DCIT CC-1, Nashik v. SHRI PRADEEP GULABCHAND JAIN, Aurangabad

ITA 125/PUN/2010 | 2007-2008
Pronouncement Date: 30-11-2011 | Result: Dismissed

Appeal Details

RSA Number 12524514 RSA 2010
Assessee PAN AEOPJ9240H
Bench Pune
Appeal Number ITA 125/PUN/2010
Duration Of Justice 1 year(s) 10 month(s) 8 day(s)
Appellant DCIT CC-1, Nashik
Respondent SHRI PRADEEP GULABCHAND JAIN, Aurangabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-11-2011
Date Of Final Hearing 23-11-2011
Next Hearing Date 23-11-2011
Assessment Year 2007-2008
Appeal Filed On 21-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO 125/PN/10 (ASSTT. YEAR: 2007-08) DY. COMMISSIONER OF INCOME-TAX .. APPELLANT CEN.CIR.1 NASHIK VS. SHRI PRADEEP GULABCHAND JAIN .. RESPONDENT AT & PO. SHIVUR VAIJAPUR AURANGABAD PAN AEOPJ9240H APPELLANT BY: SHRI NIKHIL PATHAK RESPONDENT BY: SHRI S K. AMBASTHA DATE OF HEARING : 23.11.2011 DATE OF PRONOUNCEMENT : 30 .11.2011 ORDER PER G.S. PANNU AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I NASHIK DATED 16. 11.2009 WHICH IN TURN HAS ARISEN FROM THE PENALTY ORDER OF THE ASSESSING OFFICER DATED 24.06.2009 PASSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT 196 1 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: 1. THE LD. CIT(A) HAS ERRED IN RESTRICTING THE PEN ALTY LEVIED BY THE AO FROM RS 4 97 340/- TO RS 294/- U/S 271(1)(C) AND THEREBY AL LOWING SUBSTANTIAL RELIEF OF RS 4 97 046/- TO THE ASSESSEE ON THE INCOME DECLARED U/S 153A AS THERE IS NO EXPRESS PROVISION IN THE ACT GRANTING ANY IMMUNITY TO ASSESSEE FILING RETURN U/S 153A OTHER THAN THOSE COVERED IN EXPLANATION 5 TO SEC. 271(1)(C). 2. THE LD CIT(A) HAS ERRED IN RESTRICTING THE PENAL TY LEVIED U/S 271(1)(C) ON THE INCOME DECLARED U/S 153A AFTER HOLDING THAT THE ASSESSEE W AS NOT ENTITLED TO IMMUNITY AS PER EXPLANATION 5 TO SEC. 271(1)(C). 3. THE ORDER OF THE LD. CIT(A)-I NASHIK MAY BE VAC ATED AND THAT OF THE AO BE RESTORED. 2 3. THE BRIEF FACTS LEADING TO THE LEVY OF PENALTY U NDER SECTION 271(1)(C) OF THE ACT ARE THAT THE ASSESSEE DERIVED INCOME FROM RENT REMUNERATION SHARE OF PROFIT FROM A PARTNERSHIP FI RM AND OTHER SOURCES. A SEARCH AND SEIZURE ACTION UNDER SECTION132 OF THE ACT WAS CONDUCTED ON BOTHARA GROUP OF CASES ON 22.11.2006. DURING THE COURSE OF SEARCH AND SEIZURE ACTION THE ASSESSEE D ECLARED ADDITIONAL INCOME OF RS 15 00 000/- ON ACCOUNT OF INVESTMENT I N F.DS N.S.CS K.V.PS RENOVATION OF HOUSE ETC. THE RETURN OF INC OME WAS FILED BY THE ASSESSEE UNDER SECTION 139 ON 4.12.2007 DECLARING T OTAL INCOME OF RS 15 94 664/- AND AGRICULTURAL INCOME OF RS 85 100/- WHICH INCLUDED ADDITIONAL INCOME OF RS 15 00 000/- ADMITTED BY THE ASSESSEE UNDER SECTION 132(4) OF THE ACT. THE TOTAL INCOME ASSESSE D BY THE ASSESSING OFFICER WAS RS 15 95 534/- BY MAKING ADDITION OF IN TEREST ON BANK DEPOSITS OF RS 870/-. THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT HOLDING THAT THE ASSES SEE WAS NOT ENTITLED TO BENEFIT OF EXPLANATION 5 TO SECTION 271(1)(C) A S CLAUSE (II) OF EXPLANATION 5 BELOW SECTION 271(1)(C) EXEMPTED ONLY THAT PART OF INCOME FROM THE PENAL PROVISIONS WHICH WAS COVERED BY THE STATEMENT UNDER SECTION 132(4) OF THE ACT WHERE THE ASSETS W ERE ACQUIRED BY THE ASSESSEE OUT OF HIS INCOME WHICH WAS NOT DISCLOSED IN THE RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF THE TIM E PRESCRIBED IN SECTION 139(1) AND SPECIFIED IN THE STATEMENT IN TH E MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. ACCORDING TO THE ASSE SSING OFFICER THE ASSESSEE HAS NOT SPECIFIED IN HIS STATEMENT UNDER S ECTION 132(4) THE MANNER IN WHICH SUCH INCOME HAD BEEN DERIVED EVEN THOUGH IN THE RETURN OF INCOME FILED UNDER SECTION 153A SUCH INCO ME WAS DISCLOSED. FURTHER INCOME OR TRANSACTIONS RESULTING IN SUCH IN COME WAS NOT RECORDED BEFORE THE DATE OF SEARCH IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE FOR SUCH SOURCE OF INCOME. THE ASSE SSING OFFICER 3 ACCORDINGLY HELD THAT THE ASSESSEE HAS WITHOUT REAS ONABLE CAUSE CONCEALED THE PARTICULARS OF INCOME OF RS 15 00 870 /- AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HE THEREFORE LEVIED A MINIMUM PENALTY OF RS 4 97 340/- UNDER SECTION 271(1)(C) OF THE ACT. BEING AGGRIEVED THE ASSESSEE WENT IN APPEAL BEFORE THE C OMMISSIONER OF INCOME-TAX (APPEALS). 4. THE COMMISSIONER OF INCOME-TAX (APPEALS) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE PENALTY LE VIED IN RESPECT OF THE AMOUNT OF RS 15 00 000/- OFFERED TO TAX BY THE ASSESSEE IN THE RETURN OF INCOME FILED. HE HOWEVER UPHELD THE PEN ALTY LEVIED ON THE AMOUNT OF RS 870/- ON ACCOUNT OF UNDISCLOSED INTERE ST INCOME. THE FINDINGS OF THE COMMISSIONER OF INCOME-TAX (APPEALS ) ARE NOTEWORTHY WHICH ARE AS FOLLOWS: 5. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND PENALTY ORDER OF THE AO AND SUBMISSIONS OF THE APPELLANT MADE BEF ORE ME. THE ADDITIONAL INCOME OF RS 15 00 000/- WAS DECLARED BY THE APPELL ANT IN THE STATEMENT U/S 132(4) OF THE ACT AND THE SAID INCOME IS ALSO OFFER ED TO TAX BY THE APPELLANT IN THE RETURN OF INCOME FILED U/S 139 OF THE ACT. T HE CONTENTION OF THE AO THAT SUCH INCOME WAS NOT RECORDED BY THE APPELLANT BEFORE THE DATE OF SEARCH IN HIS BOOKS OF ACCOUNTS CANNOT BE ACCEPTED AS THE APPELLANT IS NOT LIABLE TO MAINTAIN BOOK OF ACCOUNTS AS HE HAS NOT C ARRIED OUT ANY BUSINESS IN HIS INDIVIDUAL CAPACITY DURING THE YEAR UNDER APPEA L. THE AO HAS ALSO CONTENDED THAT THE APPELLANT HAS NOT POINTED OUT TH E MANNER IN WHICH THE SAID ADDITIONAL INCOME WAS EARNED. IN THIS REGARD IT IS PERTINENT TO NOTE HERE THAT IT HAS BEEN LAID DOWN BY THE HONBLE GUJARAT H IGH COURT IN THE CASE OF CIT V. MAHENDRA C SHAH 299 ITR 305 THAT IT IS NOT R EQUIRED TO SPECIFY THE MANNER IN WHICH THE INCOME WAS EARNED IN RESPECT OF AMOUNT OFFERED TO TAX IN THE RETURN OF INCOME FILED PURSUANT TO SEARCH AC TION BY PAYING TAXES THEREON FOR AVAILING IMMUNITY FROM PENALTY UNDER EX PLANATION 5 OF SECTION 271(1)(C) OF THE ACT. 6. IN VIEW OF THE ABOVE DISCUSSION I AM OF THE CON SIDERED VIEW THAT THE PENALTY U/S 271(1)(C) OF THE ACT IS NOT LEVIABLE ON THE AMOUNT OF RS 15 00 000/- OFFERED TO TAX BY THE APPELLANT IN THE RETURN OF INCOME FILED. AS REGARDS THE PENALTY LEVIED ON THE AMOUNT OF RS 870/ - ON ACCOUNT OF UNDISCLOSED INTEREST INCOME THE APPELLANT HAS NOT FILED ANY LOGICAL CONTENTION AND HENCE THE PENALTY LEVIED ON THE SAID AMOUNT IS HEREBY CONFIRMED. 5. NOT BEING SATISFIED WITH THE ORDER OF THE COMMIS SIONER OF INCOME-TAX (APPEALS) REVENUE IS IN APPEAL BEFORE U S. 6. BEFORE US THE LEARNED DEPARTMENTAL REPRESENTATI VE APPEARING FOR THE REVENUE CONTENDED THAT THE FINDING OF THE COMMISSIONER OF 4 INCOME-TAX (APPEALS) THAT WHATEVER AMOUNTS WERE DEC LARED IN RETURN UNDER SECTION 153A STAND FULLY COVERED BY DECLARATI ON UNDER SECTION 132(4) IS NOT CORRECT. THE LEARNED DEPARTMENTAL REP RESENTATIVE FURTHER SUBMITTED THAT CLAUSE (2) OF EXPLANATION 5 BELOW SE CTION 271(1)(C) EXEMPTS ONLY THAT PART OF INCOME FROM THE PENAL PRO VISIONS WHICH IS COVERED BY THE STATEMENT UNDER SECTION 132(4) WHERE THE ASSETS HAVE BEEN ACQUIRED BY THE ASSESSEE OUT OF HIS INCOME WHI CH IS NOT DISCLOSED IN THE RETURN OF INCOME TO BE FURNISHED B EFORE THE EXPIRY OF TIME SPECIFIED IN SECTION 139(1) OF THE ACT. HE FUR THER POINTED OUT THAT CLAUSE (2) OF EXPLANATION 5 OF SECTION 271(1)(C) AP PLIES ONLY TO THE RETURN OF INCOME OF THE PREVIOUS YEAR WHICH IS TO B E FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED UNDER SECTION 139(1) O F THE ACT. HE ACCORDINGLY PRAYED THAT THE ORDER OF THE COMMISSION ER OF INCOME-TAX (APPEALS) BE SET ASIDE AND THAT OF THE ASSESSING OF FICER BE AFFIRMED. 7. ON THE CONTRARY THE LEARNED COUNSEL FOR THE RES PONDENT- ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND SUBMITTED THAT THE COMMISSIONER OF IN COME-TAX (APPEALS) WAS PERFECTLY JUSTIFIED IN DELETING THE P ENALTY WITH REFERENCE TO THE AMOUNT OF RS 15 00 000/-. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. WE HAVE ALSO PERUSED THE ORDERS OF THE AUTHORITIES BELOW AN D FIND THAT THE CONCLUSION DRAWN BY THE COMMISSIONER OF INCOME-TAX (APPEA LS) DOES NOT MERIT ANY INTERFERENCE INASMUCH AS THE COMMISSIONER OF INCOM E-TAX (APPEALS) WAS RIGHT IN DELETING THE PENALTY LEVIED BY THE ASSESSING O FFICER UNDER SECTION 271(1)(C) WITH REFERENCE TO THE AMOUNT OF RS 15 00 00 0/-. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. MAHENDRA C SHAH 29 9 ITR 305 HAS HELD THAT IT IS NOT REQUIRED TO SPECIFY THE MANNER IN WHICH THE INCOME WAS EARNED IN RESPECT OF AMOUNT OFFERED TO TAX IN T HE RETURN OF INCOME FILED PURSUANT TO SEARCH ACTION BY PAYING TAXES THE REON FOR AVAILING 5 IMMUNITY FROM PENALTY UNDER EXPLANATION 5 OF SECTIO N 271(1)(C) OF THE ACT. NOTWITHSTANDING THE AFORESAID AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE FURNISHED A COPY OF THE ST ATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT TO POINT OUT THAT T HE MANNER OF EARNING OF INCOME WAS INDEED EXPLAINED BY THE ASSESSEE. IN PARTICULAR OUR ATTENTION WAS INVITED TO QUESTION NO. 7 AND 8 OF TH E STATEMENT A COPY OF WHICH HAS BEEN PLACED ON RECORD. WE HAVE PERUSED THE SAME AND FIND THAT THE ASSESSEE HAS DULY EXPLAINED THAT THE ADDITIONAL INCOME SOUGHT TO BE DECLARED HAS BEEN EARNED OUT OF BUSINE SS WHICH WAS NOT REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. TO SUCH A DEPOSITION OF THE ASSESSEE THERE IS NO NEGATION FROM THE SIDE OF THE REVENUE AND THEREFORE EVEN ON FACTS WE FIND THAT THE ASSESSEE HAS DISCHARGED THE BURDEN CAST ON HIM TO SATISFY THE MANNER OF EARNING ADDITIONAL INCOME SO AS TO AVAIL OF THE IMMUNITY FROM PENALTY PROVIDE D IN TERMS OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. 9. APART FROM THE AFORESAID AT THE TIME OF HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE HAD ALSO RELIED UPON TH E JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SURENDER PAUL V. CIT 287 ITR 223 (P&H) IN SUPPORT OF THE CASE OF THE REVENUE. ON THE BASIS OF THE AFORESAID JUDGMENT IT IS SOUGHT TO BE MADE OUT THAT SINCE THE ASSESSEE DID NOT FURNISH THE RETURN WITHIN THE PERIOD PRESCRIBED UNDER SECTION 139(1) THEREFORE THE IMMUNITY FROM PENALTY IN TERMS OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT WOULD NOT BE AVAILABLE TO THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY POINTED OUT THAT THE SAID JUDGMENT WAS INAPPLICABLE TO THE FACTS OF THE PRESENT CASE INASMUCH AS IN THE CASE BEFORE THE HO NBLE HIGH COURT THE TAXES ON THE ADDITIONAL INCOME WERE ALSO NOT PA ID EVEN ALONGWITH THE RETURN OF INCOME FILED. WE HAVE EXAMINED THE FA CTUAL POSITION IN THE PRESENT CASE AND FIND THAT THERE IS NO DISPUTE THAT THE TAXES ON THE 6 ADDITIONAL INCOME OFFERED AT THE TIME OF SEARCH HAV E BEEN DULY PAID BY THE ASSESSEE IN THE RETURN OF INCOME FILED AND IN T HIS VIEW OF THE MATTER THE RATIO OF THE JUDGMENT OF THE HONBLE PU NJAB & HARYANA HIGH COURT IN THE CASE OF SURENDER PAUL (SUPRA) IS INAPP LICABLE IN THE PRESENT CASE. 10. ACCORDINGLY WE DO NOT FIND ANY INFIRMITY OR ER ROR IN THE CONCLUSION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND THEREFORE AFFIRM HIS DECISION. RESULTANTLY THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IS CONFIRMED AND THE REVENUE FAILS IN ITS APPEAL. 9. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSE D. DECISION PRONOUNCED IN THE OPEN COURT ON THE 30 TH DAY OF NOVEMBER 2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G. S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEM BER PUNE DATED: 30 TH NOVEMBER 2011 B COPY TO:- 1) APPELLANT 2) RESPONDENT 3) THE CIT (A)-I NASHIK 4) CIT (CEN) NAGPUR 5) DR A BENCH ITAT PUNE. 6) GUARD FILE TRUE COPY BY ORDER SR. PS I.T.A.T. PUNE