Shri Gyansingh Jitsing Chauhan, Surat v. The Dy.CIT.,Cent.Circle-2,, Surat

ITA 3450/AHD/2010 | 2001-2002
Pronouncement Date: 16-09-2011 | Result: Allowed

Appeal Details

RSA Number 345020514 RSA 2010
Assessee PAN ABOPC4282F
Bench Ahmedabad
Appeal Number ITA 3450/AHD/2010
Duration Of Justice 8 month(s) 19 day(s)
Appellant Shri Gyansingh Jitsing Chauhan, Surat
Respondent The Dy.CIT.,Cent.Circle-2,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 16-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 16-09-2011
Date Of Final Hearing 08-09-2011
Next Hearing Date 08-09-2011
Assessment Year 2001-2002
Appeal Filed On 28-12-2010
Judgment Text
. .. . . .. . IN THE INCOME TAX APPELLATE TRIBUNAL : SMC BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M .) . / I.T.A. NO. 3450/AHD./2010 ! '# ! '# ! '# ! '# / ASSESSMENT YEAR : 2001-2002 SHRI GYANSINGH JITSINGH CHAUHAN SURAT -VS- DCIT CENTRAL CIRCLE-2 SURAT (PAN : ABOPC 4282F) $% / APPELLANT &'$% / RESPONDENT $% ( ) / APPELLANT BY SHRI HARDIK VORA A.R. &'$% ( ) / RESPONDENT BY SHRI H.P.MEENA SR.D.R. *!' + ( - / DATE OF HEARING 08.09.2011 ./# ( - / DATE OF PRONOUNCEMENT 16.09.2011 / ORDER THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 19.11.2010 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II AHMEDABAD CONFIRMING THE PENALTY OF RS.33 600/- LEVIED BY THE AO UNDER SECTI ON 271(1)(C) OF THE I.T. ACT 1961 FOR THE ASSESSMENT YEAR 2001-2002. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER APPEAL IT FILED THE RETURN OF INCOME ON 08.11.2007 SHOWING TOTAL INCOME AT RS.2 23 174/-. THE AO FRAMED THE ASSESSMENT UNDER S ECTION 143(3) READ WITH SECTION 153A AT RETURNED INCOME OF RS.2 23 174/- AND ALSO I NITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE I.T.ACT 1961 FOR DISCLOSU RE MADE DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS. SUBSEQUENTLY THE AO ISSUED A PENALTY NOTICE UNDER SECTION 271(1)(C) DIRECTING THE ASSESSEE TO SHOW CAUSE WHY THE PENALTY UNDER SECTION 271(1)(C) BE 2 ITA NO. 3450-AHD-2010 NOT LEVIED. IN REPLY THE ASSESSEE SUBMITTED THAT H E IS ENTITLED TO BENEFIT OF EXCEPTION TO EXPLANATION 5(2) OF SECTION 271(1)(C) OF THE I.T. A CT 1961. THEREFORE PENALTY PROCEEDING UNDER SECTION 271(1)(C) BE DROPPED. THE AO REJECTED THIS REPLY OBSERVING THAT THE ASSESSEE FAILED TO FULFILL THE BASIS OF THE PRE-REQ UISITE OF BASIS OF DISCLOSURE AS LAID DOWN IN THE EXCEPTIONS CLAUSE (EXPLANATION 5). THEREFORE HE IS INELIGIBLE FOR THE PROTECTION PROVIDED BY THE CLAUSES. HE ACCORDINGLY LEVIED THE PENALTY AT RS.33 600/- BEING 100% SOUGHT TO BE EVADED. 3. ON APPEAL IN THE IMPUGNED ORDER THE LD. CIT(A) UPHELD THE ACTION OF THE AO FOLLOWING THE DECISION OF THE ITAT THIRD MEMBER IN THE CASE OF ACIT-VS- KIRIT DAYABHAI PATEL IN ITA NO.2344/AHD/2007 FOR A.Y. 20 02-03 AND IN THE CASE OF SHRI RAJESH A. PATEL IN ITA NO.2345 2346 2348 & 2389/A HD/2007 FOR ASSESSMENT YEARS 1998-99 1999-2000 2001-02 AND 2002-03 DATED 25/06 /2009. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING BEFORE ME ON BEHALF OF T HE ASSESSEE SHRI HARDIK VORA APPEARED AND POINTED OUT THAT FOR THE ASSESSMENT YE AR UNDER APPEAL THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.2 23 174/-. THE AO FRAMED THE ASSESSMENT ACCEPTING THIS RETURN OF INCOME UNDER SECTION 143(3 ). NO MATERIAL WORTH THE NAME WAS FOUND AT THE TIME OF SEARCH DIVULGING THE UNDISCLOS ED INCOME EARNED BY THE ASSESSEE. THEREFORE NO PENALTY UNDER SECTION 271(1)(C) IS LE VIABLE. IN SUPPORT OF THIS RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS: I) ITAT DECISION DATED 30/04/2010 IN THE CASES OF KAUSHAL M. KHANNA & SANGEETABEN K. KHANNA VS- DCIT IN ITA NOS. 2883 2 885 & 2848/AHD/2009 FOR THE ASSESSMENT YEARS 2005-06 TO 2 006-07 II) ITAT DECISION DATED 29/04/2010 IN THE CASES OF SHRI ASHOK N. MISHRA & SHRI ABDUL RAZZAK A. RAJKOTIA VS- ACIT IN ITA NOS. 5198 TO 5203/MUM/09 FOR THE ASSESSMENT YEARS 2000-01 TO 2005-06 & ITA N OS. 5197 5196 5195 5194&5193/MUM/2009 FOR THE ASSESSMEN T YEARS 2000-01 TO 2004-05 3 ITA NO. 3450-AHD-2010 4.1 THE COUNSEL OF THE ASSESSEE FURTHER CLARIFIED T HAT ITAT D BENCH AHMEDABAD IN THE CASE OF KAUSHAL M. KHANNA ( SUPRA ) IN PARA 13 AT PAGE 18 HAS DULY CONSIDERED THE DECISION OF THE THIRD MEMBER IN THE CASE OF KIRIT D AHYABHAI PATEL. HE ACCORDINGLY CONTENDED THAT NO PENALTY IS LEVIABLE ON THE ASSESS EE UNDER EXPLANATION 5 TO SECTION 271(1)(C) WHEN AMOUNT DISCLOSED IN THE RETURN OF IN COME WAS NOT IN RESPECT OF ANY ASSET OR INVESTMENT OR EXPENDITURE DETECTED AT THE TIME O F SEARCH. THE SIMILAR VIEW HAS BEEN TAKEN BY THE ITAT MUMBAI A BENCH IN THE CASE OF SHRI ASHOK N. MISHRA ( SUPRA ). 5. ON THE OTHER HAND SHRI H.P.MEENA SR.D.R. APPE ARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). T HE LD. D.R. POINTED OUT THAT IN THIS CASE A SEARCH UNDER SECTION 132 OF THE I.T. ACT WA S CONDUCTED ON 16.03.2006. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL WAS FURNISHED ON 08.11.2007 IN RESPONSE TO NOTICE UNDER SECTION 153A(1) OF THE I.T. ACT 19 61 ISSUED ON 20.07.2007. SINCE THE RETURN OF INCOME ITSELF HAS BEEN FURNISHED IN RESPO NSE TO NOTICE UNDER SECTION 153A(1) THE PENALTY UNDER SECTION 271(1)(C) IS RIGHTLY LEVI ED THEREFORE ORDER OF THE LD. CIT(A) BEL UPHELD. 6. HAVING HEARD BOTH THE SIDES I HAVE CAREFULLY GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISIONS OF THE T RIBUNALS RELIED ON BY THE LD. COUNSEL OF THE ASSESSEE. ADMITTEDLY THE ASSESSEE HAS FILED TH E RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL DECLARING TOTAL INCOME OF RS.2 2 3 174/- AND ASSESSMENT HAS BEEN FRAMED UNDER SECTION 143(3) AT RETURNED INCOME. NO ADDITION OR DISALLOWANCES WERE MADE IN THE ASSESSMENT ORDER. IN THE INSTANT CASE I ALS O FIND THAT THERE IS NO MATERIAL WORTH THE NAME WAS FOUND AT THE TIME OF SEARCH DIVULGING THE UNDISCLOSED INCOME EARNED BY THE ASSESSEE. ALMOST ON IDENTICAL FACTS IN THE CASE OF ASHOK N. MISHRA ( SUPRA ) ITAT MUMBAI A BENCH IN ITA NO.5198 TO 5203/MUM/2009 ( SUPRA ) IN PARA 7 AND 8 AT PAGE 6 THE TRIBUNAL HELD AS UNDER: 4 ITA NO. 3450-AHD-2010 7. ADVERTING TO THE FACTS OF THE INSTANT CASE WE FIND THAT THERE IS NO MATERIAL WO RTH THE NAME FOUND AT THE TIME OF SEARCH DIVULGING THE UNDISCLOSED INCOME EARNED BY THE ASSESSEE BY WAY OF UNRECORDED SALES. SEIZED MATERIAL RELATES TO UNRECORDED SALE BY THE 'COMPAY' AND THAT TOO FOR A PERIOD OF 18 DAYS FROM 01.04.2003 TO 18.04.2003. NEITHER THERE IS ANY MENT ION OF SUCH SEIZED MATERIAL CONTAINING THE UNRECORDED SALES OF THE ASSESSEE 1 S PROPRIETORSHIP CONCERN NOR IT IS THE CASE OF THE ASSESSING OFFICER THAT THERE WAS AN YTHING ELSE TO SHOW THAT THE ASSESSEE WAS ALSO INDULGING IN RECORDING SALES PART LY ONLY. HERE ALSO THE ASSESSEE AS A GROUP SURRENDERED A PARTICULAR SUM WHICH WAS HONORED BY DULY OFFERING THE ADDITIONAL INCOME FOR TAXATION BY FILING REVISED RE TURNS CONTAINING SUCH INCOME. IT IS FURTHER IMPORTANT TO NOTE THAT IT IS A CASE OF S EARCH AND THERE IS NO REFERENCE TO ANY OTHER UNDISCLOSED INCOME HAVING BEEN EARNED BY THE ASSESSEE OR ANY UNDISCLOSED ASSETS IN THE SHAPE OF STOCK OR OTHERWI SE FUND TO HAVE BEEN POSSESSED AT THE TIME OF SEARCH. THE OFFERING OF RS.8 00 000 BY THE ASSESSEE IN THE SHAPE OF ADDITIONAL INCOME IN THESE SIX YEARS WAS A VOLUNTAR Y SURRENDER UNCOUPLED WITH ANY ADVERSE MATERIAL WHICH COULD FORM THE BASIS OF CONCEALING OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY T HE ASSESSEE. IN OUR CONSIDERED OPINION NO CASE HAS BEEN MADE OUT FOR THE LEVY OF PENALTY U/S 271(L)(C). WE THEREFORE SET ASIDE THE IMPUGNED ORDERS FOR THESE SIX YEARS AND ORDER FOR THE DELETION OF PENALTY. BEFORE PARTING WITH THESE APPE ALS WE WOULD LIKE TO MAKE IT CLEAR THAT THE OBSERVATIONS MADE ABOVE AND THE FIND INGS SO RECORDED BY US SHOULD NOT BE CONSIDERED TO HAVE ANY BEARING ON TAKING A D ECISION ON THE QUESTION OF PENALTY IN THE HANDS OF 'COMPANY' FOR WHICH THE FA CTS ARE REQUIRED TO BE EXAMINED INDEPENDENTLY. 8. IN THE RESULT THESE SIX APPEALS ARE ALLOWED. 6.1 IN MY CONSIDERED OPINION THE RATIO OF AFORESAI D DECISION IS SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEES CASE BECAUSE AT THE TIM E OF SEARCH THE ASSESSEE SURRENDERED A PARTICULAR SUM. IN THE ASSESSMENT YEAR UNDER APPEAL HE HAS DECLARED RS.1 LAKH AS ADDITIONAL INCOME WHICH HAS BEEN ACCEPTED BY THE D EPARTMENT. THIS ADDITIONAL INCOME DECLARED IN THE ASSESSMENT YEAR UNDER APPEAL IS A V OLUNTARY SURRENDER UNCOUPLED WITH ANY ADVERSE MATERIAL WHICH COULD FORM THE BASIS OF CONC EALING OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. I THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE ITAT MUMBAI A BENCH IN THE CASE OF SHRI ASHOK N. MISHRA IN ITA 5 ITA NO. 3450-AHD-2010 NO.5198 TO 5203/MUM/2009 ( SUPRA ) CANCEL THE PENALTY OF RS.33 600/- CONFIRMED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. 0 ( ./# 1! 2 16 / 09 /2011 / 3 ( 4+ 5 ORDER PRONOUNCED IN THE COURT ON 16.09.2011. SD/- (T.K. SHARMA) JUDICIAL MEMBER DATED : 16/09/2011 ( (( ( & 6 & 6 & 6 & 6 76# 76# 76# 76# / COPY OF ORDER FORWARDED TO:- 1. $% / APPELLANT 2. &'$% / RESPONDENT 3. *; / CONCERNED CIT 4. *;- / CIT (A) 5. 6'? 4 & ! / DR ITAT AHMEDABAD 6. 4 A B 0 / GUARD FILE. BY ORDER/ C / D 5 TALUKDAR/SR.P.S.