DCIT, Hyderabad v. Smt Shashi Agarwal, Hyderabad

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.610/H/2002 ASSESSMENT YEAR 1993-94 THE DCIT CIRCLE 2(1) HYDERABAD VS. SMT. SHASHI AGARWAL HYDERABAD (PAN/GIR NO.S-706) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.E. SUNIL BABU RESPONDENT BY : SHRI P. MURALI MOHAN RAO O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) I VISAKHAPATNAM (CAMP : HYDERABAD) DATED 15.3.2002 AND PERTAINS TO THE ASSESSMENT YEARS 1993 -94. 2. THE MAIN GRIEVANCE OF THE DEPARTMENT IS DELET ING THE ADDITION WHICH IS DECLARED BY HIM IN ITS RETURN OF INCOME TH OUGH THERE WAS NO CORROBORATIVE EVIDENCE TO DELETE THE SAME AND THERE IS NO REVISED RETURN FILED BY THE ASSESSEE. 3. BRIEF FACTS OF THE ISSUE ARE THAT THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 20.10.1992 AND DISCLOSURE WAS MADE THEREIN. CONSEQUENT TO THE SEAR CH OPERATION THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME IN THE HANDS OF THE ASSESSEE AT RS.12 61 200/-. THE SAME WAS ASSESS ED TO TAX. THE ASSESSEE IS HAVING GRIEVANCE AGAINST THAT ASSESSMEN T ORDER AND WENT IN APPEAL BEFORE THE CIT(A) AND EXPLAINED THAT THE ASS ESSEE MADE STATEMENT ITA NO.610/H/2002 SMT. SHASHI AGARWAL HYDERABAD 2 2 U/S 132(4) AND WHEREIN ADMITTED UNDISCLOSED INCOME AT RS.3 CRORES. ACCORDING TO THE ASSESSEE RS.3 CRORES WAS PROPERL Y EXPLAINED. IT WAS EXPLAINED THAT A SUM OF RS.43 LAKHS WAS ASSESSED FO R THE ASSESSMENT YEARS 1992-93 VIDE ORDER DATED 20.4.1993 ANOTHER A MOUNT AT RS.1.45 CRORES WAS DISCLOSED FOR THE ASSESSMENT YEARS 1992- 93 AND ANOTHER RS.1.05 CRORES WERE DECLARED IN THE HANDS OF M/S K UMAR LIQUORS & BEERS (P) LTD. AND M/S KUMAR SPIRITS (P) LTD. THE BALANC E LEFT WAS ONLY RS.7 LAKHS AND IT IS TO BE ASSESSED IN THE HANDS OF SHRI SATISH KUMAR AGARWAL SHRI ANIL KUMAR AGARWAL SMT. UMA AGARWAL AND SMT. SHASHI AGARWAL EQUALLY. THE CIT(A) IN THE SECOND ROUND OF APPEAL ACCEPTED THE CONTENTION OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO ASSESS ONLY RS.1.75 LAKHS IN THE HANDS OF THE ASSESSEE. AGAINST THIS THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS SEEN FROM THE FACTS OF THE CASE ORIGINALLY THE ASSESSEE DISCLOSED INCOME AT RS.75 LAKHS EACH IN TH E HANDS OF SHRI ANIL KR. AGARWAL SHRI SATISH KR. AGARWAL SMT. SHASHI AGARWAL WIFE OF SHRI SATISH KR. AGARWAL AND SMT. UMA AGARWAL WIFE OF SHR I ANIL KUMAR AGARWAL. SUBSEQUENTLY THE DECLARATION WAS MODIFIE D BY FILING AN AFFIDAVIT DATED 30.11.1992 WHEREIN THE DISCLOSURE MADE IN THE HANDS OF 4 INDIVIDUALS IS REDUCED TO RS.17.5 LAKHS EACH I.E. R S.5 LAKHS FOR THE ASSESSMENT YEARS 1992-93 AND RS.12.5 LAKHS FOR THE ASSESSMENT YEARS 1993-94 AND THE BALANCE WAS DECLARED IN THE HANDS O F THE GROUPS COMPANIES. LATER THE ASSESSEE HAS TAKEN A PLEA TH AT A CASH BALANCE OF RS.64 84 936/- AS ON 31.3.1992 IS AVAILABLE. BUT T HE ASSESSING OFFICER REJECTED THE CONTENTION THAT THERE WAS NO EVIDENCE ON THIS POINT. THE ASSESSEE IN THIS CASE FILED RETURN VOLUNTARILY ON 2 9.10.1993 AT RS.12.5 LAKHS FOR THIS ASSESSMENT YEARS AFTER COMPLETION OF SEARCH OPERATION. LATER THE ASSESSEE ONCE AGAIN FILED REVISED RETURN OF INCOME ON ITA NO.610/H/2002 SMT. SHASHI AGARWAL HYDERABAD 3 3 03.01.1996 ADMITTING INCOME AT RS.12 61 200/- . NO W THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEES INCOME IS ONLY AT RS.1.75 LAKHS FOR THE ASSESSMENT YEARS WHICH IS 1/4 TH SHARE OF RS.7 LAKHS. IN OUR OPINION THIS PLEA OF THE ASSESSEE CANNOT BE ACCEPTED BECAUSE THE INCOME WAS ASSESSED BY THE ASSESSING OFFICER ON THE BASIS OF INCOME DEC LARED BY THE ASSESSEE IN HER RETURN OF INCOME. NOT ONLY ONE TIME BUT TWO TI MES THE ASSESSEE CONFIRMED HER INCOME AS MENTIONED ABOVE IN THE RETU RN OF HER INCOME. THE INCOME DECLARED BY THE ASSESSEE IS VOLUNTARY BA SIS AND THERE WAS NO COERCION OR COMPULSION ON THE ASSESSEE. THE RETUR N FILED BY THE ASSESSEE IS NOT AGAINST HER OWN WILL. THE RETURN IS NOT FIL ED ON ACCOUNT OF MENTAL OR OTHER CONSTRAINTS. THERE WAS NO COERCION EXERTED O N THE ASSESSEE FORCING HER TO FILE THE RETURN OF INCOME IN A MANNER AS SHE FILED. THE RETURN WAS FILED BY THE ASSESSEE CONSEQUENT TO SEARCH AND IT C ANNOT BE SAID THAT THERE WAS ANY COMPULSION ON THE ASSESSEE TO DECLARE SUCH INCOME IN THE RETURN FILED BY THE ASSESSEE ON VARIOUS DATES. THE DISCLO SURE MADE IN THE RETURNS ACTUALLY TANTAMOUNT TO AN ADMISSION ON THE PART OF THE ASSESSEE TO EFFECT THAT THE AMOUNT DISCLOSED WAS TO BE CONSIDERED AS R EAL INCOME TO BE LIABLE FOR TAX. ONCE THE ASSESSEE VOLUNTARILY FILED RETUR N OF INCOME AND NOT FILED ANY REVISED RETURN AGAINST EXCLUDING THE INCOME DEC LARED BY THE ASSESSEE ON EARLIER OCCASION THEN IT IS NOT POSSIBLE TO THE ASSESSEE TO CONTEND THAT ANY SUCH DISCLOSURE OR ADMISSION WAS MADE ON ACCOUN T OF MISTAKEN BELIEF. THE ASSESSEE IS ESTOPPED FROM RAISING ANY SUCH CONT ENTION ESPECIALLY WHEN THE DISCLOSURE COMES AFTER AN ELABORATE DISCUSSION AND OPPORTUNITY OF HEARING WITH THE DEPARTMENT. IN THE TOTALITY OF FA CTS AND CIRCUMSTANCES OF THE CASE THERE IS NO ERROR OF LAW IN THE VIEW TAKE N BY THE ASSESSING OFFICER THAT THE DISCLOSURE WAS MADE BY THE ASSESSEE VOLUNT ARILY. THE DISCLOSURE MADE BY THE ASSESSEE IN THE RETURN OF INCOME IS IN GOOD FAITH AND THE SAME MUST BE ACCEPTED BY THE DEPARTMENT AS AN HONEST DIS CLOSURE AND SUCH DISCLOSURE IN THE RETURN OF INCOME CANNOT BE DELETE D BY THE CIT(A) AS THE ASSESSEE IS BOUND BY THAT RETURN OF INCOME AND THE ASSESSEE CANNOT HAVE ITA NO.610/H/2002 SMT. SHASHI AGARWAL HYDERABAD 4 4 ANY GRIEVANCE AGAINST THE ASSESSEES OWN ADMISSION WITHOUT FILING ANY REVISED RETURN OF INCOME POINTING OUT ANY OMISSION ON HER PART. IN OUR OPINION THERE IS NO PROVISION UNDER THE INCOME TAX ACT TO ALLOW ANY CLAIM OF THE ASSESSEE BY THE ASSESSING OFFICER WITHOUT A VALID REVISED RETURN. 5. IT MAY BE PERTINENT TO NOTE THAT THE JUDGMENT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (284 ITR 323) (SC) DID NOT TAKE COGNIZANCE OF THE JUDICIAL VIEW THAT THE ASSESSEE IS ENTITLED TO MAKE ANY CLAIM OF DEDUCTION IN THE COURSE OF ASSESSMENT PROCEEDINGS. ALSO THERE IS NO DISCUSSION REGARDING THE DIFFERENCE BETWEEN REVISIO N OF RETURN AND MODIFICATION (CORRECTION) OF RETURN. BEFORE THE JUD GMENT IN GOETZE'S CASE THE DIFFERENCE BETWEEN THE TWO WAS FAIRLY WELL UNDE RSTOOD AND RECOGNISED. THE ALLAHABAD HIGH COURT IN CASE OF DHAMPUR SUGAR M ILLS V CIT (1972) 90 ITR 236 (ALL) HAD CLARIFIED THAT IF AN ASSESSEE FIL ES AN APPLICATION FOR MODIFYING OR CORRECTING A RETURN FILED IT WOULD NO T MEAN THAT HE HAS FILED A REVISED RETURN. THE ORIGINAL RETURN FILED BY HIM WI LL RETAIN THE CHARACTER AS ORIGINAL RETURN BUT SUBJECT TO MODIFICATIONS REQUE STED BY THE ASSESSEE. BUT ONCE A REVISED RETURN IS FILED THE ORIGINAL RE TURN MUST BE TAKEN TO HAVE BEEN WITHDRAWN AND TO HAVE BEEN SUBSTITUTED BY A FRESH RETURN FOR THE PURPOSE OF THE ASSESSMENT. 6. THE JUDGMENT IN THE CASE OF GOETZE(INDIA) LTD. UPROOTS THE SETTLED PRACTICE AND IS CONTRARY TO THE VIEW EXPRES SED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) VIDE CIRCULAR NO 14 (XL-35) DATED APRIL 11 1955 THAT THE ASSESSING OFFICERS SHOULD NOT TAKE ADVANTA GE OF THE IGNORANCE OF THE ASSESSEES REGARDING THEIR RIGHTS AND DRAW THEIR ATTENTION TO ANY RELIEF TO WHICH THEY ARE ENTITLED AND GUIDE THE ASSESSES I N MAKING CORRECT CLAIM. 7. THE SUPREME COURT JUDGMENT HAS MADE EVERYONE R EALIZE THAT IF THEY WISH TO MAKE ANY CLAIM IN ADDITION TO OR IN MODIFICATION OF WHAT ITA NO.610/H/2002 SMT. SHASHI AGARWAL HYDERABAD 5 5 WAS MADE IN THE ORIGINAL RETURN THE SAME CANNOT BE MADE WITHOUT FILING A REVISED RETURN. 8. IT IS ALTOGETHER A DIFFERENT MATTER THAT AN AS SESSEE CAN REVISE THE RETURN OF INCOME UNDER SECTION 139(5) OF THE AC T ONLY WHEN HE DISCOVERS ANY 'OMISSION OR ANY WRONG STATEMENT'. O N CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE TH E DELETION MADE BY THE CIT(A) IS NOT JUSTIFIED AND ACCORDINGLY THE ORDER OF THE CIT(A) IS REVERSED AND THE ORDER OF THE ASSESSING OFFICER IS RESTORED. 9. IN THE RESULT THE APPEAL OF THE REVENUE IN I TA NO.610/H/2002 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 11 .2.2011 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACCOUNTANT MEMBER DATED THE 11 TH FEBRUARY 2011 COPY FORWARDED TO: 1. THE DCIT CIRCLE 2(1) HYDERABAD 2. SMT. SHASHI AGARWAL 3-5-1092/5/F NARAYANGUDA HYDERABAD 3. CIT(A)-I VISAKHAPATNAM AND CAMP AT CIT(A) I HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP/