DCIT, Tambaram v. M/s. Sakthi Footwear, CHENNAI

ITA 435/CHNY/2011 | 2007-2008
Pronouncement Date: 29-07-2011 | Result: Dismissed

Appeal Details

RSA Number 43521714 RSA 2011
Assessee PAN AAMFS6945G
Bench Chennai
Appeal Number ITA 435/CHNY/2011
Duration Of Justice 4 month(s) 23 day(s)
Appellant DCIT, Tambaram
Respondent M/s. Sakthi Footwear, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 29-07-2011
Assessment Year 2007-2008
Appeal Filed On 07-03-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI BEFORE SHRI U.B. BEDI J.M. AND SHRI N.S. SAINI AM .. I.T.A. NO. 435/MDS/2011 ASSESSMENT YEARS 2007-08 THE DY. C.I.T BUSINESS CIRCLE CHENNAI VS. M/S SAKTHI FOOTWEAR NO. 47 D.R.R AVENUE 2 ND MAIN ROAD AUDCO NAGAR KATTUPAKKAM CHENNAI (PAN NO. AAMFS 6945 G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. RAVI DEPARTMENT BY : SHRI K.E.B RENGARAJAN O R D E R PER N.S. SAINI A.M :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER PASSED BY THE LD. CIT(A)-IX CHENNAI DATED 24.12.20 10 FOR ASSESSMENT YEAR 2007-08 . PAGE 2 OF 7 I.T.A. NO. 435/MDS/2011 2. THE SOLE ISSUE EMANATING IN THIS APPEAL OUT OF T HE TWO GROUNDS TAKEN BY THE ASSESSEE IS THAT THE COMMISSIONER OF I NCOME-TAX [APPEALS] ERRED IN DELETING THE PENALTY OF RS. 4 22 079/- LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT 1961 [IN SHORT TH E ACT]. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IS ENGAGED IN THE MANUFACTURING AND EXPORT OF FOOTWEAR AND LEATHER. DURING THE COURSE OF SURVEY ON 9.3.20 07 THE ASSESSEE DECLARED INCOME OF ` . 80 LAKHS FOR ASSESSMENT YEAR 2007-08. THE ASSESSEE IN ITS RETURN OF INCOME FILED FOR THE SAID ASSESSMENT YEAR DISCLOSED TOTAL INCOME OF ` . 65 93 070/-. DURING THE COURSE OF ASSESSMENT WHEN THE ASSESSING OFFICER POINTED OUT THIS DISCREPANCY THE ASSESSEE AGREED TO PAY TAX ON THE TOTAL INCOME OF ` 80 LAKHS FOR ASSESSMENT YEAR 2007-08 AND ACCORDIN GLY ASSESSMENT WAS COMPLETED AT TOTAL INCOME OF RS. 80 LAKHS IN PL ACE OF RETURNED INCOME OF ` 65 93 070/-. THE ASSESSEE ACCEPTED THE SAID ASSESSMENT ORDER AND DID NOT FILE ANY APPEAL THERE AGAINST. PAGE 3 OF 7 I.T.A. NO. 435/MDS/2011 4. THEREAFTER THE ASSESSING OFFICER LEVIED PENALTY OF RS. 4 22 079/- U/S 271(1)(C) OF THE ACT IN RESPECT OF D IFFERENCE BETWEEN THE ASSESSED INCOME AND THE RETURNED INCOME. 5. ON APPEAL THE LD. CIT(A) DELETED THE ABOVE LEVY OF PENALTY ON THE GROUND THAT THE ASSESSEE HAS PAID TAX ON THE EN TIRE INCOME OF RS. 80 LAKHS AND IN VIEW OF THE DECISION OF THE HON 'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCT S P. LTD 322 ITR 158 [SC] INCOME DECLARED U/S 271(1)(C) OF THE ACT I S NOT EXIGIBLE IN THE INSTANT CASE. 6. BEFORE US THE LD. D.R. SUPPORTED THE ORDER OF T HE ASSESSING OFFICER AND PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF UOI VS DHARMENDRA TEXTILES PRO CESSORS [2007] 295 ITR 244 [SC]. 7. THE LD. A.R. SUPPORTED THE ORDER OF THE LD. CIT( A) AND WRITTEN SUBMISSIONS MADE BEFORE THE LD. CIT(A). PAGE 4 OF 7 I.T.A. NO. 435/MDS/2011 8. WE FIND THAT THE ASSESSEE ON THE ONE HAND PAID T AX OF RS. 26 92 800/- BUT ON THE OTHER HAND IN THE RETURN OF INCOME HE CLAIMED REFUND OF THE BALANCE AMOUNT EXCEPT TO THE EXTENT OF TAX OF INCOME OF ` 65 93 070/-. THUS MERELY BECAUSE TAX WAS PAID ON THE ONE HAND WHICH WAS CLAIMED AS REFUND ON THE OTHER H AND BY THE ASSESSEE IT CANNOT BE HELD THAT PENALTY U/S 271(1) (C) OF THE ACT CANNOT BE LEVIED IN RESPECT OF AN INCOME WHICH IS F OUND TO BE CONCEALED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. 9. FURTHER THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF RELIANCE PETRO PRODUCTS P. LTD [SUPRA] IS AN AUT HORITY FOR THE PROPOSITION THAT PENALTY U/S 271(1)(C) OF THE ACT C ANNOT BE LEVIED MERELY BECAUSE THE ASSESSEE IS UNABLE TO SUBSTANTIA TE ITS CLAIM FOR DEDUCTION MADE IN THE RETURN OF INCOME. FACTS OF T HE INSTANT CASE ARE QUITE DISTINGUISHABLE AND THEREFORE THE AFORES AID DECISION OF THE HON'BLE SUPREME COURT IS NOT APPLICABLE TO THE INSTANT CASE. SIMILARLY IT IS OBSERVED THAT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILES [SUPRA] RE LATES TO LEVY OF PENALTY UNDER CENTRAL EXCISE ACT BASED ON THE PROVI SIONS OF SECTION 11AE OF THE ACT ARE MATERIALLY DIFFERENT FROM THE P ROVISIONS OF PAGE 5 OF 7 I.T.A. NO. 435/MDS/2011 SECTION 271(1)(C) OF THE ACT. IN OUR CONSIDERED OP INION THE SAID DECISION IS NOT APPLICABLE IN THE INSTANT CASE FOR DETERMINING THE ISSUE UNDER CONSIDERATION. 10. IN OUR CONSIDERED OPINION FOR LEVY OF PENALT Y U/S 271(1)(C) OF THE ACT THE ASSESSING OFFICER MUST BRING SOME MATER IAL ON RECORD AFTER MAKING ENQUIRY TO SHOW REASONABLY THAT THE AS SESSEE HAS REALLY EARNED SOME INCOME WHICH IS CONCEALED IN THE RETURN OF INCOME OR DURING ASSESSMENT PROCEEDINGS. 11. FURTHER IT IS AN ESTABLISHED POSITION OF LAW T HAT WHEN THE ASSESSEE AGREED TO PAY TAX ON CERTAIN INCOME FOR TA XATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT DOES NOT NECESS ARILY IMPLY THAT THE ASSESSEE ALSO AGREED TO THE EFFECT THAT THE SUR RENDERED AMOUNT SO CONCEALED WAS UNDISCLOSED INCOME OF THE ASSESSEE . FOR THE ABOVE PROPOSITION RELIANCE MAY BE PLACED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SIR SHADI LAL SUGAR & GENERAL MILLS LTD & ANR VS. CIT [1987] 168 ITR 705 [SC] AND IN THE CA SE OF SURESH CHAND MITTAL [2009] 251 ITR 9 [SC]. THUS BEFORE LE VY OF PENALTY THE REVENUE MUST BRING SOME MATERIAL ON RECORD AFTER MA KING ENQUIRY TO PAGE 6 OF 7 I.T.A. NO. 435/MDS/2011 SHOW REASONABLY THAT THE AMOUNT IN RESPECT OF WHICH PENALTY IS SOUGHT TO BE LEVIED REPRESENTS ACTUAL CONCEALED INC OME OF THE ASSESSEE. IN THE INSTANT CASE WE FIND THAT ASSESS MENT WAS COMPLETED ON THE BASIS OF STATEMENT MADE BY THE ASS ESSEE AFTER DISCUSSION WITH SURVEY OFFICIALS. THE REVENUE HAVE NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW ON THE BASIS OF WHICH MA TERIAL AND HOW THE FIGURE OF ` 80 LAKHS WAS ASSESSED AT. FROM THE RELEVANT ASSESSMENT ORDER AND PENALTY ORDER PASSED BY THE AS SESSING OFFICER IT IS OBSERVED THAT NO MATERIAL WAS BROUGHT ON RECO RD BY THE ASSESSING OFFICER WHICH REASONABLY EVIDENCES THAT T HE ASSESSEE ACTUALLY EARNED MORE THAN ` 65 93 070/- DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION . THE ASSESSING OFFICER HAS REFERRED TO NO MATERIAL OTHER THAN THE DISCUSSION MADE DURING THE COURSE OF SURVEY AND CONSENT OF THE ASSE SSEE FOR BEING ASSESSED AT TOTAL INCOME OF ` 80 LAKHS FOR ENHANCING INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. 12. FURTHER IN THE ABSENCE OF ANY MATERIAL BROUGHT ON RECORD AND BROUGHT BEFORE US TO SHOW THAT HOW THE FIGURE OF ` . 80 LAKHS WAS ASSESSED AT DURING THE COURSE OF SURVEY PROCEEDINGS WE FIND NO PAGE 7 OF 7 I.T.A. NO. 435/MDS/2011 MATERIAL ON THE BASIS OF WHICH IT CAN BE CONCLUDED THAT THE ASSESSEE REALLY EARNED ANY AMOUNT MORE THAN THE INCOME DISCL OSED IN THE RETURN OF INCOME. IN THE ABOVE CIRCUMSTANCES IN O UR CONSIDERED OPINION PENALTY U/S 271(1)(C) OF THE ACT IS NOT SU STAINABLE IN THE INSTANT CASE. WE THEREFORE FOR THE ABOVE REASONS CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF T HE REVENUE. 13. IN THE RESULT APPEAL FILED BY THE REVENUE STAN DS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 29.07.2011. SD/- SD/- (U.B.S BEDI ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 29 TH JULY 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE