Dr G Ravindranath Sarma, Hyderabad v. ACIT, Tirupathi

ITSSA 16/HYD/2010 | misc
Pronouncement Date: 29-10-2010 | Result: Allowed

Appeal Details

RSA Number 1622516 RSA 2010
Assessee PAN AHSPG9845G
Bench Hyderabad
Appeal Number ITSSA 16/HYD/2010
Duration Of Justice 3 month(s) 22 day(s)
Appellant Dr G Ravindranath Sarma, Hyderabad
Respondent ACIT, Tirupathi
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 29-10-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 29-10-2010
Assessment Year misc
Appeal Filed On 07-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER IT(SS)A.16/HYD/2010 BLOCK PERIOD FROM 1.4.1996 TO 8.8.2002 DR. G. RAVINDRANATH SORMA KADAPA. (PAN AHSPG 9845 G) VS ACIT CIRCLE 2(1) TIRUPATHI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. RAMA RAO RESPONDENT BY : SHRI AMLAN TRIPATHY O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT(A) TIRUPATHI DATED 3.5.20 10 AND PERTAINS TO THE BLOCK PERIOD FROM 1.4.1996 TO 8.8.2002 . 2. IN THIS CASE PENALTY HAS BEEN LEVIED AFTER P ASSING GIVING EFFECT TO TRIBUNAL ORDER DATED 24.10.2008 IN IT(SS)A.140/H YD/2005 FOR THE BLOCK PERIOD FROM 1.4.1996 TO 8.8.2002. THE TRIBUNAL IN ITS ORDER HAS SUSTAINED THE ADDITIONS AT RS.87 857/- AND RS.29 500/- FOUND TO BE RECEIVED BY THE ASSESSEE FROM ELOMA GLORIA AND M/S BUTENOTH ALL FR OM GERMANY. IT WAS OBSERVED BY THE TRIBUNAL THAT THESE RECEIPTS MU ST HAVE BEEN REMITTED BY THE SAID INDIVIDUALS FOR THE SERVICES RENDERED B Y THE ASSESSEE. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. THE ASSESSING OFFICER IN THIS CASE LEVIED PENALTY O NLY ON THE REASON THAT THE TRIBUNAL HAS SUSTAINED THE ABOVE ADDITIONS. HOWEVE R HE HAS NOT GIVEN HIS IT(SS) 16OF 2010 DR.RAVINDRANATH SORMA KADAPA 2 2 FINDINGS INDEPENDENTLY REGARDING THE LEVY OF PENALT Y. THE PROVISIONS OF SECTION 158BFA READ AS FOLLOWS SECTION 158 BFA(2): THE ASSESSING OFFICER OR THE CIT(A) IN THE COURSE OF ANY PROCEEDINGS UNDER THIS CHAPTER MAY DIRECT T HAT A PERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THAN THE AMOUNT OF TAX LEVIABLE BUT WHICH SHALL NOT EXCEED THREE TI MES THE AMOUNT OF TAX SO LEVIABLE IN RESPECT OF THE UNDISCLOSED INCOM E DETERMINED BY THE ASSESSING OFFICER UNDER CLAUSE ( C) OF SECTION 158BC: PROVIDED THAT NO ORDER IMPOSING PENALTY SHALL BE M ADE IN RESPECT OF A PERSON IF: I) SUCH PERSON HAS FURNISHED A RETURN UNDER CLAUSE (A) OF SECTION 158BC; II) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HAS BEE N PAID OR IF THE ASSETS SEIZED CONSIST OF MONEY THE ASSESSEE OFFERS THE MONEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYA BLE; III) EVIDENCE OF TAX PAID IS FURNISHED ALONG WITH THE RE TURN; AND IV) AN APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF TH AT PART OF INCOME WHICH IS SHOWN IN THE RETURN. 4. AS SEEN FROM THE ABOVE PROVISIONS THE PROVISI ONS OF SEC.158BFA(2) ARE AKIN TO PENALTY PROCEEDINGS U/S 2 71(1) ( C) OF THE INCOME TAX ACT 1961 AND THEREFORE THE PROVISIONS A RE ANALOGUES TO SECTION 271(1) (C ) OF THE ACT. THE SUPREME COURT JUDGEMENT IN THE CASE OF CIT VS. ANWARALI (1970) 76 ITR 696 (HC). IT WA S LAID DOWN THAT BURDEN TO PROVE THE CONCEALMENT IS ON THE DEPARTMENT. IN THE INSTANT CASE THE ADDITIONS WERE MADE BY THE ASSESSING OFFICER ONLY O N PRESUMPTION BASIS; THERE IS NO CONCLUSIVE EVIDENCE WITH REGARD TO THE ABOVE ADDITIONS. THE TRIBUNAL HAS ALSO GIVEN FINDINGS IN ITS ORDER DATED 24.10.2008 IN IT(SS)A.NO.140/HYD./2005 IN PARA 9 & 10 WHICH ARE REPRODUCED AS HEREUNDER WHERE IS NO CONCLUSIVE ESTABLISHMENT OF G UILT: 9. THE FIRST RECEIPT IS OF RS.87 857/-. THIS AMOU NT IS RECEIVED FROM TWO PERSONS IN GERMANY VIZ. ELOMA AND GLORIA. THE IT(SS) 16OF 2010 DR.RAVINDRANATH SORMA KADAPA 3 3 INTIMATION SENT ALONG WITH THE REMITTANCE AND WHICH IS PART OF THE SEIZED MATERIAL STATES THAT THE AMOUNT IS SENT FOR MEDICAL EQUIPMENT. THE SEIZED MATERIAL ALSO INDICATES THAT THE ASSESSEE MAY HAVE RENDERED SERVICE TO THESE TWO PERSONS AND IN CONSIDERATION OF THE SERVICES RENDERED THE AMOUNT SEEMS TO HAVE BEEN SENT TO THE ASSESSEE. THE TWO PERSONS DO NOT APPEAR TO BE CONNECTED EITHER WITH VTL OR CPT AND THE AMOU NT CLEARLY REPRESENTS PROFESSIONAL INCOME OF THE ASSESSEE. AC CORDINGLY THIS ADDITION IS SUSTAINED. 10. ANOTHER SUM OF RS.29 500/- ALSO APPEARS TO BE THE INCOME OF THE ASSESSEE. FIRSTLY THERE IS NO INDICATION T HAT THIS HAS BEEN SENT FOR ANY CHARITABLE PURPOSE. THE SMALLNES S OF THE AMOUNT ALSO IS INDICATIVE OF THE FACT THAT REMITTAN CE AS SMALL AS THIS FROM FAR AWAY GERMANY CANNOT BE FOR CHARITABLE PURPOSE. FURTHER THE PERSON SENDING THE REMITTANCE VIZ. MR S. BUTENOTH ALSO DOES NOT SEEM TO BE CONNECTED IN ANY WAY WITH VTL OR CPT. ACCORDINGLY THIS ADDITION IS ALSO SUSTAINED. 5. IN THIS CASE THE ASSESSEE HAS GIVEN EXPLANATI ON REGARDING THE NATURE OF RECEIPT. HOWEVER IT WAS NOT ACCEPTED BY THE AUTHORITIES WHILE SUSTAINING ADDITIONS. THAT ITSELF CANNOT BE THE RE ASON FOR LEVY OF PENALTY. THE ASSESSING OFFICER WITHOUT BRINGING ON ANY CONCL USIVE EVIDENCE TO PROVE THE CONCEALMENT BY THE ASSESSEE OR THE FACT OF FURN ISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE PENALTY CANN OT BE LEVIED. MERELY BECAUSE ADDITION WAS SUSTAINED PENALTY U/S 158BFA CANNOT BE LEVIED AUTOMATICALLY. LEVY OF PENALTY WOULD NOT FOLLOW AS A NATURAL COROLLARY DE HORS UNDER THE SAID PROVISIONS. IT CANNOT BE SAID WITH CERTAINTY THAT THE ASSESSEE HAS FAILED TO RETURN THE CORRECT INCOME DU E TO ANY FRAUD GROSS OR WILLFUL NEGLIGENCE ON THE PART OF THE ASSESSEE. ME RELY CERTAIN RECEIPTS WERE TREATED AS INCOME OF THE ASSESSEE THERE IS NO MATE RIAL TO SHOW THE ASSESSEE HAS EARNED THE INCOME OUTSIDE THE BOOKS OF THE ASSESSEE. SUCH ADDITION COULD NOT AUTOMATICALLY JUSTIFY IMPOSITION OF PENALTY. IN ORDER TO JUSTIFY LEVY OF PENALTY THERE MUST BE SOME MATERIA L CIRCUMSTANCES LEADING TO REASONABLE CONCLUSION THAT THE AMOUNT DOES ACTUA LLY RECEIVED BY THE ASSESSEE AS INCOME AND THE CIRCUMSTANCES MUST SHOW THAT THERE WAS IT(SS) 16OF 2010 DR.RAVINDRANATH SORMA KADAPA 4 4 CONSCIOUS CONCEALMENT OR ACT OF FURNISHING INACCURA TE PARTICULARS OF INCOME. THE ASSESSMENT ORDER ITSELF DOES NOT PROVI DE THE CONCLUSIVE EVIDENCE THAT THE AMOUNT ASSESSED WAS IN FACT THE C ONCEALED INCOME OF THE ASSESSEE. THE DEPARTMENT NEVER EXAMINES PERSONS WHO HAVE GIVEN THESE RECEIPTS. THOUGH THE ADDITIONS WERE JUSTIFIED IN A SSESSMENT PROCEEDINGS THE SAID ADDITIONS ITSELF CANNOT BE THE REASON FOR LEVY OF PENALTY. CIRCUMSTANCES HEREIN DO NOT JUSTIFY IMPOSITION OF P ENALTY. SEC.158BFA IS BEING A PENALTY PROVISIONS THEY HAVE TO BE STRICTL Y CONSTRUED AND BEING TOTALLY AMBIGUOUS HAD TO BE CONSTRUED IN FAVOUR OF THE ASSESSEE. PROVISIONS OF SECTION 158BFA ENUMERATES CIRCUMSTANC ES UNDER WHICH PENALTY SHALL NOT BE LEVIED AND THE ABSENCE OF THOS E CIRCUMSTANCES WILL AUTOMATICALLY ATTRACT PENALTY IS NOT ACCEPTABLE. MORE SO WHEN THE MAIN SECTION USES THE WORD MAY WHICH USES A DISCRETIO N TO THE ASSESSING OFFICER AND SUCH DISCRETION SHOULD HAVE BEEN EXERCI SED IN FAVOUR OF THE ASSESSEE IN VIEW OF THE FACT THAT THERE IS NO CONCL USIVE EVIDENCE AGAINST THE ASSESSEE TO LEVY PENALTY. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS A LLOWED AND THE PENALTY LEVIED ON THE ASSESSEE IS DELETED. ORDER PRONOUNCED IN THE OPEN COURT 29.10.2010 SD/- SD/- N.R.S. GANESAN CHANDRA POOJARI JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 29 TH OCTOBER 2010 COPY FORWARDED TO: 1. SHRI S. RAMA RAO FLAT NO.102 SHRIYAS ELEGANCE DOOR NO.3-6- 643 ST. NO.9 HIMAYAT NAGAR HYDERABAD 2. THE ACIT CIRCLE 2(1) THIRUPATHI 3. CIT(A) HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP