The ACIT, Central Circle-2,, Baroda v. Dr. Yashesh Dalal, Baroda

ITA 2275/AHD/2009 | 2004-2005
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 227520514 RSA 2009
Assessee PAN ACRPP4051F
Bench Ahmedabad
Appeal Number ITA 2275/AHD/2009
Duration Of Justice 2 year(s) 8 month(s) 7 day(s)
Appellant The ACIT, Central Circle-2,, Baroda
Respondent Dr. Yashesh Dalal, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-03-2012
Date Of Final Hearing 13-03-2012
Next Hearing Date 13-03-2012
Assessment Year 2004-2005
Appeal Filed On 23-07-2009
Judgment Text
ITA NO.2275/AHD/2009 ASSESSMENT YEAR 2004-05.. 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI A.M.) I.T.A. NO. 2275/AHD/2009 (ASSESSMENT YEAR: 200 4 - 05 ) ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2 AAYAKAR BHAVAN NR. RACECOURSE CIRCLE BARODA. (APPELLANT) VS. DR. YASHESH DALAL SHRUSHTIL HOSPITAL NR. AKOTA GARDEN BARODA. (RESPONDENT) PAN: ACRPP 4051F APPELLANT BY : SHRI RAHULKUMAR SR. D.R. RESPONDENT BY : SHRI MUKUN BAKSHI. ( )/ ORDER DATE OF HEARING : 13-3-2012 DATE OF PRONOUNCEMENT : 30-3-2012 PER: SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF CIT (A)- IV BARODA DATED 22-1-2009 FOR THE ASSESSMENT YEAR 2004-05. IN APPEAL REVENUE HAS RAISED FOLLOWING GROUNDS:- 1. THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE PENALTY OF RS.3 80 785/-. ITA NO.2275/AHD/2009 ASSESSMENT YEAR 2004-05.. 2 2. THE CIT (A) HAS ERRED IN LAW AND IN FACTS IN DE LETING THE PENALTY WITHOUT APPRECIATING THAT THE EXPLANATION 5 TO SECTION 271(1) IS APPLICABLE TO THE ASSESSMENT YEAR IN WHIC H THE SEARCH WAS CARRIED AND RETURN WAS NOT FILED. 2. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A PRACTICING DOCTOR RUNNING A HOSPITAL AT AKOTA BARODA. A SEARC H U/S. 132 OF THE ACT WAS CONDUCTED ON 24-11-2005 AT HIS PLACE. IN TH E COURSE OF SEARCH THE ASSESSEE MADE A DISCLOSURE OF AN ADDITI ONAL INCOME OF RS.1 CRORE IN THE STATEMENT RECORDED U/S. 132(4) ON 24-11-2005. THE ASSESSEE FURTHER STATED THAT AS PER HIS UNDERSTANDI NG ABOUT 60% I.E. ABOUT RS.60 LACS WAS THE NET UNDISCLOSED INCOME OF F.Y. 2005-06 AND REMAINING 40% I.E.RS.40 LACS WAS FOR A.Y. 2004-05. THE ASSESSEE FILED RETURNS IN RESPONSE TO NOTICE U/S.153A ON 1-5-2006 DECLARING TOTAL INCOME OF RS.23 52 480/- AS AGAINST TOTAL INCOME OF RS.11 99 600/- DECLARED U/S.139(1). HE ALSO PAID THE TAXES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED AN AFFIDA VIT DATED 27-11- 2007 WHEREIN HE STATED AS UNDER:- I HAVE DISCLOSED FOLLOWING AMOUNT: FINANCIAL YEAR NATURE OF DISCLOSURE. AMOUNT DISCLOSED IN RS. 1999-2000 OTHER INCOME. 68 700 2003-04 PROFESSIONAL INCOME (INCLUDING ON MONEY GIVEN TO JRH DEVELOPERS BRD. (RS.900.000) 11 50 000 2004-05 PROFESSIONAL INCOME [INCLUDING NSC OF RS.50 000] 20 00 000 2005-06 PROFESSIONAL INCOME [INCLUDING GOLD BAR PURCHASED THEREFROM] 60 00 000 TOTAL. 98 18 700 ITA NO.2275/AHD/2009 ASSESSMENT YEAR 2004-05.. 3 I FURTHER DECLARE THAT DURING MY TESTIMONY IN SEARC H PROCEEDINGS I HAVE MADE AN ERROR IN ESTIMATING YEA R-WISE DISTRIBUTION OF MY TOTAL; UNDISCLOSED INCOME AS RS. 40/-LACS IN THE FINANCIAL YEAR 2004-05 AND RS.60/- LACS IN THE FINANCIAL YEAR 2005-06 DUE TO PRESSURE TENSE FRAME OF MIND AND BA SED ONLY ON A ROUGH ESTIMATED AND LIMITED UNDERSTANDING. ON DET AILED STUDY OF MY PAPERS WHILE FILING REVISED RETURNS IN TERMS OF PROVISIONS OF SECTION153A(A) THE ACTUAL YEAR WISE DISTRIBUTIO N OF UNDISCLOSED INCOME EARNED FROM PROFESSIONAL PRACTI CE IS AS PER CHART MENTIONED ABOVE AND HAVE PAID THE APPROPRIATE TAX ON THE SAME ALONG WITH STATUTORY INTEREST. 3. THE ORDER U/S. 153A WAS PASSED ON 27-12-2007 AND THE INCOME WAS ASSESSED AT RS.23 52 480/-.AS THE INCOME DECLAR ED IN THE RETURN U/S. 153A WAS HIGHER BY RS.11 52 880/- AS COMPARED TO THE INCOME DECLARED IN THE RETURN U/S. 139(1) THE A.O. CONCL UDED IT TO BE AN EFFORT ON THE PART OF THE ASSESSEE OF CONCEALING OF INCOME AND ACCORDINGLY PENALTY PROCEEDINGS WERE INITIATED AGAINST THE ASSE SSEE. 4. IN THE PENALTY PROCEEDINGS BEFORE THE A.O. THE ASSESSEE CONTENDED THAT ITS CASE WAS COVERED BY THE IMMUNITY PROVIDED IN EXPLANATION-5 TO SEC. 271(1)(C) AS THE ASSESSEE HAD DECLARED UNDISCLOSED INCOME IN THE STATEMENT RECORDED U/S. 1 32(4) DURING THE COURSE OF SEARCH AND TAXES ALONG WITH INTEREST WERE PAID THEREON IN THE RETURN FILED U/S. 153A AND ACCORDINGLY REQUESTE D TO A.O. TO DROP THE PENALTY PROCEEDINGS. THE A.O. DID NOT AGREE WI TH THE CONTENTION OF THE ASSESSEE. ACCORDING TO THE A.O. THE ASSESSE E CAME FORWARD TO DISCLOSE INCOME ONLY BECAUSE OF THE SEARCH ACTION T AKEN BY THE REVENUE DEPARTMENT. ACCORDING TO A.O. AS THE ASSESS EE HAD FAILED TO ITA NO.2275/AHD/2009 ASSESSMENT YEAR 2004-05.. 4 DISCHARGE HIS ONUS WITHIN THE MEANING OF EXPLANATIO N 1 TO SECTION 271(1)(C) PENALTY OF RS.3 80 785/- (BEING 100% OF T AX SOUGHT TO BE EVADED ) WAS LEVIED. 5. AGGRIEVED BY THE ORDER OF A.O. THE ASSESSEE PRE FERRED APPEAL BEFORE THE CIT (A). CIT (A) DELETED THE PENALTY VIE ORDER DATED 22-1- 2009 HOLDING AS UNDER:- 2.2 . THE ADDITIONAL INCOME OFFERED BY ASSESSEE U/S.153A AFTER THE SEARCH HAVING BEEN ACCEPTED IN ITS ENTIRE TY WITHOUT DETAILED DISCUSSION OF THE SEIZED DOCUMENTS. AN AS SESSEES STATUTORY OBLIGATION U/S.139(1) IS TO GIVE CORRECT AND COMPLETE INFORMATION WITH THE RETURN OF INCOME COMPILED WIT H THEN THERE IS NO CONTRAVENTION WHICH CAN ATTRACT PENALTY. IN O THER WORDS THE ASSESSEE CONCEALED THE INCOME COMES TO AN END W HEN THE CORRESPONDING AMOUNT WAS OFFERED FOR TAXATION WHEN ALL THE NECESSARY PARTICULARS ARE DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED U/S. 153A. IN A CASE WHERE ALL THE NECESSARY PARTICULARS ARE DECLARED BY THE ASSESSEE IN THE RET URN OF INCOME IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED H IS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPE CT OF THE UNDISCLOSED INCOME. THE ASSESSING OFFICER HAS NOT D ISCHARGED THE BURDEN TO PROVE THE CONCEALMENT OF INCOME WHIC H WAS LEVIED PURELY ON THE BASIS OF VOLUNTARY SURRENDER M ADE BY THE ASSESSEE IN GOOD FAITH. THEREFORE THE ASSESSEE HAD MADE DISCLOSURE AFTER THE SEARCH CANNOT BE TREATED AS CO NCEALMENT. IT CANNOT BE SAID TO BE THE AMOUNT OF TAX SOUGHT TO BE EVADED BECAUSE THE UNDISCLOSED INCOME WAS DECLARED DURING THE COURSE OF SEARCH ONLY. FURTHER THE DISCLOSURE MADE BY DR. YASHESH VINODCHANDRA DALAL U/S.132(4) OF THE ACT A ND IS THEREFORE ENTITLED TO THE IMMUNITY TO LEVY OF PENA LTY UNDER EXPLANATION-5 ATTACHED TO SECTION 271(1)(C ) SINCE TAXES ALONG WITH INTEREST WERE PAID ON THE DISCLOSURE MADE BY T HE ASSESSEE. KEEPING IN VIEW THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE AS WELL AS THE CASES RELIED UPON BY LD. COUNSEL (SU PRA) THE ITA NO.2275/AHD/2009 ASSESSMENT YEAR 2004-05.. 5 PENALTY IMPOSED U/S. 271(1) (C) IS HEREBY DELETED. HENCE THE APPEAL IS ALLOWED. 6. AGGRIEVED BY THE ORDER OF CIT (A) THE REVENUE I S IN APPEAL BEFORE US. 7. THE LD. DR CONTENDED THAT THE CIT (A) HAS ERRED IN DELETING THE PENALTY. THE LD. DR ARGUED THAT THE ASSESSEES CASE IS NOT COVERED BY EXPLANATION (1) TO SECTION 271(1)(C) BUT EXPLANATIO N (5) TO SECTION 271(1)(C) IS APPLICABLE. ACCORDING TO HIM THE ASSES SEE IS NOT ENTITLED TO IMMUNITY BY EXPLANATION 5 BECAUSE BENEFIT OF EXP LANATION 5 IS CONFINED TO THE RETURN FOR THE YEAR IN RESPECT OF W HICH THE PREVIOUS YEAR IS TO END OR EVEN THOUGH ENDED THE TIME FOR F ILING THE RETURN U/S. 139(1) IS YET TO EXPIRE. HE RELIED ON THE DECISION OF ACIT VS. KIRIT DAHYABHAI PATEL (2009) 121 ITD 159. THE HEAD NOTE R EADS AS UNDER:- BENEFIT OF EXPLANATION 5 IS CONFINED TO THE RETURN FOR THE YEAR IN RESPECT OF WHICH THE PREVIOUS YEAR IS YET TO END OR EVEN THOUGH ENDED THE TIME FOR FILING THE RETURN UNDER S. 139( 1) IS YET TO EXPIRE.. 8. HE ALSO RELIED ON THE DECISION OF AJIT B. ZOTA ( 2010) 40 SOT 543 (MUM.) WHEREIN IT WAS HELD AS UNDER:- WHEN COMPARED TO THE ORIGINAL RETURN ALREADY FILED AND THE RETURN FILED IN RESPONSE TO NOTICE UNDER S. 153A A SSESSEE HAD OFFERED AN ADDITIONAL INCOME OF RS.40 000/- AS SPEC ULATION PROFIT WITHOUT DISTURBING THE CAPITAL GAINS WORKING EXPL ANATION 1 TO S. 271(1)(C) CANNOT BE INVOKED AS THERE IS NO BONA FIDE EXPLANATION GIVEN WHY THIS INCOME WAS NOT DISCLOSED AT THE TIME ITA NO.2275/AHD/2009 ASSESSMENT YEAR 2004-05.. 6 OF FILING ORIGINAL RETURN NO IMMUNITY IS AVAILABL E TO THE ASSESSEE WHEN ADDITIONAL INCOME WAS DISCLOSED IN TH E RETURN UNDER S. 153A PENALTY UPHELD. 9. THE LD. AR ON THE OTHER HAND ARGUED THAT THE ASS ESSEES CASE FALLS UNDER EXPLANATION 1 AND NOT EXPLANATION 5. TH E CONTENTION OF THE LD. AR IS THAT THE DISCLOSURE OF ADDITIONAL INCOME OF RS.1 CRORE WAS BASED ON THE DISCLOSURE MADE BY THE ASSESSEE DURING THE COURSE OF SEARCH AND NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH. IT IS NOT THE CASE OF DETECTION OF UNDISCLO SED INCOME DURING THE SEARCH. FURTHER DURING THE COURSE OF ASSESSMENT THE ASSESSEE SUO-MOTO OFFERED THE INCOME BY MEANS OF AN AFFIDAV IT. IN THE ASSESSMENT FRAMED U/S. 153A R.W.S. 143(3) THE INCOM E HAS BEEN ASSESSED AT RS.23 52 480/- BEING THE INCOME DECLARE D AND AS SUCH THERE IS NO CHANGE IN THE INCOME THAT HAS BEEN ASSE SSED. THE LD. AR FURTHER STATED THAT THE DISCLOSURE WAS DONE VOLUNTA RILY AND NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING SEARCH NO PENALTY U/S. 271(1)(C) SHOULD BE LEVIED. HE RELIED ON VARIOUS DE CISIONS APART FROM FOLLOWING DECISIONS FOR THE PROPOSITION THAT NO PEN ALTY BE LEVIED. (1) ADDL. CIT VS. PREM CHAND GARG 119 ITD 97 (DEL) (TM) (2) DCIT VS. SUSHMA DEVI AGARWAL & ORS. ITA NO.876 /KOL/2008 DATED 23-6-2011. (3) BHAIRAV LAL VERMA VS. UOI (1998) 230 ITR 855 ( ALL) (FB). 10. WE HAVE HEARD THE PARTIES PERUSED THE MATERIAL ON RECORD AND CASE LAWS CITED BY BOTH THE PARTIES. ITA NO.2275/AHD/2009 ASSESSMENT YEAR 2004-05.. 7 11. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAD DECLARED TOTAL INCOME OF RS.23 52 480/- IN RETURN U/S. 153A AND TH E TAXES THEREON WERE PAID BY THE ASSESSEE. THE INCOME THAT WAS DECL ARED WAS NOT BASED ON ANY INCRIMINATING MATERIAL SEIZED DURING T HE COURSE OF SEARCH. THE DISCLOSURE WAS DONE VOLUNTARILY AND THE INCOME WAS ALSO ASSESSED ON THE BASIS OF RETURN FILED BY THE ASSESS EE. 12. IN THE CASE OF BHAIRAV LAL VERMA VS. UOI (SUPRA ) THE HONBLE HIGH COURT HAS HELD THAT IT CANNOT BE HELD AS A PR INCIPLE OF LAW THAT THE DISCLOSURE OF INCOME MADE AFTER THE SEARCH/RAID CANNOT BE VOLUNTARY. IT IS A QUESTION WHICH HAS TO BE DECIDED BY THE DEPARTMENT IN EACH CASE ON THE BASIS OF THE MATERIAL ON RECORD . 13. IT IS AN UNDISPUTED FACT THAT THE ASSESSMENT WA S MADE BY THE A.O. ON THE BASIS OF ADMISSION OF THE ASSESSEE AND NOT ON BASIS OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH. FUR THER THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE U/S. 153A AFTER THE SEARCH HAS BEEN ACCEPTED IN ITS ENTIRETY WITHOUT DETAILED DISCUSSIO N OF THE SEIZED DOCUMENTS. IN A CASE WHERE ALL THE NECESSARY PARTIC ULARS ARE DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED HIS INCOME OR FURNISHED INAC CURATE PARTICULARS OF INCOME IN RESPECT OF THE UNDISCLOSED INCOME. THEREFORE THE CASE UNDER CONSIDERATION IS NOT THE CASE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OR CO NCEALED ANY PARTICULARS OF INCOME IN THE RETURN FILED U/S. 153A OF THE ACT. THE ASSESSING OFFICER HAS NOT DISCHARGED THE BURDEN TO PROVE THE CONCEALMENT OF INCOME WHICH WAS LEVIED PURELY ON T HE BASIS OF ITA NO.2275/AHD/2009 ASSESSMENT YEAR 2004-05.. 8 VOLUNTARY SURRENDER MADE BY THE ASSESSEE. THEREFORE THE ASSESSEE MADE DISCLOSURE AFTER SEARCH CANNOT BE TREATED AS C ONCEALMENT. WHEN THERE IS NO FINDING OF CONCEALMENT IN RESPEC T OF RETURN FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S. 153A WE FI ND THAT PENALTY U/S. 271(1)(C) CANNOT BE LEVIED. WE THEREFORE CANCEL TH E PENALTY OF RS.3 80 785/- LEVIED U/S. 271(1)(C). 14. IN THE RESULT APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN OPEN COURT ON 30 -3 - 2012. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-IV BARODA. 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHMEDABAD. ITA NO.2275/AHD/2009 ASSESSMENT YEAR 2004-05.. 9 1.DATE OF DICTATION 13 - 3 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 21 / 3 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 29 - 3 -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 30 - 3 -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 30 - 3 -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 3 0 - 3 -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..