KUNJIPERI HAJI JAMEELA,KOZHIKODE V. ACIT, CENTRAL CIRCLE-2, KOZHIKODE

ITA 8/COCH/2025

AI Insights

The case involves multiple appeals by different assessees against the penalties levied under section 271(1)(c) of the Income-tax Act, 1961, for the assessment years 2013-2014 to 2016-2017. The penalties were imposed following the discovery of incriminating material during search and seizure operations on the Malabar Group of Companies, which allegedly linked to undisclosed incomes of the appellants. The appellants contested the penalties, arguing that their disclosures of additional incomes were voluntary and not based on the seized materials. The Tribunal found that the lower authorities had not adequately discussed how the seized materials were related to the undisclosed incomes of the appellants and thus remitted the matter back to the CIT(A) for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 38438 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Other Referred Cases: Sir Shadilal Sugar & General Mills Ltd. v. CIT, MAK Data Private Limited v. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURESH SIVANANDAN
• Keywords: Opportunity of being heard; Search and seizure

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Soundararajan K, Judicial Member ITA No.1129/Coch/2024 : Asst.Year 2013-2014 ITA No.1130/Coch/2024 : Asst.Year 2014-2015 ITA No.1131/Coch/2024 : Asst.Year 2015-2016 Panchily Jameela 14/200A, Cholakkal House Down Hill, Malappuram – 676 519. PAN : AIQPJ3578A. v. The Assistant Commissioner of Income-tax, Cen.Cir.2 Kozhikode. (Appellant) (Respondent) ITA No.1147/Coch/2024 : Asst.Year 2014-2015 ITA No.1148/Coch/2024 : Asst.Year 2015-2016 Abdul Khader Nadakkel Thirumangalath House Arikulam P.O., Quilandy Kozhikode – 673 322. PAN : AGTPN3087F. v. The Assistant Commissioner of Income-tax, Cen.Cir.2 Kozhikode. (Appellant) (Respondent) ITA No.1132/Coch/2024 : Asst.Year 2013-2014 ITA No.1133/Coch/2024 : Asst.Year 2014-2015 ITA No.1134/Coch/2024 : Asst.Year 2015-2016 Jaifer Thayyil 17.1491-D, 3rd Floor Malabar Gate, Puthiyara PO Kozhikode – 673 004. PAN : ADJPT8559M. v. The Assistant Commissioner of Income-tax, Cen.Cir.2 Kozhikode. (Appellant) (Respondent) ITA No.2/Coch/2025 : Asst.Year 2013-2014 ITA No.3/Coch/2025 : Asst.Year 2014-2015 ITA No.6/Coch/2025 : Asst.Year 2015-2016 ITA No.8/Coch/2025 : Asst.Year 2016-2017 ITA No.1129/Coch/2024 & Ors. Panchily Jameela & Ors. 2 Kunjiperi Haji Jameela Aiswarya, Chulliyode Road PO Civil Station Kozhikode – 673 020. PAN : ACNPJ5272A. v. The Assistant Commissioner of Income-tax, Cen.Cir.2 Kozhikode. (Appellant) (Respondent) Appellants by : Sri.C.B.M.Warrier, CA Respondent by : Sri.Suresh Sivanandan, CIT-DR Date of Hearing : 13.03.2025 Date of Pronouncement : 21.03.2025 O R D E R Per Inturi Rama Rao, AM : These appeals filed by the assessee are directed against different orders of the Commissioner of Income-tax (Appeals)-3, Kochi [“CIT(A)” for short] confirming penalty u/s.271(1)(c) of the Income-tax Act, 1961 (“the Act” hereinafter). 2. Since identical facts and issues are involved in all these appeals, they were heard together and are being disposed of vide consolidated order. For the sake of clarity and convenience, the facts relating to appeal bearing ITA No.1129/Coch/2024 in case of Panchily Jameela are stated hereunder. 3. The brief facts of the case are that the appellant is an individual. The original return of income for the assessment year 2013-2014 was filed on 26.12.2014 declaring total income of Rs.71,90,100. Subsequently, during the course of search and seizure proceedings in ITA No.1129/Coch/2024 & Ors. Panchily Jameela & Ors. 3 the case of one Malabar Group of Companies conducted u/s.132 of the Act on 26.02.2019, it was stated that certain incriminating material relating to the appellant was stated to have been found and seized. Based on such incriminating material, the Assessing Officer (“the AO\" hereinafter) issued notice u/s.153C of the Act on 10.05.2021. In response to the notice issued u/s.153C of the Act, the appellant filed return of income on 22.02.2022 declaring total income of Rs.75,61,880. 3. Against the said return of income, the assessment was completed by the AO vide order dated 11th March, 2022 passed u/s.143(3) r.w.s. 153C of the Act accepting the returned income at Rs.76,34,100. Thereafter, the AO initiated penalty proceedings u/s.271(1)(c) of the Act vide show cause notice dated 15th March, 2022. In response to the show cause notice, it is submitted that the disclosure of additional income in response to notice u/s.153C of the Act is voluntary and is not based on the seized material, and therefore, the appellant is not in guilty of concealing any particulars of income, and therefore, the penalty was not exigible u/s.271(1)(c) of the Act. It is further contented that merely because the appellant is agreed to the additional income, it cannot be presumed that the appellant had concealed particulars of income, by placing reliance on the judgment of the Hon’ble Supreme Court in the case of Sir Shadilal Sugar & General Mills Ltd. v. CIT. The AO rejecting the above explanation of the appellant and placing the decision of the Hon’ble Supreme Court in the case of MAK Data Private Limited v. CIT held that the appellant is guilty of concealing particulars of income and levied penalty of Rs.1,37,196 vide order dated 22nd September, 2022. ITA No.1129/Coch/2024 & Ors. Panchily Jameela & Ors. 4 4. Being aggrieved by the above order, an appeal was filed before the CIT(A), who vide the impugned order confirmed the penalty levied u/s.271(1)(c) of the Act. 5. Being aggrieved by the above order of the CIT(A), the appellant is before us in the present appeal. 6. We heard rival submissions and perused the material available on record. On a mere reading of the orders of the authorities below, it would be clear that the lower authorities had failed to discuss the evidences found as a result of search and seizure in the case of Malabar Group of companies, which led to the unearthing of the undisclosed income in the hands of the appellant. The AO also not discussed as to how the seized material led to unearthing of the undisclosed income and how the seized material in the case of Malabar Group of companies has relation to the appellant herein. Merely because the appellant has disclosed additional income in response to notice u/s.153C of the Act, it cannot led to the conclusion that the appellant is guilty of concealing the particular of income or guilty of concealment of income. It is the case of assessment made u/s.153C of the Act, pursuant to the initiation of search and seizure in the case of a third person. In the above circumstances, we remit the matter back to the file of the CIT(A) for de novo disposal of the appeal in accordance with law after affording a reasonable opportunity of being heard to the assessee. 7. In the result, the appeals filed by the assessees are allowed for statistical purposes. ITA No.1129/Coch/2024 & Ors. Panchily Jameela & Ors. 5 Order pronounced on this 21st day of March, 2025. Sd/- (Soundararajan K) Sd/- (Inturi Rama Rao) JUDICIAL MEMBER ACCOUNTANT MEMBER Cochin; Dated : 21st March, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "