Shri Pravinchandra Ratilal Pipwala, Surat v. The Income tax Officer, Ward-5(3),, Surat

ITA 4034/AHD/2008 | 2005-2006
Pronouncement Date: 23-12-2010 | Result: Allowed

Appeal Details

RSA Number 403420514 RSA 2008
Assessee PAN AAEHP8699P
Bench Ahmedabad
Appeal Number ITA 4034/AHD/2008
Duration Of Justice 2 year(s) 8 day(s)
Appellant Shri Pravinchandra Ratilal Pipwala, Surat
Respondent The Income tax Officer, Ward-5(3),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 23-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 23-12-2010
Date Of Final Hearing 14-12-2010
Next Hearing Date 14-12-2010
Assessment Year 2005-2006
Appeal Filed On 15-12-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH D DD D BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI MUKUL SHRAWAT MUKUL SHRAWAT MUKUL SHRAWAT MUKUL SHRAWAT JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER AND AND AND AND SHRI SHRI SHRI SHRI N.S.SAINI N.S.SAINI N.S.SAINI N.S.SAINI ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER DATE OF HEARING : 14-12-2010 DRAFTED ON:22- 12-2010 ITA NO. 4034 /AHD/ 2008 ASSESSMENT YEAR : 2005-06 PR AVINCHANDRA RATILAL PIPWALA HUF 4/3321 NEAR SUPER YARN MARKET ZAMPA BAZAR SURAT. VS INCOME TAX OFFICER WARD 5(3) AAYAKAR BHAVAN MAJURA GATE SURAT. PAN/GIR NO. : AAEHP 8699 P (A PPELLANT ) .. ( RESPONDENT ) APPELLANT BY : NONE. RESPONDENT BY: S HRI U. B. MISHRA SR.D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II I SURAT DATED 11-11-2008 ON THE SOLE GROUND THAT THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACT IN CO NFIRMING THE LEVY OF PENALTY OF `.1 09 325/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FI LED A RETURN DECLARING TOTAL INCOME OF `.14 417/- ON 25-11-2005. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LEARNED ASSESS ING OFFICER FOUND THAT TOTAL GIFTS OF `. 4 LACS WERE CREDITED T O THE CAPITAL ACCOUNT OF THE APPELLANT AND ASKED FOR DETAILS OF T HE SAID GIFTS VIDE QUESTIONNAIRE DATED 7-7-2006. THE ASSESSEE FILED A REPLY ON24-7- 2006 BUT NO DETAILS WERE FILED. SUBSEQUENTLY AFTER A PERIOD OF 11 MONTHS FROM THE DATE OF ISSUE OF QUESTIONNAIRE THE ASSESSEE FILED A REVISED RETURN OFFERING THE GIFTS FOR TAXATION. T HE LEARNED ASSESSING OFFICER WAS OF THE VIEW THAT EVEN THE ORI GINAL RETURN FILED ON 25-11-2006 WAS OUT OF TIME AND THEREFORE THE RE VISED RETURN - 2 - COULD NOT BE TREATED AS VALID RETURN WHICH WAS FILE D AFTER A LAPSE OF 18 MONTHS. THE LEARNED ASSESSING OFFICER THEREFORE REJECTED THE EXPLANATION IN THIS REGARD AND IMPOSED A PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED. 3. ON APPEAL BEFORE THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IN ORDER TO BUY A MENTA L PEACE OFFERED THE AMOUNTS OF GIFTS FOR TAXATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY FILING THE REVISED RETURN. DURING PE NALTY PROCEEDINGS ALSO THE ASSESSEE SUBMITTED AFFIDAVITS OF SEVEN DONORS WITH THEIR PAN BUT THE LEARNED ASSESSING OFFICER DI D NOT CONSIDER THE SAME. THE LEARNED ASSESSING OFFICER ALSO DID NO T RECORD THE STATEMENTS OF THE DONORS AND LEVIED PENALTY ARBITRA RILY. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE R ELIED ON A NUMBER OF JUDICIAL PRONOUNCEMENTS WHICH I FIND ARE NOT RELEVANT TO THE ISSUE IN QUESTION. 4. AFTER CONSIDERING THE SUBMISSIONS THE LEARNED CO MMISSIONER OF INCOME TAX (APPEALS) OBSERVED AS UNDER:- IT IS SEEN THAT THE ORIGINAL RETURN WAS FILED BEYO ND THE STATUTORY PERIOD AND THEREFORE THE APPELLANT HAD LO ST THE RIGHT TO FILE A REVISED RETURN WHICH IS NONEST IN L AW AS HAD BEEN HELD BY THE HON'BLE APEX COURT IN THE CASE OF KUMAR JAGDISHCHANDRA SINHA 220 ITR 67. IT IS ALSO IMPORTA NT TO NOTE THAT THE APPELLANT REVISED THE RETURN OF INCOME ONL Y AFTER THE LEARNED ASSESSING OFFICER ISSUED A DETAILED QUESTIO NNAIRE REGARDING THE SOURCE OF CASH CREDITS APPEARING IN T HE CAPITAL ACCOUNT. EVEN THEN THE APPELLANT DID NOT ACCEPT HI S MISTAKE AND FILED A REVISED RETURN ONLY AFTER A PERIOD OF M ORE THAN 11 MONTHS HAD ELAPSED. THIS MEANS THAT THE INCOME WAS REVISED ONLY AFTER DETECTION BY THE LEARNED ASSESSI NG OFFICER. IN THE INSTANT CASE THE MALAFIDE INTENTION STANDS E STABLISHED SINCE HAD THE LEARNED ASSESSING OFFICER NOT PROBED INTO THE SOURCE OF ADDITION TO CAPITAL OF THE APPELLANT THE UNEXPLAINED CREDITS WOULD HAVE GONE UNNOTICED I.E. THE APPELLANT WAS ALMOST FORCED TO FILE A REVISED RETUR N WHICH IN ANY CASE WAS NONEST ONLY AFTER HE CAME TO KNOW THA T THE SOURCES OF CASH CREDITS COULD NOT HAVE BEEN EXPLAIN ED. FILING OF AFFIDAVITS AT THE PENALTY STAGE IS THEREFORE ONL Y AN AFTERTHOUGHT TO MISLEAD THE REVENUE SINCE THIS EXER CISE COULD HAVE BEEN UNDERTAKEN AT THE ASSESSMENT STAGE ITSELF HAD THE - 3 - APPELLANT BEEN ABLE TO ESTABLISH THE GENUINENESS OF SUCH CASH CREDITS. THEREFORE I AM OF THE CONSIDERED VIE W THAT THE APPELLANT IN THIS CASE DELIBERATELY FURNISHED INACC URATE PARTICULARS OF INCOME IN THE ORIGINAL RETURN AND HA VING FILED THAT RETURN BELATEDLY FORFEITED HIS RIGHT TO FILE A REVISED RETURN CLEARLY ATTRACTS PROVISIONS OF EXPLANATION- 1 TO SECTION 271(1)(C) OF THE ACT. THE PENALTY IMPOSED IN THIS C ASE IS THEREFORE CONFIRMED. 5. THE ASSESSEE FILED LETTER DATED 20-11-2010 STATI NG THAT THE ASSESSEE HAS FILED 3 SETS OF PAPER BOOK AND HAS REQ UESTED FOR DISPOSING OFF THE APPEAL ON MERITS. 6. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE AND PERUSED THE MATERIAL ON RECORD. IN THE INSTANT CASE THE ASSESSEE IN THE ORIGINAL RETURN HAS SHOWN RECEIPT O F GIFT OF `.4 LACS FROM 7 PERSONS WHICH THE ASSESSEE OFFERED FOR TAXAT ION BY FILING A REVISED RETURN AT THE TIME OF THE ASSESSMENT HEARIN G. THE LEARNED ASSESSING OFFICER OBSERVED THAT ORIGINAL RETURN FIL ED BY THE ASSESSEE WAS BEYOND THE DUE DATE AND THE REVISED RE TURN WAS CONSEQUENTLY INVALID. THE LEARNED ASSESSING OFFICER LEVIED PENALTY OF `.1 09 325/- UNDER SECTION 271(1)(C) IN RESPECT OF THE ABOVE AMOUNT OF `.4 LACS WHICH WAS CONFIRMED BY THE LEARN ED COMMISSIONER OF INCOME TAX(APPEALS). WE FIND THAT I T IS NOT IN DISPUTE THAT THE ASSESSEE HAS FILED AFFIDAVITS OF T HE 7 DONORS WITH PAN DURING THE COURSE OF THE PENALTY PROCEEDINGS TO SHOW THAT THE GIFTS WERE GENUINE AND THE SAME WAS OFFERED FOR TAX ATION TO BUY PEACE OF MIND. 7. NO MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE AFFIDAVITS OR PAN WERE NOT GENUINE. THE LO WER AUTHORITIES HAD LEVIED PENALTY ON THE GROUND THAT THESE MATERIA LS WERE NOT FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 8. IN OUR CONSIDERED VIEW PENALTY PROCEEDINGS ARE S EPARATE AND DISTINCT FROM ASSESSMENT PROCEEDINGS. THE ASSESSEE IS NOT PREVENTED FROM BRINGING NEW AND FRESH MATERIAL TO S HOW THAT PENALTY IS NOT LEVIABLE IN ITS CASE. COMPLETION OF ASSESSMENT DOES - 4 - NOT SHUT DOWN THE DOOR OF THE ASSESSEE TO FILE EVID ENCES DURING THE PENALTY PROCEEDINGS TO SHOW THAT THERE WAS NO CONCE ALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. 9. IT IS A ESTABLISHED POSITION OF LAW THAT FINDING S IN THE ASSESSMENT ARE ONLY RELEVANT MATERIALS BUT NOT CONC LUSIVE MATERIALS FOR LEVYING OF THE PENALTY AND BEFORE LEV YING OF THE PENALTY THE LEARNED ASSESSING OFFICER IS DUTY BOUND TO CONSIDER ALL THE MATERIALS WHICH ARE AVAILABLE ON RECORD AT THE TIME OF THE PASSING OF PENALTY ORDER. WE FIND THAT THE ASSESSEE HAS BROUGHT MATERIAL ON RECORD TO SHOW THAT THE GIFTS WERE GENU INE AND NO DEFECT IN SUCH MATERIALS COULD BE POINTED OUT BY TH E REVENUE. THUS IN OUR CONSIDERED OPINION PENALTY UNDER SECTION 271 (1)(C) OF `.1 09 325/- WAS LEVIED ON A WRONG FOOTING IN THE I NSTANT CASE AND THEREFORE THE SAME IS DELETED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 23 RD DAY OF DECEMBER 2010. SD/- SD/- (MUKUL SHRAWAT ) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: AHMEDABAD 23 RD DAY OF DECEMBER 2010 COMPILED AND COMPARED BY: PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-III SURAT. 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD - 5 - DATE INITIALS 1. DRAFT DICTATED ON 21-12-2010 -------------- ----- 2. DRAFT PLACED BEFORE AUTHORITY 21-12-2010 ----- -------------- 3. DRAFT PROPOSED & PLACED 23-12-2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 23-12-2010 ---------- --------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 23-12-2010 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON 23-12-2010 ---------- ---------- 7. FILE SENT TO THE BENCH CLERK 23-12-2010 ------- ------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- A.R. 9. DATE OF DISPATCH OF ORDER ---------------- ---- -----------------