Shri Satbirsingh H. Bhusari, Ahmedabad V. The ACIT, Circle-2, Ahmedabad

ITSSA 89/AHD/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9266 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-10-2019
• Assessment Year: misc
• Appeal Filed On: 17-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Set aside

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER () ./ I.T(SS).A. NO. 89/AHD/2015 ( ASSESSMENT YEAR : BLOCK PERIOD 01-04-1989 TO 15- 02-2000) SHRI SATBIRSINGH H. BHUSARI 21/487, SATYAGRAH CHAVNI, SATELLITE ROAD, AHMEDABAD / VS. ASST.C.I.T. CIRCLE 2, AHMEDABAD ./ ./ PAN/GIR NO. : AFVPB3970Q ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HARDIK VORA, A.R. / RESPONDENT BY : SHRI L. P. JAIN, SR.D.R. !' DATE OF HEARING 01/10/2019 #$%& !' / DATE OF PRONOUNCEMENT 04/10/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX(APPEALS)-10, AHMEDABAD (CIT' IN SHORT), DATED 09.01.2015 ARISING IN THE PENALTY ORDER DATED 16.09.2013 PASSE D BY THE ASSESSING IT(SS)A NO. 89/AHD/15 [SHRI SATBIRSINGH H. BHUSARI VS. ACIT] - 2 - OFFICER (AO) UNDER S. 158BFA(2) OF THE INCOME TAX A CT, 1961 (THE ACT) CONCERNING BLOCK PERIOD 01.04.1989 TO 15.02.20 00. 2. THE SOLITARY GROUND OF APPEAL IS ON THE MAINTAI NABILITY OF IMPOSITION OF PENALTY UNDER S.158BFA(2) OF THE ACT. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT ALTHOUGH TH E QUANTUM PROCEEDINGS HAVE BEEN ADJUDICATED AGAINST THE ASSES SEE BY THE ITAT VIDE ITS ORDER IT(SS)A NO. 200/AHD/2003 ORDER DATED 22.01.2013, HOWEVER, THIS BY ITSELF WILL NOT AUTOMATICALLY WARR ANT IMPOSITION OF PENALTY UNDER S.158BFA(2) OF THE ACT. THE LEARNED AR SUBMITTED THAT BOTH THE AO AND CIT(A) HAVE IMPOSED PENALTY UNDER S . 158BFA(2) OF THE ACT ON THE PRESUMPTION THAT THE IMPOSITION OF P ENALTY IS AUTOMATIC WHICH IS NOT CORRECT. THE LEARNED AR REFERRED TO T HE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. BECHARBHAI P. PARMAR [2012] 341 ITR 499 (GUJ) TO SUBMIT THAT IMPOSITION OF PENALTY UNDER S. 158BFA(2) OF THE ACT IS DISCRETIONARY AND THE REVENUE IS REQUIRED TO TAKE A RELOOK AT THE MERITS FOR EXERCIS ING THE DISCRETION FOR OR AGAINST THE ASSESSEE AS THE CONSIDERATIONS FOR I MPOSITION OF PENALTY ARE DIFFERENT. THE LEARNED AR SUBMITTED THAT BOTH AO AS WELL AS CIT(A) HAVE NOT LOOKED INTO THE MERITS AT ALL. IT WAS POINTED OUT THAT THE CIT(A) WHILE HAVING REPRODUCED THE SUBMISSIONS OF THE ASSESSEE, HAS NOT EXAMINED THE ISSUE FROM THE ANGLE OF MERIT AND HAS SIMPLY CONFIRMED THE ACTION OF THE AO IN SHORT SENTENCE AS AN AUTOMATIC CONSEQUENCE AS CAN BE SEEN FROM PAGE NOS. 16 & 17 O F ITS ORDER. THE LEARNED AR THUS SUBMITTED THAT THE ISSUE REQUIRES T O BE SET ASIDE TO THE LOWER AUTHORITIES. 4. THE LEARNED DR RELIED ON THE ORDER OF CIT(A). IT(SS)A NO. 89/AHD/15 [SHRI SATBIRSINGH H. BHUSARI VS. ACIT] - 3 - 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE MAINTAINABILITY OF PENALTY UNDER S. 158BFA(2) OF TH E ACT IS IN QUESTION. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) IS REPRODUCED FOR EASE OF REFERENCE: AFTER CONSIDERING RIVAL SUBMISSIONS, I AM NOT INCL INED TO AGREE WITH THE CONTENTION OF THE APPELLANT. SECTION 158 BFA(2) READS AS FOLLOWS: '158BFA(2) THE ASSESSING OFFICER OR THE COMMISSIONE R (APPEAL) IN THE COURSE OF ANY PROCEEDINGS UNDER THI S CHAPTER, MAY DIRECT THAT A PERSON SHALL PAY BY WAY OF PENALT Y A SUM WHICH SHALL NOT BE LESS THAN THE AMOUNT OF TAX LEVI ABLE BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TA X SO LEVIABLE IN RESPECT OF THE UNDISCLOSED INCOME DETER MINED BY THE ASSESSING OFFICER UNDER CLAUSE (C) OF SECTION 158BC . PROVIDED THAT NO ORDER IMPOSING PENALTY SHALL BE MA DE IN RESPECT OF A PERSON IF (I) SUCH PERSON HAS FURNISHED A RETURN UNDER CLAUSE (A) OF SECTION 158BC, (II) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HA S BEEN PAID OR, IF THE ASSETS SEIZED CONSIST OF MONEY , THE ASSESSEE OFFERS THE MONEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYABLE; (III) EVIDENCE OF TAX PAID IS FURNISHED ALONGWITH T HE RETURN; AND (IV) AN APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN. PROVIDED FURTHER THAT THE PROVISIONS OF THE PRECEDI NG PROVISO SHALL NOT APPLY WHERE THE UNDISCLOSED INCOM E DETERMINED BY THE ASSESSING OFFICER IS IN EXCESS OF THE INCOME SHOWN IN THE RETURN AND IN SUCH CASES THE PE NALTY SHALL BE IMPOSED ON THAT PORTION OF UNDISCLOSED INC OME DETERMINED WHICH IS IN EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME SHOWN IN THE RETURN' A PLAIN READING OF THE SECTION REVEALS THAT PENALTY IS NOT LEVIABLE IN EXCEPTIONS COVERED UNDER THE FIRST PROV ISO. THE SECOND PROVISO CLEARLY SAYS THAT THE PROVISIONS OF FIRST P ROVISO SHALL NOT APPLY WHERE THE UNDISCLOSED INCOME DETERMINED BY TH E ASSESSING OFFICER IS IN EXCESS OF THE INCOME SHOWN IN THE RET URN AND IN SUCH CASES THE PENALTY SHALL BE IMPOSED ON THAT PORTION OF UNDISCLOSED INCOME DETERMINED WHICH IS IN EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME SHOWN IN THE RETURN. IN THIS CASE, THE UNDIS CLOSED INCOME WAS DETERMINED AT RS.1,20,63,250/- AS AGAINST UNDISCLOS ED INCOME IT(SS)A NO. 89/AHD/15 [SHRI SATBIRSINGH H. BHUSARI VS. ACIT] - 4 - DECLARED BY THE APPELLANT AT RS.12,90,000/-. THEREF ORE, THE CASE OF THE APPELLANT IS CLEARLY COVERED BY THE SECOND PROV ISO TO SECTION 158BFA(2) OF THE ACT. THE UNDISCLOSED INCOME OF RS. 1,20,63,250/- WAS DETERMINED BY THE A.O AFTER CAREFULLY CONSIDERI NG ALL FACTS OF THE CASE AND THE MATERIAL SEIZED DURING THE SEARCH. THE APPELLANT HAS RELIED ON SEVERAL JUDGMENTS IN SU PPORT OF HIS CONTENTION. WITH DUE REGARD TO RATIO OF JUDGMENTS I N THESE CASES, THE SAME ARE NOT APPLICABLE IN THE PRESENT CASE SINCE T HE FACTS OF THE CASE ARE DIFFERENT. IN VIEW OF DISCUSSION ABOVE, I HOLD THAT THE A.O WA S JUSTIFIED IN LEVYING PENALTY OF RS 73,01,745/- U/S. 158BFA(2) OF THE ACT. ACCORDINGLY, PENALTY OF RS. 73,01,745/- IS CONFIRME D. THIS GROUND OF APPEAL IS DISMISSED. 6. A PERUSAL OF THE ORDERS OF THE AO & CIT(A) WOULD SHOW THAT PENALTY HAS BEEN IMPOSED AND SUSTAINED UNDER S.158B FA(2) OF THE ACT SIMPLY OWING TO THE FACT OF ADDITIONS ON ACCOUNT OF UNDISCLOSED INCOME. THE MERIT OF THE CASE HAS NOT BEEN LOOKED INTO INDEED FROM THE ANGLE OF PENALTY PROCEEDINGS AND THE PENALTY HA S BEEN IMPOSED AS AN AUTOMATIC CONSEQUENCE WHICH IS CONTRARY TO THE D ECISION OF THE HONBLE GUJARAT HIGH COURT IN BECHARBHAI P. PARMAR (SUPRA). 7. THE HONBLE HIGH COURTS IN CIT VS. BECHARBHAI P. PARMAR [2012] 341 ITR 499 (GUJ); RADHA KRISHNA VIHAR [TS-6 40-HC-2017) (AP)] AND CIT VS. DR. GIRIRAJ AGARWAL GIRI HAVE OBSERVED IN CHORUS THAT PENALTY UNDER S.158BFA(2) OF THE ACT IS DIRECT ORY AND NOT MANDATORY IN NATURE AND ESSENTIALLY HOLDS THAT ANY DISCRETION VESTED IN AN AUTHORITY HAS TO BE EXERCISED IN A REASONABLE AN D RATIONAL MANNER DEPENDING UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE. 8. FROM THE APPELLATE ORDER OF CIT(A) EXTRACTED IN EARLIER PARA, IT IS OSTENSIBLE THAT THE CIT(A) HAS NOT DEALT WITH IS SUE ON MAINTAINABILITY OF PENALTY ON MERITS. THE MATTER IS ACCORDINGLY SET ASIDE TO THE FILE OF THE CIT(A) TO RE-EXAMINE THE I SSUE AFRESH IN ACCORDANCE WITH LAW AND IN THE LIGHT OF THE DECISIO N OF THE HONBLE IT(SS)A NO. 89/AHD/15 [SHRI SATBIRSINGH H. BHUSARI VS. ACIT] - 5 - GUJARAT HIGH COURT IN BECHARBHAI P. PARMAR (SUPRA). IT SHALL BE OPEN TO ASSESSEE TO PLACE ALL ARGUMENTS BEFORE THE CIT(A ) FOR FRESH DETERMINATION OF ISSUE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 04/10/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- ). / REVENUE 2. / ASSESSEE +. ,-.! /! / CONCERNED CIT 4. /!- / CIT (A) 2. 345 6!6-.7 ' -.&7 89, / DR, ITAT, AHMEDABAD :. 5;< = / GUARD FILE. BY ORDER / 7 /8 ' -.&7 89, THIS ORDER PRONOUNCED IN OPEN COURT ON 04/10/2019