Bombay High Court
Rahul Shantaram Sawale vs The Asst Commissioner Of Income Tax ... on 25 February, 2019
Bench: Akil Kureshi, M.S. Sanklecha
8. os itxa 1469-1467-1472-1604-16.doc
R.M. AMBERKAR
(Private Secretary)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
O.O.C.J.
INCOME TAX APPEAL NO. 1469 OF 2016
WITH
INCOME TAX APPEAL NO. 1467 OF 2016
INCOME TAX APPEAL NO. 1472 OF 2016
INCOME TAX APPEAL NO. 1604 OF 2016
Rahul Shantaram Sawale .. Appellant
Versus
The Asst. Commissioner of Income Tax .. Respondents
Central Circle-1, Nashik & Anr.
...................
Ms. Alisha Pinto i/by Mihir Naniwadekar for the Appellant
Mr. Sham Walve for Respondent No. 1
...................
CORAM : AKIL KURESHI &
M.S. SANKLECHA, JJ.
DATE : FEBRUARY 25, 2019.
P.C.:
1. These appeals arise in similar background. They have been heard together and would be disposed of by this common order.
2. Since reference was made to the documents in Income Tax Appeal No. 1469 of 2016, same will be treated as lead matter. This appeal is filed by the assessee to challenge the judgment of the Income Tax Appellate Tribunal ('the Tribunal' for short). Learned counsel for the appellant assessee 1 of 5 ::: Uploaded on - 27/02/2019 ::: Downloaded on - 21/03/2019 12:02:48 :::
8. os itxa 1469-1467-1472-1604-16.doc pressed following question for our consideration:-
"Whether on the facts and in circumstances of the case and in law, the Tribunal was justified in holding that advances for booking of flats is income for the purpose of Explanation 5A of Section 271(1)(c) of the Income Tax Act, 1961 ("the Act" for short) and levying penalty for the same?"
3. Appellant assessee is engaged in the business of real estate development. The assessee's premises were subjected to search and seizure operation. Statements of responsible persons were recorded leading to issuance of notice under Section 153A of the Income Tax Act, 1961 by the Assessing Officer. The assessee filed return of income in which additional income was disclosed but it was stated that such additional income was disclosed to buy peace and on the condition that no penalty proceedings would be initiated. The Assessing Officer framed assessment pursuant to assessee's return under Section 153A of the Act and made the suitable additions. He also instituted penalty proceedings and imposed penalty under Section 271 (1)(c) of the Act read with explanation 5A. The assessee challenged the penalty order before the Commissioner (Appeals). Though several grounds were raised in the appeal memo, at the time of arguments, the assessee pressed only one 2 of 5 ::: Uploaded on - 27/02/2019 ::: Downloaded on - 21/03/2019 12:02:48 :::
8. os itxa 1469-1467-1472-1604-16.doc ground namely, "On the facts and in law the Assessing Officer has erred in levying penalty of Rs. 15,08,250/- under Section 271(1)(c) of the Act", before the Commissioner (Appeals).
4. The Commissioner (Appeals) allowed the appeal principally on the ground that the disclosure of the additional income related to the advances received by the assessee from the prospective buyers. He accepted the assessee's contention that such advance did not form the part of the assessee's income. The Revenue carried the matter in appeal. The Tribunal reversed the order of the Commissioner upon which the assessee has filed this appeal.
5. Having heard the learned counsel for the parties, we do not find any error in the view of the Tribunal. The order of the assessment under Section 153A of the Act has become final. The assessee has not questioned the additions further. It is true that the penalty proceedings are independent of the assessment proceedings. Nevertheless, the assessee cannot merely raise a contention that the advance receipt was really 3 of 5 ::: Uploaded on - 27/02/2019 ::: Downloaded on - 21/03/2019 12:02:48 :::
8. os itxa 1469-1467-1472-1604-16.doc not in the nature of income and therefore, no penalty could be levied. In the appeal before the Commissioner, the assessee had not taken any such elaborate ground.
6. We have perused the appeal memo of the appeal before the Commissioner which nowhere explains the assessee's stand that the amount in question did not represent the income or the reasons for the same. Further, as noted, the assessee confined the appeal to a single ground namely that the Assessing Officer had committed an error in leaving the penalty. We also notice that the main thrust of the assessee's contention in the appeal was that the disclosures were made to buy peace and on condition that the penalty proceedings would not be instituted. Both grounds not found favour with the Supreme Court in case of MAK DATA P Ltd Vs. CIT 1. We also notice that the assessee has not built up any case for arguing that the receipt in question was not in the nature of income. Merely by stating so and relying on the judgment of this Court in the case of CIT, Nagpur Vs. Karda Constructions Pvt Ltd2, 1 (2013) 358 ITR 593 (SC) 2 Income Tax Appeal (L) No. 1960 of 2012 decided on 25.2.2013 4 of 5 ::: Uploaded on - 27/02/2019 ::: Downloaded on - 21/03/2019 12:02:48 :::
8. os itxa 1469-1467-1472-1604-16.doc the assessee cannot hope to establish the same. The assessee had made disclosure of additional income. To dislodge his own declaration that the disclosures did not relate to income the assessee had to lay down a foundation which in the present case is totally missing. Section 271(1) of the Act as is well known refers to a penalty that may be imposed on an assessee under specified circumstances. Explanation 5A added to the said sub-section by Finance Act 2009 w.e.f. 1.6.2007 covers a situation where the assessee post search files a return of income disclosing additional income claiming immunity from penalty. The explanation provides that notwithstanding declaration of such income in the return filed after the date of search, the same would be deemed to be a case of concealing particulars of income or the case of furnishing of inaccurate particulars of income. The case of the assessee would squarely fall within this explanation and the Tribunal correctly reinstated the order of the Assessing Officer. In the result, no question of law arises. All Income Tax appeals are dismissed.
[ M.S. SANKLECHA, J. ] [ AKIL KURESHI, J ]
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