Smt Jayaben Ramesh Tailor, Surat V. The DY.CIT.,Cent.Circle-2, Surat

ITSSA 760/AHD/2010

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0510 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 8 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: 19-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 22-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: MEHUL R SHAH
• Keywords: Search and seizure; Principle of natural justice; Benefit of exemption
• Section: 143(3); 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACC OUNTANT MEMBER JAYNABEN RAMESHBHAI TAILOR, MAIN BAZAR, VYARA- 394650 PAN: AAWPT 9897 N (APPELLANT) VS THE DCIT, CIRCLE-2, SURAT (RESPONDENT) ASSESSEE BY: SHRI MEHUL R. SHAH, AR REVENUE BY: SMT. SONIA KUMAR, SR.D.R. DATE OF HEARING : 22-01-2015 DATE OF PRONOUNCEMENT : 30-01-20 15 / ORDER PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER:- THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-II, AHMEDABAD DATED 04-08-2010 FOR A.Y. 2006-07. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON REC ORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED I N THE ACTIVITIES OF THE DEVELOPMENT AND SALE OF FLATS OF LAND. A SEARC H AND SEIZURE ACTION IN IT(SS)A NO. 760/AHD/2010 ASSESSMENT YEAR 2006-07 I.T.(SS)A NO. 760/AHD/2010 A.Y. 2006-07 PAGE NO JAYNABEN RAMESH TAILOR VS. DCIT 2 THE CASE OF ASSESSEE WAS CONDUCTED ON 15-11-2006 AN D THEREAFTER NOTICE U/S. 153A WAS ISSUED AND IN RESPONSE TO WHICH ASSES SEE FILED HER RETURN OF INCOME FOR A.Y. 2006-07 ON 28-03-2008 DECLARING TOT AL INCOME OF RS. 14,69,610/- WHICH INCLUDED ADDITIONAL INCOME OF RS. 5,01,000/- MADE DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) R.W.S. 153A VIDE ORDER DATED 30-06- 2008 AND THE TOTAL INCOME WAS DETERMINED AT RS. 14, 69,610/- BEING THE RETURNED INCOME. ON THE DISCLOSURE OF RS. 5,01,000 /- WHICH WAS MADE BY THE ASSESSEE, AO VIDE PENALTY ORDER DATED 22-12-200 8 LEVIED PENALTY OF RS. 1,64,710/- U/S. 271(1)(C) OF THE ACT. AGGRIEVE D BY THE AFORESAID ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE LD. C IT(A). LD. CIT(A) FOLLOWING THE DECISION OF SPECIAL BENCH OF HONBLE AHMEDABAD TRIBUNAL IN THE CASE OF ACIT VS. KIRIT DAYABHAI PATEL, HELD THA T ASSESSEE WAS NOT ENTITLED TO BENEFIT OF EXEMPTION UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT AND ACCORDINGLY UPHELD THE PENALTY LEVIED B Y AO. 4. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUN D:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE PENALTY OF RS. 1,64,710/- U/S. 271(1)(C) OF THE ACT AS LEVIED BY THE AO, WHICH NEE DS TO BE DELETED IN THE INTEREST OF NATURAL JUSTICE AND EQUITY. 5. BEFORE US, LD. AR SUBMITTED THAT ADDITIONAL INCO ME OF RS. 5,01,000/- ADMITTED DURING SEARCH WAS OFFERED BY THE ASSESSEE IN THE RETURN FILED BY THE ASSESSEE AND THE SAME WAS ACCEPTED BY THE AO AN D NO ADDITION WAS MADE TO THE RETURNED INCOME. LD. AR FURTHER SUBMIT TED THAT ON THE UNDISCLOSED INCOME, ASSESSEE HAS ALSO PAID TAX ALON G WITH INTEREST AND WAS THEREFORE ENTITLED TO BENEFIT OF IMMUNITY AS PE R EXPLANATION 5 TO I.T.(SS)A NO. 760/AHD/2010 A.Y. 2006-07 PAGE NO JAYNABEN RAMESH TAILOR VS. DCIT 3 SECTION 271(1)(C). LD. AR FURTHER SUBMITTED THAT LD . CIT(A) WHILE CONFIRMING THE ACTION OF AO HAD RELIED ON SPECIAL B ENCH DECISION OF AHMEDABAD TRIBUNAL IN THE CASE OF KIRIT DAYABHAI PA TEL (SUPRA). HE SUBMITTED THAT THE AFORESAID DECISION OF SPECIAL BE NCH OF AHMEDABAD TRIBUNAL HAS BEEN OVERRULED BY THE HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO. 1181, 1182 TO 1185 OF 2010. HE ALSO PLA CED ON RECORD THE COPY OF THE AFORESAID DECISION OF HONBLE GUJARAT H IGH COURT. HE THEREFORE SUBMITTED THAT IN THE PRESENT CASE SINCE CIT(A) HAD FOLLOWED SPECIAL BENCH DECISION OF TRIBUNAL WHICH HAS BEEN OVERRULED BY HOBBLE GUJARAT HIGH COURT, NO PENALTY IS LEVIABLE IN THE CASE OF A SSESSEE. LD. DR ON THE OTHER HAND SUPPORTED THE ORDER OF AO AND LD. CIT(A) . 6. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED T HE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE C OURSE OF SEARCH AND SEIZURE ACTION A DISCLOSURE OF RS. 5,01000/- WAS MA DE BY THE ASSESSEE AND THE SAME WAS ALSO INCLUDED BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF T HE ACT. THE RETURN FILED BY THE ASSESSEE HAS ALSO BEEN ACCEPTED BY THE AO AN D NO ADDITION HAS BEEN MADE BY AO. THE AO IN THE PRESENT CASE HAD LE VIED PENALTY ON THE AMOUNT SURRENDERED BY THE ASSESSEE DURING THE COURS E OF SEARCH AND SEIZURE OPERATION AND THE AFORESAID PENALTY WAS CON FIRMED BY LD. CIT(A) BY FOLLOWING THE DECISION IN THE CASE OF KIRIT DAYA BHAI PATEL (SUPRA). WE FIND THAT THE DECISION IN THE CASE OF KIRIT DAYABHA I PATEL (SUPRA) WAS CHALLENGED BY THE ASSESSEE AND THE HONBLE GUJARAT HIGH COURT VIDE ORDER DATED 03-12-2014 IN TAX APPEAL NOS. 1181-1185 OF 20 10 HAS REVERSED THE ORDER OF HONBLE TRIBUNAL BY HOLDING AS UNDER:- 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE DECISIONS RELIED UPON BY LEARNED SE NIOR ADVOCATE FOR THE APPELLANT, WE ARE OF THE CONSIDERED OPINION THA T THE VIEW TAKEN I.T.(SS)A NO. 760/AHD/2010 A.Y. 2006-07 PAGE NO JAYNABEN RAMESH TAILOR VS. DCIT 4 BY THE TRIBUNAL IS ERRONEOUS. THE CIT(A) RIGHTLY HE LD 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 PROV ISION OF SECTION 153A OF THE I.T. ACT, THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE I.T, ACT IS TO BE CONSIDE RED AS RETURN FILED UNDER SECTION 139 OF THE ACT, AS THE ASSESSING OFFI CER HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, THE RE TURN IS TO BE CONSIDERED FOR THE PURPOSE OF PENALTY UNDER SECTION 271(L)(C) OF THE I.T. ACT AND THE PENALTY IS TO BE LEVIED ON THE INC OME ASSESSED OVER AND ABOVE THE INCOME RETURNED UNDER SECTION 153A, I F ANY. 14. FURTHER, IN THE PRESENT CASE, IT APPEARS FROM THE RECORD THAT THE ASSESSEES HAD SATISFIED ALL THE CONDITIONS WHICH AR E REQUIRED FOR CLAIMING IMMUNITY FROM PAYMENT OF PENALTY UNDER SEC TION 271(1) OF THE ACT. THE PROVISION DOES NOT SPECIFY ANY TIME LI MIT DURING WHICH THE AFORESAID AMOUNT I.E. THE AMOUNT OF PENALTY WIT H INTEREST HAS TO BE PAID. ADMITTEDLY WHEN THE ASSESSEES HEREIN HAVE PAID THE ENTIRE AMOUNT WITH INTEREST, THE ASSESSING OFFICER OUGHT T O HAVE GRANTED THEM IMMUNITY AVAILABLE UNDER SECTION 27I(1)(C) OF THE INCOME TAX ACT. 15. THE DECISION RELIED UPON BY LEARNED ADVOCATE FO R THE RESPONDENT WILL NOT APPLY TO THE FACTS OF THE PRESENT CASE. 16. IN VIEW OF THE AFORESAID FACTS OF THE CASE AND ALSO THE PRINCIPLE LAID DOWN IN THE DECISIONS RELIED UPON BY THE LEARN ED SENIOR COUNSEL FOR THE APPELLANT MORE PARTICULARLY THE PRINCIPLE L AID DOWN IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. GEBILAL KANHAILAL (SUPRA) AND COMMISSIONER OF INCOME TAX VS. ABDUL RA SHID (SUPRA), WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY U NDER SECTION 271(1) (C) OF THE INCOME TAX ACT CANNOT BE LEVIED O N THE INCOME SHOWN IN THE RETURN FILED UNDER SECTION 153 OF THE I.T. ACT. 7. BEFORE US, REVENUE HAS NOT BROUGHT ANY BINDING C ONTRARY DECISION IN ITS SUPPORT. WE THEREFORE RESPECTFULLY FOLLOWING T HE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAYABHAI PA TEL, HOLD THAT NO PENALTY IS LEVIABLE IN THE PRESENT CASE AND THUS DIRECT ITS DELETION. I.T.(SS)A NO. 760/AHD/2010 A.Y. 2006-07 PAGE NO JAYNABEN RAMESH TAILOR VS. DCIT 5 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (MUKUL KR. SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 30/01/2015 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,