Mahagautaneshwar Nagar Sihor Corp., Bhavnagar v. The Income tax Officer, Ward-1(2),, Bhavnagar

ITA 3063/AHD/2009 | 1997-1998
Pronouncement Date: 15-07-2011 | Result: Dismissed

Appeal Details

RSA Number 306320514 RSA 2009
Assessee PAN AAAAM9001G
Bench Ahmedabad
Appeal Number ITA 3063/AHD/2009
Duration Of Justice 1 year(s) 7 month(s) 29 day(s)
Appellant Mahagautaneshwar Nagar Sihor Corp., Bhavnagar
Respondent The Income tax Officer, Ward-1(2),, Bhavnagar
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 15-07-2011
Date Of Final Hearing 12-07-2011
Next Hearing Date 12-07-2011
Assessment Year 1997-1998
Appeal Filed On 16-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND A. K. GARODIA AM) ITA NO.3063 3064 3065 3066 3067 3068 AND 3069/A HD/2009 A.Y .: 1997-98 1998-99 1999-2000 2000-01 2001-02 2002- 03 AND 2003-04 MAHA GAUTAMESHWAR NAGAR SIHOR CORPORATION C/O. PRAVINBHAI M. PANDYA ASHISH PLOT NO.17 NILAMBAUG BHAVNAGAR VS THE INCOME TAX OFFICER WARD- 1 (2) BHAVNAGAR PA NO. AAAAM 9001 G (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SHRI MATHIVANAN M. SR. DR O R D E R PER BENCH: ALL THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF THE LEARNED CIT(A)-XX AHMEDABAD DATED 04-08-2009 FOR THE ABOVE ASSESSMENT YEARS CH ALLENGING THE LEVY OF PENALTY U/S 271 (1) ( C ) OF THE IT ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A SURVEY WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 21-01-2003. DURING THE COURSE OF SURVEY IT WAS CLAIMED BY THE ASSESSEE THAT IT IS A NON TRADING CORPORATION (NTC) FORMED FOR THE BENEFIT OF ITS MEM BERS ON NO PROFIT/NO LOSS BASIS. HOWEVER IT WAS NOTED BY THE SURVEY PARTY THAT IN REALITY A GROUP OF PERSONS WERE CARRYING OUT BUSINE SS OF PURCHASES ITA NO.3063 TO 3069/AHD/2009 MAHA GAUTAMESHWAR NAGAR SIHOR CORPN. VS ITO W-1(2) BHAVNAGAR 2 AND SALES OF PLOTS OF LAND IN THE NAME OF SO-CALLED NTC. IN RESPONSE TO NOTICE U/S 148 OF THE IT ACT ISSUED BY THE AO T HE ASSESSEE FILED RETURN SHOWN NIL INCOME FOR ALL THE YEARS. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS THE AO FOUND FROM CERTAIN D OCUMENTS AND PAPERS IMPOUNDED DURING THE SURVEY CONFORMING THAT THERE WAS NO GENUINE NTC AS CONFESSED BY THE ASSESSEE BUT IT WA S A GROUP OF FOUR PERSONS DOING THE PURCHASE AND SALES OF PLOTS OF LAND AND THEREBY EARNING PROFITS. AS PER THE COPIES OF THE P URCHASE DEEDS IMPOUNDED THE TOTAL PURCHASE PRICE PAID FOR THE LA ND WAS SHOWN AT RS.19 43 190/-. THE SOURCE OF ORIGINAL INVESTMENT W AS NOT EXPLAINED. IT WAS MENTIONED IN THE DETAILS NOTED IN THE ASSESS MENT ORDER THAT THE IMPOUNDED FILED X-21 ON PAGE 9 SOME SUMMARY OF TRA NSACTIONS HAVE BEEN MENTIONED ON THE CREDIT SIDE RS.15 37 822/- H AS BEEN SHOWN WITH THE NARRATION INCOME FROM SALE OF PLOTS AND ON THE DEBIT SIDE THE ASSESSEE HAS SHOWN EXPENDITURE OF RS.3 55 675/- AND THUS THE GROSS PROFIT IS WORKED OUT AT RS.11 82 147/-. THUS PROFIT WAS DIVIDED IN THE NAMES OF 4 PERSONS WHO WERE RUNNING THE SO-C ALLED NTC. THE AO THEREFORE ESTIMATED THE NET INCOME OF THE ASSE SSEE AT RS.21 00 000/- IN THE ASSESSMENT YEARS UNDER APPEAL 1997-98 TO 2003-04 AND EQUALLY TAXED THE INCOME IN EACH YEAR I .E. RS.3 00 000/- PER YEAR TAKING THE STATUS OF THE ASSESSEE AS AOP. THE ASSESSEE FILED APPEALS BEFORE THE LEARNED CIT(A) WHICH WAS D ISMISSED. ON FURTHER APPEAL THE TRIBUNAL PARTLY ALLOWED THE APP EALS OF THE ASSESSEE ESTIMATING THE PROFIT OF EACH YEAR AT RS.2 00 000/- IN PLACE OF RS.3 00 000/- ESTIMATED BY THE AO. THE AO VIDE S EPARATE PROCEEDINGS ISSUED SHOW CAUSE NOTICE FOR LEVY OF PE NALTY U/S 271 (1) ( C ) OF THE IT ACT AND DESPITE SERVICE OF NOTICES THE ASSESSEE DID NOT ITA NO.3063 TO 3069/AHD/2009 MAHA GAUTAMESHWAR NAGAR SIHOR CORPN. VS ITO W-1(2) BHAVNAGAR 3 ATTEND THE PENALTY PROCEEDINGS AND EVEN NO WRITTEN SUBMISSION WAS FILED. THE AO VIDE SEPARATE ORDER LEVIED PENALTY U/ S 271 (1) (C) OF THE IT ACT. THE SAME WAS CHALLENGED BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) NOTED THAT AT SOME STAGES THE LEARNE D COUNSEL FOR THE ASSESSEE APPEARED BEFORE HIM BUT LATER ON DID NOT A TTEND THE PROCEEDINGS AND NO APPLICATION FOR ADJOURNMENT WAS MADE. THE APPEALS WERE THEREFORE DECIDED CONSIDERING THE SU BMISSION OF THE ASSESSEE ON MERITS. THE LEARNED CIT(A) NOTED THE WR ITTEN SUBMISSION OF THE ASSESSEE IN THE IMPUGNED ORDER AND CONFIRMED THE PENALTY IN ALL THE ASSESSMENT YEARS. HIS FINDINGS IN PARA 7.2 ARE REPRODUCED AS UNDER: 7.2 I HAVE CAREFULLY CONSIDERED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDERS AS WELL AS IN THE PENALTY ORDERS AND HAVE ALSO CAREFULLY GONE THROUGH THE SUBMISSION FILED BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS. IT IS PROVED BEYOND DOUBT THAT THE APP ELLANT IS AN ASSOCIATION OF PERSONS AND NOT A GENUINE NON TRADING CORPORATION. THOUGH THE APPELLANT HAS CLA IMED ITS STATUS TO BE NON TRADING CORPORATION NOTHI NG HAS BEEN DONE TO FULFILL THE CONDITIONS UNDER THE NON T RADING CORPORATION ACT AND THEREBY TO SHOW THAT THE NON TR ADING CORPORATION IS GENUINE AND IS RUN ON NO-PROFIT/NO-L OSS BASIS. IT IS ALSO PROVED THAT THE PLOTS OF LAND PUR CHASED WERE SOLD BY THE MEMBERS AND THE PROFIT WAS EARNED THEREON. IN THE RETURNS OF INCOME FILED EVEN IN RES PONSE TO NOTICES ISSUED U/S.148 BY THE AO THE APPELLANT HAS SHOWN NIL INCOME. THE APPEALS FILED BY THE APPELLAN T FOR ALL THE YEARS UNDER APPEAL WERE DISMISSED BY THE CI T(A) AND WERE PARTLY ALLOWED BY THE HON'BLE TRIBUNAL AND THE INCOME OF THE APPELLANT WAS FINALLY DETERMINED AT R S.2 LACS FOR EACH YEAR BY THE FINAL FACTS FINDING AUTHO RITY AGAINST NIL RETURNED INCOME. SINCE THERE IS CLEAR CONCEALMENT OF PARTICULARS OF INCOME WHICH EVEN AFT ER ITA NO.3063 TO 3069/AHD/2009 MAHA GAUTAMESHWAR NAGAR SIHOR CORPN. VS ITO W-1(2) BHAVNAGAR 4 DETECTION BY THE DEPARTMENT HAS NOT BEEN SHOWN BY T HE APPELLANT IN THE RETURNS OF INCOME FILED THEREAFTE R IS NOTHING BUT FOOLPROOF CASE OF CONCEALMENT OF INCOME AND WHICH THE APPELLANT CANNOT PROVE OTHERWISE BY ITS FANCIFUL ARGUMENTS AND TAKING TECHNICAL SHELTER. EV EN THOUGH THE INCOME HAS BEEN DETERMINED BY THE FINAL FACTS FINDING AUTHORITY AT RS.2 LACS FOR EACH YEAR IN PLA CE OF RS.3 LACS IN EACH YEAR DETERMINED BY THE AO AND CONFIRMED BY THE CIT(A) IT CANNOT DEFACE THE FACT OF CONCEALMENT WHICH ACTUALLY HAS BEEN MADE BY THE APPELLANT. IN THE GIVEN FACTS OF THE CASE THE APPE LLANT CANNOT ESCAPE BY STATING THAT IT IS MERELY A CASE O F ESTIMATE. IN SUCH CIRCUMSTANCES PENALTY HAS BEEN L EVIED ON ULTIMATELY DETERMINED CONCEALED INCOME WHICH TH E APPELLANT CANNOT ANY WAY REBUT THAT IT IS NOT THE CONCEALED INCOME OF THE APPELLANT. THE INFERENCE OF MENS REA WHICH IS CONSIDERED NECESSARY FOR CONCEALMENT PENALTY IS VERY CLEAR IN THE CASE OF THE APPELLANT AS THE RETURNS FILED FOR ALL THE YEARS ARE AT NIL INCOME. THUS IT IS ESTABLISHED THAT THE APPELLANT HAS INTENTIONALLY CO NCEALED ITS INCOME IN THE GARB OF NTC AND HAS KNOWINGLY FIL ED THE RETURNS OF INCOME FOR ALL THE YEARS IN THE STATUS O F NTC THOUGH IT WAS AN AOP RUN BY FOUR PERSONS FOR BENEFI TS. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF A.M. SHAH & CO. VS. CIT REPORTED IN 238 ITR 415 HAS HELD THA T ANY CONCEALMENT OR INACCURACY IN THE PARTICULARS OF INC OME IN THE RETURN OCCURRING AT ANY STAGE UP TO AND INCLUSI VE OF THE ULTIMATE STAGE OF WORKING OUT OF TOTAL INCOME W OULD ATTRACT THE PENALTY PROVISIONS OF SECTION 271(L)(C) . IT HAS FURTHER BEEN HELD THAT WORDS 'INACCURATE PARTI CULARS' WOULD COVER FALSITY IN FINAL FIGURES AS ALSO THE CONSTITUENT ELEMENTS - CERTAIN ITEMS NOT SHOWN IN T HE CLOSING STOCK PROFIT THEREFORE SUPPRESSED TO THAT EXTENT - INCOME NOT SHOWN BY THIS PROCESS OBVIOUSLY WAS CONCEALMENT OF PARTICULARS OF INCOME AND HENCE THE PENALTY IMPOSED ON THIS VERY BASIS IS JUSTIFIED. IT IS FURTHER HELD THAT THE ASSESSEE HAD RESORTED TO RECORDING BO GUS PURCHASES AND NON-RECORDING OF CERTAIN ITEMS EITHER IN SALES OR STOCKS IT CANNOT BE SAID THAT THE ASSESSM ENT WAS MADE ON ESTIMATE BASIS AND THERE WAS NOTHING FA LSE ITA NO.3063 TO 3069/AHD/2009 MAHA GAUTAMESHWAR NAGAR SIHOR CORPN. VS ITO W-1(2) BHAVNAGAR 5 OR INCORRECT. THUS THIS DECISION IS SQUARELY APPLI CABLE TO THE PRESENT FACTS OF THE APPELLANT'S CASE. HENCE I N VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY RELYING ON THE DECISION OF HON'BLE GUJ ARAT HIGH COURT CITED SUPRA I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HAS CONCEALED ITS INCOME BY SHOWING N IL INCOME WHILE FILING THE RETURNS OF INCOME FOR ALL T HE YEARS SHOWING CLANDESTINELY ITS STATUS AS NTC. SINCE THE CONCEALMENT EMANATED FROM THE DATE OF FILING THE RE TURNS IS WELL ESTABLISHED THE PENALTIES THEREFORE LEVI ED FOR ALL THE YEARS ARE HELD TO BE JUSTIFIED AND ARE HEREBY CONFIRMED. 7. IN THE RESULT ALL THE APPEALS FOR A.Y. 1997 -98 TO 2003-04 ARE DISMISSED. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTIFYING THE DATE OF HEARING THROUGH REGISTERED POST. APPEAL IS THEREFORE DECIDED IN THE ABSENCE OF THE ASSESSEE. THE LEARNED DR RELI ED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE NTC WAS FOUND TO BE BOGUS AND THE ASSESSEE CONCEALED PARTICULARS OF INCOME AS WELL AS FILED INACCURATE PARTICULARS THEREFORE PE NALTY WAS RIGHTLY IMPOSED. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR AND ALSO PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. THE LEARNED CIT(A) SPECIFICALLY NOTED IN THE IMPUGNED ORDER THAT NOBOD Y APPEARED BEFORE THE AO AT THE PENALTY STAGE AND EVEN NO WRITTEN SUB MISSION WAS FILED DESPITE THE NOTICE OF PENALTY. THUS THE FINDINGS O F THE AO IN THE PENALTY ORDER HAVE NOT BEEN REBUTTED BY THE ASSESSEE. SAME IS THE POSITION BEFORE THE LEARNED CIT(A) BECAUSE ON THE DATE OF HE ARING NOBODY APPEARED AND THE LEARNED CIT(A) ON THE BASIS OF MAT ERIAL ON RECORD DECIDED THE APPEAL OF THE ASSESSEE. AGAIN THE ASSE SSEE DID NOT ITA NO.3063 TO 3069/AHD/2009 MAHA GAUTAMESHWAR NAGAR SIHOR CORPN. VS ITO W-1(2) BHAVNAGAR 6 APPEAR BEFORE THE TRIBUNAL DESPITE NOTIFYING THE DA TE OF HEARING. IN THIS CASE THE ASSESSEE WAS FOUND TO BE ASSOCIATION OF PERSONS AND WAS NOT A GENUINE NTC. THE ASSESSEE DID NOT FILE R ETURN OF INCOME FOR ASSESSMENT YEARS 1997-98 TO 2002-03 AND EVEN IN THE REPLY TO NOTICE U/S 148 OF THE IT ACT NIL RETURN WAS FILED. FOR ASSESSMENT YEAR 2003-04 THE RETURN WAS AGAIN FILED AT NIL INCOME. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO AND INCOME WAS COMPUTED FOR ALL THE ASSESSMENT YEARS ON THE BASIS OF THE MA TERIAL FOUND DURING THE COURSE OF SURVEY. ULTIMATELY THE FINDINGS OF T HE AO WERE CONFIRMED BY THE TRIBUNAL BUT THE ADDITION WAS REDU CED FROM RS.3 00 000/- TO RS.2 00 000/-. IT IS THEREFORE C LEAR THAT THE ASSESSEE CONCEALED PARTICULARS OF INCOME AND DID NO T FILE RETURN OF INCOME DELIBERATELY FOR ALL THE YEARS WITHIN THE ST ATUTORY PERIOD. IN SPITE OF DETECTION MADE DURING THE COURSE OF SURVEY OF THE CONCEALED INCOME THE ASSESSEE DID NOT DISCLOSE ANY INCOME. T HESE FACTS WOULD SHOW THAT THE ASSESSEE CONCEALED THE PARTICULARS OF INCOME FROM THE REVENUE DEPARTMENT AND AS SUCH THE AUTHORITIES BELO W WERE JUSTIFIED IN LEVYING THE PENALTY IN ALL THE ASSESSMENT YEARS. IN THE ABSENCE OF ANY REBUTTAL FROM THE SIDE OF THE ASSESSEE BEFORE T HE AO AND BEFORE THE LEARNED CIT(A) ON THE PENALTY MATTER WE DO NO T FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE A UTHORITIES BELOW. WE CONFIRM THE FINDINGS OF THE AUTHORITIES BELOW AND D ISMISS ALL THE APPEALS OF THE ASSESSEE. ITA NO.3063 TO 3069/AHD/2009 MAHA GAUTAMESHWAR NAGAR SIHOR CORPN. VS ITO W-1(2) BHAVNAGAR 7 5. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-07-2011 SD/- SD/- (A. K. GARODIA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 15-07-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD