Sanjay Rathod, Pune v. Dy. CIT, Pune

ITA 934/PUN/2010 | misc
Pronouncement Date: 16-02-2012 | Result: Allowed

Appeal Details

RSA Number 93424514 RSA 2010
Assessee PAN AAZPR9209H
Bench Pune
Appeal Number ITA 934/PUN/2010
Duration Of Justice 1 year(s) 7 month(s) 23 day(s)
Appellant Sanjay Rathod, Pune
Respondent Dy. CIT, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 16-02-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-02-2012
Date Of Final Hearing 09-02-2012
Next Hearing Date 09-02-2012
Assessment Year misc
Appeal Filed On 23-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER I.T.A. NO. 934/PN/2010 BLOCK PERIOD : 1-4-1990 TO 14-2-2001 SANJAY RATHOD 660 RAVIWAR PETH PUNE-411 002 PAN AAZPR 9209 H APPELLANT VS. DY. CIT CIR. 5 PUNE RESPONDENT APPELLANT BY: SHRI NILESH KHANDELWAL RESPONDENT BY: SHRI A.S. SINGH ORDER PER G.S. PANNU AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)- III PUNE DATED 3-3-2010 PERTAINING TO BLOCK PERIOD FROM 1-4-1990 TO 14-2- 2001 WHICH IN TURN ARISES FROM THE ORDER PASSED U/ S 158BFA(2) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS T HE ACT FOR SHORT) BY THE A.O ON 24-1-2007. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED TWO GROU NDS OF APPEAL. IN SO FAR AS GROUND OF APPEAL NO. 1 RELATING TO THE OR DER OF PENALTY U/S 158BFA(2) OF THE ACT BEING TIME BARRED IS CONCERNED THE SAME HAS NOT BEEN PRESSED AT THE TIME OF HEARING AND IS ACCORDIN GLY DISMISSED. 3. THE SECOND GROUND OF APPEAL RAISED BY THE ASSESS EE READS AS UNDER: WITHOUT PREJUDICE TO GROUND NO. 1 ON FACTS AND CI RCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS OF LAW IT BE HELD THAT THE PENALTY OF RS. 1 87 434/- IMPOSED BY THE A.O IN TERMS OF SEC. PAGE 2 OF 5 ITA NO. 934/PN/2010 SANJAY RATHOD B.P 1-4-1990 TOP 14-2-2001 158BFA(2) ON THE QUANTUM OF RS. 3 12 390/- AND UPHE LD BY THE FIRST APPELLATE AUTHORITY IS UNJUSTIFIED UNWARRANTED AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS PREVAILING IN THE CASE. IT FURTHER BE HELD THAT NO PENALTY IS IMPOSABLE IN THE CASE OF THE APP ELLANT IN TERMS OF PROVISIONS OF SEC. 158BFA(2) OF THE ACT. THE PENALT Y IMPOSED BY THE A.O BE DELETED. JUST AND PROPER RELIEF BE GRANTED T O THE APPELLANT IN THIS RESPECT. 4. IN THIS CASE CONSEQUENT UPON SEARCH ACTION ON T HE ASSESSEE ON 14- 2-2001 BLOCK ASSESSMENT U/S 158BC OF THE ACT WAS FI NALIZED WHEREIN THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD WAS DETERMI NED AT RS. 5 29 880/- AS AGAINST THE UNDISCLOSED INCOME RETURNED BY THE A SSESSEE AT RS. 92 000/-. THE ADDITIONS MADE WERE THE SUBJECT MATT ER OF APPEAL PROCEEDINGS AND ULTIMATELY THE TRIBUNAL DISPOSED OF F THE APPEALS OF THE ASSESSEE AS WELL AS OF THE REVENUE VIDE ITA NO. 859 /PN/2003 AND 928/PN/2004 ON 16-7-2004 AND 25-5-2006 RESPECTIVELY . SUBSEQUENTLY THE A.O VIDE ORDER DATED 24-1-2007 HAS IMPOSED PENA LTY U/S 158BFA(2) OF THE ACT OF A SUM OF RS. 1 87 434/-. THE SAID PENAL TY HAS BEEN IMPOSED ON THE DIFFERENCE IN THE AMOUNT OF UNDISCLOSED INCOME DISCLOSED BY THE ASSESSEE AND FINALLY ASSESSED BY THE A.O. 5. IN THE ABOVE BACKGROUND THE FIRST AND FOREMOST PLEA OF THE ASSESSEE IS THAT THE PENALTY HAS BEEN LEVIED ON THE QUANTUM OF INCOME WHICH HAS BEEN PARTLY DELETED BY THE TRIBUNAL AND I N THAT REGARD THE ADDITION WAS INVITED TO AN ORDER OF THE TRIBUNAL DA TED 16-7-2004 (SUPRA). IT IS POINTED OUT THAT THE ADDITION OF RS. 1 93 550 /- WHICH WAS MADE BY WAY OF ENHANCEMENT BY THE CIT(A) HAS SINCE BEEN DEL ETED BY THE TRIBUNAL VIDE ITS ORDER DATED 16-7-2004 (SUPRA) WHEREAS THE A.O WHILE CONSIDERING THE FINALLY DETERMINED UNDISCLOSED INCOME HAS CONSI DERED THE SAME AS INCLUSIVE OF THE SAID SUM OF RS. 1 93 550/-. AS PE R THE APPELLANT IF THE PAGE 3 OF 5 ITA NO. 934/PN/2010 SANJAY RATHOD B.P 1-4-1990 TOP 14-2-2001 SAID MODIFICATION IS MADE THE ONLY DIFFERENCE REMAI NING BETWEEN THE ASSESSED INCOME AND THE RETURNED INCOME WOULD BE RS . 1 18 550/-. ON THIS ASPECT THE LEARNED DR FAIRLY CONSENTED TO THE FACTUAL MATRIX BROUGHT OUT BY THE LEARNED COUNSEL FOR THE APPELLANT AND AC CORDINGLY WE PROCEED ON THAT BASIS. EVEN WITH REGARD TO THE PENALTY IMP OSED FOR THE BALANCE OF INCOME THE PLEA SET UP BY THE ASSESSEE IS THAT T HE LOWER AUTHORITIES HAVE IMPOSED A PENALTY ON WRONG CONSIDERATION INAS MUCH AS THE PENALTY HAS BEEN LEVIED MERELY BECAUSE THE FINALLY ASSESSED UNDISCLOSED INCOME IS HIGHER THAN THE UNDISCLOSED INCOME RETURNED BY T HE ASSESSEE. IN THIS CONNECTION RELIANCE HAS BEEN PLACED ON THE JUDGMEN T OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. DODSAL LTD. (2009 ) 312 ITR 112 (BOM) TO CONTEND THAT THE PENALTY U/S 158BFA(2) OF THE AC T IS NOT MANDATORY OR AUTOMATIC. IT IS FURTHER POINTED OUT THAT IN THIS CASE THE ASSESSEE HAD DULY EVALUATED AND DETERMINED THE UNDISCLOSED INCOM E ON ACCOUNT OF INVESTMENT MADE IN PAWNED ORNAMENTS AT RS. 75 000/- WHEREAS A.O HAS DETERMINED THE SAME AT RS. 1 93 550/- RESULTING IN THE DIFFERENCE OF RS. 1 18 550/-. THE ASSESSEE HAD EXPLAINED THAT THE BA LANCE INVESTMENT PERTAINING TO THE PAWNED ORNAMENT WAS AVAILABLE AND THE SAME WAS SUPPORTED BY CASH FLOW AND WITHDRAWALS FROM THE BAN K. HOWEVER THE SAID EXPLANATION HAS BEEN REJECTED ULTIMATELY. HOWEVER THE SAME DOES NOT PARTAKE THE CHARACTER OF ANY DELIBERATE CONCEALMENT ON THE PART OF THE ASSESSEE AND THEREFORE ACCORDING TO THE LEARNED CO UNSEL THERE WAS NO JUSTIFICATION TO IMPOSE PENALTY U/S 158BFA(2) OF TH E ACT. 7. ON THE OTHER HAND THE LEARNED DR APPEARING FOR THE REVENUE HAS DEFENDED THE ORDERS OF LOWER AUTHORITIES BY POINTIN G OUT THAT HIGHER ASSESSMENT OF UNDISCLOSED INCOME THAN THE UNDISCLOS ED INCOME DECLARED IN THE RETURN BY THE ASSESSEE IS EXIGIBLE TO PENALT Y U/S 158BFA(2) OF THE ACT INASMUCH IT IS ONLY ON ACCOUNT OF SEARCH THAT SUCH ASSESSMENT HAS BEEN MADE. PAGE 4 OF 5 ITA NO. 934/PN/2010 SANJAY RATHOD B.P 1-4-1990 TOP 14-2-2001 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. OSTENSIBLY THIS IS A CASE WHERE PENALTY HAS BEEN LEVIED MERELY FOR THE REASON THAT UNDISCLOSED INCOME ASSESSED IS HIGHER THAN THE UNDI SCLOSED INCOME STATED BY THE ASSESSEE IN HIS RETURN OF INCOME. IT IS QUITE CLEAR IN TERMS OF THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF DODSAL LTD (SUPRA) THAT THE IMPOSITION OF PENALTY U/S 158BFA(2 ) IS NOT MANDATORY OR AUTOMATIC AND IS INDEED DISCRETIONARY IN NATURE. I N TERMS THEREOF IT WOULD SUFFICE TO SAY THAT THE PENALTY IS NOT IMPOSABLE ME RELY BECAUSE THE UNDISCLOSED INCOME HAS BEEN ASSESSED AT A FIGURE HI GHER THAN THE UNDISCLOSED INCOME DISCLOSED IN THE RETURN OF INCOM E. IN THE PRESENT CASE WE FIND THAT THE DIFFERENCE IN RETURNED INCOM E AND THE ASSESSED INCOME IS PRIMARILY BECAUSE OF NON-ACCEPTING OF EXP LANATION FURNISHED BY THE ASSESSEE AND IS NOT A CASE WHERE THE EXPLANATIO N HAS BEEN FOUND TO BE FALSE OR OTHERWISE FANCIFUL. CONSIDERING THE AF ORESAID WE ARE OF THE VIEW THAT NO PENALTY U/S 158BFA(2) IS MAINTAINABLE IN THE PRESENT CASE. ACCORDINGLY WE SET ASIDE THE ORDER OF THE CIT(A) A ND DIRECT THE A.O TO DELETE THE PENALTY. 10 IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 16 TH FEBRUARY 2012. SD/- SD/- (I.C. SUDHIR) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE DATED THE 16 TH FEBRUARY 2012 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT- III PUNE 4. THE CIT(A)-IV PUNE 4. THE D.R A BENCH PUNE BY ORDER SENIOR PRIVATE SECRETARY PAGE 5 OF 5 ITA NO. 934/PN/2010 SANJAY RATHOD B.P 1-4-1990 TOP 14-2-2001 INCOME TAX APPELLATE TRIBUNAL PUNE