ITO 9(1)(1), MUMBAI V. ANJU R. INNANI, MUMBAI

ITSSA 9/MUM/2010

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 8776 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-10-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 05-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K PAHWA
• Keywords: Search and seizure
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, G , MUMBAI BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 9/MUM/2010 (BLOCK PERIOD -01.04.1988 TO 22.12.1988) INCOME TAX OFFICER WARD 9(1)(1), ROOM NO.226, AAYAKAR BHAVAN, 4 TH FL, M K MARG, MUMBAI-400020 APPELLANT VS ANJU R INNANI A-53, VARSHA, GULMOHAR CROSS R.NO.4JVPD SCHEME, JUHU VILE PARLE, MUMBAI-400049 PAN:AAHP11233L .RESPONDENT ASSESSEE BY : SHRI S L JAIN REVENUE BY : SHRI S K PAHWA O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER DATED 05.11.2009 OF CIT(A)-XIX, MUMBAI FOR THE BLOC K PERIOD - 01.04.1988 TO 22.12.1988 ARISING FROM THE PENALTY ORDER U/S 158BFA(2) OF THE INCOME TAX ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) ERRED IN DELETING TH E ITA NO. 9/MUM/2010 (BLOCK PERIOD -01.04.1988 TO 22.12.1988) 2 PENALTY OF RS.7,59,760/- IMPOSED U/S 158BFA(2) OF THE IT ACT BY THE AO ON UNDISCLOSED INCOME; 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) ERRED IN LAW IN DEL ETING THE PENALTY ON THE GROUND OF APPLICABILITY OF SUB- CLAUSE (IV) OF PROVISO TO SECTION 158BFA(2) EVEN THOUGH AN APPEAL WAS FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER BEFORE THE CIT(A) 3. THERE WAS A SEARCH AND SEIZURE ACTION IN THIS C ASE. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE BLOCK PERIOD DISCLOSING AN INCOME OF RS.1,62,34,736/- WHICH INC LUDED UNDISCLOSED INCOME OF RS.65 LAKHS. THE ASSESSMENT WAS COMPLETED DETERMINING THE TOTAL UNDISCLOSED INCOME OF RS.65 LAKHS. SUBSEQUENTLY, THE PENALTY PROCEEDINGS WERE INITIATED AND A PENALTY OF RS.7,59,760/- WAS IMPOSED UNDER S ECTION 158BFA(2) VIDE ORDER DATED 28.3.2006. THE ASSESSEE CHALLENGED THE PENALTY BEFORE THE CIT(A) WHO HAS DELETED THE PENALTY VIDE IMPUGNED ORDER. 4. WE HAVE HEARD THE LEARNED DR AS WELL AS THE LEA RNED AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT RECO RD. IT IS TO BE NOTED THAT THE AO HAS NOT MADE ANY ADDITION IN THE RETURNED INCOME AS DISCLOSED BY THE ASSESSEE FOR TH E BLOCK PERIOD. AS PER THE FIRST PROVISO TO SUB-SECTION 2 OF SECTION 158BFA NO ORDER IMPOSING PENALTY SHALL BE MADE IF THE CONDITION PROVIDED UNDER THE SAID PROVISO ARE SATI SFIED. WE ITA NO. 9/MUM/2010 (BLOCK PERIOD -01.04.1988 TO 22.12.1988) 3 QUOTE THE PROVISIONS OF SUB-SECTION (2) OF SECTIO N 158BFA AS UNDER : LEVY OF INTEREST AND PENALTY IN CERTAIN CASES. 158BFA. (1) WHERE THE RETURN OF TOTAL INCOME INCLUDING UNDISCLOSED INCOME FOR THE BLOCK PERIOD, IN RESPECT OF SEARCH INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS REQUISITIONED UNDER SECTION 132A ON OR AFTER THE 1ST DAY OF JANUARY, 1997, AS REQUIR ED BY A NOTICE UNDER CLAUSE (A) OF SECTION 158BC , IS FURNISHED AFTER THE EXPIRY OF THE PERIOD SPECIFIED IN SUCH NOTICE, OR IS NOT FURNISHED, THE ASSESSEE SHALL BE LIABLE TO PAY SIMP LE INTEREST AT THE RATE OF [ONE] PER CENT OF THE TAX ON UNDISCL OSED INCOME, DETERMINED UNDER CLAUSE (C) OF SECTION 158BC , FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PER IOD COMMENCING ON THE DAY IMMEDIATELY FOLLOWING THE EXP IRY OF THE TIME SPECIFIED IN THE NOTICE, AND (A) WHERE THE RETURN IS FURNISHED AFTER THE EXPIRY OF THE TIME AFORESAID, ENDING ON THE DATE OF FURNISHING THE RET URN; OR (B) WHERE NO RETURN HAS BEEN FURNISHED, ON THE DATE OF COMPLETION OF ASSESSMENT UNDER CLAUSE (C) OF SECTION 158BC . (2) THE ASSESSING OFFICER OR THE COMMISSIONER (APPE ALS) IN THE COURSE OF ANY PROCEEDINGS UNDER THIS CHAPTER, M AY DIRECT THAT A PERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THAN THE AMOUNT OF TAX LEVIABLE B UT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SO L EVIABLE IN RESPECT OF THE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER UNDER CLAUSE (C) OF SECTION 158BC : PROVIDED THAT NO ORDER IMPOSING PENALTY SHALL BE MADE IN RESPECT OF A PERSON IF (I) SUCH PERSON HAS FURNISHED A RETURN UNDER CLAUS E (A) OF SECTION 158BC ; ITA NO. 9/MUM/2010 (BLOCK PERIOD -01.04.1988 TO 22.12.1988) 4 (II) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HA S BEEN PAID OR, IF THE ASSETS SEIZED CONSIST OF MONEY, THE ASSE SSEE OFFERS THE MONEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYABLE; (III)EVIDENCE OF TAX PAID IS FURNISHED ALONG WITH 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 PRECEDING 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 UNDI SCLOSED INCOME SHOWN IN THE RETURN. 5. THE FIRST PROVISO MAKES IT CLEAR THAT IF THE ASSESSEE HAS FURNISHED A RETURN, UNDER CLAUSE (A) OF SECTION 158BC; THE TAX PAYABLE ON SUCH RETURN I NCOME HAS BEEN PAID AND NO APPEAL AGAINST THE ASSESSME NT OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN H AS BEEN FILED THEN NO ORDER IMPOSING THE PENALTY SHALL BE M ADE. 6. THE SECOND PROVISO FURTHER MAKES IT CLEAR THAT I F THE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFI CER IS IN EXCESS OF THE INCOME SHOWN IN THE RETURN THE PENALT Y MAY BE IMPOSED ON THAT PORTION OF UNDISCLOSED INCOME WHIC H IS IN EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME SHOWN IN THE RETURN. UNDISPUTEDLY, IN THE CASE IN HAND, THE AO HAS NOT ITA NO. 9/MUM/2010 (BLOCK PERIOD -01.04.1988 TO 22.12.1988) 5 MADE ANY ADDITION OF UNDISCLOSED INCOME IN EXCESS O F THE INCOME SHOWN IN THE RETURN OF INCOME FILED BY THE ASSESSEE. THEREFORE, WHEN THE CONDITIONS UNDER THE FIRST PROV ISO ARE SATISFIED, NO PENALTY CAN BE LEVIED U/S 158BFA(2). ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A) IN DELETING THE PENALTY. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 13.10.2010 SD SD (R.K.PANDA) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 13 TH OCT 2010 SRL:71010 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI