Income Tax Appellate Tribunal - Chennai
Kishorekumar Gokaldas, Chennai vs Department Of Income Tax on 4 June, 2013
IN THE INCOME-TAX APPELLATE TRIBUNAL
'B' BENCH, CHENNAI.
Before Dr. O.K. Narayanan, Vice-President &
Shri S.S. Godara, Judicial Member
I.T.A. Nos.716 and 717/Mds/2013
Assessment Years : 2007-08 and 2009-2010
The Assistant Commissioner of Shri Kishorekumar Gokuldas,
Income Tax, Central Circle I (5), Vs. No.5, Bishop Wallers Avenue (East),
3rd Floor, Uthamar Gandhi Salai, Mylapore, Chennai 4.
Nungambakkam, Chennai 600 034. [PAN:AAKPK6281D]
(Appellant) (Respondent)
Appellant by : Shri N. Madhavan, JCIT
Respondent by : Shri R.Meenakshisundaram, Advocate
Date of Hearing : 04.06.2013
Date of pronouncement : 11.06.2013
ORDER
PER S.S. Godara, Judicial Member
These two appeals filed by the Revenue are directed against different orders of the Commissioner of Income Tax (Appeals) -I, Chennai both dated 09.01.2013; in ITA No. 53/2011-12, for assessment year 2007-08 and ITA No. 54/2011-12, for assessment year 2009-10; passed under section 271AAA of the Income Tax Act 1961 [in short the "Act"]. Since the issue raised by the Revenue is common in both appeals, i.e. deletion of penalty under section 271AAA of the "Act", we take up I.T.A. No. 716/Mds/2013 as the 'lead' case.
2 I.T.A. Nos Nos.716 & 717/M/ 717/M/13 /M/13
2. Inviting our attention to the grounds raised in the appeal, the Revenue vehemently contends that the CIT(Appeals) has erred in deleting penalty of `.18,02,049/- in question imposed by the Assessing Officer. In light thereof, the DR at the behest of the Revenue prays for acceptance of the appeal.
3. The assessee strongly supports the order of the CIT(Appeals) as well as findings contained therein and submits that since the penalty provision under section 271AAA of the "Act" is not attracted in the instant case, the impugned penalty has been rightly deleted.
4. Facts apropos are that the assessee is an 'individual'. He is a builder and has also got receipts from interest and rent. On 10.10.2007, the assessee had filed his 'return' disclosing income of `.2,30,900/- for the impugned assessment year. On 11.09.2008, a 'search' was conducted in his premises as well as in his group cases which lead to seizure of books of account and other documents. In the course thereof, he is also stated to have made disclosure of `.53.55 lakhs. Thereafter, a notice under section 153A dated 27.04.2010 was issued to him. In response, the assessee filed his 'return' dated 13.09.2010.This time, he declared income of `.55,85,900/-.
5. As we find from the case file, the Assessing Officer finalized 'scrutiny' assessment in assessee's case vide order dated 30.12.2010 accepting the income 'returned' by the assessee without any addition being made.
3 I.T.A. Nos Nos.716 & 717/M/ 717/M/13 /M/13 However, he also initiated 'penalty' proceedings under section 271(1)(c) of the "Act" on the ground that except for 'search', the undisclosed income admitted by the assessee in the course of 'search' amounting to `.53.55 lakhs comprising an amount of `.18.55 lakhs [`.15.00 lakhs and `.3.55 lakhs] in the shape of unaccounted cash payment made to one Smt. G. Lakshmi and other broker; an amount of `.10.00 lakhs to Mr. Petha Naicker and on money amount of `.25.00 lakhs paid for purchase of land which were not reflected in the books of account, would not have seen the light of the day.
6. In 'penalty' proceedings, it transpires that the Assessing Officer issued a letter dated 06.06.2011 to the assessee. Thereafter, he passed penalty order dated 27.06.2011 without any representation at the behest of the assessee on the ground that the penalty proceedings were getting barred by limitation on 30.06.2011.
7. Aggrieved, the assessee preferred appeal. It is noticed from the CIT(Appeals)'s order under challenge that while accepting assessee's contentions, it has been held that since he had duly admitted undisclosed income in the course of 'search' with source and tax had been paid, it is not a case to confirm the penalty. On legality also, it has been held that no penalty could have been imposed under section 271(1)(c) of the "Act" as in 'search' cases on or after 01.06.2007, the same could be done only under section 271AAA of the "Act".
4 I.T.A. Nos Nos.716 & 717/M/ 717/M/13 /M/13 Therefore, the Revenue is aggrieved and is in appeal before the 'Tribunal'.
8. We have heard rival contentions and perused the case file. The only contention of the Revenue before us is that, but for 'search', assessee's undisclosed income of `.53.55 lakhs would have gone unnoticed. The assessee, while justifying CIT(Appeals)'s order, places reliance on the statutory provisions i.e. section 271AAA(2) which reads as under:
"(2) Nothing contained in sub-section (1) shall apply if the assessee,--
(i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived;
(ii) substantiates the manner in which the undisclosed income was derived; and
(iii) pays the tax, together with interest, if any, in respect of the undisclosed income."
In view thereof and after giving our thoughtful consideration, we are of the view that admittedly, whilst initiating penalty proceedings under section 271(1)(c) of the "Act" in the impugned 'search' conducted on 11.09.2008 i.e. on or after 01.06.2007, the Assessing Officer had not taken into consideration the specific provision i.e. section 271AAA of the "Act". Apart from that, it also emanates from the case file that in the course of 'search', the assessee admitted undisclosed income of `.53.55 lakhs. The same was 'returned' on 13.09.2010 in furtherance to notice under section 153A of the 5 I.T.A. Nos Nos.716 & 717/M/ 717/M/13 /M/13 "Act". We make it clear that earlier, he had disclosed income of `.2,30,900/-. Post section 153A notice, he declared income of `.55,85,900/- i.e. `.2,30,900/- + additional amount of `.53,55,000/-. Needless to state, he also paid the taxes there upon. It is not the case of the Revenue that the assessment finalized lead to any addition in assessee's case. Similarly, there is no finding that the assessee had any 'undisclosed' income not returned after 153A notice. We reiterate that no cogent material has been produced by the Revenue to rebut the findings of the CIT(Appeals) regarding admission of undisclosed income by way of statement recorded under section 132(4), explanation of its source and also payment of taxes by the assessee. Therefore, in our view, the present case is covered by section 271AAA(2) of the "Act" and the penalty has been rightly deleted by the CIT(Appeals).
I.T.A. No. 717/Mds/2013
9. Both parties before us are fair enough to submit that in the instant case as well, the facts are similar and the same issue i.e. penalty deleted under section 271AAA of the "Act" is involved. After perusing the case file, we find that the present case has also arisen from the very 'search' dated 11.09.2008 hereinabove. Therefore, in this case as well, we uphold the order of the CIT(Appeals).
6 I.T.A. Nos Nos.716 & 717/M/ 717/M/13 /M/13
10. Consequently, both appeals filed by the Revenue are dismissed.
Order pronounced on Tuesday, the 11th of June, 2013 at Chennai.
Sd/- Sd/- (Dr. O.K. NARAYANAN) (S.S. GODARA) VICE-PRESIDENT JUDICIAL MEMBER Chennai, Dated, the 11.06.2013 Vm/- To: The assessee//A.O./CIT(A)/CIT/D.R.