THE ACIT, Circle-10,, Ahmedabad v. M/S. PATEL BROTHERS,, Ahmedabad

MA 141/AHD/2010 | 1997-1998
Pronouncement Date: 27-08-2010 | Result: Dismissed

Appeal Details

RSA Number 14120524 RSA 2010
Assessee PAN AAEEP3346A
Bench Ahmedabad
Appeal Number MA 141/AHD/2010
Duration Of Justice 2 month(s) 11 day(s)
Appellant THE ACIT, Circle-10,, Ahmedabad
Respondent M/S. PATEL BROTHERS,, Ahmedabad
Appeal Type Miscellaneous Application
Pronouncement Date 27-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 27-08-2010
Assessment Year 1997-1998
Appeal Filed On 16-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER AND SHRI D.C. AGARWAL ACCOUNTANT MEMBER M.A.NO.141/AHD/2010 (ARISING OUT WITH ITA NO.3017/AHD/2003 ASSESSMENT YEAR:1997-98 DATE OF HEARING:27.8.10 DRAFTED:27.8. 10 DCIT CIRCLE-10 AHMEDABAD V/S . M/S. PATEL BROTHERS 4 TH FLOOR PUSHPAKBUILDING OPP. CAMA HOTEL KHANPUR AHMEDABAD PAN NO.AAEEP3346A (ORIGINAL RESPONDENT) (ORIGINA L APPELLANT) (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI R.K. DHANESTA SR-DR RESPONDENT BY:- SHRI M.G. PATEL AR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- BY WAY OF THIS MISCELLANEOUS APPLICATION (MA) REVE NUE HAS REQUESTED TRIBUNAL TO AMEND ITS ORDER PASSED IN ITA NO.3017/AHD/2003 DATED 10-07-2009 AS REGARD TO DELETION OF LEVY OF PENALTY U/S.271(1) O F THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS ARE THAT THE ASSESSING OFFICER L EVIED THE PENALTY U/S.271(1) OF THE ACT AMOUNTING TO RS.6 81 215/- ON THE DISALLOWA NCE OF SECRET COMMISSION OF RS.19 85 255/- AND THIS DISALLOWANCE OF SECRET COMM ISSION WAS CONFIRMED UP TO THE TRIBUNAL AND ACCORDINGLY ASSESSING OFFICER LEVIED T HE PENALTY. THE CIT(A) ALSO CONFIRMED THE LEVY OF PENALTY. BUT THE TRIBUNAL DEL ETED THE PENALTY. ACCORDING TO THE REVENUE TRIBUNAL HAS WRONGLY PLACED RELIANCE ON TH E CASE OF ACIT V. VIP INDUSTRIES MA NO.141/AHD/2010 (A/O ITA NO.3017/AHD/03) DCIT CIR-10 ABD V. M/S. PATEL BROTHERS PAGE 2 LTD WHILE DELETING THE PENALTY. THE REVENUE HAS RAISED THE MAIN GRIEVANCE IN PARA- (V) AS UNDER:- (V) THE ITATS RELIANCE ON THE DECISION IN THE CAS E OF ACIT V/S. VIP INDUSTRIES LTD. IS OUT OF CONTEXT AND IT IS ALSO W RONGLY APPLIED TO THE FACTS OF THE PRESENT CASE. IN THAT CASE THE ITAT OBSERVED T HAT WHERE A GENUINE CLAIM IS MADE FOR DEDUCTION WHICH IS NOT ACCEPTED BY THE REVENUE BUT ALL THE NECESSARY PARTICULARS ARE DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME IT CANNOT BE SAID BY ANY STRETCH OF IMAGINATION THAT T HE ASSESSEE HAS CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF I NCOME IN RESPECT OF THE CLAIM OF DEDUCTION WHICH STANDS REPELLED BY THE AUT HORITIES. BUT IN THE INSTANT CASE THE ASSESSEE HAS NEVER FURNISHED THE BASIS OF COMPUTATION OF COMMISSION NOR THE DETAILS OF PERSONS WHO RECEIVED THE COMMISSION NOR EVIDENCE OF ACTUAL PAYMENT OF COMMISSION. THUS THE ASSESSEES CASE FAILS IN ALL THE TESTS LAID DOWN BY THE ITAT MUMBAI BENCH I N THE CASE OF M/S. VIP INDUSTRIES LTD CITED ABOVE AND RELIED BY THE ITAT IN SUPPORT OF ITS DECISION/CONCLUSION. IN FACT THE BASED ON THE ABOVE DECISION ITAT SHOULD HAVE CONFIRMED THE PENALTY LEVIED U/S.271(1). 3. WE FIND THAT THE TRIBUNAL HAS GIVEN A CATEGORICA L FINDING IN PARA-7 OF ITS ORDER WHICH READS AS UNDER:- 7 SINCE THE LEARNED DR HAS VEHEMENTLY RELIED ON TH E DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILES PROCESSORS (SUPRA) WE THEREFORE HAVE TO REFER TO THAT DECISIO N ALSO. IN THE CASE OF DHARMENDRA TEXTILES PROCESSOR (SUPRA) WE NOTED THA T THE HOBLE SUPREME COURT HAS HELD THAT PENALTY U/S.271(1) IS A CIVIL LIABILITY AND THAT WILLFUL CONCEALMENT AND MENS REA ARE NOT ESSENTIAL INGREDIENTS FOR ATTRACTING THE CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PRO SECUTION U/S.276 OF THE ACT. IT HAS FURTHER BEEN HELD IN THAT CASE THAT MENS REA IS NOT AN ESSENTIAL INGREDIENT FOR IMPOSING THE PENALTY. THE HO;BLE SC IN THIS CA SE NOWHERE HELD THAT IF THE ADDITION IS MADE PENALTY IS AUTOMATIC. THIS JUDGME NT DOES NOT OVERRULE THE EXPLANATIONS APPENDED TO SECTION 271(1)(C). IT EVEN HELD THAT THE OBJECT BEHIND THE ENACTMENT OF SECTION 271(1)(C) READ WITH EXPLANATIONS INDICATES THAT THE SAID SECTION HAS BEEN ENACTED TO PROVIDE F OR A REMEDY FOR LOSS OF REVENUE. THE PENALTY UNDER THAT PROVISION IS A CIVI L LIABILITY. THUS THE RATIO LAID DOWN IN THIS JUDGMENT WAS CONFINED TO TREATING THE WILLFUL CONCEALMENT IS NOT ESSENTIAL FOR IMPOSING THE PENALTY U/S.271(1) OF T HE ACT. WHERE AN ASSESSEE GENUINELY MAKES A CLAIMS FOR A PARTICULAR DEDUCTION BY DISCLOSING ALL THE NECESSARY FACTS RELATING TO THE SAME THAT CANNOT B E REGARDED TO BE A CONCEALMENT EVEN IF THE ASSESSEES CLAIM IS REJECTE D. THIS IS THE SETTLED LAW THAT PENALTY PROCEEDINGS ARE DISTINCT FROM THE ASSE SSMENT PROCEEDINGS AND THEREFORE IF ANY ADDITION IS MADE IT DOES NOT MEA N THAT THE PENALTY WILL AUTOMATICALLY BE LEVIED. IN THE PENALTY PROCEEDINGS THE ASSESSEE IS GIVEN AN OPPORTUNITY TO EXPLAIN HIS CASE IF HE SUCCESSFULLY EXPLAINS HIS POSITION AND IS NOT TRAPPED WITHIN THE PARAMETERS OF SECTION 271(1) (C) ALONG WITH THE EXPLANATIONS DEEMING THE CONCEALMENT OF INCOME PEN ALTY CANNOT BE IMPOSED. MA NO.141/AHD/2010 (A/O ITA NO.3017/AHD/03) DCIT CIR-10 ABD V. M/S. PATEL BROTHERS PAGE 3 NOW THE REVENUE WANT REVIEW OF TRIBUNALS ORDER AN D NOTHING ELSE. EVEN OTHERWISE THAT IS NOT POSSIBLE IN THE GIVEN FACTS AND CIRCUMS TANCES OF THE CASE. ACCORDINGLY THIS MA OF REVENUE IS DISMISSED. 4. IN THE RESULT REVENUES MA IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 27/ 08/2010 SD/- SD/- (D.C.AGARWAL) (MAHA VIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD DATED : 27/08/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-VI AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD