Shri Ravi Krishna Naidu,, Pune v. DCIT, Circle-4,, Pune

ITA 413/PUN/2013 | 2005-2006
Pronouncement Date: 28-04-2014 | Result: Dismissed

Appeal Details

RSA Number 41324514 RSA 2013
Assessee PAN AADPN9591N
Bench Pune
Appeal Number ITA 413/PUN/2013
Duration Of Justice 1 year(s) 2 month(s) 19 day(s)
Appellant Shri Ravi Krishna Naidu,, Pune
Respondent DCIT, Circle-4,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 28-04-2014
Assessment Year 2005-2006
Appeal Filed On 08-02-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NOS.410 TO 413/PN/2013 (A.YS: 2002-03 TO 2005-06) SHRI RAVI KRISHNA NAIDU A-102 1 ST FLOOR EMPRESS COURT GHORPADI PUNE 411036 PAN: AADPN9591N APPELLANT VS. DCIT CIRCLE-4 PUNE RESPONDENT ITA NOS.414 TO 417/PN/2013 (A.YS: 2002-03 TO 2005-06) SMT. KALPANA RAVI NAIDU A-102 1 ST FLOOR EMPRESS COURT GHORPADI PUNE 411036 PAN: AFVPN6227J APPELLANT VS. DCIT CIRCLE-4 PUNE RESPONDENT ASSESSEE BY : SHRI KISHOR PHADKE DEPARTMENT BY : SHRI P.L. PATHADE DATE OF HEARING : 04.04.2014 DATE OF ORDER : 28.04.2014 ORDER PER SHAILENDRA KUMAR YADAV J.M: ALL THESE APPEALS PERTAIN TO ASSESSEE HUSBAND AND WIFE WITH REGARD TO SIMILAR PENALTY LEVIED UNDER TWO CONSOLID ATED ORDERS OF CIT(A) SO THEY ARE BEING DISPOSED OFF BY THIS COMM ON ORDER. 2 2. IN ITA NO.410/PN/2013 THE ASSESSEE HAS FILED TH E APPEAL ON THE FOLLOWING GROUNDS. 1. THE LEARNED CIT(A)-II PUNE ERRED IN LAW AND ON FAC TS IN CONFIRMING THE PENALTY OF 96 692/- U/S.271(1)(C). 2. THE LEARNED CIT(A)-II PUNE ERRED IN LAW AND ON FAC TS IN CONFIRMING THE ORDER OF THE LEARNED ASSESSING OFFIC ER OF LEVYING CONCEALMENT PENALTY WITHOUT APPRECIATING TH E FACT THAT ALL THE NECESSARY PARTICULARS WERE DISCLOSED B Y THE APPELLANT. 3. THE APPELLANT CRAVES LEAVE TO ADDITION / MODIFY / A LTER / DELETE ALL / ANY OF THE GROUNDS OF APPEAL 3. THE ASSESSEE IS AN INDIVIDUAL WHO HAVE NOT FILED RETURN OF INCOME FOR FOUR ASSESSMENT YEARS FROM 2002-03 TO 20 05-06. THE ASSESSING OFFICER RECEIVED SPECIFIC INFORMATION FRO M THE INVESTIGATION WING PUNE BASED ON WHICH NOTICE U/S.148 WAS ISSU ED AND SERVED ON THE ASSESSEE AND IN RESPONSE TO WHICH THE ASSES SEE FILED A RETURN OF INCOME FOR RESPECTIVE ASSESSMENT YEARS. DURING THE PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT A SUM OF MONEY W AS DEPOSITED IN THE BANK ACCOUNTS FOR ALL THE YEARS UNDER CONSIDERA TION FOR WHICH NO ACCEPTABLE AND CONVINCING EXPLANATIONS WAS GIVEN BY THE ASSESSEE. AS AGAINST THESE THE ASSESSEE DID NOT PREFER ANY A PPEAL MEANING THEREBY THAT IN QUANTUM ISSUE WAS DECIDED AGAINST T HE ASSESSEE AND THE SAME ACHIEVED FINALITY AGAINST THE ASSESSEE. C ONSEQUENTLY THE ASSESSING OFFICER INITIATED AND LEVIED PENALTY PROC EEDINGS U/S.271(1)(C) FOR CONCEALMENT OF INCOME AND FURNISH ING OF INADEQUATE PARTICULARS OF INCOME. AGGRIEVED BY ABO VE PENALTY ORDER THE ASSESSEE PREFERRED AN APPEAL WHEREIN VARIOUS C ONTENTIONS WERE RAISED AND HAVING CONSIDERED THE SAME THE CIT(A) H AD CONFIRMED THE PENALTY LEVIED BY ASSESSING OFFICER AND THE SAME HA S BEEN OPPOSED BEFORE US. WE FIND THAT THE ASSESSING OFFICER LEVI ED PENALTY OF 1 11 557/- FOR A.Y. 2005-06 U/S.271(1)(C) ON THE GR OUND THAT CONCEALMENTS OF PARTICULARS OF INCOME AND BECAUSE O F NON-FILING OF RETURN OF INCOME. THE STAND OF THE ASSESSEE HAS BE EN THAT THE 3 RETURNS OF INCOME WERE FILED AFTER RECEIPT OF NOTIC E U/S.148 AND THE ASSESSEE WAS TRANSPARENT IN STATING THE INCOME FROM HOUSE PROPERTY WHICH WAS RECEIVED AT THE END OF DISPUTE WITH CIEL. THE STAND OF ASSESSEE HAS BEEN THAT THE ASSESSING OFFICER HAD NE VER EXTENDED REASONS FOR REASSESSMENT U/S 147 BASED ON WHICH THE NOTICE U/S 148 WAS ISSUED AND THEREFORE IN THE ABSENCE OF AN Y SUCH REASON IT WAS INCORRECT TO OBSERVE THAT THE ASSESSEE HAD CONC EALED THE PARTICULARS OF INCOME. THE ASSESSEE HAD EMPHASIZED ABOUT THE DISPUTE WITH THE LESSEE M/S COTTAGE INDUSTRIES EXPO SITION LTD J & K INDIA (REFERRED AS CIEL) WHEREBY THERE WAS THREAT O F LOSING THE ENTIRE PREMISES ON ACCOUNT OF A PERMANENT TENANCY BASIS AN D THE ALTERNATIVE POSSIBILITY OF HEAVY COMPENSATION. IT WAS ALSO STATED ON BEHALF OF ASSESSEE THAT AS THE MATTER WAS SUB-JUDIC E THE EXACT CHARACTER WAS UNKNOWN IN ALL THESE YEARS. THE ASSES SEE HAS ALSO TRIED TO DEMONSTRATE ITS BONAFIDE BY STATING THAT O N RECEIPT OF NOTICE U/S 148 THE ASSESSEE DISCHARGED THE DUTY OF PAYMENT OF TAXES OF PAST AND PRESENT YEARS. THE ASSESSEE HAS AGAIN REITERATE D REGARDING THE FACT OF THE SETTLEMENT OF DISPUTE SO AS TO EXPLAIN THE REASONS FOR DELAY. THE ASSESSEE ALSO SUBMITTED THAT HE WAS NOT AWARE OF ANY TAX COMPLIANCES AND THE DEFAULT HAVING BEEN COMMITTED I NNOCENTLY WITHOUT REALIZING ITS IMPACT AS HE WAS OF A LOW EDU CATION BACKGROUND AND ECONOMIC SITUATION. THE ASSESSEE REQUESTED THAT IT WAS FIRST TIME DEFAULT AND THEREFORE LENIENCY BE SHOWN. THE ASSESS EE ALSO STATED THAT HE WAS UNDER CONFUSED STATE OF MIND WITH REGAR D TO CHARACTER OF THE INCOME AT THE RELEVANT POINT OF TIME SO PENALT Y BE DELETED. WE FIND IT UNDISPUTED THAT THAT THE ASSESSEE OWNED A P ROPERTY AT A POSH LOCALITY IN A PREMIUM CITY OF MUMBAI BEING A SHOP A DMEASURING 800 SQ.FT ACQUIRED UNDER A LONG LEASE TERM FROM THE LES SOR SINCE 1983. THE ASSESSEE HAS STATED THAT HE WAS IN THE BUSINESS OF TRADING IN CARPETS HANDICRAFTS JEWELLERY ETC SINCE 1980. THE ASSESSEE IN ORDER TO INCREASE THE BUSINESS VOLUME ENTERED INTO AN AGR EEMENT WITH M/S CIEL WAY BACK IN THE YEAR 1992 WHEREBY THE SAID PAR TY HAD TO MANAGE THE BUSINESS OF THE ASSESSEE AS WELL AS CARR Y OUT THEIR 4 BUSINESS OF TRADING IN CARPET. THE ASSESSEE WAS TO RECEIVE FIXED INCOME ON MONTHLY BASIS. THE SAID UNDERSTANDING CON TINUED FOR SMOOTHLY TILL 1995 AND THEN A DISPUTE AROSE BETWEE N THE PARTIES BY WHICH CIEL STARTED CLAIMING TENANCY OF THE SAID PRO PERTY. THE CIT(A) OBSERVED FROM THE ARTICLES OF AGREEMENT FILE D DURING THE APPELLATE PROCEEDINGS ON BEHALF OF ASSESSEE THAT TH E ASSESSEE HAD TAKEN A DEPOSIT OF 1 40 000/- INITIALLY AND A MONTHLY CHARGES INITIALLY FIXED AT 35 000/- P.M. FOR A PERIOD OF THREE YEARS. THE AGREEMENT ALSO OUTLINES AT THE CLAUSES OF VARIOUS S ERVICES PROVIDED BY THE ASSESSEE AND THE RENEWAL OF THE MONTHLY CHAR GES AT THE END OF EVERY THREE YEARS OF EXTENDED PERIOD. AS IS EVIDEN T FROM THE AGREEMENT THE ASSESSEES ALLOWED THE LESSEE / THE C IEL TO SHARE THE SPACE ALONG WITH HIM. THE ASSESSEES THUS WERE IN RE CEIPT OF THE MONTHLY RENT SINCE 1992. THE ASSESSEE WAS ENGAGED I N THE BUSINESS ACTIVITY SINCE 1980 AND THEREFORE TO TAKE THE PLE A OF IGNORANCE AND OF DEFAULT BEING INNOCENT WAS NOT FOUND CORRECT BY CIT(A). THE ASSESSEE HAS NOT BROUGHT THE ENTIRE FACT ON RECORD WITH RESPECT TO THE DISPUTE WHICH AROSE SUBSEQUENTLY WITH M/S CIEL IN T HE YEAR 1995 THOUGH THE ASSESSEE WAS IN REGULAR RECEIPT OF THE M ONTHLY RENT FOR THE SAID PREMISES. THE ASSESSEE THUS BEING IN THE L INE OF A BUSINESS AND ALSO IN RECEIPT OF MONTHLY RENT FOR SUCH A LONG TIME BEING MORE THAN 15 YEARS AND NOT FILING THE RETURN OF INCOME W AS NOT JUSTIFIED. IT MAKES CLEAR THAT THE ASSESSEE APPARENTLY HIDING EARNING OF INCOME FROM INCOME TAX DESPITE OF THE FACT THAT DISPUTE WA S GOING ON SINCE 1995. THE ASSESSEE HAS NOT GIVEN ANY REASONABLE EX PLANATION FOR HIDING FOR THE SAID RENT RECEIPTS. EVEN THE ASSESS EE HAS NOT FILED THE COPY OF THE BANK STATEMENT TO INDICATE WHETHER THE AMOUNTS DEPOSITED IN THE BANK ACCOUNT WERE WITHDRAWN AND EN JOYED BY THE ASSESSEE. IT WAS ONLY AFTER THE INVESTIGATION WAS CARRIED OUT THAT THE ENTIRE FACTS CAME TO LIGHT OF THE DEPARTMENT WITH R EGARD TO THE ABOVE INCOME. THE ASSESSEE WAS DELIBERATELY HIDING THIS INCOME TO DEPARTMENT TILL THE DEPARTMENT CARRIED OUT INVESTIG ATION BASED ON WHICH A NOTICE U/S.148 AND THE ASSESSEE ADMITTED TO ESCAPED INCOME 5 ONLY SINCE 2002-03. THE RETURN OF INCOME WAS FILED AFTER ISSUANCE OF NOTICE U/S 148 AND THAT IT WAS NOT VOLUNTARY OR SUO MOTO ACT OF THE ASSESSEE. THE ASSESSEE HAD ALSO ACCEPTED TO THE ADD ITION AND HAD NOT PREFERRED APPEAL AGAINST THE ADDITIONS MADE FOR ALL THESE YEARS. THE ENTIRE ACT OF THE ASSESSEE AS EVIDENT FROM THE MATERIAL ON RECORD BY NO MEANS OF IMAGINATION CAN BE CHARACTERIZED AS BONAFIDE. THE FACTS AND MATERIAL BROUGHT ON RECORD DO NOT SHOW AN Y EFFORTS OF THE ASSESSEE IN DISCLOSING THE TRANSACTIONS SINCE THE Y EAR 1992 WHEN IT HAD ENTERED INTO THE AGREEMENT WITH CIEL AND ANY FI NANCIAL YEAR. THEREAFTER THE ASSESSEE HAS BEEN ENJOYING THE BENE FITS OF THE RECEIPT WITHOUT DISCLOSING THEM TO THE DEPARTMENT. THE ASSE SSEE HAS CONCEALED THE PARTICULARS OF THE INCOME AND IN THE GIVING FACT IT WAS A CONSCIOUS CONCEALMENT ON HIS PART. THE ASSESSEE CONSCIOUSLY DISREGARDED THE STATUTORY OBLIGATION AND DELIBERATE LY DEFIANCED THE LAW. THE ASSESSEE SUPPRESSED THE RECEIPT OF MONTHL Y RENT SINCE 1992 AND HAS NOT FILED ANY RETURN OF INCOME EXCEPT AFTER ISSUANCE OF NOTICE U/S.148. THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTAN TIATE THE PLEA OF IGNORANCE OF LAW BECAUSE HE WAS RUNNING THE BUSINE SS IN VERY PRIME LOCATION OF BOMBAY SINCE 1980 AS DISCUSSED ABOVE. IN VIEW OF ABOVE THE ASSESSING OFFICER WAS JUSTIFIED IN LEVYING THE PENALTY OF 1 11 557/- FOR A.Y.2005-06 AND THE SAME WAS RIGHTLY UPHELD BY CIT(A) WHICH NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 3.1 A SIMILAR ISSUE AROSE IN A.YS.2002-03 TO 2004- 05. FACTS BEING SIMILAR SO FOLLOWING THE SAME REASONING WE ARE NO T INCLINED TO INTERFERE WITH THE FINDING OF CIT(A) WHO HAS CONFI RMED THE PENALTY LEVIED IN THESE YEARS BY ASSESSING OFFICER. WE UPH OLD THE SAME. 4. A SIMILAR ISSUE AROSE IN THE CASE OF WIFE OF ASS ESSEE WHO IS CO- OWNER OF THE PROPERTY AND A SIMILAR PENALTY WAS LEV IED FOR A.YS.2002- 03 TO 2005-06 IN A SIMILAR FACTS AND CIRCUMSTANCES. FACTS BEING SIMILAR SO FOLLOWING THE SAME REASONING WE ARE NO T INCLINED TO INTERFERE WITH THE FINDING OF CIT(A) FOR ALL THESE FOUR YEARS WHEREBY 6 HE CONFIRMED THE RESPECTIVE PENALTIES LEVIED BY ASS ESSING OFFICER IN ALL THESE YEARS. 5. IN THE RESULT ALL THE APPEALS FILED BY ASSESSEE S ARE DISMISSED AS DISCUSSED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF APRIL 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 28 TH APRIL 2014 GCVSR COPY TO:- 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-II PUNE 4. THE CIT-II PUNE 5. THE DR A BENCH I.T.A.T. PUNE. 6. GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY I.T.A.T. PUNE