PIYUSH A. VORA,MUMBAI vs. ASST CIT CEN CIR 47, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH “A”, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No.3222/Mum/2017 (Assessment Year- 2009-10) Piyush A. Vora ACIT, CC-47 52/5th Floor, Kedia Apartment, Mumbai. Doongarshi Road, Malabar Hill, Vs Mumbai-400006 PAN:ABLPV6068P (Appellant) (Respondent) ITA No.3221/Mum/2017 (Assessment Year- 2010-11) Piyush A. Vora ACIT, CC-47 52/5th Floor, Kedia Apartment, Mumbai. Doongarshi Road, Malabar Hill, Vs. Mumbai-400006 PAN:ABLPV6068P (Appellant) (Respondent) TA No.3223/Mum/2017 (Assessment Year- 2011-12) Piyush A. Vora ACIT, CC-47 52/5th Floor, Kedia Apartment, Mumbai. Doongarshi Road, Malabar Hill, Vs. Mumbai-400006 PAN:ABLPV6068P (Appellant) (Respondent) ITA No.3224/Mum/2017 (Assessment Year- 2011-12) Piyush A. Vora ACIT, CC-47 52/5th Floor, Kedia Apartment, Mumbai. Doongarshi Road, Malabar Hill, Vs. Mumbai-400006 PAN:ABLPV6068P (Appellant) (Respondent)

Assessee by : Shri Prakash K. Jotwani (AR) Revenue by : Shri Virender Singh (DR)

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Reserve for order : 10.05.2018 Date of Pronouncement : 23.05.2018

Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This group of four appeals by assessee under section 253 of Income Tax Act

are directed against the separate orders of Ld. Commissioner of Income-Tax

(Appeals)-50, Mumbai, [for short the ld. CIT(A)] for Assessment Years

2009-2010 to 2011-12. In appeal for Assessment Year 2009-10, 2010-11 &

2011-12, the Ld. CIT(A) confirmed the penalty levied under section

271(1)(c) of the Act. For Assessment Year 2011-12, the Assessing Officer

also levied the penalty under section 271AAA, which was also confirmed by

Ld. CIT(A). In all appeal arising out of penalty levied under section

271(1)(c) the assessee has raised common grounds of appeal. Therefore, all

appeals were taken together and are decided by a consolidated order to

avoid the conflicting decision.

assessee has raised the following grounds of appeal:

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erred in stating that there is no provision for revising the return of income filed u/s 153A. 3. Brief facts of the case are that a search and seizure action under section 132

was carried out at the residence and business premises of Rohan Group

related notice on 26.05.2011 by DDIT(Inv.), Unit-3, Mumbai. Search action

at the residence of assessee was also carried out. The assessee is one of the

individual in Rohan Group. The assessee filed return of income under

section139 of the Act for Assessment Year 2009-10 on 26.12.2011

declaring total income of Rs. 36,16,250/-. Consequent upon the search the

assessee was served with notice under section 153A. In response to the

notice under section 153A, the assessee filed return of income on

28.01.2014 declaring the same income as declared in the return of income

under section 139. During the assessment proceeding the assessee filed

revised return under section 153A and revised return of income declaring

total income of Rs. 38,31,250/-. In the revised return of income, the assessee

added commission income of Rs. 2,00,000/-, which was not offered in

earlier returns. The Assessing Officer passed the assessment order on

28.03.2014 under section 143(3) rws 153A accepting the revised return of

income. The assessing officer initiated penalty under section 271(1)(c). The

assessing officer initiated penalty on the additional income of Rs. 2,00,000/-

offered in the revised return of income and the deduction of Rs. 15,000/-

claimed under section 80D, which was not offered/ claimed in earlier

income. The assessing officer levied a minimum penalty @ 100% of the tax 3

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sought to be evaded. The Assessing Officer worked out the penalty of Rs. 73,078/- in its order dated 19.09.2014. On appeal before the Ld. CIT(A), the penalty order on additional income of Rs.200,000/- was confirmed, however

on deduction under section 80D of Rs.15,000/- the penalty was deleted. Therefore, further aggrieved by the order of Ld. CIT(A), the assessee has filed the present appeal before us. 4. We have heard the Ld. Authorized Representative (AR) of the assessee and

Ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The Ld. AR of the assessee submits that assessee has neither concealed the income nor furnished inaccurate

particular thereof. During the assessment proceeding, the assessee filed revised return of income declaring/offering the tax on commission income, which was not offered in the earlier return. The assessee offered suo-moto.

The Assessing Officer has not detected any concealed income or fact of inaccurate particular. Since the assessee has neither concealed nor furnished inaccurate particular of income, therefore, the penalty levied by Assessing

Officer is not sustainable. The ld. AR of the assessee submits that the Assessing Officer made the erroneous application of ratio in case of MAK Data (supra) 358 ITR 493(SC). On the other hand, the Ld. DR for the Revenue supported the order of Assessing Officer. The Ld. DR for the

Revenue submits that it was a case of search. The return of income in response to the notice under section 153A was filed by assessee. During the

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assessment proceeding under section 153A when the question was raised by the Assessing Officer the then the assessee filed his revised return of income. The revised return filed by the assessee was not voluntary rather the

assessee was cornered by the Assessing Officer. The Ld. DR for the Revenue further submits that the plea of bonafide error is an after though story of the assessee. 5. We have considered the rival submission of the parties and have gone

through the orders of authorities below. We have noted that the assessee filed return of income under section 139 on 26.12.2011 declaring total income at Rs. 36,16,250/-. The assessee again in response to the notice

under section 153A filed return of income on 28.01.2014 declaring the total income at Rs. 38,16,250/-. The assessment was completed on 18.03.2014 under section 153A r.w.s. 143(3). The Assessing Officer while passing the

assessment order assessed the total income at Rs. 38,31,250/-. The Assessing Officer made the addition of Rs. 15,000/- under section 80D holding that while filing revised return of income on 14.02.2014 no claim of

Rs. 15,000/- under section 80D was made. The Assessing Officer levied the penalty under section 271(1)(c) on addition income of Rs. 2,00,000/- offered by assessee in the revised return of income and on addition of Rs. 15,000/- under section 80D. The Assessing Officer levied the penalty @ 100% of the

tax sought to be evaded.

ITA No. 3221 to 3224/M/2017 - Piyush A. Vora 6. On appeal before the Ld. CIT(A), the Ld. CIT(A) deleted the penalty qua the addition of Rs. 15,000/- added under section 80D. However, the penalty of Rs. 2,00,000/- offered in revised return of income was sustained. The Ld.

CIT(A) sustained the penalty while relying on the decision of Hon'ble Supreme Court in case of MAK Data 358 ITR 493(SC). In our view, the ratio of decision in MAK Data (supra) is not applicable on the fact of present case. In case of MAK Data, the transaction were not recorded in the

books of account and that the Assessing Officer has categorically recorded the finding that he is not satisfied and that the assessee concealed the true particular of income. However, in the present case, the assessee himself

offered the additional income in revised return of income. The Hon'ble Supreme Court in case of CIT Vs Reliance Petroproducts (P.) Ltd. held that the conditions under section 271(1)(c) must exist before the penalty is

imposed. Everything depends upon the return of income filed, because return of income is the only document, where the assessee can furnish the particular of income. When such particulars found to be inaccurate, the

liability would arise. In the present case, the assessee offered additional income of Rs. 2,00,000/-, which was accepted by Assessing Officer. We have noted that the Assessing Officer has not recorded his satisfaction that return of income was found to be incorrect or erroneous or false. The

Hon'ble Court in Reliance Petroproducts (P.) Ltd. (supra) further held that if there is no finding of the Assessing Officer to recall that return were found

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to be incorrect or erroneous, there would be no question of inviting the

penalty under section 271(1)(c). Thus, in our view, there was no particular

inaccurate particulars of income was furnished by the assessee while filing

revised return of income. Thus, in our view, no penalty was leviable on the

fact of the present case. Hence, the grounds of appeal raised by the assessee

are allowed.

ITA No. 3221/Mum/2017 for A.Y. 2010-11

under section 132 on 26.05.2011 on the Rohan Group. The search action

was also carried out at the residence of the assessee. In response to the

notice under section 153A, the assessee filed return income on 28.01.2014

declaring total income of Rs. 25,48,400/-. The assessment under section

143(3) r.w.s. 153A was completed on 18.03.2014 determining the total

income at Rs. 25,48,400/-. The Assessing Officer initiated the penalty while

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passing the assessment order and levied penalty of Rs. 6,88,575/-. The Assessing Officer levied the penalty holding that assessee concealed the income of Rs. 25,48,400/- which was declared by the assessee only in response to the notice under section 153A. The Assessing Officer further concluded that had the search not been taken place, the assessee would not have declared income of Rs. 25,48,400/-. The Assessing Officer levied the penalty of Rs. 6,88,575/- under section 271(1)(c) being @ 100% of the tax allegedly to be evaded. On appeal before the Ld. CIT(A), the penalty was restricted to Rs. 90,946/-. Therefore, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us. 10. We have heard the ld. AR of the assessee and ld. DR for the Revenue and perused the material available on record. The ld. AR of the assessee submits that the Assessing Officer made the erroneous application of ratio in case of MAK Data (supra). The assessee has neither concealed any income nor furnished any inaccurate particular thereof. On the other hand, the ld. DR for the Revenue supported the order of authorities below. The ld. DR further submits that had the search not took place at the premises of the assessee, the assessee would have successfully evaded the tax liability. The ld. DR adopted the same submissions are made in appeal for AY 2009-10. 11. We have considered the rival submission of the parties and have gone through the orders of authorities below. The Assessing Officer levied the penalty under section 271(1)(c) holding that no return of income was filed

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by assessee under section 139 of the Act. Before the ld. CIT(A), the assessee

urged that the Assessing Officer accepted the return of income filed by

assessee which proved that no inaccurate particular was furnished by

assessee and there is no evasion of tax. The assessee also urged that he has

paid the advance tax on his tax liability on his income of Rs. 25,48,400/-.

The ld. CIT(A) considering the contention restricted the penalty to the

extent of advance tax. As we have noted in the appeal for assessment year

2009-10 that the assessing officer has not recorded that his satisfaction that

any particulars of income furnished by assessee were found to be inaccurate.

The Hon'ble Court in Reliance Petroproducts (P.) Ltd. (supra) further held

that if there is no finding of the Assessing Officer to recall that return were

found to be incorrect or erroneous, there would be no question of inviting

the penalty under section 271(1)(c). Thus, in our view, there was no

incorrect particular furnished by the assessee while filing revised return of

income. Moreover, for failure to furnish return of income the assessing

officer has levied penalty separately under section 271F. Thus, in our view,

no penalty was leviable under section 271(1)(c), on the fact of the present

case. Hence, the grounds of appeal raised by the assessee are allowed.

ITA No. 3223/Mum/2017 for A.Y. 2011-12 [under section 271(1)(c)] 12. The assessee has raised the following grounds of appeal:

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B. The Ld. Commissioner of Income Tax Appeal failed to appreciate the fact in the original return, income from meeting fees received was Rs. 8,20,000/- and TDS on the same was Rs. 82,000/-. However, due to oversight income being net of TDS amounting to Rs. 7,38,000/- was offered as income from meeting fees. The Ld. CIT Appeal failed to appreciate the fact that the appellant voluntarily revised the income tax return U/S 139 r.w.s. 153A of the Income Tax Act, 1961 offering Rs. 8,20,000/- as income from meeting fees. C. The Ld. Commissioner of Income Tax Appeal failed to appreciate the fact that the appellant had voluntarily filed the return of income and has not furnished any inaccurate particulars of income. The appellant had submitted all the required details and offered a bonafide explanation for the stand taken.

of income under section 139 on 30.03.2013 for AY 2011-12 declaring total

income of Rs.32,59,062/-. Consequent upon the search and seizure under

section 132 on 26.05.2011 as referred above, the assessee was served with

notice under section 153A dated 21.01.2014. In response to the notice under

section 153A, the assessee filed his return of income 28.01.2014 declaring

total income of Rs. 48,21,930/-. Subsequently, the assessee filed revised

return of income on 14.02.2014/- revising the total income at

Rs.49,02,700/-. The assessing officer passed assessment order on

18.03.2014 accepting the return of income declared in the revising return

dated 14.02.2014. The assessing officer levied penalty under section

271(1)(c) on the additional income offered in the revised return. The

assessing officer levied penalty @100% of tax sought to be evaded. On

appeal before ld. CIT(A) the action of assessing officer was confirmed.

Therefore, further aggrieved the assessee filed this appeal before this

Tribunal.

ITA No. 3221 to 3224/M/2017 - Piyush A. Vora 14. We have heard the ld. AR of the assessee and ld. DR for the Revenue and perused the material available on record. The ld. AR of the assessee submits that the Assessing Officer made the erroneous application of ratio in case of MAK Data (supra). The assessee has neither concealed any income nor furnished any inaccurate particular thereof. The ld. AR for the assessee further submits that the assessee due to over sight omitted to include the tax deducted at source in his total return of income being net TDS of Rs.82,000/-. The omission for not offering Rs.82,000/- as the income from Meeting Fee of Rs.8,20,000/- was taken as Rs.7,38,000/-. On the other hand, the ld. DR for the Revenue supported the order of authorities below. The ld. DR further submits that had the search not took place at the premises of the assessee, the assessee would have successfully evaded the tax liability. The ld. DR adopted the same submissions are made in appeal for AY 2009-10 and in 2010-11. 15. We have considered the rival submission of the parties and have gone through the orders of authorities below. The Assessing Officer levied the penalty under section 271(1)(c) holding that the assessee in his revise return of income and offered additional income Rs.82,000/- by enhancing the income of Meeting Fee to Rs.820,000/- as against Rs.7,38,000/- filed in the original return of income. The assessing officer levied the penalty on additional income offered in revised return of Rs.82,000/-. The assessing officer levied the penalty @ 100% of tax allegedly to be evaded. The

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penalty was worked out at Rs.25,340/-. Before the ld. CIT(A), the assessee again explained the fact about unintentional omission to include the amount of TDS of Rs.82,000/- as income from Meeting Fee of Rs.820,000/- as

against Rs.7,38,000/- offered in the revise return. The ld CIT(A) not accepted the contention of the assessee holding that there is no provision in the Act to revise the return of income filed under section 153A and confirmed the action of assessing officer. The ld CIT(A) further held that

technically the income of Rs.82,000/- cannot be treated as declared income of the assessee. 16. We have noted that there was no tax evasion in offering the income of

Rs.82,000/-. The said amount in the form of advance tax (TDS) by payer of Meeting Fee, has already been deposited. The assessee has not claimed setoff of the said TDS, rather it was included in the total income offered

by the assessee. In our view the assessee has not furnished inaccurate particulars of income. Moreover, the contention of the assessee that the income of Rs.82,000/- was left to be declare while filing return of income

seems to be bonafide and genuine. We have also noted that the Assessing Officer has accepted the return of income filed by assessee which proved that no inaccurate particular was furnished by assessee. There was no revenue loss to the in offering the said income of Rs.82,000/-. evasion of

tax. Thus, in our considered view, no penalty was leviable under section

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271(1)(c), on the fact of the present case. Hence, the grounds of appeal

raised by the assessee are allowed.

ITA No. 3224/Mum/2017 for A.Y. 2011-12[under section 271AAA]

section 132 on 26.05.2011, the assessee declare undisclosed jewellery of

Rs.15,62,870/- as his undisclosed income. However, while filing return of

income under section 139(4) on 30.03.2013, the assessee not offered the

said undisclosed income. In response to the notice under section 153A, the

assessee included the said undisclosed income. The assessing officer

initiated penalty under section 271AAA, while passing assessment order on

18.03.2014. No reply was furnished by assessee; the assessing officer levied

the penalty @10% of the undisclosed income. The assessing officer levied

the penalty of Rs.15,62,70/- under section 271AAA. On appeal before ld

CIT(A) the action of the assessing officer was confirmed. Therefore, further

aggrieved by the order of ld. CIT(A) the assessee has filed this appeal before

this Tribunal. 13

ITA No. 3221 to 3224/M/2017 - Piyush A. Vora 20. We have heard the ld. AR of the assessee and ld. DR for the Revenue and perused the material available on record. The ld. AR of the assessee submits that the Assessing Officer levied the penalty under section 271AAA without any basis. The assessee during the search offered undisclosed income of Rs.15,6,270/- and paid the tax on such undisclosed income. The assessee also substantiated the manner in which the said income was derived. In support of his submission the ld AR for the revenue relied on decision of Tribunal in Sunil Kumar Vs DCT [2015] 70 SOT137/62 taxmann.com 78(Chandigarh), Udai C.Tamhankar Vs DCIT (2015) 174 TTJ 151. On the other hand, the ld. DR for the Revenue supported the order of authorities below. The ld. DR further submits that despite disclosing the undisclosed income during the search on 26.05.2011, the assessee not included the said income in his return of income filed under section 139(4) on 30.03.2013. Had the search not took place at the premises of the assessee, the assessee would have successfully evaded the tax liability. The assessee has not substantiated the manner in which the said undisclosed income was derived. 21. We have considered the rival submission of the parties and have gone through the orders of authorities below. The Assessing Officer while passing assessment order recorded that “in response to the notice under section 153A the assessee furnished return of income, including the said undisclosed income. A penalty proceeding under section 271AAA is initiated”. The assessing officer levied the penalty under section 271AAA

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holding that the assessee offered no explanation. The assessing officer further held that the assessee failed to substantiate the manner in which undisclosed income was derived. Before, ld CIT(A) the assessee urged that

during the course of search the assessee declare income of Rs. 15,62,870/- during the statement recorded under section132(4). The assessee in the same statement specified that the said income has been derived from brokerage and financial advisory business. The assessee further vide his letter dated

17.02.2014 further substantiated the manner in which the said undisclosed income was derived. 22. We have noted that the assessing officer has not referred the contents of

statement of assessee recorded under section 132(4), while levying the penalty. No reference of the question during the recording the statement, put to the assessee or the answer of assessee is referred by assessing officer in

his order under section 271AAA. The assessee during the first appellate stage specifically relied on his reply/letter dated 17.02.2014 that he has substantiated the manner in which the undisclosed income was derived and

contended that income was derived from the brokerage and advisory business. The ld CIT(A) not disputed the contents of the reply of assessee dated 17.02.2014 or the statement of assessee under section 132(4) in substantiating the manner of deriving the undisclosed income. The ld

CIT(A) discarded the contention of the assessee holding that no documentary evidence was produce of such income. In our view it was

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escaped from attention of ld CIT(A) that the assessee has shown the TDS of

Rs. 82,000/-, which was initially omitted to include in his return of income.

Moreover, the ld CIT(A) having co-terminus power and was fully competent

to inquire about the non- genuinity of such TDS. The assessee has

discharged his onus in substantiating the manner of deriving the undisclosed

income. In our view the lower authority was not justified in levying the

penalty under section 271AAA.

Order pronounced in the open court on 23rd day of May 2018.

Sd/- Sd/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 23/05/2018 S.K.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai Guard file.�ािपत�ित //True C BY ORDER 6. (Asstt.Registrar) ITAT, Mumbai