Jignesh Venilal Koralwala, Bharuch vs Assessee
- CitationITA No.447/Ahd/2013
Ratio decidendi
The rule this decision rests on
Where additional income is declared in response to a notice under section 153A, that declaration is to be treated as a return filed under section 139(1), and where no addition is made over and above the income so declared, no penalty under section 271(1)(c) can be sustained in respect of that income. Where the Assessing Officer has made an addition over and above the income declared pursuant to a section 153A notice, and the assessee has disclosed all necessary particulars, the assessee is entitled to the immunity under Explanation 5 to section 271(1)(c), and a penalty on the residual addition cannot be imposed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
सुनवाई क तार ख/ Date of Hea ring : 2 2/04/2015 घोषणा क तार ख /Date of P ronouncement: 30 /04 /20 15
आदेश /O R D E R
PER SHRI S.S. GODARA, JUDICIAL MEMBER
This assessee's appeal for A.Y.2006-07, arises from order of the CIT(A)-I Baroda dated 30.11.2012 passed in case no.CAB/1- 91/2012-13 confirming penalty of Rs.70 lac, in proceedings u/s.271(1)(c) of the Income Tax Act in short 'the Act'.
2. Facts of the case are in a very narrow compass. The assessee individual is in civil construction business. He filed return u/s.139(1) admitting income of Rs.6,93,540/-. The department conducted a search in his case and associate's case on 17.1.2007 ITA No. 447/Ahd/2013 Shri Jignesh Venilal Koralwala.
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seizing alleged incriminating material. This culminated in issuance of a section 153A notice. The assessee filed his return in pursuance on 27.12.2007 enhancing his income to Rs.2,13,42,040/-. This included additional income of Rs.2,06,48,692/-. The Assessing Officer in the course of scrutiny refer to the alleged seized material revealing onmoney payments of Rs.16,46,970/- in sale instances of residential units in assessment years 2003-04, 2004-05 and 2006-07. The last one is the impugned assessment year. The corresponding onmoney sum herein reads Rs.1,85,000/-. The assessee had already declared a sum of Rs.18,500/- in the latter return. The Assessing Officer added the balance sum as well in his income returned by rejecting the assessee's plea of treating only 8 to 10 per cent thereof as the net profits. And also initiated penalty proceedings u/s.271(1)(c) alleging concealment and furnishing of inaccurate particulars qua the additional income abovesaid.
3. The assessee preferred an appeal in quantum proceedings. The CIT(A) in his order dated 4.1.2010 directed the Assessing Officer to treat only a sum of Rs.27,750/- as onmoney adition @15% of the gross amount (supra). The quantum proceedings attained finality accordingly.
4. The assessee strongly contested penalty notice in the relevant proceedings. He sought section 271(1)(c) Explanation 5 immunity. The Assessing Officer in penalty order dated 29.3.2011 held that additional income (supra) had not been voluntarily disclosed, there ITA No. 447/Ahd/2013 Shri Jignesh Venilal Koralwala.
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was no justification regarding onmoney addition in question and treated the assessee's case as that of concealment leading to furnishing of inaccurate particulars of income. The impugned penalty of Rs.70 lac stood imposed accordingly 'minimum' rate.
5. The CIT(A) has confirmed the Assessing Officer's action imposing the impugned penalty.
6. We have heard both sides and gone through the case file. Relevant facts stand narrated hereinabove. The authorities below treat assessee's additional income declared of Rs.2,06,48,692/- as a case of concealment and furnishing of inaccurate particulars of income u/s.271(1)(c) of the Act. The assessee reiterates the same in its grounds of appeal. The Revenue strongly supports the CIT(A)'s order. We find that the hon'ble jurisdictional High Court in the case of Kirit Dayabhai Patel vs. ACIT in Tax Appeal No.1181, 1182 to 1185 of 2010 decided on 3.12.2014 holds that in case the additional income is disclosed in furtherance to a section 153A notice, the same has to be treated as a one filed u/s.139(1) and unless any addition thereupon is made, it is not a case of penalty u/s.271(1)(c) of the Act. Admittedly facts of the present case indicate that such income assessed over and above one declared post 153A notice is an addition of Rs.27,750/- (supra). Therefore we follow the jurisdictional High Court and delete the impugned penalty. Coming to the aforesaid residual addition, the case file reveals that the assessee had already disclosed its all necessary details so as to ITA No. 447/Ahd/2013 Shri Jignesh Venilal Koralwala.
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qualify for immunity u/s.271(1)(c) Explanation 5. The assessee's grounds challenging imposition of the impugned penalty succeed.
7. The assessee's appeal is allowed.
Order pronounced in the Court on this day, the 30th April, 2015 at Ahmedabad.
Sd/- Sd/- (PRAMOD KUMAR) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 30/04/2015 Prabhat Kr. Kesarwani, Sr. P.S. आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आयु त / Concerned CIT
4. आयकर आयु त(अपील) / The CIT(A)-III, Ahmedabad
5. वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदेशानुस ार / BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
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