Income Tax Appellate Tribunal - Pune
Anilkumar Rampratap Agrawal (Goyal),, ... vs Assistant Commissioner Of ... on 30 March, 2017
आयकर अपील य अ धकरण] पण
ु े यायपीठ "ए" पण
ु े म
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
सु ी सष
ु मा चावला, या यक सद य एवं
ी अ नल चतव
ु द
" , लेखा सद य के सम%
BEFORE MS. SUSHMA CHOWLA, JM AND
SHRI ANIL CHATURVEDI, AM
आयकर अपील सं. / ITA No.1529/PUN/2014
नधा'रण वष' / Assessment Year : 2007-08
Shri Anilkumar Rampratap .......... अपीलाथ /
Agrawal (Goyal), 40, Giriraj,
Appellant
Vidyanagar, Jalna Road,
Aurangabad - 431003.
PAN No.AGXPG1041N.
बनाम v/s
The Asst.Commissioner of Income Tax .......... यथ /
(Central), Central Revenue Building,
Respondent
Cantonment, Aurangabad.
अपीलाथ क ओर से / Appellant by : None
यथ क ओर से / Respondent by : Shri Anil Kumar
Chaware.
सन
ु वाई क तार ख / घोषणा क तार ख /
Date of Hearing : 08.03.2017 Date of Pronouncement: 30.03.2017
आदे श / ORDER
PER ANIL CHATURVEDI, AM :
This appeal of the assessee is emanating out of the order of Commissioner of Income Tax (A) - Aurangabad dated 28.05.2014 for the assessment year 2007-08.
2. The relevant facts as culled out from the material on record are as under :-
2ITA No.1529/PUN/2014
AY.No.2007-08 2.1 Assessee is an individual who is stated to be belonging to Kalika Group in whose cases a search and seizure action u/s 132 of the Act was conducted on 16.06.2009. During the course of search action, various papers, diary etc. were found and seized. In view of the material found, assessee offered to tax Rs.5,00,000/- in return of income that was filed in response to notice u/s 153A of the Act.
Consequent to the search, notice u/s 153A of the Act was issued to assessee on 08.06.2011 and in response to which assessee filed his return of income on 18.07.2011 declaring total income at Rs.9,58,239/-. Thereafter the assessment was completed on 30.11.2011 and the total income was assessed at Rs.9,58,239/-. AO noted that since the income of Rs.5,00,000/- was not shown in the original return of income but was declared in the return furnished in response to notice u/s 153A of the Act and in view of the provisions of Explanation of 5A to Sec.271(1)(c) of the Act, assessee was liable for penalty. He accordingly vide order dated 17.05.2012 levied penalty of Rs.1,53,000/- by invoking Explanation 5A to Sec.271(1)(c) of the Act. Aggrieved by the order of AO, assessee carried the matter before Ld. CIT(A) who upheld the levy of penalty and dismissed the appeal of the assessee by holding as under :
"6. Ground No.2 is in respect of penalty of Rs.1,53,000/- on the amount of Rs.5,00,000/- offered to tax in the return of income filed in response to notice u/s 153A of the Act. It has also been noticed that during search action, incriminating papers and material has been found and seized and on the basis of the same, an amount of Rs.5,00,000/- has been offered to tax in statement recorded u/s 132(4) and also return of income filed u/s 153A of the Act. The A.O. has levied penalty by invoking Explanation-5A to section 271(1)(c) of the Act. The said Explanation-5A reads us under -
"[Explanation-5A - Where, in the course of a search initiated u/s.132 on or after the first day of June, 2007, the assessee is found to be the owner of -
(i) any money, bullion, jewellery or other valuable articles or thing (hereinafter in this Explanation referred to as assets) and the assessee claims that such assets have 3 ITA No.1529/PUN/2014 AY.No.2007-08 been acquired by him by utilizing (wholly or impart) his income for any previous year,
(ii) any income based on any entry in any books of account or other documents or transactions and he claims that entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and -
(a) where the return of income for such previous year has been furnished before the said date but such income has not been declared therein; or
(b) the due date for filing the return of income for such previous year has expired but the assessee has not filed the return.
then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income.]"
6.1 From the above Explanation-5A it can be noticed that the said Explanation is applicable in the cases where the action u/s 132 has been conducted after 01/06/2007 and the same is applicable in respect of the amount offered to tax in the returns of income filed for the years in respect of the time limit prescribed u/s 139(1) has been expired on the date of search. The provisions of Explanation-5A reproduced above are clearly applicable to the case of the appellant and hence the A.O. is justified in invoking the said Explanation and levying penalty u/s 271(1)(c) of the Act. The above proposition of law is supported by the recent decision of Hon'ble ITAT, Pune in the case of ACIT Vs. Chhoriya Land Developers & Construction Company bearing ITA Nos.1389 to 1395/PN/2012 dated 20/12/2013. In this decision, the Hon'ble ITAT, in para-10 & 11 has held as under.
"The unambiguous phraseology of the Explanation 5A, which we have already elucidated earlier, clearly makes out that the legislative intent depicts that Explanation 5A is applicable where a search has been initiated u/s 132 of the Act on or after 01.06.2007 and it covers (a) any precious year which has ended before the date of search and where the return of income for such previous year has been furnished before the said date but such income has not been declared; and, (b) any previous year whose due date of filing of the return of income has expired but assessee has not filed the return till the date of search, if other conditions prescribed therein are satisfied. Therefore, the aforesaid plea of the assessee, in our view, does not merit indulgence and is rejected accordingly.
11. For all the above reasons, we therefore, find no justification for the CIT(A) to hold that the provisions of Explanation 5A to section 271(1)(c) of the Act are inapplicable in the present case. On the contrary, as the aforesaid discussion shows, the case of the assessee is liable to be examined in terms of Explanation 5A to section 271(1)(c) of the 4 ITA No.1529/PUN/2014 AY.No.2007-08 Act and accordingly, the order of the CIT(A) on this aspect is set-aside and that of the Assessing Officer is restored."
6.2 In view of the above facts and discussion, I am of the considered view that the A.O. is justified in levying penalty on the income of Rs.5,00,000/- declared by the appellant in return of income filed u/s 153A at Rs.40,21,630/-. The penalty u/s 271(1)(c) of Rs.1,53,000/- is, therefore, confirmed."
Aggrieved by the order of Ld. CIT(A), assessee is now in appeal before us and has raised the following ground :
"On the facts and circumstances of the case and in law, the learned CIT(A), Aurangabad has erred in confirming the order of the Assistant Commissioner of Income Tax (Central), Aurangabad, passed u/s.271(1)(c) on dated 17.05.2012 amounting to Rs.1,53,000/- for the A.Y.s 2007-2008 the penalty levied may kindly be deleted."
3. On the date of hearing none appeared on behalf of the assessee nor any adjournment application was filed on his behalf though the notice of hearing was served on the assessee. We therefore proceed to dispose of the appeal ex-parte qua the assessee. Before us, Ld.D.R. supported the order of AO and Ld. CIT(A) and further relied on the decision of Co-ordinate Bench of the Tribunal in the case of Sarita Kaur Manjet Singh Chopra in ITA No.1562/PN/2013 dt.30.10.2015. He thus supported the order of Ld. CIT(A).
4. We have heard the Ld. D.R. and perused the material on record. The issue in the present case is with respect to levy of penalty by invoking Explanation 5A to Sec.271(1)(c) of the Act. It is an undisputed fact that a search action took place on 16.06.2009 and that assessee had offered the income in response to notice u/s 153A of the Act and therefore the applicability of provisions of Sec.271(1)(c) Explanation 5A is not in doubt. In the case of Sarita Kaur Manjeet Singh Chopra (supra), we find that the Co-ordinate 5 ITA No.1529/PUN/2014 AY.No.2007-08 Bench of the Tribunal has upheld the levy of penalty in case of search inter alia u/s 132 of the Act on or 01.06.2007 and when assessee was found to be owner of any money, bullion, jewellery or other valuable articles or things and the assessee claims that such assets have been acquired by him by holding as under :
"14. The first aspect of the issue raised by the assessee before us is that where no satisfaction has been recorded by the Assessing Officer, since in the hands of assessee, there was no addition whatsoever, as the income offered by the assessee was accepted in toto, no penalty under section 271(1)(c) of the Act could be levied. From the perusal of assessment order, it is clear that the Assessing Officer after considering the facts of the case and also the return of income filed by the assessee pursuant to issue of notice under section 153A of the Act vide para 3.2 noted that the total sale consideration of the ancestral property was Rs.3.40 crores, out of which Rs.1.70 crores was received in cash and Rs.1.70 crores was received in cheque. The cheque amount was shared by the co-owner. However, the entire cash amount was claimed to be received by the assessee. The Assessing Officer further considered that the assessee had offered the cheque amount and cash amount aggregating to Rs.2.55 crores for taxation under the head 'long term capital gains'. The Assessing Officer further observed that since the assessee had not declared this amount of capital gains in her original return and subsequently, after search has declared the total amount of capital gains and thus, concealed the particulars of income and consequently, penalty proceedings under section 271(1)(c) of the Act were initiated separately by the Assessing Officer. The above said finding of the Assessing Officer is the deemed satisfaction recorded by the Assessing Officer before initiating penalty proceedings under section 271(1)(c) of the Act and in view thereof, we find no merit in the plea of the assessee in this regard.
15. Now, coming to the issue that where the assessee had offered the income in the return of income filed after surrendering the additional income, can the assessee be held to have concealed its income vis-à-vis original return of income filed by the assessee. Section 271(1) of the Act makes provision for levying penalties on assessee in different eventualities, one such eventuality is for concealment of income or furnishing of inaccurate particulars of income. Only on fulfillment of the conditions stipulated in section 271(1)(c) of the Act, there arises a question of exercising power under the said provision to impose penalty. The said section lays down that where the Assessing Officer or t he CIT(A) in the course of any proceedings under the Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, then he may direct that such person shall pay by way of penalty stipulated in the aforesaid provision. The Explanation/s under section 271(1)(c) of the Act set out the circumstances, which justifies the levy of penalty. For searches initiated under section 132 of the Act before first day of June, 2007, Explanation 5 was introduced by the Finance Act, 2007 with retrospective effect from 01.04.2003. Under the said 6 ITA No.1529/PUN/2014 AY.No.2007-08 section, where the assessee was found to be owner of any money, bullion, jewellery or other valuable articles or things and the assessee claims that such assets have been acquired by him by utilizing, wholly or in part his income, for any previous year, which had ended before the date of search, but the return of income for such year had not been furnished before the said date, or where the return of income had been furnished but such income had not been declared therein or for any previous year which is to end on or after the date of search, then notwithstanding that such income was declared by him in the return of income, he was deemed to have concealed particulars of his income or furnished inaccurate particulars of income, unless the income or the transactions were recorded in the books of account or the person in the course of search makes a statement under section 132(4) of the Act that the said money, bullion, jewellery, valuable articles or things, has been acquired by him out of his income, which has not been so far disclosed, but specifies the manner in which the said income has been derived and pays the taxes together with interest. Under Explanation 5, an exemption was provided to the person who was searched and was found in possession of money, bullion, jewellery, valuable articles or things, then in case he declared the same under the statement recorded under section 132(4) of the Act and thereafter, pays the taxes on the same, no penalty under section 271(1)(c) of the Act was levied on such person.
16. However, for searches initiated under section 132 of the Act on or after first day of June, 2007, another Explanation 5A was applicable, which was introduced by the Finance Act, 2007 w.e.f. 01.06.2007. The original Explanation 5A provided that where in the course of search, the assessee was found to be the owner of any money, bullion, jewellery, valuable articles or things and the assessee claims that such asset had been acquired by him by utilizing wholly or in part his income for any previous year or any income is based on any entry in books of account or other documents or transactions and he claims that the same represents his income for any previous year, then where the period has ended before the date of search and the due date for filing the return of income for such year has expired and the assessee has not filed the return of income, then notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall for the purpose of imposition of penalty under section 271(1)(c) of the Act, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of income. The said Explanation 5A was substituted by the Finance (No.2) Act, 2009 with retrospective effect from 01.06.2007 with the amendment that where the return of income for such previous year had been furnished before the date of search, but such income had not been declared therein or where the due date of filing the return of income for other previous year has expired, but the assessee had not filed the return of income, then notwithstanding the fact that the said income is declared by him in any return of income furnished on or after the date of search, he shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars of his income.
17. The deeming provisions of Explanation 5A under section 271(1)(c) of the Act are applicable to all the searches initiated under section 132 of the Act on or after first day of June, 2007.7 ITA No.1529/PUN/2014
AY.No.2007-08 The conditions laid down in the Explanation 5A is where during the course of search, the assessee is found to be in possession of any money, bullion, jewellery, valuable articles or things and the assessee claims that such assets have been acquired by him by utilizing wholly or in part his income, for any previous year on any income based on any entries in books of account, or other documents or transactions and he claims that such entries in the books of account or other documents or transactions represent his income for any previous year, then in cases where the return of income for such previous year had been furnished by the assessee prior to the date of search, but the said income had not been declared in the said return of income or the due date for filing the return of income had expired for such previous year and the assessee had not filed the return of income, it is further laid down that notwithstanding the fact that such income which has been discovered due to the search proceedings, is declared by him in any return furnished on or after the date of search, but irrespective of the same, he would be deemed to have concealed the particulars of income or furnished inaccurate particulars of income. Reading the above said provisions of the Explanation 5A to section 271(1)(c) of the Act, it is noted that the person is deemed to have concealed particulars of his income or furnished inaccurate particulars of such income, which is equivalent to the value of money, bullion, jewellery, valuable articles or things from the possession of the assessee during the course of search conducted on or after first day of June, 2007. Further, where any income is based on any entry in any books of account or other documents or transactions and he claims that all the above said represents his income for any previous year, then the Explanation lays down to that extent, the person would be deemed to have concealed his particulars of income or furnished inaccurate particulars of income."
Before us no contrary binding decision has been placed on behalf of assessee. We therefore by following the decision of the Co-ordinate Bench of the Tribunal, find no reason to interfere with the order of Ld. CIT(A) and thus the ground of assessee is dismissed.
5. In the result, the appeal of the assessee is dismissed.
Order pronounced on the 30th day of March, 2017.
Sd/- Sd/-
(SUSHMA CHOWLA) (ANIL CHATURVEDI)
या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
पण
ु े Pune; दनांक Dated : 30th March, 2017.
Yamini
8
ITA No.1529/PUN/2014
AY.No.2007-08
आदे श क) * त+ल,प अ-े,षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. The Pr.CIT-II, Pune
4. The CIT(A)-III, Pune.
5. #वभागीय &त1&न'ध, आयकर अपील य अ'धकरण, "ए" / DR, ITAT, "A" Pune;
6. गाड, फाईल / Guard file आदे शानस ु ार/ BY ORDER,स या////// True Copy //T // // True Copy// सहायक रिज12ार/ Assistant Registrar, आयकर अपील य अ'धकरण ,पण ु े / ITAT, Pune.