSESSEE. FOR A.Y. 2005 - 06 ON THE ADDITIONAL INCOME OFFERED OF RS.1,50,060/ - A PENALTY OF RS.56,000/ - WAS LEVIED. LIKEWISE FOR A.Y. 2006 - 07 ON THE ADDITIONAL INCOME DECLARED OF RS.19,50,000/ - AS AGAINST ORIGINALLY RETURNED INCOME OF RS.77,089/ - T HE AO HAS HELD THAT RETURN WAS FILED ONLY WHEN THE SEARCH TOOK PLACE HENCE ON THAT AMOUNT LEVIED A PENALTY OF RS.6,57,000/ - . 2. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, THROUGH A COMBINED ORDER LEARNED CIT(A) HAS HELD AS UNDER: 2.3 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LEARNED COUNSEL AND ALSO CONSIDERED THE PENALTY ORDERS SO PASSED BY THE ASSESSING OFFICER. I HAVE ALSO CAREFULLY CONSIDERED THE DECISIONS RELIED UPON BY THE LD. COUNSEL. THE LD. COUNSEL HAS RELIED UPON THE DECISIONS WHICH ARE IN FAVOUR OF THE APPELLANT WHEREAS THE DECISIONS ARE AGAINST THE APPELLANT ALSO. THEREFORE, THE APPELLANT CANNOT DERIVE SUPPORT ONLY FROM THE DECISIONS SO RELIED UPON BY THE LD. COUNSEL. SECONDLY, THE DECISIONS RELIE D UPON BY THE LD. COUNSEL ARE NOT EXACTLY ON THE ISSUE OF IMPOSING PENALTY WHERE INCOME DISCLOSED IN THE RETURNS FILED U/S 153A WAS IN EXCESS OF THE RETURNS FILED U/S 139(1) OF THE ACT EXCEPT THE DECISION OF THE HON'BIE CALCUTTA HIGH COURT IN THE CASE OF C IT VS. SURESH CHAND BANSAL 223 CTR (CAL.) 128 AND THEREFORE ALSO, THE APPELLANT CANNOT DERIVE SUPPORT FROM THE DECISIONS SO RELIED UPON BY THE LD. COUNSEL. 2.4 IT IS EVIDENT FROM PARA - 4 OF THE PENALTY ORDERS THAT PLENTY OF UNACCOUNTED MATERIAL WAS RECOVERE D DURING THE COURSE OF SEARCH AND THE MAIN PERSON OF THE GROUP SHRI PANKAJ MAGANLAL HARYANI HAD MADE A DISCLOSURE OF UNDISCLOSED INCOME OF RS. 2.63 CRORES FOR THE WHOLE GROUP ON THE BASIS OF THAT MATERIAL RECOVERED DURING THE COURSE OF SEARCH. HE HAD ALSO ASSURED THAT THE INCOME SHALL BE DISCLOSED IN THE RESPECTIVE RETURNS OF INCOME TO BE FILED BY THE MEMBERS OF THE GROUP AS UNACCOUNTED INCOME/INVESTMENT. THE APPELLANT HAD WORKED OUT HIS PART OF UNDISCLOSED INCOME FOR RS. 25.00 LAKHS AND DISCLOSED THE INCOM E FOR THE A.Y. 2007 - 08 BUT LATTER ON THE INCOME WAS DISCLOSED IN THE RESPECTIVE RETURNS AS PER CHART GIVEN IN PARA - 4 OF THE PENALTY ORDERS AS THE RELEVANT SEIZED DOCUMENTS WERE RELATING TO THE A.Y. 2005 - 06 TO THE A.Y.2007 - 08 . THE DETAILS FOR THE RELEVANT YE ARS FOR WHICH THE ADDITIONAL INCOME WAS DISCLOSED IN THE RETURNS FILED U/S 153A OF THE ACT FOR THE ASSESSMENT YEARS I N IT (SS) A NO S . 708 & 709 /AHD/201 0 SHREE SADGURU FOODS, BHARUCH VS. ACIT , CENTRAL CIRCLE - 2 , BARODA . FOR A.Y S . 2005 - 06 & 200 6 - 0 7 - 3 - APPEAL AS COMPARED TO RETURNS FILED U/S 139 OF THE ACT CAN BE SEEN IN THE ABOVE TABLE, IT IS AN ADMITTED FACT THAT IF NO SEARCH WAS CONDU CTED, THE ADDITIONAL INCOME WOULD HAVE NEVER BEEN DISCLOSED AS THIS INCOME WAS NEITHER BEEN DISCLOSED IN THE RETURNS FILED U/S 139(1) NOR IN ANY REVISED RETURNS. THUS, THE ADDITIONAL INCOME DECLARED IN THE RETURNS U/S 153A OF THE ACT PARTAKE THE CHARACTER OF CONCEALMENT OF PARTICULARS OF INCOME IN VIEW OF THE EXPLANATION - 5 TO SEC. 271(1 ) (C) OF THE ACT. IT WAS HELD BY THE ASSESSING OFFICER IN THE PENALTY ORDERS UNDER CONSIDERATION THAT THE ASSESSEE'S CASE IS OUT OF THE EXCEPTIONS OF EXPLANATION - 5 TO SECTION 271(1)(C) OF THE ACT. THE VIEW TAKEN BY THE ASSESSING OFFICER IS NOW SUPPORTED BY THE DECISION OF THE THIRD MEMBER BENCH OF THE HON'BLE JURISDICTIONAL AHMEDABAD TRIBUNAL GIVEN IN THE CASE OF ACIT VS. KIRIT DAHYABHAI PATEL [2009] 121 ITD 159 (AHD.) (TM). 2.1 IT WAS CONCLUDED BY LEARNED CIT(A) THAT THE INCOME DISCLOSED WAS NOTHING BUT ACCEPTANCE OF UNDISCLOSED INCOME WHICH WAS DETECTED AFTER THE SEARCH OPERATION; THEREFORE, THE PENALTY WAS RIGHTLY IMPOSED. 3. ON THE DATE OF HEARING AUTHORIZED PERSON WAS NO T PERSONALLY PRESENT . H OWEVER , A WRITTEN NOTE IS FILED ASKING TO DECIDE THIS APPEAL ON THE BASIS OF THE WRITTEN SUBMISSIONS. ALONG WITH THIS WRITTEN SUBMISSION , FURNISHED AN ORDER OF HON BLE GUJARAT HIGH COURT PRONOUNCED IN THE CASE OF KIRIT DAHYABHAI PATE L DATED 3 RD OF DECEMBER, 2014. ON FACTS AND LAW , THE HON BLE HIGH COURT HAS NOTED AS UNDER: 4. THE APPELLANT - ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2002 - 03 ON 07.06.2002, DECLARING TOTAL INCOME AT RS.1,30,900/ - . A SEARCH UNDER SEC TION 132 OF THE INCOME TAX ACT, 1961 [FOR SHORT'THE ACT'] WAS CONDUCTED IN THE ASSESSEE'S RESIDENTIAL AND OFFICE PREMISES ON 04.09.2003. IN RESPONSE TO THE NOTICE UNDER SECTION 153(1)(A) OF THE ACT, THE ASSESSEE - APPELLANT DISCLOSED ADDITIONAL INCOME OVER A ND ABOVE THE INCOME WHICH WAS DECLARED IN THE ORIGINAL RETURN. THEREAFTER, THE ASSESSMENT PROCEEDINGS UNDER SECTION 153(1)(B) OF THE ACT WERE COMPLETED ON 20.03.2006 AND THE RETURN OF INCOME IN PURSUANCE TO THE SEARCH WAS ACCEPTED. SIMULTANEOUSLY, PENALTY PROCEEDINGS WERE ALSO INITIATED UNDER SECTION 271(1)(C) OF THE ACT AS THE APPELLANT DISCLOSED ADDITIONAL INCOME IN PURSUANCE OF THE SEARCH. HOWEVER, THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE APPELLANT AND LEVIED PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED .. 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF TH E CASE AND ALSO CONSIDERING THE DECISIONS RELIED UPON BY LEARNED SENIOR ADVOCATE FOR THE APPELLANT, WE ARE OF THE CONSIDERED OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL IS ERRONEOUS. IT (SS) A NO S . 708 & 709 /AHD/201 0 SHREE SADGURU FOODS, BHARUCH VS. ACIT , CENTRAL CIRCLE - 2 , BARODA . FOR A.Y S . 2005 - 06 & 200 6 - 0 7 - 4 - THE CI T(A) RIGHTLY HELD THAT IT IS NOT RELEVANT WHETHER ANY RETURN OF INCOME WAS FILED BY THE ASSESSEE PRIOR TO THE DATE OF SEARCH AND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETURN OF INCOME. IN VIEW OF SPECIFIC PROVISION OF SECTION 153A OF THE I.T. ACT, THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153(A) OF THE I.T. ACT IS TO BE CONSIDERED AS RETURN FILED UNDER SECTION 139 OF THE ACT, AS THE ASSESSING OFFICER HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, THE RETURN IS TO BE CONSIDER ED FOR THE PURPOSE OF PENALTY UNDER SECTION 271(1) (C ) OF THE I.T. ACT AND THE PENALTY IS TO BE LEVIED ON THE INCOME ASSESSED OVER AND ABOVE THE INCOME RETURNED UNDER SECTION 153A, IF ANY. 14. FURTHER, IN THE PRESENT CASE, IT APPEARS F ROM THE RECORD THAT THE ASSESSEES HAD SATISFIED ALL THE CONDITIONS WHICH ARE REQUIRED FOR CLAIMING IMMUNITY FROM PAYMENT OF PENALTY UNDER SECTION 271(1) OF THE ACT. THE PROVISION DOES NOT SPECIFY ANY TIME LIMIT DURING WHICH THE AFORESAID AMOUNT I.E. THE AMOUNT OF PENALTY WITH INTEREST HAS TO BE PAID. ADMITTEDLY WHEN THE ASSESSEES HEREIN HAVE PAID THE ENTIRE AMOUNT WITH INTEREST, THE ASSESSING OFFICER OUGHT TO HAVE GRANTED THEM IMMUNITY AVAILABLE UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. 3.1 IN ADDITION TO THE ABOVE JUDG MENT, AN ANOTHER DECISION OF ITAT D BENCH AHMEDABAD PRONOUNCED IN THE CASE OF NITROCHEM INDIA PVT. LTD. VS. ACIT, CENTRAL CIRCLE - 2, BARODA, B EARING IT(SS)A NO. 750/AHD/2010 A.Y. 2005 - 06 ORDER DATED 16.0 1 .2015 THE AFORESAID DECISION OF KIRIT DAHYABHAI PAT EL (SUPRA) HAS BEEN FOLLOWED AND THE PENALTY U/S.271(1)(C) WAS DELETED. 4. FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., SMT. SONIA KUMAR HAS PLACED RELIANCE ON PAGE 6 PARAGRAPH 2.3 OF ORDER OF THE LEARNED CIT(A) AND PLEADED THAT INCRIMINATING MATERIAL WAS RECOVERED DURING THE COURSE OF SEARCH AND IN THE ENTIRE GROUP AN INCOME OF RS.2.63 CRORE WAS DISCLOSED ; HENCE , THIS IS A FIT CASE FOR LEVY OF CONCEALMENT PENALTY. LEARNED SR.D.R. HAS ALSO PLEADED THAT IN THE LIGHT OF FEW DECISIONS REFERRED BY LEARNED C IT(A) IN PARAGRAPH 2.5 OF THE ORDER ; PENALTY IS TO BE LEVIED ON THE DIFFERENCE OF THE INCOME DECLARED IN COMPLIANCE OF NOTICE U/S.153A COMPARING WITH THE ORIGINAL RETURN FILED. SINCE, THE UNDISCLOSED IT (SS) A NO S . 708 & 709 /AHD/201 0 SHREE SADGURU FOODS, BHARUCH VS. ACIT , CENTRAL CIRCLE - 2 , BARODA . FOR A.Y S . 2005 - 06 & 200 6 - 0 7 - 5 - INCOME WAS NOT DISCLOSED IN THE REGULAR RETURN FILED BEF ORE THE DATE OF SEARCH ; HENCE , THE ADDITIONAL INCOME SO DECLARED WAS NOTHING BUT CONCEALED INCOME. NOW THESE FINDINGS ARE CHALLENGED BEFORE US. 5. AFTER CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT LEARNED C IT(A) HAS AFFIRMED THE LEVY OF PENALTY BY FOLLOWING THE DECISION OF ITAT AHMEDABAD PRONOUNCED IN THE CASE OF KIRIT DAHYABHAI PATEL, 121 ITD 15 9 (AHD)(TM). SINCE THAT ORDER OF THE TRIBUNAL NOW STOOD REVERSED BY THE HON BLE JURISDICTIONAL HIGH COURT , THEREFO RE , THIS JUDGMENT IS BINDING UPON US. WE HAVE ALREADY REPRODUCED SOME OF THE PARAGRAPH OF THE ORDER OF THE HON BLE GUJARAT HIGH COURT SUPRA AND AFTER COMPARING THE FACTS OF THIS CASE, WE HEREBY REVERSE THE LEGAL FINDING OF LEARNED CIT(A) AND DIRECT TO DELE TE THE PENALTY. RESULTANTLY GROUND S RAISED ARE HEREBY ALLOWED. 6. IN THE RESULT, THE APPEAL S OF THE ASSESSEE ARE ALLOWED. SD/ - SD/ - ( ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30 / 01 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . / 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. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD