Valibhai Khanbhai Mankad, Ahmedabad vs Department Of Income Tax

ITO Shri Valibhai Khanbhai Mankad Ward 1(1), Vs Prop. Abad Roadways, Ahmedabad 35-A, Taslim Society, Nr. Bibi Talav, Vatva, Ahmedabad PAN : AFAPM 0480 P

अपीलाथ / (Appellant) ू"यथ यथ / (Respondent)

Revenue by : Shri Subhash Bains, CIT-DR Assessee(s) by : Shri A.C. Shah, AR

सुनवाई क% तार'ख/ / Dateof Hearing : 24/02/2015 घोषणा क% तार'ख / Date of Pronouncement: 27/02/2015

आदे श/O R D E R

PER BENCH :

This appeal by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-VI, Ahmedabad dated 09.06.2011 for the Assessment Year 2006-07.

2. The Revenue has raised the following grounds of appeal:-

The Ld. CIT(A) erred in law and on facts in deleting the penalty u/s 271(1)(c) amounting to Rs.2,81,24,512/-.

3. Briefly stated facts are that assessment u/s 143(3) of the Income-tax Act (hereinafter referred to as "the Act") was framed pertaining to Assessment Year 2006-07 vide order dated 26/12/2008. While framing the assessment, the Assessing Officer made various disallowances and additions. The Assessing Officer, while framing the assessment, also initiated the penalty proceedings. Subsequently, the penalty was imposed ITA No 1960/Ahd/2011 ITO v. Valibhai Khanbhai Mankad For AY 2006-07 2

u/s 271(1)(c) of the Act vide order dated 17.03.2011. Against the aforesaid penalty order, the assessee filed appeal before the ld. CIT(A) who, after considering the submissions, allowed the appeal and directed the Assessing Officer to delete the penalty. Aggrieved by the aforesaid order of the ld. CIT(A), the Revenue is an appeal before us.

4. The ld. CIT-DR submitted that the ld. CIT(A) was not justified in deleting the penalty imposed u/s 271(1)(c) of the Act. He submitted that admittedly a survey operation u/s 133A of the Act was conducted at the business premises of the assessee on 24.11.2006 and during the survey operation, the assessee offered additional income totaling to Rs.41,73,000/-. He submitted that the assessee cannot be allowed to take the benefit of its deliberate act of concealing income. He submitted that had the survey action was not conducted, the income would have been escaped assessment.

5. On the contrary, the ld. Counsel for the assessee Shri A.C. Shah vehemently argued that the order of the CIT(A) is justified and he submitted that the penalty was imposed on addition of Rs. 7,93,34,193/- and the income offered for taxation amounting to Rs.41,73,000/-, totaling to Rs.8,41,96,458/-. He submitted that out of these additions, the addition made on account of non-payment of TDS amounting to Rs.7,93,34,193 has been deleted by the Hon'ble ITAT in ITA No.2228/Ahd/2009 vide order dated 29.04.2011 and in respect of other additions, penalty has been deleted on the basis that the assessee has disclosed the same in his original return. Therefore, there was no concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee.

6. We have heard the rival submissions, perused the orders of the lower authorities and material available on record. The factum of deletion of addition in respect of non-deduction of tax by the assessee is not ITA No 1960/Ahd/2011 ITO v. Valibhai Khanbhai Mankad For AY 2006-07 3

controverted by the ld. CIT-DR. Therefore, we do not see any reason to interfere with the order of the ld. CIT(A) deleting the penalty on this amount. Further, we find that the fact that the penalty is levied on the amount which was reflected in the original return as income. The ld. CIT(A) has followed the decision of this Bench of the Tribunal rendered in the case of DCIT Vs. Dr. Satish B Gupta (42 SOT 48)(Ahd). Ld. CIT-DR has contended that the CIT(A) failed to appreciate the fact that the additional income amounting to Rs.41,73,000/- was declared in consequence to the survey action by the Revenue. However, it is not disputed by the ld. CIT- DR that the assessee has declared this income in his original Return of Income, although it was belated return. As per provisions of Section 271(1)(c) of the Income-tax Act, penalty can be imposed if the assessee has concealed the particulars of income or furnishing the inaccurate particulars of such income. There is no dispute with regard to the fact that the particulars of income are reflected in the Return of Income. It is not the case of the Revenue that the returns of income filed were invalid. In fact, the Assessing Officer has proceeded on the basis of the returns filed by the assessee and particulars furnished therein. Therefore, we do not see any good reason to interfere with the order of the ld. CIT(A) which is hereby confirmed. Thus, this ground of appeal of the Revenue is rejected.

7. In the result, the appeal of the Revenue is rejected.

Order pronounced in the Court on 27th February, 2015 at Ahmedabad.

Sd/- Sd/-

G.D. AGRAWAL (KUL BHARAT) VICE-PRESIDENT (AZ, LZ & BZ) JUDICIAL MEMBER Ahmedabad; Dated 27/02/2015 Biju T., PS ITA No 1960/Ahd/2011 ITO v. Valibhai Khanbhai Mankad For AY 2006-07 4 षत Copy आदे श क% ूितिल-प अमे-षत/ of the Order forwarded to : 1. अपीलाथ / The Appellant 2. ू"यथ / The Respondent. 3. संबंिधत आयकर आयु/ / Concerned CIT 4. आयकर आयु/(अपील) / The CIT(A)- VI, Ahmedabad 5. / DR, ITAT, Ahmedabad

-वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद

6. गाड फाईल / Guard file.

/ BY ORDER, आदे शानु सार

TRUE COPY

Dy./Asstt.Registrar) उप/सहायक पंजीकार ( उप/ अिधकरण, अहमदाबाद / आयकर अपीलीय अिधकरण, ITAT, Ahmedabad