The Deputy Commissioner Of Income Tax, Central Circle-1(3), Bangalore V. Sri B.V. Sreenivasa Reddy, Bellary

MA 3/BANG/2023

AI Insights

The case involves a miscellaneous petition filed by the revenue against Shri B.V. Sreenivasa Reddy concerning an alleged factual error in a previous Tribunal order. The dispute centered on whether the cash seized during a search operation, amounting to Rs.1,30,19,000, was correctly included in the return filed under section 148 of the Income Tax Act. The revenue contended that the cash was not disclosed in the return, while the assessee argued that it was included as business income. The Tribunal reviewed the submissions and found no merit in the revenue's claims, leading to the dismissal of the petition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124309 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-06-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-05-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 05-12-2022
• Other Referred Cases: CIT vs. Karam Chand Thapar and Bros. P. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 271(1)(c); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH : BANGALORE BEFORE SHRI. CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P. No. 3/Bang/2023 (in ITA No. 372/Bang/2022) Assessment Year : 2012-13 The Deputy Commissioner of Income Tax, Central Circle – 1(3), Bengaluru. Vs. Shri B.V. Sreenivasa Reddy, No. 523, 2 nd Floor, Embassy Woods, Opp. Accenture, Cunningham Road, Bengaluru – 560 080. PAN: AFBPR9736C APPELLANT RESPONDENT Assessee by : Shri Ravi Shankar, Advocate Revenue by : Shri Bipin C N., Addl. CIT (DR) Date of Hearing : 26-05-2023 Date of Pronouncement : 26-06-2023 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present miscellaneous petition has been filed by revenue seeking certain alleged factual rectification in the order passed by this Tribunal dated 16.08.2022. 2. The issue that is alleged by the revenue is in respect of the observation by this Tribunal in para 11 regarding the cash seized of Rs.1,30,19,000/- being included in the return filed u/s. 148. Page 2 of 5 M.P. No. 3/Bang/2023 (in ITA No. 372/Bang/2022) 3. For the sake of ready reference, we reproduce para 11 that reads as under: “11. In the present facts of the case, we note that assessee has given explanation on the income having cash available with assessee from the preceding assessment year which has not been verified by the Ld.AO during the assessment proceedings. Assessee had not lost the opportunity of filing the original return u/s. 139(1) of the Act for A.Y. under consideration as on the date of search, and the return filed in view of the notice issued u/s. 148 of the Act, the assessee included the allegedly undisclosed cash found from the premises. For the above reasons, in our considered opinion, this is not a fit case to levy penalty u/s. 271(1)(c) of the Act. In our view, levy of penalty is not a mechanical procedure and has to be issued with lot of checks and balances. The case made out by the Ld.AO in the penalty order dated 31/03/2018 by not accepting the closing balance for financial year 2010-11 cannot be a reason to levy penalty for F.Y. 2011-12 (being A.Y. 2012- 13 under consideration). We therefore direct the Ld.AO to delete the penalty so levied as it does not stand the test of law.” 3.1. The Ld.DR submitted that there is no such disclosure of the cash seized by the assessee in the computation. He submitted that this observation by this Tribunal in factually incorrect. 4. On the contrary, the Ld.AR submitted that the return of income filed by assessee for the year under consideration was the original return that was filed in lieu of notice u/s. 148 of the act as the notice u/s. 148 was issued at the time when the return could be filed by the assessee u/s. 139(1) of the act. This Tribunal has observed that as on the date of issuance of notice u/s. 148 dated 03.09.2013, assessee had time to file its original return of income u/s. 139(1) of the act. The Ld.AR submitted that assessee had disclosed its business income to be Rs.1,46,34,723/- as per the computation and as per the cash book reproduced by the Ld.CIT(A) in the penalty order he himself Page 3 of 5 M.P. No. 3/Bang/2023 (in ITA No. 372/Bang/2022) noted the opening cash available with the assessee on 01.04.2011 to be Rs.1,79,32,027/-. 5. The Ld.AR thus submitted that there was no reason to disbelieve the cash available with the assessee for A.Y. 2012-13 that was found to be seized amounting to Rs.1,30,19,000/-. It is the submission of the Ld.AR that the entire penalty has been levied by disbelieving the closing balance for the financial year relevant to Assessment Year 2011-12 i.e. 31.03.2010. He thus submitted that the observations of this Tribunal in para 11 deserves to be upheld. We have perused the submissions advanced by both sides in the light of records placed before us. 6. The Ld.DR submitted that benefit has been given to the assessee on wrong assumption of facts that the cash seized is considered for the purposes of filing return of income in lieu of notice issued u/s. 148 of the act. However there is nothing on record brought out by the revenue to disprove this factual observation neither at the time of hearing of this present MP nor thereafter. The LD.DR had undertaken to file written submission within a week’s time after the hearing of the present miscellaneous petition got concluded. There is no supportive documents filed by the Ld.DR in order to establish the alleged factual mistake apparent on record. 7. We therefore go by the computation of income based on which the tax has been paid by the assessee. The computation of income filed by the assessee in the present miscellaneous petition Page 4 of 5 M.P. No. 3/Bang/2023 (in ITA No. 372/Bang/2022) reveals that Rs.1,46,34,723/- has been declared as loss under the head “Income from Business”. 8. As there is nothing on record brought out by the revenue to establish the factual mistake alleged in the present miscellaneous petition, we are inclined to dismiss the miscellaneous petition filed by the revenue. 8.1. At this juncture, we refer to the decision of Hon’ble Supreme Court in case of CIT vs. Karam Chand Thapar and Bros. P. Ltd. reported in 176 ITR 535 wherein Hon’ble Court has observed as under: “It is not necessary for the Tribunal to state in its judgment specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of facts, as if that were a magic formula; if the judgment of the Tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal.” In the result, the miscellaneous petition filed by the revenue stands dismissed. Order pronounced in the open court on 26 th June, 2023. Sd/- Sd/- (CHANDRA POOJARI) (BEENA PILLAI) Accountant Member Judicial Member Bangalore, Dated, the 26 th June, 2023. /MS / Page 5 of 5 M.P. No. 3/Bang/2023 (in ITA No. 372/Bang/2022) Copy to: 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, ITAT, Bangalore