Income Tax Appellate Tribunal - Ahmedabad
Indiraben P.Patel, Ahmedabad vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "A" BENCH AHMEDABAD
Before Shri D.K.Tyagi, Judicial Member and
Shri A. Mohan Alankamony, Accountant Member
ITA Nos. 79 to 84/Ahd/2013
Assessment Years :2003-04 to 2008-09
Indiraben P. Patel V/s. ITO,
10, Chandravati Society, W ard 6(4),
Nr. Bhairavnath Temple, Pratyaksh Kar Bhavan,
Bhairavnath Road, Opp. Polytechnic, Ambawadi,
Kankaria, Ahmadabad - Ahm edabad
380028
P AN No. ABHPP4151H
(Appellant) .. (Respondent)
अपीलाथȸ कȧ ओर से Shri P. M. Patel, A.R.
By Appellant
ू×यथȸ कȧ ओर से/By Respondent Shri Rahul Kumar, Sr. D.R.
सुनवाई कȧ तारȣख/Date of Hearing
16.05.2013
घोषणा कȧ तारȣख/Date of Pronouncement 21.06.2013
ORDER
PER : D.K.Tyagi, Judicial Member
These appeals filed by the assessee against separate orders of CIT(A)- XI, Ahmadabad, for A.Ys. 2003-04 to 2008-09, confirming the penalty imposed by Assessing Officer u/s. 271(1)(C) of the Act. Since facts in all the appeals are same and similar grounds of appeal except the figure has been taken. These were heard together and are being disposed of by this consolidated order by taking the facts of A.Y. 03-04.
2. Brief facts of the case are that in the case of assessee's husband, the FIU-IND had intimated that he had made substantial investments in various schemes using 20 folios. In most of the folios, the invested amount was of the I T A No s . 7 9 to 84 / Ah d /2 0 13 A. Ys . 20 03- 04 t o 08- 09 Page 2 order of Rs.45,000/- to Rs.48,000/-. The investment amount was kept less than Rs. 50,000/- to evade the KYC norms. FIU-IND detected investment and informed the ADIT, Ahmadabad. In pursuance to this information, the ADIT issued summons u/s. 131(1A) to the assessee on 28.04.2009. In these summons specific inquiry was made in respect of investments in movable and immovable assets. During the investigation, the assessee had admitted following undisclosed incomes:
Asst. Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Undisclosed 539,314 471,886 786,528 458,970 545,339 412,484 income In addition to this, the assessee had also admitted following undisclosed income in the case of her husband i.e. Shri Prahladbhai Ranchodbhai Patel.
Asst. Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Undisclosed 624,031 534,971 792,242 505,394 579,469 637,412 income To bring the undisclosed income to tax, notice u/s. 148 was issued on 22.03.2010 for A.Y. 03-04. In response to this, the assessee filed revised return declaring taxable income of Rs.7,00,370/- and tax free income of Rs.27,906/-. The assessment in this case was completed by assessment order dated 30.11.2010 wherein the returned income of Rs.7,00,370/- was accepted. Penalty proceedings u/s. 271(1)(C) were also initiated in the assessment order.
3. Since the assessee had not declared her taxable income of Rs. 5,52,137/- (7,00,370-1,48,233) in the regular course, accordingly, the Assessing Officer vide penalty order dated 30.05.2011 levied a penalty of I T A No s . 7 9 to 84 / Ah d /2 0 13 A. Ys . 20 03- 04 t o 08- 09 Page 3 Rs.1,65,641/- for concealment of particulars of income. The Assessing Officer while levying this penalty observed as under:
"The assessee filed her return of income for the A.Y. under consideration on 30/09/2003 declaring total income of Rs.1,48,233/-. In this case the FIU-IND had disseminated information that Sh. Praladbhai R Patel, husband of the assessee had made investment of substantial amount by using 20 folios in various schemes. In most of the folios, the investment amount was Rs. 45,000/- to Rs. 48.000/- which appeared to be an attempt to avoid K Y C. Sh. Praladbhai R Patel, husband of the assessee was also joint holder in some folios by using several bank accounts. Investment of substantial amount, by using multiple folios and investment just below threshold limit, were considered suspicious and the Asstt. Director of Income- Tax (Investigation), Unit ll(2) had initiated investigation into the matter by way of issuing summons u/s 131 of the I T Act, 1961 on 28/04/2009 to Shri Prahadbhai R Patel, husband of the assessee, disclosed the Income of Rs. 5,94,314 /- in the hands of the assessee for the A.Y. 2003-04.
2. The case of assessee was therefore reopened by way of issuing notice u/s. 148 dated 22/03/2010 of The I. T. Act, 1961 after recording following reasons for the same:-
"Reason recorded for issue of Notice u/s. 148 of the Act. In this case the DDlT(Inv), Unit-II(2), Ahmedabad vide confidential letter No. DDIT(lnv.)-ll(2)/FIU-IND/PRP/Forw./2009-10 dated 3.2.2010 addressed to the Addl.CIT, Range - 6, Ahmedabad and copy endorsed to the ITO, Ward 6(4), Ahmedabad has forwarded case records relating to suspicious transaction undertaken by Shri Prahladbhai R. Patel, Ahmedabad on the basis of information disseminated by FIU-IND. As per the details passed on to this office,Shri Prahladbhai R. Patel has admitted total undisclosed income for the A.Ys. 2003-
04 to 2008-09, vide letter dated 11.11.2009, pertaining to him, his wife (Smt. Indiraben P. Patel and his three children. The bifurcation of undisclosed income I T A No s . 7 9 to 84 / Ah d /2 0 13 A. Ys . 20 03- 04 t o 08- 09 Page 4 admitted in the case of Indiraben P. Patel (wife of the assessee),assessment year-wise are given as under:-
Asst. Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Undisclosed 539,314 471,886 786,528 458,970 545,339 412,484 income In view of the above information, I have reason to believe that in the case of the assessee, Smt. Indiraben P. Patel, the income chargeable to tax of Rs. 5,94,314/- for A. Y. 2003-04 has escaped assessment within the meaning of section 147 of the I.T. Act, 1961, "
3. After reopening the case, the assessee filed revised return alongwith submission dated 22/04/2010 declaring total income of Rs. 7,00,370/- and tax free income of Rs. 27,906/- for the A Y 2003-
04. Thereafter, notice u/s143(2), dated 01/07/2010 issued and duly served upon the assessee. Details required for completion of assessment required vide notice u/s 142(1) dated 22/09/2010. In response to above notices, A R of the assessee attended and order u/s. 143(3) r.w.s. 147 of the Act was passed on 30/11/2010 computing total income of Rs.7,00,370/-. Penalty proceedings were initiated separately for concealment of true particulars of income. Notice u/s. 274 r.w.s, 271(1)(C) issued along with the assessment order and duly served upon the assessee. The assessee did not respond to the notice so issued. A fresh notice was issued on 16.05.2011 requesting the assessee to show cause as to why penalty u/s 271(1)(c) of the I T Act should not be levied in her case. The assessee did not respond to this notice either. It is therefore, presumed that the assessee has no explanation to offer and penalty proceedings are hereby finalized.
Section 271(l)(c) of the I.T Act provides that where the assessing officer, in the course of any proceedings under the IT Act, is satisfied that any person has concealed the particulars of his income or I T A No s . 7 9 to 84 / Ah d /2 0 13 A. Ys . 20 03- 04 t o 08- 09 Page 5 furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income.
Further, In Dilip N Shroff v JCIT [2007] 6 SCC 329, the Apex court explained the terms "concealment of income" and "furnishing inaccurate particulars" which are the basis upon which penalty u/s 271(1)(c) of the I T Act could be levied. Hon'ble Court observed that the expression "conceal" is of great importance. According to Law Lexicon, the word "conceal" means:
"to hide or keep secret. The word "conceal" is con + celare which implies to hide. It means to hide or withdraw from observation; to cover or keep from sight; to prevent the discovery of; to withhold knowledge of. The offence of concealment is, thus, a direct attempt to hide an item of income or a portion thereof from the knowledge of the Income-tax authorities."
4. In this case the assessee had filed her original return of income declaring a total income of Rs. 1,48,233/-. Investigations carried out by the Department revealed that the assessee had made investments out of undisclosed sources and when confronted by the Department, in response to a notice U/s. 148, the assessee filed a return of income declaring the hitherto undisclosed income. Had the investigations been not carried out by the Department, the sources of investments made by the assessee would have not been brought to taxation. The assessee was therefore committed default by concealing true particulars of her income to the extent of Rs.5,52,137/- for which he was liable for penalty u/s 271 (1)(c) of the Act. The assessee had deliberately and willfully evaded the resultant I T A No s . 7 9 to 84 / Ah d /2 0 13 A. Ys . 20 03- 04 t o 08- 09 Page 6 tax of Rs.1,65,641/-. In this case, minimum and maximum penalty leviable u/s.271 (1) (c) of the Act are as under:
Penalty leviable at 100% of tax on income concealed of Rs.5,52,137/- Rs.1.65,641/-
300% of tax on income concealed Rs.4,96,923/-
However, considering the facts of the case, a penalty of Rs.1,65,641/-, is levied in this case. Issue Demand Notice & Challan."
This action of the Assessing Officer was confirmed by ld. CIT(A).
4. While confirming the action of the Assessing Officer, ld. CIT(A) observed as under:
"3. In the penalty order the A.O. has clearly mentioned that penalty notice u/s. 274 r.w.s. 271(1)(C) issued to the appellant on 30.11.2010 i.e. alongwith the assessment order. This notice remained uncomplied with. Another penalty notice was issued by the A.O. on 16.05.2011. This notice also remained uncomplied with. The fact of non-compliance of penalty notices remained uncontroverted even during the appellate proceedings. Since the appellant has not furnished any reply during the penalty proceedings, accordingly, the appellant's case is wholly and exclusively covered with the provisions of sub clause-A to explanation-1 to section 271(1)(C). Since the appellant has failed to file any reply during the penalty proceedings, accordingly, as per the provisions of sub-clause A of explanation 1 to section 271(1)(C), the items of undeclared income are hit by the penal provisions of sec.271(1)(C) of the I.T. Act, 1961. Reliance in this regard is place on K.P. Madhusudanan vs CIT 251 ITR 99 (S.C)."
I T A No s . 7 9 to 84 / Ah d /2 0 13 A. Ys . 20 03- 04 t o 08- 09 Page 7
5. At the time of hearing, before us, ld. Counsel for the assessee besides making other submission also submitted that the Assessing Officer as well as ld. CIT(A) were wrong in saying that penalty notice issued by the Assessing Officer on 16.05.2011 was not complied with by the assessee. For making this submission, reliance was placed on Annexure F of the paper book at page no.32, which is a letter addressed to the Assessing Officer dated 24th May, 2011 in reply to penalty notice dated 16.05.2011 to the Assessing Officer, which was claimed to have been received by the office of the Assessing Officer on 26th May, 2011 as evidenced by the seal of Assessing Officer's office of even date. It was further submitted that unless this explanation offered by the assessee was considered and found to be false or not bonafide, explanation 1 to Section 271(1)(C) of the Act is not attracted and penalty for concealment u/s. 271(1)(C) cannot be levied. Reliance was placed for making this submission on the decision of Hon'ble Apex Court in the case of T. Ashok Pai vs. CIT, 292 ITR 11 (SC). Concluding his argument, ld. Counsel for the assessee submitted that the penalty imposed by the A.O. and sustained by the ld. CIT(A), may kindly be deleted.
6. Ld. Sr. D.R., on the other hand, relied upon the orders of lower authorities.
7. After hearing both the parties and perusing the record, we find that the Assessing Officer, while levying penalty in this case, has categorically mentioned that no reply was filed by the assessee in compliance to the notice dated 16.05.2011, which was served upon the assessee. Similarly, we find that the ld. CIT(A) has also mentioned that during appellate proceeding before I T A No s . 7 9 to 84 / Ah d /2 0 13 A. Ys . 20 03- 04 t o 08- 09 Page 8 him also the fact of non compliance of penalty notice was not controverted. We are also surprised as to why the assessee did not bring the fact of replying the penalty notice dated 16.05.2011 of the Assessing Officer, to the notice of ld. CIT(A). However, since the copy of reply has been placed on record before us claiming the same being received by the office of the Assessing Officer on 26.05.2011 as evidenced by the seal of Assessing Officer's office of even date and penalty order was passed by the Assessing Officer on 30.05.2011, the same cannot be ignored. Therefore, we feel that the matter requires fresh adjudication at the end of Assessing Officer after taking into consideration the reply dated 24.05.2011 of the assessee in compliance to the penalty notice dated 16.05.2011. For this purpose, the matter is restored back to the file of A.O. for fresh adjudication after giving opportunity of being heard to the assessee.
8. In the result, all these appeals of assessee are allowed for statistical purpose.
This Order pronounced in open Court on 21.06.2013 Sd/- Sd/-
(A. Mohan Alankamony) (D.K. Tyagi)
Accountant Member Judicial Member
True Copy
S.K.Sinha
आदे श कȧ ूितिलǒप अमेǒषत / Copy of Order Forwarded to:-
1. अपीलाथȸ / Appellant
2. ू×यथȸ / Respondent
3. संबंिधत आयकर आयुƠ / Concerned CIT
4. आयकर आयुƠ- अपील / CIT (A)
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड[ फाइल / Guard file.
By order/आदे श से,