The ITO, Ward-8(1),, Surat v. Dr.Bipinchandra Dahyabhai Patel, Surat

ITA 1284/AHD/2010 | 2003-2004
Pronouncement Date: 13-08-2010 | Result: Dismissed

Appeal Details

RSA Number 128420514 RSA 2010
Bench Ahmedabad
Appeal Number ITA 1284/AHD/2010
Duration Of Justice 3 month(s) 20 day(s)
Appellant The ITO, Ward-8(1),, Surat
Respondent Dr.Bipinchandra Dahyabhai Patel, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 13-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 13-08-2010
Assessment Year 2003-2004
Appeal Filed On 23-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH BEFORE SHRI G.D. AGARWAL VICE-PRESIDENT (AZ) AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.1284/AHD/2010 [ASSTT.YEAR: 2003-04] INCOME TAX OFFICER -VS- DR. BIPINCHANDRA DAHYABHA I WARD-8(1) ROOM NO.415 PATEL NANI VED GAM SURA T AAYKAR BHVAN MAJAURA GATE PAN NO.ADGPP4058G SURAT (APPELLANT) (RESPONDENT) REVENUE BY :SHRI K. MADHUSUDAN SR-DR ASSESSEE BY: NONE O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-V SURAT IN APPEAL NO.CAS-V/74 /08-09 DATED 28-01-2010. THE ASSESSMENT WAS FRAMED BY ITO WARD-8(1) SURAT U/S. 144 OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HI S ORDER DATED 28-11-2008 FOR ASSESSMENT YEAR 2003-04. THE PENALTY UNDER DISPUTE WAS LEVIED BY ITO WARD-8(1) SURAT U/S.271(1) OF THE ACT VIDE HIS ORDER DATED 2 8-05-2009. 2. THE ONLY ISSUE IN THIS APPEAL OF THE REVENUE IS AGAINST THE ORDER OF CIT(A) IN DELETING THE LEVY OF PENALTY AMOUNT OF RS.4 05 873/ - U/S.271(1)(C) MADE BY ASSESSING OFFICER. FOR THIS REVENUE HAS RAISED THE FOLLOWING GROUND:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.4 05 873/- IGNORING THE FACT THAT THE ADDITION MADE IN THIS CASE HAS BEEN ACCEPTED BY THE ASSESSEE BY NOT PREFERRING APPEAL. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. IT IS AN ADMITTED POSITI ON THAT THE PENALTY U/S.271(1) OF ITA NO.1284/AHD/2010 A.Y. 2003-04 ITO WD-8(1) SRT V. DR. BIPINCHANDRA D PATEL PAGE 2 THE ACT WAS LEVIED ON PROTECTIVE ADDITION. THE BRIE F FACTS ARE THAT THE ASSESSEE FILED RETURN OF INCOME SHOWING TOTAL INCOME OF RS.53 640/ - CONSEQUENT UPON A SURVEY CONDUCTED AT THE OFFICE PREMISES OF ONE SHRI PANKAJ DANAWALA CA BY THE INVESTIGATION WING SURAT ON 11-03-2005 AND BASED O N MATERIAL AVAILABLE IN THAT SURVEY THE CASE OF THE ASSESSEE WAS REOPENED. IN TH E ASSESSMENT ADDITION OF RS.7 94 496/- WAS MADE WHICH INCLUDES CERTAIN INVES TMENTS AND LOWER HOUSEHOLD WITHDRAWALS. THE PENALTY PROCEEDINGS WERE INITIATED . THE PENALTY WAS LEVIED BY THE ASSESSING OFFICER. AGGRIEVED ASSESSEE PREFERRED AP PEAL BEFORE CIT(A). THE ASSESSEE IN HIS APPEAL MEMO HAS MENTIONED THAT THE IMPUGNED PENALTY IS BAD IN LAW AS IN THE CASE OF THE ASSESSEE THE PROTECTIVE ADDIT IONS WERE MADE AND HENCE NO PENALTY CAN BE LEVIED IN RESPECT OF PROTECTIVE ADDI TION. THE CIT(A) DELETED THE PENALTY BY GIVING FOLLOWING FINDING IN PARA-4 OF HIS APPELLATE ORDER:- 4. I HAVE GONE THROUGH THE FINDINGS OF THE ASSESSI NG OFFICER AND THE SUBMISSION OF THE APPELLANT MADE IN THE APPEAL MEMO . IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE AMOUNT REPRESENTING ADDIT IONS OF RS.7 94 496 HAS BEEN ADDED ON PROTECTIVE BASIS SIN THE HANDS OF THE ASSESSEE IS NOT DISPUTED. SINCE THE ADDITION IS PROTECTIVE IN NATURE IT CANN OT BE SAID THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS OF SUCH INCOME. THE HONOURABLE CALCUTTA HIGH COURT IN THE CASE OF SUPER STEEL SALES REPORTED IN 178 ITR 451 HAS HELD THAT NO PENA LTY CAN BE IMPOSED DON AN ADDITION MADE ON PROTECTIVE BASIS. AGGRIEVED REVENUE CAME IN APPEAL BEFORE US. 4. WE FIND THAT IT IS AN ADMITTED FACT THAT THIS AD DITION IS PROTECTIVE ADDITION AND PENALTY LEVIED U/S.271(1) OF THE ACT IS ON PROTECT IVE ADDITIONS. WE FIND THAT THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT V. SUPER STEEL (SALES) CO. (1989) 178 ITR 451 (CAL) HAS CATEGORICALLY HELD THAT THERE CAN BE PROTECTIVE ASSESSMENT BUT PENALTY U/S.271(1) CAN BE ONLY ON WHOM SUBSTANTIVE ASSESSMENT IS MADE. DISPUTE AS TO WHETHER INCOME ALLEGEDLY CONCEALED ASSESSABLE IN THE HANDS OF A OR B UNLESS AND UNTIL THE SAME IS DETERMINED CHARGE OF CONCEAL MENT CANNOT BE MADE AGAINST PERSON IN WHOSE HANDS INCOME IS ADDED ON PROTECTIVE BASIS. THE HONBLE HIGH COURT CONSIDERED THE FACTS THAT IN THIS CASE THE ASSESSME NT WAS MADE ON PROTECTIVE BASIS AND FOR THE LAST SEVERAL YEARS THE INCOME HAD ACTU ALLY BEEN ASSESSED IN THE HANDS OF ONE MAHABIR PRASAD MODI AND NOT IN THE HANDS OF THE ASSESSEE. THERE CAN BE A PROTECTIVE ASSESSMENT BUT THERE CANNOT BE ANY PROTE CTIVE PENALTY. BEFORE ANY PENALTY CAN BE LEVIED THE INCOME HAS TO BE ASSESSE D AS CONCEALED INCOME IN THE ITA NO.1284/AHD/2010 A.Y. 2003-04 ITO WD-8(1) SRT V. DR. BIPINCHANDRA D PATEL PAGE 3 ASSESSMENT OF AN ASSESSEE. THEREAFTER IN PENALTY P ROCEEDINGS THE COMPETENT AUTHORITY HAS TO PROBE INTO AND DECIDE WHETHER THER E HAS BEEN ANY CONCEALMENT OF INCOME. BUT WHERE THERE IS A DISPUTE AS TO WHETHER SUCH INCOME ALLEGEDLY CONCEALED WOULD BE ASSESSED IN THE HANDS OF X OR Y UNLESS TH E DETERMINATION IS MADE BY THE INCOME-TAX OFFICER NO CHARGE OF CONCEALMENT CAN BE MADE AGAINST THE PERSONS IN WHOSE HANDS THE INCOME IS ADDED ON PROTECTIVE BASIS . HE IS LIABLE ONLY IF IT IS HIS INCOME WHICH HAS BEEN CONCEALED. IN OTHER WORDS ON LY A PERSON UPON WHOM A SUBSTANTIVE ASSESSMENT IS MADE WOULD BE LIABLE FOR PENALTY PROVIDED THE CONDITIONS PRECEDENT FOR IMPOSITION OF THE PENALTY IS SATISFIE D. IT HAS BEEN STATED BY COUNSEL FOR THE REVENUE THAT THE DEPARTMENT DID NOT DISPUTE THE ASSESSMENT MADE IN THE HANDS OF THE SAID MAHABIR PROSAD MODI. IN EITHER VIEW OF THE MATTER NO PENALTY CAN BE LEVIED IN THIS CASE. THE HONBLE HIGH COURT IN THE CASE OF SUPER STEEL (SALES) CO. (SUPRA) RELIED ON BY THE ASSESSEE CLEARLY LAID DO WN THE PRINCIPLE THAT IN CASE OF PROTECTIVE ADDITION PENALTY U/S.271(1) OF THE ACT CANNOT BE LEVIED. RESPECTFULLY FOLLOWING HONBLE CALCUTTA HIGH COURT IN THE CASE OF SUPER STEEL (SALES) CO. (SUPRA) WE CONFIRM THE ORDER OF CIT(A) DELETING T HE PENALTY LEVIED BY ASSESSING OFFICER U/S.271(1)(C) OF THE ACT. 5. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS DAY OF 13 TH AUG 2010 SD/- SD/- ( G.D.AGARWAL ) ( MAHAVIR SINGH ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD DATED : 13/08/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-V SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD