CHUNILAL DODEJA HUF,ULHASNAGAR vs. ITO WD 2(1), THANE

Assessee by : Shri Bhupendra Shah/Bhupendra G. Fafadia (AR) Revenue by : Shri V. Justin (DR) Date of hearing : 23.10.2017 Date of Pronouncement : 23.10.2017 Order under section 254(1) of Income Tax Act PER BENCH 1. This group of 34 appeals are directed against the different orders of ld.

CIT(A)-3, Thane. In all appeals, the ld. CIT(A) confirmed the order of penalty levied under section 271(1)(c) of the Act. In all appeals, common grounds of appeal are raised , all the appellant are from the same group/ family members, thus, all the appeals were clubbed together and are decided by a common order.

Rajkumari Dodeja in Ms. Jhanvi Dodeja in ITa No. 1887 & 1888/Mum/2016 , Shri Hiranand Dodeja in ITA No. 1889 & 1890/Mum/2016, Pramod Dodeja, HUF in ITA Nos. 1891 & 1892/Mum/2016, Ms. Pushpa Dodeja in ITA No. 1893 & 1894/Mum/2016, Lekhrajmal Dodeja, HUF in ITA No. 1895 & 1896/Mum/2016, Shri Kurli Dodeja in ITA No. 1897/Mum/2016, Ms.

Roma Dodeja in & 1899/Mum/2016 and Ms. Anita Dodeja in ITA No. 1900/Mum/2016. The ld. Departmental Representative (DR) for the Revenue after going through the decision relied by ld AR, not disputed the contention of ld. AR of the assessee. The ld DR fairly conceded that all the appeals are covered in favour of assessee by various decision of the Tribunal.

The assessment of all parties were re-opened under section 147 of the Act.

During the assessment, the assessee contended that they have filed revised return of income declaring the said deposit as income representing the cash ITA N0.1607/M/2016 & Ors. Dhamandas Sakharmal Dodeja deposit in their bank account. The contention of the assessee was not accepted by the Assessing Officer and the difference in the revised return and the original return was treated as concealed income and levied the penalty under section 271(1)(c) of the Act. On appeal before the ld. CIT(A), the action in levying the penalty was confirmed. Thus, with these backgrounds these appeals are filed before us.

“4. -------------. We have gone through the orders of the authorities below as well as the order of the Tribunal passed in the cases of Murli Dudeja in & 3848/Mum/2016 dated 17/02/2017, other family members and in the case of ITA N0.1607/M/2016 & Ors. Dhamandas Sakharmal Dodeja

Chandan Deodeja and Umesh Dodeja Karta Umesh Dodeja, HUF in & 3735/Mum/2016 dated 18.04.2017 wherein under similar facts and circumstances, Tribunal have deleted the penalty after observing as under:-

“8. We have considered rival contentions and also perused the material available on record and case law's relied upon by the rival parties. We have observed that the assessee filed original return of income on 9th August, 2005. The assessee held bank account with Union Bank of India, Shahad, Ulhasnagar in which assessee had deposited an amount of Rs. 1.5 lacs in cash which was not declared and disclosed in the return of income originally filed with the Revenue on 09-08-2005. It is the contention of the assessee that he relied on the expert advise of his tax-consultant who advised him that the said amount received was not taxable being his share in profits and investment in discontinued family business of properties on realization of funds invested in the properties on family separation . The assessee filed so called revised return of income on 28th February, 2011 wherein said cash deposit of Rs.1.50 lacs in Union Bank of India, Shahad was duly included as income although the prescribed time limit for filing revised return of income as prescribed u/s 139(5) of the Act had lapsed long back on 31-03-2007. The said so called revised return of income was also not filed by the assessee with jurisdictional AO but with the ITO, Kalyan , but said so called revised return of income was admittedly filed prior to issuance of separate notice's u/s 148 of the Act by ITO, Kalyan and as well by the jurisdictional AO which remained uncontroverted and is an admitted position between the rival parties as notices u/s 148 of the Act was issued by the ITO, Kalyan as well jurisdictional AO only in the month of March 2012 while the so called revised return of income was filed earlier on 28-02-2011. It is the say of the Revenue that tax evasion petition was filed against the assessee which was investigated by Revenue since September 2010 which is the main reason for the assessee filing so called revised return of income with the Revenue on 28-02-2011. It was the contention of the Revenue that very few percentage of the cases are selected for scrutiny and had there been no tax evasion petition filed against the assessee , the assessee would not had come forward to file the so called revised return of income on 28-02-2011. Thus, it is the contention of the Revenue that the alleged revised return of income filed by the assessee on 28- 02-2011 including the said undisclosed income of Rs.1,50,000/- which was deposited in cash in an undisclosed bank account with Union Bank of India would have never come into notice of the Revenue and there would have been loss of Revenue. Merely because tax evasion petition is filed against the tax- payer does not mean that the tax-payer has concealed income or furnished in-accurate particulars of income and it could not be said with the certainty that the Revenue will in each of such cases shall proceed against the tax- payer by re-opening the concluded ITA N0.1607/M/2016 & Ors. Dhamandas Sakharmal Dodeja assessment in each and every tax evasion petition filed against the tax-payer. The tax-payer can always come forward and explain and account for its sources of income with the return of income filed with the Revenue. The tax- payer can also come forward with an explanation that certain receipts were not included as income in the return of income filed with the Revenue as the said receipts do not bear the character of income within the four corners of charging provisions of the Act or the receipt had a character of being an exempt income within statutory provisions of the Act of 1961 . There are also possibilities that the tax evasion petitions could be filed to cause vengeance on the tax-payer with a malice to seek revenge and retribution against the tax- payer. The fate of tax evasion petition hinges on the outcome of an enquiry and investigation conducted by the Revenue. The tax-payer may when tax-evasion petition is filed against him also re-visit his financial data for the relevant period and in order to avoid un- necessary and protracted litigation with Revenue come forward to file revised computation of income and pay taxes with applicable interest on some additional disclosure out of caution to avoid litigation. This is a normal and reasonable human conduct which falls within preponderance of human probabilities. The assessee in the instant case came forward and filed so called revised return of income on 28-02-2011 albeit beyond stipulated time u/s 139(5) of the Act of 1961 which expired on 31-03- 2007 but before issuance of notice u/s 148 of the Act by the Revenue in the month of March 2012 as well the assessee filed affidavit dated 21-03-2011 explaining facts and circumstances under which the said cash of Rs.1,50,000/- was deposited in his bank account which was not included in the return of income filed with the Revenue which shows and proves bona-fide conduct of the assessee . The assessee had submitted that the said receipt of Rs.1,50,000/- which was deposited in cash in Bank account with Union Bank of India, Shahad was advised to be tax-free by his tax-expert Advocate for last thirty years .It is also submitted that the assessee being not highly educated person trusted the said advocate tax-expert and did not included the said receipt of Rs.1,50,000/- in the return of income filed with the Revenue. The assessee had also filed an affidavit dated 21-03-2011 explaining the facts and circumstances wherein the said income was not included as income in the return of income originally filed with the Revenue. Revenue could not controvert the contents of the affidavit filed by the assessee to prove that the said affidavit had a false or untrue averments made by the assessee. In our considered view keeping in view facts and circumstances of the case, penalty levied u/s 271(1)(c) of the Act cannot be sustained under the afore- stated circumstances as the assessee had came forward with an explanation which is a reasonable and bonafide explanation complying with the mandate of Section 271(1)(c) of the Act read with explanation 1 and hence penalty levied by the AO u/s 271(1)(c) of the Act as confirmed by learned CIT(A) is hereby ITA N0.1607/M/2016 & Ors. Dhamandas Sakharmal Dodeja ordered to be deleted. Thus, the assessee's appeal in for assessment year 2005-06 is allowed . We order accordingly.

5. Considering the decision of Tribunal in assessee’s group /family member’s case wherein the facts of all cases are similar except variation of figure.

Thus, respectfully following the decision of co-ordinate bench, we do not find any justification in levying the penalty. Hence, the grounds of appeal raised in all appeals are allowed.