Shri Anilkumar C. Radhanpura,, Ahmedabad v. The Dy.CIT, Central Circle-2(2),, Ahmedabad

ITA 2824/AHD/2013 | 2009-2010
Pronouncement Date: 30-09-2016 | Result: Allowed

Appeal Details

RSA Number 282420514 RSA 2013
Assessee PAN AEDPR4879K
Bench Ahmedabad
Appeal Number ITA 2824/AHD/2013
Duration Of Justice 2 year(s) 9 month(s) 27 day(s)
Appellant Shri Anilkumar C. Radhanpura,, Ahmedabad
Respondent The Dy.CIT, Central Circle-2(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 30-09-2016
Date Of Final Hearing 29-09-2016
Next Hearing Date 29-09-2016
Assessment Year 2009-2010
Appeal Filed On 03-12-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH AHMEDABAD BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER ./ ITA NO. 2824/AHD/2013 / ASSESSMENT YEAR : 2009-10 SHRI ANIL KUMAR C. RADHANPURA F-404 SHREEJI ENCLAVE NR.ANAND NAGAR CROSS ROADS SATELLITE AHMEDABAD-380015 PAN : AEDPR 4879 K VS DCIT CENTRAL CIRCLE (2)2 AHMEDABAD / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI P.M. MEHTA CA REVENUE BY : SHRI RAHUL KUMAR SR. DR / DATE OF HEARING : 29/09/2016 / DATE OF PRONOUNCEMENT: 30/09/2016 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-III AHMEDABAD DATED 30.09.2013 FOR AY 2009-10. 2. THE SOLITARY GROUND RAISED BY THE ASSESSEE READS AS UNDER: IN THE LAW AND ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED IN CONFIRMING PENALTY U/S 271AAA L EVIED BY ASSESSING OFFICER FOR RS.2 62 597/-. 3. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT VIDE APPLICATION DATED 15.03.2009 A REQUEST WAS MADE TO THE AO THAT IT WAS NOT POSSIBLE FOR ASSESSEE TO MAKE THE ADVANCE TAX PAYMENT OF THE SEI ZED JEWELLERY; THEREFORE THE SAME SHOULD BE DISPOSED OF AND ITS PROCEEDS SHO ULD BE APPROPRIATED TOWARDS TAX LIABILITY. THE UNDISCLOSED INCOME WAS I NCLUDED IN THE RETURN OF INCOME WHICH IS NOT DISPUTED BY THE LD. AO. HOWEVER THE PENALTY HAS BEEN IMPOSED ON TECHNICAL GROUND THAT THE ASSESSEE DID N OT PAY ADVANCE TAX ON THE RETURNED INCOME. THE LD. AO HOWEVER FAILED T O APPRECIATE THE FOLLOWING AS NARRATED BY THE ASSESSEE IN ITS LETTE R DATED 15.03.2009:- SMC-ITA NO.2824/AHD/2013 ANIL C. RADHANPURA VS. DCIT AY : 2009-10 2 . IN THIS CONNECTION ASSESSEE RELIES ON DECISION OF HON'BLE SUPREME COURT IN THE CASE OF B.A. MALANI V/S CIT CIVIL APPEAL NO . 5950 OF 2008 WHEREIN THE FACTS WERE THAT DURING THE COURSE OF SEARCH SH ARES WORTH MARKET VALUE OF RS. 61.38 LAKHS AND DEMAND DRAFT WORTH RS. 10 LAKHS IN THE NAME OF PAN CLOTHING COMPANY LIMITED WAS SEIZED AND ASSESSEE BY LETTER DATED 16 DECEMBER 1995 STATED THAT HE GIVES HIS CONSENT TO DISPOSE OF THE SHARES AS EXPEDITIOUSLY AS POSSIBLE FOR APPROPRIATING THE PRO CEEDS TOWARDS TAXES AND ADVANCE TAXES. HOWEVER SUCH APPLICATION WAS NOT AC CEDED TO BY THE INCOME- TAX DEPARTMENT AND DEMAND WAS RAISED. EVEN THE IN COME-TAX OFFICER HAS LEVIED INTEREST UNDER SECTION 220(2) OF THE ACT. IN THE CIVIL APPEAL FILED BY THE ASSESSEE THE HON'BLE APEX COURT HAS OBSERVED A S UNDER:- UNFORTUNATELY THIS ASPECT OF THE MATTER HAS NOT B EEN CONSIDERED BY THE LEARNED COMMISSIONER AND THE HIGH COURT IN ITS PROPER PERSPECTIVE. THE DEPARTMENT HAS TAKEN THE PLEA THAT UNLESS THE AMOUNT OF FAX DUE WAS ASCERTAINABLE THE SECURITIES COULD NOT HAVE BEEN SOLD AND THE DEMAND DRAFT COULD NOT BE ENCASHE D. THE SAME LOGIC WOULD APPLY TO THE CASE OF THE ASSESSES IN REGARD T O LEVY OF INTEREST ALSO. IT IS ONE THING TO SAY THAT THE LEVY OF INTER EST ON THE GROUND OF NON-PAYMENT OF CORRECT AMOUNT OF TAX BY ITSELF CAN BE A GROUND FOR NON-ACCEDING TO THE REQUEST OF THE ASSESSES AS THE LEVY IS A STATUTORY ONE BUT IT IS ANOTHER THING TO SAY THAT THE SAID FA CTOR SHALL NOT BE TAKEN INTO CONSIDERATION AT ALL FOR THE PURPOSE OF EXERCI SE OF THE DISCRETIONARY JURISDICTION ON THE PART OF THE COMMISSIONER. APPEL LANT VOLUNTEERED THAT THE SECURITIES BE SOLD. WHY THE SAID REQUEST O F THE APPELLANT COULD NOT BE ACCEDED TO HAS NOT BEEN EXPLAINED IT WAS A VOLUNTARY ACT ON THE PART OF THE APPELLANT. 4 IN VIEW OF WHAT IS STATED HEREIN ABOVE THAT ASS ESSEE'S REQUEST TO TREAT SEIZED GOLD OF 1162.059 GMS AGAINST ADVANCE TAX LIA BILITY IS WELL WITHIN THE PURVIEW OF SECTION 132B OF THE ACT AND THE ASSESSEE 'S REQUESTS YOUR GOODSELVES TO KINDLY ADJUST SEIZED GOLD AS STATED H EREIN ABOVE AGAINST ADVANCE TAX OF AY 2009-2010 NOW THE ASSESSEE WILL N OT BE LIABLE TO ANY INTEREST U/S 234A 234B OR 234C OF THE ACT.. 3.1 IN FIRST APPEAL THE LD. CIT(A) TOOK A NEW ANGL E AND CONFIRMED THE PENALTY BY OBSERVING AS UNDER:- 7. FROM THE PERUSAL OF RECORDS IT IS FOUND THAT I N THIS CASE APPELLANT MADE DISCLOSURE OF ADDITIONAL INCOME BUT TAXES WERE NOT PAID ON THE SAME. APPELLANT WROTE LETTERS ON 15/12/2008 01/01/2009 A ND 31/01/2009 TO THE AO FOR RELEASE OF STOCK OF GOLD ORNAMENTS. SUBSEQUE NTLY LETTER DTD. 15/03/2009 WAS WRITTEN TO THE AO FOR ADJUSTMENT OF SEIZED ASSETS AGAINST ADVANCE TAX. HOWEVER AS PER THE PROVISIONS OF SEC TION 132B OF THE IT ACT THE SEIZED ASSETS CAN BE ADJUSTED ONLY AGAINST EXIS TING LIABILITY OF AN ASSESSEE. SMC-ITA NO.2824/AHD/2013 ANIL C. RADHANPURA VS. DCIT AY : 2009-10 3 SINCE ADVANCE TAX IS NOT AN EXISTING LIABILITY THE REQUEST OF APPELLANT WAS NOT ACCEPTED. 8. EXPLANATION (2) HAS BEEN INSERTED BELOW SECTION 132B OF THE IT. ACT W.E.F. 1 ST JUNE 2013 WHICH READS AS FOLLOWS: 'EXPLANATION 2. - FOR THE REMOVAL OF DOUBTS IT IS HEREBY DECLARED THAT THE 'EXISTING LIABILITY' DOES NOT INCLUDE ADVANCE T AX PAYABLE IN ACCORDANCE WITH THE PROVISIONS OF PART C OF CHAPTER XVII'. THE EXPLANATION IS CLARIFICATORY IN NATURE BECAUSE IT BEGINS WITH THE PHRASE 'FOR THE REMOVAL OF DOUBTS'. THUS IT IS CLEAR THAT INTENTION OF LEGISLATURE WAS ALWAYS THAT SEIZED ASSETS CANNOT BE ADJUSTED AGAINS T ADVANCE TAX LIABILITY. 9. THE RELIANCE PLACED BY THE APPELLANT ON THE DECI SION OF HON'BLE ITAT LUCKNOW BENCH IN THE CASE OF SURESHCHANDRA VARMA IS ALSO OF NO HELP BECAUSE BY INSERTION OF EXPLANATION 2 TO SECTION 13 2B AS MENTIONED ABOVE IT HAS BEEN CLARIFIED THAT SEIZED ASSETS CANNOT BE ADJ USTED AGAINST ADVANCE TAX LIABILITY OF AN ASSESSEE. THEREFORE AO HAS RIGHTLY CONCLUDED THAT ESSENTIAL CONDITION OF SECTION 271AAA REGARDING PAYMENT OF TA XES IN RESPECT OF UNDISCLOSED INCOME IS NOT SATISFIED. LEVY OF PENALT Y OF RS.2 62 957/- U/S. 271AAA IS JUSTIFIED IN SUCH A SITUATION AND THE SAM E IS CONFIRMED. 3.2 LD. COUNSEL CONTENDS THAT (A) THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF B.A. MALANI (SUPRA) HAS CLEARLY HELD THAT IF THE ASSESSEE HAS M ADE A REQUEST FOR DISPOSAL OF JEWELLERY IT CANNOT BE BRUSHED ASIDE A ND A DEFINITE VIEW IS TO BE TAKEN. IN THIS CASE THERE IS NO REJECTION OF ASSESSEES APPLICATION. ASSESSEE IS A HANDICAPPED PERSON AND FINANCIALLY WE EK AND WAS NOT ABLE TO PAY THE ADVANCE TAX; THEREFORE THE REQUEST WAS MADE WHICH IS AS PER LAW AS HELD BY HONBLE SUPREME COURT. (B) THE ASSESSMENT YEAR IS AY 2009-10; WHEREAS THE EXPL ANATION SOUGHT TO BE APPLIED BY THE LD. CIT(A) HAS COME INTO EFFECT F ROM 01.06.2013 WHICH IS CLEARLY A PROSPECTIVE APPLICATION. ASSESS EE RELIANCE ON THE DECISION OF ITAT LUCKNOW BENCH IN THE CASE OF SURE SHCHANDRA VARMA (SUPRA) WAS PERFECTLY JUSTIFIED. 4. LD. DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. SMC-ITA NO.2824/AHD/2013 ANIL C. RADHANPURA VS. DCIT AY : 2009-10 4 5. I HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. IN VIEW OF THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF B.A. MALANI (SUPRA) AND THE DECISION OF ITAT LUCKNOW BENCH IN THE CASE OF SURE SHCHANDRA VARMA (SUPRA) THIS IS NOT A FIT CASE TO LEVY PENALTY U/S 271AAA OF THE ACT. THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEE L LTD. V. STATE OF ORISSA [1972] 83 ITR 26 HAS SQUARELY HELD THAT THE PENALT Y CANNOT BE IMPOSED FOR TECHNICAL OR VENIAL VIOLATION OF LAW. THE ASSESSEE S APPLICATION FOR DISPOSAL OF JEWELLERY HAS NOT BEEN REJECTED. SIMILARLY EXP LANATION (2) TO SECTION 132B IS NOT APPLICABLE TO ASSESSEES CASE AS IT WAS INTR ODUCED MUCH LATER WITH EFFECT FROM 01.06.2013. IN VIEW OF THESE FACTS IT IS HELD THAT IT IS NOT A FIT CASE FOR IMPOSITION OF PENALTY U/S 271AAA OF THE ACT WH ICH IS DELETED. 6. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER 2016 AT AHMEDABAD. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 30/09/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. / DR ITAT AHMEDABAD 6. / GUARD FILE . / BY ORDER TRUE COPY / ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD