ACIT, CHENNAI v. Dr.B.Chendhilnathan, CHENNAI

ITA 860/CHNY/2011 | 2002-2003
Pronouncement Date: 30-09-2011 | Result: Dismissed

Appeal Details

RSA Number 86021714 RSA 2011
Assessee PAN AIEPS6384D
Bench Chennai
Appeal Number ITA 860/CHNY/2011
Duration Of Justice 4 month(s) 21 day(s)
Appellant ACIT, CHENNAI
Respondent Dr.B.Chendhilnathan, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-09-2011
Assessment Year 2002-2003
Appeal Filed On 09-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENNAI BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI N.S. SAINI ACCOUNTANT MEMB ER I.T.A. NOS. 858 TO 863/MDS/2011 A.YS. 2000-01 TO 2005-06 THE ASSTT COMMISSIONER OF INCOME TAX BUSINESS CIRCLE III CHENNAI 600 034. (APPELLANT) VS. DR. B. CHENDILNATHAN NO. 4 J-BLOCK BRIKRIT APTT. ALACRITY COMPLEX VIJAYA NAGAR VELACHERY CHENNAI 600 042. PAN : AIEPS 6384 D (RESPONDENT) APPELLANT BY : SHRI K.E.B. RANGARAJ AN JUNIOR STANDING COUNSEL RESPONDENT BY : SHRI S. SRIDHAR ADVOCATE DATE OF HEARING : 29.09.2011 DATE OF PRONOUNCEMENT : 30.09.2011 O R D E R PER BENCH : THESE APPEALS FILED BY THE REVENUE ARE DIRECTED A GAINST THE CONSOLIDATED ORDER DATED 21.02.2011 OF COMMISSIONER OF INCOME ITA NOS. 858 TO 863/MDS/2011 2 TAX (APPEALS)-VII CHENNAI FOR THE ASSESSMENT YEAR S ASSESSMENT YEARS 2000-01 TO 2005-06. 2. THE REVENUE HAS RAISED THREE COMMON GROUNDS OF A PPEAL IN ALL THE YEARS UNDER CONSIDERATION. HOWEVER THE SOLE I SSUED INVOLVED IN ALL THE GROUNDS IS THAT THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)( C) OF THE INCOME- TAX ACT 1961 [IN SHORT THE ACT]. 3. BRIEF FACTS OF THE CASE EMERGING FROM THE ORDERS OF THE LOWER AUTHORITIES ARE THAT THE ASSESSEE IS A DOCTOR AND A TTACHED TO THE APOLLO HOSPITALS CHENNAI. HE FILED HIS ORIGINAL RETURN OF INCOME FOR THE THREE ASSESSMENT YEARS AS FOLLOWS: ASST.YE A R RETURNED DATE OF ( ORIQINAL) FILING 2000 - 01 1 80 458 30.8.2000 2001 - 02 2 29 320 30.7.2001 2002 - 03 3 88 807 25.10.200 2003 - 04 4 59 280 25.22.200 2004 - 05 7 55 246 31.10.200 2005 - 06 8 23 772 26.10.200 ITA NOS. 858 TO 863/MDS/2011 3 4. A SURVEY WAS CONDUCTED IN THE CASE OF APOLLO HOS PITAL CHENNAI. DURING THE COURSE OF INVESTIGATION IT WAS FOUND THAT THE ASSESSEE RECEIVED THE FOLLOWING AMOUNTS IN CASH AS FEES FROM THE HOSPITAL DURING THE FINANCIAL YEAR AS DETA ILED BELOW WHICH WERE NOT SHOWN BY THE ASSESSEE IN ITS RETURN OF INCOME FILED: ASST.YEAR AMOUN T OF FEES RECEIVED. 2000 - 01 1 35 400 2001 - 02 5 65 250 2002 - 03 9 07 300 2003 - 04 9 67 380 2004 - 05 13 55 660 2005 - 06 21 51 725 5. ON THE BASIS OF THE ABOVE INFORMATION THE CASE WAS REOPENED FOR ALL THE ASSESSMENT YEARS UNDER CONSIDE RATION. IN RESPONSE THE APPELLANT FILED REVISED RETURNS AND O FFERED ADDITIONAL INCOME FROM PROFESSION AFTER CLAIMING TH E EXPENSES INCURRED AS UNDER: ITA NOS. 858 TO 863/MDS/2011 4 ASST.YEAR AMOUNT OF FEES RECEIV ED 2000 - 01 1 35 400 2001 - 02 5 65 250 2002 - 03 9 07 300 2003 - 04 9 67 380 2004 - 05 13 55 660 2005 - 06 21 51 725 6. THE AO COMPLETED THE ASSESSMENT U/S 143(3) R.W.S . 147 ON 24.1.2009 BY DISALLOWING THE ADDITIONAL EXPENDIT URE CLAIMED BY THE ASSESSEE FOR ALL THE ASSESSMENT YEARS. AGAIN ST THIS THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AND GOT S OME RELIEF ON ACCOUNT OF EXPENSES DISALLOWED. 7. AGAINST THE ORDER OF THE CIT(A) THE ASSESSEE AS WELL AS DEPARTMENT WENT IN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL IN ITA NOS. 1219 TO 1221/MDS/2009 VIDE ITS CONSOLID ATED ORDER DATED 19.3.2010 FOR THE ASSESSMENT YEARS 2000-01 TO 2002-03 ALLOWED THE CLAIM OF THE APPELLANT IN RESPECT OF AD MINISTRATIVE CHARGES AND EXPENSES MADE ON PAYMENT OF SALARY TO A SSISTANTS. ITA NOS. 858 TO 863/MDS/2011 5 8. THUS THE DIFFERENCE BETWEEN THE ORIGINAL RETURNE D INCOME AND FINAL REVISED INCOME FROM PROFESSION WHICH WAS DUE TO DISCLOSURE OF ADDITIONAL INCOME FROM PROFESSION WAS CONSIDERED AS CONCEALED INCOME OF THE ASSESSEE FOR IMPOSITION OF PENALTY U/S 271( 1)( C) OF THE ACT FOR THE ASSESSMENT YEARS AS UNDER: ASST.YE A R CONCEALED INCOME 2000 - 01 1 35 400/ - 2001 - 02 5 65 250/ - 2002 - 03 9 07 300/ - 2003 - 04 6 87 743/ - 2004 - 05 9 82 305 / - 2005 - 06 15 64 638/ - FOR THE REASON THAT THE ADDITIONAL INCOME OFFERED B Y THE ASSESSEE IS NOT A VOLUNTARY DISCLOSURE AND IN HIS S UBMISSION THE ASSESSEE NEVER CLARIFIED THE REASONS FOR UNDERSTATE MENT OF HIS PROFESSIONAL INCOME IN HIS ORIGINAL RETURN. 9. AGGRIEVED ON THE LEVY OF PENALTY FOR ALL THE YEA RS UNDER CONSIDERATION THE ASSESSEE FILED APPEALS BEFORE TH E LD. CIT(A). 10. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE DELETED THE PENALTY BY OBSERVING AS UNDER : ITA NOS. 858 TO 863/MDS/2011 6 7. I HAVE CAREFULLY CONSIDERED THE PENALTY ORDERS A S WELL AS THE ARGUMENT OF THE LEARNED AR OF THE APPELLANT. IT IS TRUE THAT THERE WAS A SURVEY CONDUCTED BY THE DEPARTMENT AND IN CONSEQUENT OF THAT ACTION THE APPELLANT HAS REVISED THE RETURN OF INCOME BY ADMITTING ADDITIONAL INCOME FOR ALL THE S IX ASST. YEARS. DURING THE COURSE OF APPELLATE HEARING THE AR HAS PLEADED THAT WHERE THE APPELLANT AGREES TO CERTAIN ADDITIONS EITHER WITH A VIEW TO BUY PEAC E OR AVOID HARASSMENTS OR LITIGATION OR AGREEMENT AS REQUIRED BY THE ASSESSING OFFICER PENALTY CANNOT BE LEVIED AND HE IS RELYING ON THE FOLLOWING DECISIONS . A. CLT VS. ASHOKA MARKETING LTD [103 ITR PAGE 543 (SC) } B. CLT VS. K.P.MADHUSUDANAN [251 ITRPAGE 99 (SC)} C. CLT VS. SURESH CHANDRA METAL [ 251 LTR PAGE 9 (SC) } 7.1 IN ADDITION TO THIS I AM OF THE OPINION THAT THE FOLLOWING COURT'S DECISIONS ARE VERY RELEVANT TO TH E FACT OF THE CASE. 1) 'CIT V SURAJ BHAN 159 TAXMAN 26 P & H - PENALTY CANNOT BE IMPOSED MERELY ON ACCOUNT OF HIGHER INCOME HAVING BEEN SUBSEQUENTLY DECLARED. IN HIS CASE THE ITA NOS. 858 TO 863/MDS/2011 7 ASSESSEE HAD FILED THE REVISED RETURN SHOWING HIGHER INCOME AND GAVE AN EXPLANATION THAT HE OFFERED HIGHER INCOME TO BUY PEACE OF MIND AND TO AVOID LITIGATION. 2) CIT V. SURESH CHANDRA MITTAL 251 ITR 9 SC/119 TAXMAN 433 SC - WHEN THE ASSESSEE FILED A REVISED RETURN SHOWING HIGHER INCOME AND GAVE EXPLANATION THAT HE OFFERED HIGHER INCOME TO BUY PEACE OF MIND AND TO AVOID LITIGATION PENALTY CANNOT BE IMPOSED MERELY ON ACCOUNT OF HIGHER INCOME HAVING BEEN SUBSEQUENTLY DECLARED. ' 8. I ALSO RELY ON THE HON'BLE SUPREME COURT'S DECIS ION IN THE CASE OF RELIANCE PETROPRODUCTS P. LT. (322 ITR 158) (SC) 83 (FOR PENALTY U/S 271(1)(C) WHEREIN IT IS HELD THAT 'MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE THAT BY ITSELF WOULD NOT ATTRACT THE PENALTY UNDER SECTION 271 (1)( C)' . ITA NOS. 858 TO 863/MDS/2011 8 9. MOREOVER THE QUANTUM APPEAL FOR THE ASSESSMENT YEAR 2000-01 TO 2002-03 WERE DECIDED IN FAVOUR OF THE APPELLANT BY THE HON'BLE ITAT 'A' BENCH IN ITA NOS. 1219 TO 1221/MDS/2009 DATED 19.3.2010. CONSIDERING ALL THE ABOVE AND ALSO RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE ITAT 'B' BENCH AND THE COURT'S DECISIONS OF THE H IGH COURT AND SUPREME COURT I AM OF THE OPINION THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271( 1)(C) AND THE PENALTY IMPOSED BY THE AO ARE HEREBY DELETED. 11. BOTH THE PARTIES AGREED THAT THE ISSUE AT HAND IS COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF DCIT VS. D R. V. BALAJI DATED 7.7.2011 PASSED IN ITA NOS. 673 TO 675/MDS/2011 IN THE ASSESSMENT YEARS 2003-04 TO 2005-06 WHEREIN IN SIMILAR FACTS A ND CIRCUMSTANCES OF THE CASE THE TRIBUNAL CONFIRMED THE ORDER OF TH E LD. CIT(A) DELETING THE PENALTY IMPOSED U/S 271(1)(C) OF THE A CT AND DISMISSED THE APPEAL OF THE REVENUE BY FOLLOWING THE DECISION OF THE CO- ORDINATE MADRAS BENCH OF THE TRIBUNAL IN THE CASE OF DR. R. GOPALAKRISHNAN IN ITA NO. 203/MDS/2009 DATED 4.12.2 009 AS ALSO THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COU RT IN THE CASE OF ITA NOS. 858 TO 863/MDS/2011 9 CIT VS. R. GOPALAKRISHNAN IN TAX CASE [APPEALS] NO. 520 OF 2010 DATED 5.7.2010. HENCE HE PLEADED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE CONFIRMED AND THE APPEALS OF THE REVENUE IN THE YEARS UNDER CONSIDERATION BE DISMISSED. 12. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE MATERIAL ON RECORD WE FIND THAT THE MADRAS BENCH O F THE TRIBUNAL IN THE CASE OF DR. V. BALAJI [SUPRA] IN THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE HAS DELETED THE PENALTY B Y OBSERVING AS UNDER: 3. AT THE TIME OF HEARING IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE ISSUE IN THESE APPEALS WAS AGAINST TH E ACTION OF THE LEARNED CIT(A) IN DELETING THE LEVY OF PENALTY IMPOSED UNDER SECTION 271(1)(C). IT WAS FAIRLY AGREED BY BO TH THE SIDES THAT THE ISSUE WAS SQUARELY COVERED BY THE DECI SION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE O F DR. R. GOPALAKRISHNAN IN ITA NO. 203/MDS/09 DATED 4-12-200 9 AS ALSO THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. DR. R. GOPALAKRISHNAN IN TAX CA SE (APPEALS) NO. 520 OF 2010 DATED 05-07-2010 WHEREIN THE HON'BLE HIGH COURT HAS HELD AS FOLLOWS: ITA NOS. 858 TO 863/MDS/2011 10 6. A READING OF SECTION 139(1) WOULD CLEARLY SHOW THAT IF A PERSON HAVING FILED THE RETURN ALREADY DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT HE MAY FURNISH A REVISED RETURN AT ANY TIME BEFORE EXPIRY OF ONE YEAR BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR. ADMITTEDLY THE ASSESSEE HAS FILE D THE REVISED RETURN WITHIN THE TIME SPECIFIED IN THE SECTION. THE APPELLATE AUTHORITY HAS RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT REPORTED IN THE CASE OF UNION OF INDIA & OTHERS V. DHARMENDRA TEXTILES PROCESSORS & OTHERS (306 ITR 277). THE SAID JUDGMENT RELIED UPON BY THE FIRST APPELLATE AUTHORITY WAS CLARIFIED IN THE SUBSEQUENT JUDGMENT BY THE HON'BLE SUPREME COURT IN THE DECISION REPORTED IN THE CASE OF UNION OF INDIA V. RAJASTHAN SPINNING & WEAVING MILLS (23 DTR 158) WHEREIN IT HAS BEEN HELD THAT THERE HAS TO BE A SPECIFIC FINDING THAT THE NON-DISCLOSURE OF INCOME IS WILLFUL AND DELIBERATE. THE SAID JUDGMENT OF THE HON'BLE APEX COURT WAS ALSO FOLLOWED IN COMMISSIONER OF CENTRAL EXCISE PUNE V. S.K.F. INDIA LTD. (239 E.L.T. 385). ITA NOS. 858 TO 863/MDS/2011 11 7. CONSIDERING THE AFORESAID JUDGMENT AND ALSO FACTS INVOLVED IN THE PRESENT CASE ON HAND THERE I S NO MATERIAL TO HOLD THAT THE SUPPRESSION ON THE PAR T OF THE ASSESSEE IS WILLFUL AND DELIBERATE. WE ARE O F THE OPINION THAT THE ORDER PASSED BY THE TRIBUNAL DOES NOT WARRANT ANY INTERFERENCE. ACCORDINGLY TH E QUESTION OF LAW IS ANSWERED AGAINST THE REVENUE. THE APPEAL IS DISMISSED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT I S NOTICED THAT THE LEARNED CIT(A) HAS DELETED THE PEN ALTY BY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DR. MADAN MOHAN REDDY V S. DY. CIT DATED 2-7-2010 WHICH HAS CONSIDERED THE DECISION IN THE CASE OF DR. R. GOPALAKRISHNAN PASSE D BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL AND AS THE DECISION IN THE CASE OF DR. R. GOPALAKRISHNAN HAS A LSO BEEN APPROVED BY THE HON'BLE JURISDICTIONAL HIGH COUR T WE ARE OF THE VIEW THAT THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. IN THE CIRCUMSTANCES TH E APPEALS OF THE REVENUE ARE DISMISSED. ITA NOS. 858 TO 863/MDS/2011 12 13. AS IN THE PRESENT CASE ALSO BOTH THE PARTIES H AVE AGREED THAT THE FACTS OF THE INSTANT CASE ARE SIMILAR TO THE FA CTS OF THE ABOVE CASE AND THE ISSUE INVOLVED STANDS COVERED BY THE A BOVE QUOTED DECISION OF THE MADRAS BENCH OF THE TRIBUNAL WE TH EREFORE RESPECTFULLY FOLLOWING THE ABOVE QUOTED DECISION OF THE TRIBUNAL AND THE DECISION OF THE HON'BLE MADRAS HIGH COURT CONF IRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE GROUNDS OF APPEAL OF THE REVENUE IN ALL THE APPEALS. 14. IN THE RESULT ALL THE APPEALS OF THE REVENUE A RE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER 2011. SD/- SD/- (HARI OM MARATHA) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 30 TH SEPTEMBER 2011. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-VII CHENNAI-34 (4) CIT CHENNAI (5) D.R. (6) GUARD FILE