Mr. Rajeev Arora,, Vidisha v. The ITO,, Vidisha

ITA 534/IND/2009 | 2004-2005
Pronouncement Date: 17-02-2010 | Result: Allowed

Appeal Details

RSA Number 53422714 RSA 2009
Bench Indore
Appeal Number ITA 534/IND/2009
Duration Of Justice 2 month(s) 24 day(s)
Appellant Mr. Rajeev Arora,, Vidisha
Respondent The ITO,, Vidisha
Appeal Type Income Tax Appeal
Pronouncement Date 17-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 17-02-2010
Date Of Final Hearing 15-02-2010
Next Hearing Date 15-02-2010
Assessment Year 2004-2005
Appeal Filed On 23-11-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER ITA NO.534/IND/2009 A.Y. 2004-05 RAJIV ARORA VIDISHA (PAN ADFPA-2641-H) .APPELLANT VS INCOME TAX OFFICER VIDISHA .RESPONDENT APPELLANT BY : S/SHRI H.P. VERMA AND A. GOYA RESPONDENT BY : SMT. APARNA KARAN SR. DR O R D E R THIS APPEAL IS BY THE ASSESSEE CHALLENGING THE CONFI RMATION OF PENALTY BY THE THE LEARNED CIT(A) VIDE ORDER DATED 21.8.2009 IMPOS ED U/S 271(1)(C) OF THE ACT AMOUNTING TO RS.41 000/-. DURING HEARING OF THIS A PPEAL I HAVE HEARD SHRI H.P. VERMA ALONG WITH SHRI ASHISH GOYAL LEARNED COUNSE L FOR THE ASSESSEE AND SMT. APARNA KARAN LEARNED SR. DR. THE CRUX OF ARGUMENT S ON BEHALF OF THE ASSESSEE IS THAT THE PENALTY OF RS.41 000/- WAS UNJUSTIFIABLY I MPOSED BY THE AO BY HOLDING THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OR CONCEALED THE INCOME. IT WAS CONTENDED THAT THE INCOME OF RS.1 33 660/- WAS MIST AKENLY LEFT TO BE OFFERED IN THE RETURN HOWEVER THE SAME WAS OFFERED ON 8.121.2004 ITSELF VIDE LETTER DATED 2 8.11.2004 BY PLEADING THAT THE SAID LETTER WAS DULY FILED BEFORE THE AO. IT WAS PLEADED THAT THE INCOME WAS OFFERED FOR TAXATION BE FORE DETECTION BY THE DEPARTMENT AS THE FIRST NOTICE U/S 143(2) WAS ISSUE D ON 6.9.2005. A PLEA WAS ALSO RAISED THAT THE IMPUGNED INCOME WAS INTEREST O N CAPITAL FROM THE FIRM M/S INDIAN AUTOMOBILES WHEREIN THE ASSESSEE WAS A PARTN ER. A PLEA WAS ALSO RAISED THAT EVEN THE FIRM HAS RECORDED IN ITS BOOKS THE IN TEREST PAID TO THE ASSESSEE. THE FIRM FILED THE RETURN ON THE SAME DATE I.E. 1.4.200 4. RELIANCE WAS PLACED ON THE DECISION IN RAJASTHAN SPINNING & WEAVING MILLS (22 4 CTR 1) (SC) T. ASHOK PAI V. CIT; 11 ITJ 593 (SC); CIT V. D&H SECHERON EL ECTRODES PRIVATE LIMITED (2008) 5 ITJ 645 (MP) CIT V. SURESHCHANDRA GUPTA ( 7 ITJ 793) (MP). ON THE OTHER HAND THE LEARNED SR. DR STRONGLY DEF ENDED THE IMPOSITION OF PENALTY BY CONTENDING THAT THERE IS A CLEAR FINDING IN THE ASSESSMENT ORDER AS WELL AS IN THE IMPUGNED ORDER THAT THE ASSESSEE DEL IBERATELY CONCEALED ITS INCOME/FURNISHED INACCURATE PARTICULARS OF INCOME. IT WAS ALSO PLEADED THAT EVEN THE TAX WAS NOT PAID BY THE ASSESSEE THEREFOR E THE IMPOSITION OF PENALTY WAS DEFENDED. THE LEARNED SR. DR ALSO CONTENDED TH AT THE LETTER DATED 8 TH NOVEMBER 2004 WAS NOT AVAILABLE ON THE FILE OF THE DEPARTMENT BY FURTHER CONTENDING THAT EVEN THERE IS NO SIGNATURE OF THE R ECEIVING PERSON ON THE SEAL OF THE DEPARTMENT AFFIXED ON THE LETTER DATED 8.11.200 4. IN REPLY THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT IT IS FOR T HE CONCERNED OFFICIAL TO PUT HIS/HER SIGNATURE. TO SUBSTANTIATE ITS CLAIM THE A SSESSEE HAS ALSO FILED AN 3 AFFIDAVIT BY CONTENDING THAT THE LETTER DATED 8.11. 2004 WAS DULY FILED BY THE ASSESSEE. 2. I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED RESPECTIVE COUNSELS AND PERUSED THE MATERIAL AVAILABLE ON THE FILE. BRIEF F ACTS ARE THAT THE ASSESSEE FILED HIS RETURN ON 1.11.2004 AND THEREAFTER REALIZED THA T HE DID NOT INCLUDE THE AMOUNT OF RS.1 33 660/- RECEIVED AS INTEREST ON CAP ITAL FROM INDIAN AUTOMOBILES WHEREIN THE ASSESSEE WAS A PARTNER. AS PER THE ASSESSEE VIDE LETTER DATED 8.11.2004 THE ASSESSEE SUO MOTO INFORMED THE ITO THAT THE IMPUGNED AMOUNT COULD NOT BE RETURNED IN THE INCOME THEREFO RE THIS MAY BE CONSIDERED AS INCOME OF THE ASSESSEE. I HAVE FOUND THAT ON TH E AFORESAID LETTER DATED 8.11.2004 THE SEAL OF THE OFFICE OF THE ITO VIDISH A HAS BEEN DULY AFFIXED MENTIONING THE DATE ALSO. HOWEVER THE REVENUE HAS DISPUTED THE LETTER. DURING HEARING THE LEARNED SR. DR ALSO PRODUCED THE ASSES SMENT RECORD WHEREIN NO SUCH ORIGINAL LETTER WAS CLAIMED TO BE AVAILABLE. H OWEVER ON PERUSAL BY THE UNDERSIGNED I FOUND THAT PHOTOCOPY OF THE LETTER W AS DULY AVAILABLE. ON QUESTIONING FROM THE BENCH WHETHER THE SEAL OF TH E DEPARTMENT IS BOGUS THE LEARNED SR. DR CONVENIENTLY AVOIDED TO REPLY THE QU ESTION BUT CONTENDED THAT NO SUCH ORIGINAL LETTER IS AVAILABLE ON THE FILE. TO S UBSTANTIATE ITS CLAIM THE ASSESSEE HAS ALSO FILED AN AFFIDAVIT WHEREIN IT HAS BEEN CLA IMED THAT FOR THE ASSESSMENT YEAR 2004-05 THE RETURN WAS FILED ON 1.11.2004 AND THE AMOUNT OF RS.1 33 600/- RECEIVED FROM THE PARTNERSHIP FIRM M/S INDIAN AUTOM OBILES AS INTEREST WAS WRONGLY LEFT OUT TO BE MENTIONED IN THE RETURN WHIC H WAS DULY OFFERED FOR 4 TAXATION VIDE LETTER DATED 8.11.2004. TO FURTHER S UBSTANTIATE ITS CLAIM THE ASSESSEE ALSO INVITED MY ATTENTION TO THE PAPER BOO K WHEREIN THE SEAL OF THE OFFICE OF THE LEARNED CIT DR MENTIONING THE DATE AS 10 TH FEBRUARY 2010 IS ALSO AVAILABLE THEREIN ALSO THERE IS NO SIGNATURE. THIS FACTUAL ASPECT COULD NOT BE CONTROVERTED BY THE REVENUE. THE PROVISION OF SECT ION 282B(3) OF THE ACT WAS INSERTED BY THE FINANCE (NO. 2) ACT 2009 WITH EFFE CT FROM 1.10.2010 WHICH IS REPRODUCED HEREUNDER :- (3) EVERY DOCUMENT LETTER OR ANY CORRESPONDENCE RECEIVED BY AN INCOME-TAX OR ON BEHALF OF SUCH AUTHORITY SHALL B E ACCEPTED ONLY AFTER ALLOTTING AND QUOTING OF A COMPUTER GENERATED DOCUM ENT IDENTIFICATION NUMBER. HOWEVER SAME WAS NOT THE POSITION BEFORE THE INSER TION OF SECTION 282B OF THE ACT. IN VIEW OF THESE FACTS I HAVE NO OPTION BUT TO ACCEPT THE LETTER OF THE ASSESSEE DATED 8.11.2004 TO BE GENUINE ESPECIALLY W HEN THE SEAL OF THE DEPARTMENT HAS NOT BEEN CLAIMED TO BE BOGUS. 3. UNDER THE AFOREMENTIONED SITUATION NOW THE QUES TION ARISES WHETHER THE INTEREST INCOME OF RS.1 33 660/- WAS DETECTED BY TH E DEPARTMENT BEFORE OFFERED FOR TAXATION AND ALSO WHETHER THE ASSESSEE CONCEALE D ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF ITS INCOME. I AM OF THE C ONSIDERED OPINION THAT SINCE THE LETTER DATED 8.11.2004 WAS FILED BY THE ASSESSE E OFFERING THE IMPUGNED AMOUNT IN THE RETURN THEREFORE IT CAN BE SAID THA T THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME ESPECIALLY WHEN THE AMOUNT WAS OFFERED FOR TAXATION BEFORE DETECTION BY THE DEPARTMENT. RATHER IT 5 SUPPORTS THE CASE OF THE ASSESSEE THAT THE ASSESSEE WAS MORE SERIOUS ABOUT ITS OBLIGATION THAT CORRECT INCOME SHOULD BE DECLARED. EVEN OTHERWISE NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE ON 23.12.2004. I F THE NOTICE WOULD HAVE BEEN ISSUED BEFORE OFFER OF THE IMPUGNED AMOUNT FOR TAXA TION I.E. 8.11.2004 IN THAT SITUATION THE STAND OF THE REVENUE WOULD HAVE BEEN STRONGER THEREFORE IT CAN BE SAID THAT THE ASSESSEE NEITHER CONCEALED ITS INCOME NOR FURNISHED INACCURATE PARTICULARS OF ITS INCOME. IN VIEW OF THIS FACTUAL FINDING THE ASSESSEE GETS SUPPORT FROM THE RATIO LAID DOWN IN DECISION OF THE HONBLE APEX COURT IN THE CASE OF UNION OF INDIA V. RAJASTHAN SPINNING & WEAV ING MILLS (2009) 224 CTR (SC) 1 WHEREIN THE DECISION IN THE CASE OF DHARMEND RA TEXTILES (2008) 219 CTR (SC) 617 WAS DULY CONSIDERED T. ASHOK PAI V. C IT (SUPRA) CIT V. D&H SECHERON ELECTRODES LIMITED (SUPRA) WHEREIN CERTAIN INCOME WAS AGREED TO BE ADDED BY THE ASSESSEE DURING THE ASSESSMENT PROCEED INGS IN ORDER TO BUY PEACE WITH THE UNDERSTANDING THAT NO PENALTY PROCEEDINGS WOULD BE INITIATED. THE HONBLE JURISDICTION HIGH COURT HELD THAT SINCE THE ASSESSEE AGREED TO ADDITION THEREFORE THERE IS NO CONCEALMENT CONSEQUENTLY TH ERE IS NO GOOD GROUND FOR IMPOSITION OF PENALTY. HOWEVER UNDER THE AFOREMENT IONED FACTS THE CASE OF THE ASSESSEE IS ON MUCH STRONGER FOOTING. 4. FOR IMPOSING PENALTY U/S 271(1) THE TWIN CONDIT IONS OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME HAS NECESSARILY TO BE FULFILLED. SECTION 271(1) OF THE ACT IS REPR ODUCED HEREUNDER :- 6 271. (1) IF THE 5 [ASSESSING] OFFICER OR THE 6 [***] 7 [COMMISSIONER (APPEALS)] 8 [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT IS SATISF IED THAT ANY PERSON ( A ) 9 [* * *] ( B ) HAS 10 [* * *] FAILED TO COMPLY WITH A NOTICE 11 [UNDER SUB- SECTION (2) OF SECTION 115WD OR UNDER SUB-SECTION (2) OF SECTION 115WE OR] UNDER SUB-SECTION (1) OF SECTION 142 OR SUB- SECTION (2) OF SECTION 143 12 [OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER SUB-SECTION (2A) OF SECTION 142 ] OR ( C ) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR 13 [* * *] FURNISHED INACCURATE PARTICULARS OF 14 [SUCH INCOME OR] 15 THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT V. SKYLINE AUTO PRODUCTS PVT. LTD. (142 TAXMAN 558) (M.P.); 271 ITR 335 EVEN WENT TO THE EXTENT THAT WHEN MISTAKE IS BONA FIDE SUCH A GROUND CANNOT BE A GOO D GROUND FOR IMPOSING PENALTY U/S 271(1). THE HONBLE GUJARAT HIGH COURT IN A.M. SHA H & COMPANY V. CIT; 108 TAXMAN 137 CLEARLY HELD THAT CONCEALMENT/INACCURACY OCCURRING UPTO FINAL STAGE MUST BE CONSIDERED BEFORE INVOKING THE PROVISIONS OF SEC TION 271(1) OF THE ACT. THE DICTIONARY MEANING OF THE WORD CONCEALMENT IS TO HIDE TO KEEP SECRET. IN THE PRESENT APPEAL SINCE THE ASSESSEE HAS SUO MOTO DECLARED THA T HE RECEIVED INTEREST OF RS.1 33 660/- FROM THE PARTNERSHIP CONCERN BEFORE D ETECTION BY THE DEPARTMENT THEREFORE IT IS A CLEAR CASE WHERE NO PENALTY SHOU LD HAVE BEEN IMPOSED. IN VIEW OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS I AM OF TH E CONSIDERED OPINION THAT NO PENALTY IS EXIGIBLE CONSEQUENTLY THIS APPEAL OF T HE ASSESSEE IS ALLOWED. FINALLY THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH FEBRUARY 2010. SD (JOGINDER SINGH) JUDICIAL MEMBER FEBRUARY 17 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR *DBN/