The ACIT, 1(2), Bhopal v. M/s People's General Hospital (P) Ltd., Bhopal

ITA 257/IND/2011 | 2005-2006
Pronouncement Date: 06-02-2012 | Result: Dismissed

Appeal Details

RSA Number 25722714 RSA 2011
Assessee PAN AACCP0810R
Bench Indore
Appeal Number ITA 257/IND/2011
Duration Of Justice 4 month(s) 8 day(s)
Appellant The ACIT, 1(2), Bhopal
Respondent M/s People's General Hospital (P) Ltd., Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 06-02-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 06-02-2012
Assessment Year 2005-2006
Appeal Filed On 28-09-2011
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.257/IND/2011 A.Y. 2005-06 ACIT-1(2) BHOPAL . APPELLANT VS. M/S. PEOPLES GENERAL HOSPITAL (P) LTD. BHOPAL PAN AACCP 0810 R . RESPONDENT DATE OF HEARING : 30.1.2012 DATE OF PRONOUNCEMENT : 6.2.2012 APPELLANT BY SHRI KESHAVE SAXENA CIT/DR RESPONDENT BY SHRI ASHISH GOYAL ADVOCATE ORDER PER JOGINDER SINGH THE REVENUE IS AGGRIEVED BY THE ORDER DATED 29.7.2 011 OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I BHO PAL WHEREIN THE DELETION OF PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1) OF THE ACT HAS BEEN CHALLENGED ON THE GROUND THAT THE APPEAL I S PENDING BEFORE THE HON'BLE HIGH COURT. 2 2. DURING HEARING OF THIS APPEAL WE HAVE HEARD LEA RNED REPRESENTATIVES OF BOTH SIDES. THE CRUX OF ARGUMENT S ON BEHALF OF THE REVENUE IS THAT THE PENALTY WAS WRONGLY DELETED BY THE LD. FIRST APPELLATE AUTHORITY AS THERE IS A CONCEALMENT OF INCOME BY TH E ASSESSEE BY FURNISHING INACCURATE PARTICULARS. ON THE OTHER HAN D LD. COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT SINCE THE QUANTUM HAS BEEN DELETED BY THE TRIBUNAL THEREFORE NO PENALTY SURVIVES FOR WHICH RELIANCE WAS PLACED UPON THE DEC ISION IN THE CASE OF M/S. S.K. JAIN (ITA NO.375 TO 378/IND/2010 ORDER D ATED 2.6.2011). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. IN VIEW OF THE CONTENTIONS RAISED BY THE LD. RESPECTIVE COUNSEL W E ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE ORDER DATED 2 .6.2011 (SUPRA): - THIS BUNCH OF FOUR APPEALS IS BY THE REVENUE FOR THE ABOVE ASSESSMENT YEARS AGAINST THE DIFFERENT ORDERS DATED 29.3.2010 WHEREIN DELETION OF PENALTY U/S 271(1)(C) HAS BEEN CHALLENGED. AT THE OUTSET THE LD. COUNSEL FOR ASSESSEES CONTEN DED THAT THE TRIBUNAL WHILE DECIDING THE QUANTUM APPEALS VIDE OR DER IN ITA NO.210/IND/2007 & ITA NO.1/IND/2008 ANNULLED THE ASSESSMENTS/DECIDED THE ISSUE IN FAVOUR OF THE ASSE SSEE. IT WAS FURTHER CONTENDED THAT SINCE THE QUANTUM APPEALS HA VE BEEN DECIDED IN FAVOUR OF THE ASSESSEES THEREFORE NO P ENALTY SURVIVES. THIS FACTUAL MATRIX WAS CONSENTED TO BE C ORRECT BY THE LD. SR. DR. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. BRIEF FACTS ARE THAT TH E ASSESSEE FIRM WAS IN THE BUSINESS OF CONTRACTOR AND WAS DERIVING INCOME FROM IRRIGATION CONTRACTS. A SEARCH AND SEIZURE OPERATIO N WAS CARRIED 3 OUT AT THE RESIDENTIAL PREMISES OF THE PARTNER OF T HE FIRM AND SURVEY U/S 133A OF THE ACT WAS CARRIED OUT AT THE B USINESS PREMISES OF THE ASSESSEE FIRM. CERTAIN DOCUMENTS B ELONGING TO THE FIRM WERE ALLEGEDLY SEIZED FROM THE RESIDENCE OF THE PARTNER THEREFORE NOTICE U/S 153C R.W.S. 153A WAS ISSUED TO WHICH THE ASSESSEE FILED ITS RETURN ON 8.7.2005 DEC LARING INCOME OF RS.28 73 200/- AS WAS ORIGINALLY SHOWN IN THE RE TURNS FILED U/S 139 OF THE ACT FOR AY 1999-00. THE ASSESSMENT WAS C OMPLETED ON 29.12.2006 U/S 153A R.W.S. 143(3) DETERMINING TH E TAXABLE INCOME AT RS.92 39 390/- MAKING THE ADDITION OF RS. 18 27 965/- ON ACCOUNT OF SUPPRESSED NET PROFIT RS.44 10 314/- ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITORS RS.1 50 000/- ON A CCOUNT OF DISALLOWANCE OF SALARY TO PARTNERS AND RS.77 915/- ON ACCOUNT OF INCOME FROM NETTING ON HIRE OF PLANT AND MACHINERY (TOTAL ADDITION RS.64 66 194/-). THE ASSESSING OFFICER INI TIATED PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT WHICH WAS IN VIEW OF THE ORDER OF THE TRIBUNAL DELETED BY THE LD. CIT(A) AN D IS UNDER CHALLENGE BEFORE THE TRIBUNAL BY THE REVENUE. THE T RIBUNAL WHILE ANNULLING THE QUANTUM APPEALS OBSERVED AS UND ER: 22. HAVING STATED SO WHEN WE INDEPENDENTLY LOOK A T THE PROVISIONS OF SECTION 153C IT BECOMES APPARENTLY CLE AR THESE PROVISIONS ARE ATTRACTED ONLY IN A SITUATION WHERE SOME ASSETS OR MATERIAL OR BOOKS OF ACCOUNTS OR OTHER THINGS ARE FOUND WHICH BELONG TO OTHER PERSON AND ONLY IN THAT SITUATION TH E PROCEEDINGS UNDER SECTION 153A CAN BE INITIATED AGAIN ST SUCH PERSON. THUS IN SECTION 153C EXISTENCE OF SOME MATE RIAL OR DOCUMENTS OR THINGS OR ASSETS IS A PRE-REQUISITE HENCE IF THE INTERPRETATION OF PROVISIONS OF SECTION 153A AS MADE BY US HEREIN BEFORE IS IGNORED EVEN THEN IN OUR OPINION PROCEEDI NGS U/S 153C CAN BE INITIATED ONLY IN RESPECT OF SUCH YEAR(S) IN RESPECT OF WHICH THERE IS SOME MATERIAL AND TOTAL INCOME OF SUCH YEAR(S) WOULD BE COMPUTED BY APPLYING THE PROVISIONS OF SECT ION 153A IN THE MANNER AS OUTLINED BY US IN PARAGRAPH 22 HEREINBEFO RE. THE OTHER REQUIREMENT OF SECTION 153C IS REGARDING THE SATIS FACTION TO BE RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON WHICH AS STATED EARLIER EXISTS IN THE PRESENT CASE HENCE NO FAULT CAN BE ATTRIBUTED ON THE PART OF THE ASSESSING OFFICER IN THIS REGARD. 4 23. IN VIEW OF ABOVE DISCUSSION WE ARE OF THE VIEW THAT SINCE THE MATERIAL PERTAINS ONLY TO THE ASSESSMENT YEARS 2004-05 AND 2005-06 ONLY THOSE YEARS ASSESSMENTS COULD BE REOPE NED UNDER SECTION 153C OF THE ACT. HENCE WE QUASH THE ASSESS MENT PROCEEDINGS FOR AYRS. 1999-00 TO 2003-04. CONSEQUENTLY ASSESSMENT OF SUCH YEARS ARE DECLARED NULL AND VOID. T HUS ADDITIONAL GROUNDS NO.1 AND 3 ARE ALLOWED. 3. IN VIEW OF THE ABOVE WHEN THE BASIS ON WHICH THE PENALTY WAS LEVIED IS NO MORE IN EXISTENCE THEREFORE PEN ALTY AUTOMATICALLY DESERVES TO BE DELETED. THIS PROPOSIT ION IS SUPPORTED BY THE FOLLOWING JUDICIAL PRONOUNCEMENTS: I. K.C. BUILDERS VS. CIT 265 ITR 562 (SC) II. CITY DRY FISH CO. VS. CIT 238 ITR 63 (AP) III. CIT VS. S.P. VIZ CONSTRUCTION CO. 176 ITR 47 ( PAT) IV. CIT VS. AGRAWALLA BROTHERS [1991] 189 ITR 786 ( PAT); V. CIT (ADDL.) VS. BADRI PRASAD KASHI PRASAD [1993] 200 ITR 206 (ALL); VI. CIT VS. BAHRI BROTHERS P. LTD. [1987] 167 ITR 8 80 (PAT); VII. CIT VS. BEDI & CO. P. LTD. [1990] 183 ITR 59 ( KAR); VIII.CIT VS. BENGAL JUTE MILLS CO. LTD. [1988] 174 ITR 402 (CAL); IX. CIT VS. BHAGWAN LTD. [1987] 168 ITR 846 (CAL); X. CIT VS. MADANLAL SOHANLAL [1989] 176 ITR 189 (CA L); XI. CIT VS. ROY DURLABHJI [1995] 211 ITR 470 (RAJ); XII. HIRA LAL HARI LAL BHAGWATI VS. C.B.I. [2003] 2 62 ITR 466 (SC); [2003] 4 JT SC 381; XIII. MOHAMMED (KTMS) VS. UNION OF INDIA [1992] 197 ITR 196 (MAD); XIV. SIR SHADILAL SUGAR AND GENERAL MILLS LTD. VS. CIT [1987] 168 ITR 705 (SC); XV. UTTAM CHAND VS. ITO [1982] 133 ITR 909 (SC); [1 982] 2 SCC 543. 5 AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION AND THE PENALTY WILL NOT AUTOMATICALLY I MPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY DEFINES OF LAW. CONCEALMENT REFERS TO A DELIBERATE ACT ON THE PART OF THE ASSESSEE. THE EXPRESSION HAS CONCEALED THE PARTICU LARS OF INCOME AND HAS FURNISHED INACCURATE PARTICULARS O F INCOME HAVE NOT BEEN DEFINED EITHER IN SEC. 271(1)(C) OR E LSEWHERE IN THE ACT. ONE THING IS CERTAIN THAT THESE TWO CIRCUM STANCES ARE NOT IDENTICAL IN DETAILS ALTHOUGH THEY MAY LEAD TO THE SAME EFFECT NAMELY KEEPING OFF A CERTAIN PORTION OF IN COME. THE FORMER IS DIRECT AND THE LATER MAY BE INDIRECT IN I TS EXECUTION. THE WORD CONCEAL IS DERIVED FROM LATIN WORD CONC OLARE WHICH IMPLIES TO HIDE. THE OFFENCE OF CONCEALMENT IS TH US A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOME OR A PORTION THER EOF FROM THE KNOWLEDGE OF THE INCOME-TAX AUTHORITIES. IN THE IMP UGNED APPEALS SINCE THE VERY BASIS OF ADDITIONS IS NO MO RE IN EXISTENCE THEREFORE THE PENALTY SO IMPOSED AUTO MATICALLY GOES. SINCE THERE WAS NO LIABILITY TO TAX NO PENAL TY COULD BE LEVIED. FOR IMPOSING PENALTY U/S 271(1)(C) OF THE A CT EITHER THERE SHOULD BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. IN THE PRESE NT APPEALS SINCE THE QUANTUM ASSESSMENTS WERE ANNULLED BY THE TRIBUNAL AND NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE BY EITHER SIDE THEREFORE PENALTY DOES NOT SURVIVE. WHILE DE LIBERATING UPON THE ISSUE THE HONBLE APEX COURT IN THE CASE OF K.C. BUILDERS (SUPRA) HELD AS UNDER: WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER ON T HE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED ARE DELET ED THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCE ALMENT AND THEREFORE IN SUCH A CASE NO PENALTY CAN SURVIVE AND T HE PENALTY IS LIABLE TO BE CANCELLED. ORDINARILY PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. IT WAS FURTHER HELD: REVERSING THE DECISION OF THE HIGH COURT THAT THE FIN DING OF THE APPELLATE TRIBUNAL WAS CONCLUSIVE AND THE PROSECUTIO N COULD NOT BE SUSTAINED SINCE THE PENALTY WAS CANCELLED FOLLOW ING THE TRIBUNALS ORDER AND NO OFFENCE SURVIVES UNDER THE I.T. ACT THEREAFTER. QUASHING THE PROSECUTION WAS AUTOMATIC. AL LOWING THE TRIAL TO PROCEED FURTHER WOULD BE AN IDLE AND EMPTY FORMALITY. 6 4. IN VIEW OF THESE FACTS AND THE JUDICIAL PRONOUNC EMENTS WE FIND NO INFIRMITY IN THE STAND OF THE LD. CIT(A). T HE SAME IS UPHELD. FINALLY ALL THESE APPEALS OF THE REVENUE ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 2.6.2011. 4. IF THE FACTS OF THE PRESENT APPEAL ARE KEPT IN J UXTAPOSITION WITH THE ORDER MENTIONED HEREINABOVE UNDISPUTEDLY IN THE Q UANTUM APPEAL OF THE CASE OF THE ASSESSEE THE ADDITION WAS DELETED BY THE TRIBUNAL AND NO CONTRARY DECISION WAS PRODUCED BEFORE US BY EITH ER SIDE. WE ARE OF THE VIEW THAT WHERE THE ADDITIONS MADE IN THE ASSES SMENT ORDER ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT WAS LEVIED ARE DELETED THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY FOR CONCEALMENT CONSEQUENTLY NO PENALTY SURVIVES AND THE SAME IS L IABLE TO BE CANCELLED BECAUSE WHEN THE VERY BASIS FOR LEVYING THE PENALTY IS NO MORE IN EXISTENCE THERE IS NO QUESTION OF PENALTY U/S 271( 1) OF THE ACT. OUR VIEW IS FORTIFIED BY THE DECISION FROM HONBLE APEX COURT IN THE CASE OF K.C. BUILDERS VS. ACIT (265 ITR 562) (SC). THE TRIB UNAL IN THE AFORESAID ORDER HAS ALREADY CONSIDERED THE ISSUE BY FOLLOWING VARIOUS JUDICIAL PRONOUNCEMENTS. IN VIEW OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS WE FIND NO MERIT IN THE APPEAL OF THE REVENUE CONSEQU ENTLY THE STAND OF THE LD. FIRST APPELLATE AUTHORITY IS AFFIRMED. 7 SO FAR AS THE ARGUMENT OF THE LD. CIT/DR THAT APPE AL IS PENDING BEFORE THE HON'BLE HIGH COURT WE ARE OF THE VIEW T HAT THE HON'BLE HIGH COURT HAS NEITHER STAYED THE OPERATION OF THE ORDER NOR ANY CONTRARY DECISION WAS FILED BEFORE US THEREFORE IT IS NOT A GROUND TO TAKE A CONTRARY VIEW ESPECIALLY WHEN THE ISSUE IS COVERED BY THE DECISION OF HONBLE APEX COURT IN THE CASE OF K.C. BUILDERS (SU PRA). FINALLY THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 30.1.2012. SD SD (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6.2.2012 COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR !VYS!