The ITO, v. Shri Kailash Chandra Kankoria,

ITA 254/IND/2006 | misc
Pronouncement Date: 05-01-2010 | Result: Dismissed

Appeal Details

RSA Number 25422714 RSA 2006
Bench Indore
Appeal Number ITA 254/IND/2006
Duration Of Justice 3 year(s) 8 month(s) 23 day(s)
Appellant The ITO,
Respondent Shri Kailash Chandra Kankoria,
Appeal Type Income Tax Appeal
Pronouncement Date 05-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 05-01-2010
Date Of Final Hearing 05-01-2010
Next Hearing Date 05-01-2010
Assessment Year misc
Appeal Filed On 12-04-2006
Judgment Text
PAGE 1 OF 6 I.T.A.NO. 254/IND/2007 SHRI KAILASH CHANDRA KANKARIA IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : N.A. I.T.A.NO. 254/IND/2006 A.Y. : 2002-03 INCOME-TAX OFFICER SHRI KAILASH CHANDRA KANKARIA DHAR VS PROP. M/S. ASHISH KUMAR SUNIL KUMAR MANDI PRANGAN DHAR APPELLANT RESPONDENT APPELLANT BY : SMT.APARNA KARAN SR. DR RESPONDENT BY : SHRI MANOJ GUPTA C.A. DATE OF HEARING : 05.01.2010 O R D E R PER V.K. GUPTA A.M. THIS APPEAL FILED BY THE REVENUE ARISES OUT OF ORDE R OF THE LD. CIT(A)-I INDORE DATED 16.01.2006 FOR THE ASSESSM ENT YEAR 2002-03. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. IN THIS APPEAL THE REVENUE IS AGGRIEVED BY THE DE CISION OF THE LD. CIT(A) CANCELLING THE PENALTY OF RS. 7 69 769/- LEVIED BY THE ASSESSING OFFICER U/S 271(`1)(C) OF THE INCOME-TAX ACT 1961. PAGE 2 OF 6 I.T.A.NO. 254/IND/2007 SHRI KAILASH CHANDRA KANKARIA 4. THE FACTS IN BRIEF ARE THAT THE SURVEY U/S 133A W AS CONDUCTED ON 23.9.2004 AT THE BUSINESS PREMISES OF THE ASSES SEE WHEREIN HE SURRENDERED AN ADDITIONAL INCOME OF RS. 25 LAKHS FO R ASSESSMENT YEAR 2002-03 THE IMPUGNED ASSESSMENT YEAR. THE ASSESSEE FILED RETURN IN RESPONSE TO NOTICE U/S 148 DISCLOSING SUCH ADDITION AL INCOME THEREIN WHICH WAS ACCEPTED BY THE DEPARTMENT. THE PENALTY P ROCEEDINGS U/S 271(1)(C) WERE INITIATED WHEREIN IT WAS SUBMITTED THAT THE ASSESSEE SURRENDERED THE ADDITIONAL INCOME VOLUNTARILY AT TH E TIME OF SURVEY. HENCE PROVISIONS OF EXPLANATION 4 TO SECTION 271(1 )(C) WERE NOT ATTRACTED. IT WAS ALSO CONTENDED THAT SUCH ADDITION AL INCOME HAD BEEN SURRENDERED WITH THE TACIT UNDERSTANDING THAT PENAL TY U/S 271(1)(C) WOULD NOT BE LEVIED. THE A.O. HOWEVER HELD THAT IN THE SURVEY THE ASSESSEE HAD NO OTHER OPTION BUT TO DISCLOSE SOME ADDITIONAL INC OME BASED ON DOCUMENTS HENCE SUCH SURRENDER WAS NOT VOLUNTARY. HE FURTHER REJECTED THE CLAIM OF THE ASSESSEE THAT IN THE RETURN OF INC OME SO FILED SUCH INCOME HAD BEEN DECLARED VOLUNTARILY. THE A.O. ALSO HELD T HAT THE SUBSTANTIVE PROVISIONS OF LAW RELATING TO PENALTY FOR CONCEALME NT OF INCOME WOULD BE THOSE IN FORCE ON THE DATE OF ORIGINAL RETURN WHER EIN THE INCOME HAD BEEN CONCEALED AND THE FILING OF SUBSEQUENT RETURN U/S 1 48 WOULD NOT ALTER THE POSITION. FOR THIS PROPOSITION THE A.O. RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ONKAR SARAN & SONS AS PAGE 3 OF 6 I.T.A.NO. 254/IND/2007 SHRI KAILASH CHANDRA KANKARIA REPORTED IN 194 ITR 1. AGGRIEVED BY THIS THE ASSES SEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A) WHEREIN SUBMISSI ONS MADE BEFORE THE A.O. WERE REITERATED. IN ADDITION TO SUCH SUBMISSIO NS IT WAS ALSO CONTENDED THAT THERE COULD BE NUMEROUS REASONS FOR MAKING SURRENDER OF INCOME BUT THAT WOULD NOT NECESSARILY MEAN THAT TH E ASSESSEE HAD CONCEALED THE INCOME OR HAD FURNISHED INACCURATE PA RTICULARS OF HIS INCOME. THE ASSESSEE ALSO RELIED ON VARIOUS JUDICIA L DECISIONS IN SUPPORT OF ITS VARIOUS CONTENTIONS. THE LD. CIT(A) HELD THA T GENERALLY IN THE COURSE OF SURVEY IT WAS THE PRACTICE OF THE DEPART MENT TO AGREE FOR NON- LEVY OF PENALTY IF THE ASSESSEE MADE ANY SURRENDER IN THE COURSE OF SURVEY HENCE THERE WAS AS SUCH NO SCOPE FOR LEVY OF PENAL TY IN SUCH KIND OF SITUATION. FOR THIS VIEW HE RELIED ON VARIOUS JUDI CIAL DECISIONS. HE ALSO HELD THAT IF THE ASSESSEE MADE SURRENDER TO BUY PEA CE OF MIND AND AVOID LITIGATION THE PENALTY FOR CONCEALMENT COULD NOT B E LEVIED. IN THIS REGARD ALSO HE RELIED ON VARIOUS DECISIONS. HE FURTHER PL ACED RELIANCE ON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. SHYAMLAL M.SONI AS REPORTED IN 276 ITR 156 FOR TH E PROPOSITION THAT IF IN THE REVISED RETURNS THE ASSESSEE HAD DISCLOSED THE INCOME PERTAINING TO EARLIER YEARS AS A CONSEQUENCE OF SEARCH THEN NO PENALTY COULD BE LEVIED BECAUSE THE ASSESSEE HAD FILED REVISED RETURN DISCL OSING HIS ADDITIONAL INCOME WHICH HAD BEEN ACCEPTED BY THE DEPARTMENT HENCE NO PAGE 4 OF 6 I.T.A.NO. 254/IND/2007 SHRI KAILASH CHANDRA KANKARIA CONCEALMENT OF INCOME. THE LD. CIT(A) ALSO HELD THA T UNLESS THERE WAS EVIDENCE SHOWING THAT THE ASSESSEE HAD CONSCIOUSLY CONCEALED THE PARTICULARS OF HIS INCOME MERE SURRENDER OF INCOME WOULD NOT BY ITSELF JUSTIFY IMPOSITION OF PENALTY AND IN THE PRESENT CA SE THE ELEMENT OF MENS REA WAS MISSING. HENCE FOR THIS REASON ALSO THE L EVY OF PENALTY WAS NOT JUSTIFIED. AGGRIEVED BY THIS THE REVENUE IS IN APP EAL BEFORE US. 5. THE LD. DEPARTMENTAL REPRESENTATIVE NARRATED THE FA CTS AND CONTENDED THAT IN VIEW OF THE LATEST DECISION OF HO N'BLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILES NOW IT WAS SETTLED THAT MENS REA WAS NOT AN ESSENTIAL CONDITION TO LEVY THE PENALTY U/S 271( 1)(C) OF THE ACT. HENCE THESE OBSERVATIONS OF THE LD. CIT(A) WERE NOW NO MO RE VALID. SHE FURTHER PLACED STRONG RELIANCE ON THE ORDER OF THE A.O. 6. THE LEARNED COUNSEL ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND CONTENDED THAT DECISIONS RELIED ON BY THE ASSESSING OFFICER WERE D ISTINGUISHABLE ON FACTS AND CONTENDED THAT THE DECISION OF THE HON'BLE SUPR EME COURT IN THE CASE OF ONKAR SARAN & SONS WAS IN REGARD TO THE PROVISIO NS OF LAW WHICH WERE TO BE APPLICABLE IN A CASE WHERE RETURNS FILE D IN RESPONSE TO NOTICE U/S 148 INVOLVED AN ELEMENT OF CONCEALMENT. HOWEVER IN THE PRESENT CASE THERE WAS NO SUCH ELEMENT INVOLVED IN THE RET URN FILED IN RESPONSE TO PAGE 5 OF 6 I.T.A.NO. 254/IND/2007 SHRI KAILASH CHANDRA KANKARIA NOTICE U/S 148. HE FURTHER PLACED STRONG RELIANCE O N THE ORDER OF THE LD. CIT(A). 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 8. IT IS NOTED THAT ADDITIONAL INCOME HAS BEEN OFFERED BY THE ASSESSEE IN THE COURSE OF SURVEY TO BUY PEACE AND T O AVOID PROTRACTED LITIGATION. IT IS ALSO NOTED THAT THE ADDITIONAL IN COME HAS BEEN DULY DISCLOSED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 ISSUED BY THE DEPARTMENT. HENCE ON THE BASIS OF SUCH RETURN IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE DECISION OF THE HON'BLE JURISDIC TIONAL HIGH COURT IN THE CASE OF SHYAMLAL M. SONI (SUPRA) SQUARELY CONCL UDES THE DISPUTE IN FAVOUR OF THE ASSESSEE. ACCORDINGLY WE HOLD THAT T HE ORDER OF THE LD. CIT(A) IS CORRECT IN LAW. HENCE WE DISMISS ALL THE GROUNDS OF THE REVENUE. 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. PAGE 6 OF 6 I.T.A.NO. 254/IND/2007 SHRI KAILASH CHANDRA KANKARIA THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 5 TH JANUARY 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 5 TH JANUARY 2010. CPU* 78D121