ITO, Ward-2, Kadapa v. Sri Suresh, M/s. Vijayalakshmi Electronics, Kadapa

ITA 794/HYD/2011 | 2004-2005
Pronouncement Date: 09-09-2011 | Result: Dismissed

Appeal Details

RSA Number 79422514 RSA 2011
Assessee PAN AIOPS4956F
Bench Hyderabad
Appeal Number ITA 794/HYD/2011
Duration Of Justice 4 month(s) 7 day(s)
Appellant ITO, Ward-2, Kadapa
Respondent Sri Suresh, M/s. Vijayalakshmi Electronics, Kadapa
Appeal Type Income Tax Appeal
Pronouncement Date 09-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 09-09-2011
Assessment Year 2004-2005
Appeal Filed On 02-05-2011
Judgment Text
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.794/HYD/11 : AS STT. YEAR 2004-05 INCOME TAX OFFICER WARD - 2 KADAPA V/S. SHRI K.SURESH M/S VIJAYALAKSHMI ELECTRONICS KADAPA. ( PAN - AIOPS 4956 F) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PHANI RAJU RESPONDENT BY : S MT. K.NEERAJA O R D E R PER G.C.GUPTA VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEA R 2004-05 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(APPEALS). 2. THE ONLY ISSUE IN THIS APPEAL IS REGARDING VAL IDITY OF PENALTY IMPOSED UNDER S.271(1)(C) OF THE ACT. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REL IED ON THE ORDER OF THE ASSESSING OFFICER. HE SUBMITTED THAT T HE ASSESSEE HAS NOT DISCLOSED ITS TURNOVER CORRECTLY AND THEREFORE IT RESULTED IN UNDERSTATEMENT OF INCOME AND THE ADDITION MADE IN THE ASSESSMENT O F THE ASSESSEE WAS CONFIRMED IN APPEAL BY THE CIT(A) AS WELL AS BY THE TRIBUNAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT EVEN IN THE REVISED RETURN FILED BY THE ASSESSEE IT HAD INCLUDED ONLY ONE PER CENT AS INCOME BY WAY OF ESTIMATE ON THE ADDITIONAL TURNOVER DISCLOSED IN TH E REVISED RETURN FILED AND FAILED TO DISCLOSE ENTIRE ADDITIONAL TURNOVER AS IN COME OF THE ASSESSEE. ITA NO.794/HYD/11 SHRI K.SURESH M/S VIJAYALAKSHMI ELECTRONICS KADAPA . 2 4 THE LEARNED COUNSEL FOR THE ASSESSEE HAS OPPOSE D THE SUBMISSION OF THE LEARNED DEPARTMENTAL REPRESENTATI VE. SHE SUBMITTED THAT THE ASSESSEE HAS ITSELF DISCOVERED THAT CERTAI N AMOUNT OF TURNOVER WAS NOT DISCLOSED IN THE ORIGINAL RETURN BY INADVERTENC E AND ACCORDINGLY FILED THE REVISED RETURN DISCLOSING THE TURNOVER OMITTED TO B E INCLUDED IN THE ORIGINAL RETURN AND OFFERED 1% OF SUCH TURNOVER AS INCOME. HOWEVER THE ASSESSING OFFICER HAS INCLUDED THE ENTIRE ADDITIONAL TURNOVER AS INCOME OF THE ASSESSEE AND THE ORDER OF THE ASSESSING OFFICER WAS CONFIRME D IN APPEAL AGAINST WHICH THE ASSESSEE HAS FILED APPEAL BEFORE THE HON BLE A.P. HIGH COURT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND HAVE PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). WE FIND THAT THE ASSESSEE HAS CLAIMED THAT IT WAS THE ASSESSEE WHO HAS DISCOVERED THAT CERTAIN AMOUNT OF TURNOVER WAS NOT DISCLOSED IN THE ORIGINAL RETURN FILED BY IT UNDER S.139(1) BY INADVERTENCE AND ACCORDINGLY BEFO RE THE COMPLETION OF ASSESSMENT BY THE DEPARTMENT AND ALSO BEFORE INIT IATION OF ANY RE- ASSESSMENT PROCEEDINGS IT HAS FILED A REVISED RET URN DISCLOSING THE TURNOVER WHICH WAS OMITTED IN THE ORIGINAL RETURN A ND ALSO OFFERED ADDITIONAL INCOME WORKED OUT AT 1% ON THE ADDITIONAL TURNOVER DISCLOSED BY THE ASSESSEE. THIS CLAIM OF THE ASSESSEE COULD NOT BE C ONTROVERTED ON BEHALF OF THE REVENUE. THE ONLY DISPUTE IS WITH REGARD TO TH E ELEMENT OF PROFIT IN THE ADDITIONAL TURNOVER DISCLOSED BY THE ASSESSEE IN TH E REVISED RETURN FILED BY IT. THE CASE OF THE ASSESSEE BEFORE THE ASSESSING O FFICER WAS THAT PROFIT ELEMENT ON THE ADDITIONAL TURNOVER WAS ONLY 1% WHE REAS THE ASSESSING OFFICER HELD THAT THE ENTIRE ADDITIONAL TURNOVER DISCLOSED BY THE ASSESSEE WAS LIABLE TO BE TAXED AS INCOME IN THE HANDS OF TH E ASSESSEE. WE FIND THAT IT IS NOW WELL SETTLED THAT THE ASSESSMENT PROCEEDI NGS AND PENALTY PROCEEDINGS ARE DIFFERENT. FACTS OF THE CASE MAY OR MAY NOT JUSTIFY THE ITA NO.794/HYD/11 SHRI K.SURESH M/S VIJAYALAKSHMI ELECTRONICS KADAPA . 3 ACTION OF THE ASSESSING OFFICER IN BRINGING TO TAX THE ENTIRE ADDITIONAL TURNOVER BY HOLDING THE SAME AS INCOME OF THE ASSE SSEE. BUT IN OUR CONSIDERED OPINION IT IS NOT A FIT CASE FOR IMPOSI TION OF PENALTY UNDER S.271(1)(C) OF THE ACT. IN THIS CASE THE FACT IS THAT THE ADDITION TURNOVER HAS BEEN DECLARED BY THE ASSESSEE ITSELF AND IT WA S NOT THE CASE OF THE DEPARTMENT THAT IT HAS DETECTED THE UNDERSTATEMENT IN THE TURNOVER BEFORE THE ASSESSEE DECLARED THE SAME. THE BASIS OF THE ADDITION MADE IN THIS CASE REMAINS THE ADDITIONAL INCOME DISCLOSED BY THE ASSESSEE VOLUNTARILY AND BEFORE THE COMPLETION OF THE ASSESSMENT BY THE DEPARTMENT BY FILING A REVISED RETURN OF ITS INCOME. WHAT WOULD BE INCOM E ELEMENT EMBEDDED IN THE ADDITIONAL TURNOVER DISCLOSED BY THE ASSESSEE W AS A SUBJECT MATTER OF ESTIMATE AND APPLICATION OF LAW. IN THESE FACTS O F THE CASE WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN H OLDING THAT NO PENALTY COULD BE IMPOSED IN THIS CASE AND DIRECTING THE ASS ESSING OFFICER TO DELETE THE PENALTY LEVIED BY HIM IN THIS REGARD. ACCORDIN GLY THE ORDER OF THE CIT(A) IS CONFIRMED AND THE GROUNDS OF THE REVENUE ARE REJ ECTED. 6. IN THE RESULT APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 9 TH SEPTEMBER 2011 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 9 TH SEPTEMBER 2011 COPY FORWARDED TO: 1. SHRI K.SURESH M/S VIJAYALAKSHMI ELECTRONICS 21 - 3 - 5 SFS STREET KADAPA. 2. INCOME TAX OFFICER WARD - 2 KADAPA 3. COMMISSIONER OF INCOME - TAX(APPEALS) GUNTUR. 4. COMMISSIONER OF INCOME TAX TIRUAPTI 5. DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD. B.V.S.