Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Shri Radhey Shyam Mittal Versus The DCIT, Jaipur

Penalty u/s 271(1)(c) - surrender of income - suo motu further income declared in the returns filed u/s 153A - Held that:- It is trite law that penalties should not be imposed unless the case falls under the four corners of law mandating the penalty. Thus such laws are to be strictly implemented. Adverting to explanation 5A to section 271(1)(c) if explicitly refers to “Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ub clause ii of explanation. 5A cannot be accepted. This is simply so as there is no mention of any specific transaction. Beside there should be any evidence found during the course of search. Thus in my considered view impugned penalties cannot be sustained under explanation 5A to section 271(1)(c).

While interpreting proviso to sec. 153A, various judicial forums have held that additions in respect of finalized assessments cannot be made unless incriminating material is discovered du .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

/s 271(1)(c) are deleted. - Decided in favour of assessee. - ITA No. 1013, 1014 & 1015/JP/2013 - Dated:- 4-12-2015 - SHRI R.P. TOLANI, JUDICIAL MEMBER For the Petitioner : Shri Vijay Goyal, CA & Shri Mridul Goyal, Advocate For the Respondent : Shri Raj Mehra, JCIT-. DR ORDER PER R.P. TOLANI, JM These are assessee s appeals arising out of ld. CIT(A), Central, Jaipur three different orders dated 17-10-2013 challenging confirmation of penalty imposed u/s 271(1)(c) of the Act as under:- AY Conce .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

27/08/2008, during the course of search no incriminating material, evidence or documents whatsoever were found. Since search officer unrelentingly demanded declaration of additional income, assessee had no alternative but to surrender certain income in search statement, relevant part of the statement is as under: I have perused the affidavit notarized on 14-09-2010 wherein it has been averred by the appellant that the expenses on the marriage of his son Shri Praful Mittal was incurred out of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dresses, confirmations of the persons who gave such gifts to the assessee along with the details of the amount of gifts, source of withdrawal, copy of cash book or bank account has been filed along with this affidavit. In absence of any details of substantiating evidence it is not clear how the AO was required to verify the averments made in this affidavit. The AO has therefore held this affidavit to be self serving evidence and has rejected it while passing the order u/s 271(1)(c). Even during .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fabricated seals of different business concerns. These were used to generate bogus bills and the sundry creditors for such bogus purchases could not be verified by him. It was on the basis of these documents that he admitted to having earned unaccounted income from the business concern M/s Mittal & Company and in response to question 12 he has admitted that he had spent this amount on the marriage of his sons and purchase of the jewellery which was also found during the course of search and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cuments that the surrender was made. In search statement, the assessee thus declared ₹ 30.00 lacs as his undisclosed income from pharmaceutical business and additional income of ₹ 10,84,897/- qua marriage expenses of son Saurabh and house renovation were declared in the returns filed u/s 153A for AY 2003-04, AY 2005-06 and AY 2006-07. For balance amount ₹ 19,15,303/- assessee retracted however, ld AO not accepting the retraction made the addition of ₹ 19,15,303/- in AY 20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e of Filing Total Income declared Additional Income declared Particulars of additional Income 2003-04 30-03-2009 495210 4,00,000 Income surrendered in statement u/s 132(4) on account of marriage of son Shri Prafful Mittal 2005-06 30-03-2009 661150 5,00,000 Income surrendered in statement u/s 132(4) on account of marriage of son Shri Deepak Mittal 55,200 Income surrendered on account of unexplained cash creditors recorded in regular books 2006-07 30-03-2009 262400 1,29,697 Income surrendered in s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that the penalty was not leviable on merits as well under law. Qua these items of income neither ant incriminating material was found during search, nor any statement was record and no amount was offered. There was no justification of penalty in a case assessee suo motu offered further income to avoid any complications. The explanation did not find favor with ld. AO who imposed the impugned penalty in respective years as mentioned in above table. Aggrieved from the Assessment order of the ld AO .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ical business. Looking at the unrelenting attitude of the department and to stop the agony of family members caused by search proceedings on all the residential and business premises, assessee declared an amount of ₹ 30.00 lacs qua only alleged pharmaceutical business and ₹ 10,84,897/- representing the unaccounted expenses in marriage and renovation in house. As mentioned above the retraction of balance amount ₹ 19,15,303/- by the assessee has been ultimately upheld by ITAT in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income for any previous year; or (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and,- (a) where the return of income for such previous year has been furnish .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed inaccurate particulars of such income.] From the reading of above provision, it is clear that in the case of searches carried out after 01.06.2007 the penalty for the previous years can only be imposed where the assessee is: - (i) found to be owner of any money, bullion, jewellery or other valuable article or thing found acquired by utilizing the income of previous year (ii) or any income based on any entry in any books of account or other documents or transactions entries in which represents .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ns filed u/s 153A was purely on the basis of disclosure made in search statement, therefore deeming provisions of Explanation 5A to section 271(1)(c) are not at all attracted in assessee s case, consequently impugned penalty can not be imposed under these facts case of the assessee. Since the penalty under explanation 5A to section 271(1)(c) is deeming in nature consequently penalty cannot be levied on the income qua for which the ingredients of explanation are absent. The return filed in respon .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee could not produce evidence supporting the cash gifts, therefore, assessee suo motu offered income in 153A returns even though there was neither incriminating material nor any declaration by statement. In penalty proceedings, assessee to this effect also filed a duly sworn affidavit to support his contentions which is placed on paper book. Ld AO except summarily holding it to be self-serving document has not controverted it as no further verification, enquiry or assessee s cross examinatio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation of ₹ 30.00 lacs in statement u/s 132(4). Assessee had no pharmaceutical business at all which was arbitrarily forced on assessee and in assessment assessee s version was found to be correct as no addition was made. Even though no incriminating material whatsoever was found in search in this behalf, to spare the wrath of the department assessee suo motu offered ₹ 10,84,897/- as unaccounted expenses in marriage and renovation in house in these years. The fact that despite there b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and offered by assessee to ward off the rigor created by search actions and consequent proceedings. Imposition of further penalty is highly unjustified in these facts and circumstances. Penalty proceedings are distinct and separate and even the legality of addition made can be challenged in penalty proceedings. It is not disputed that no material whatsoever found during the course of search. Original assessments for AY 2003-04, AY 2005-06 had become final by the time search on 27/08/2008 was ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

regular set of books and certain purchases were not accounted for. In order to avoid difficulties and litigation, the assessee came forward with an offer of income additional to that estimated by the Assessing Officer and filed revised returns. In the course of the assessment proceedings penal action was initiated under section 271(1)(C) of the Income-tax Act, 1961, in which the maximum penalty was levied repelling the assessee's contention that a promise had been made not to levy penalty. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce that no penalty was levied, the facts clearly suggested that such an inducement must have been given by the searching party; that when only partial evidence in support of concealment for a very limited period was detected there was no reason why any person would go to offer much higher amounts for a large number of years ; that in view of the deposition given under section 132(4) followed by the co-operating attitude of the assessee in paying the tax no penalty would be leviable under sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

swered the reference in favour of the Department. On appeal to the Supreme Court: Held, reversing the decision of the High Court, that the final fact-finding authority was the Appellate Tribunal and its decision on the facts could be gone into by the High Court only if a question had been referred on whether the finding of the Tribunal was perverse, in the sense that it was such as could not reasonably have been arrived at on the material placed before the Tribunal. In the absence of such a ques .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ourt of fact. The decision of the Tribunal on the facts can be gone into by the High Court in the reference jurisdiction only if a question has been referred to it whether the finding arrived at by the Tribunal on the facts was perverse in the sense that no reasonable person could have taken such a view. The ld. AR of the assessee submitted that assessment proceedings and penalty proceedings are two separate proceedings. The additions made during assessment proceedings or additional disclosures .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e penalty proceedings are separate from assessment proceedings and the finding in the assessment proceedings does not lead to conclusion that the assessee has concealed the income. The penalty u/s. 271(1)(c) is not automatic. The ld AO has not brought on record any positive material to show that the income is based on the entries recorded in seized documents. There must be independent finding as held by Hon ble Calcutta High Court in the case of Durga Kamal Rice Mills vs. CIT (2004) 265 ITR 25 ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

quasi-criminal proceeding and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t is not disputed that no incriminating material was found during the search and declared income stands deleted by ITAT and the additions in question were declared in the return by the assessee. Ld. DR further contends that explanation 5A to section 271(1)(c) is applicable inasmuch as sub clause ii thereof refers to word transaction and the impugned addition impliedly mean to be the transactions of the assessee. It is contended that penalties have been rightly imposed. 2.7 I have heard the rival .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Notification: Exempt certain supplies to NPCIL.

Notification: Seeks to amend notification No. 12/2017-CT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017-CT(R) to reduce CGST rate on specified supplies of Works Contract Services.

Forum: 3B mistake

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Input tax credit

Forum: Cess paid instead of SGST

Forum: Manpower Service provider

Forum: Construction of single unit bungalow

Forum: Duty Drawback & Input Credit - under GST

Article: SIMPLIFIED E-WAY BILL UNDER GST

Article: SERVICES UNDER REVERSE CHARGE UNDER GST REGIME

Highlight: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017 - Notification

Highlight: Companies (Acceptance of Deposits) Second Amendment Rules, 2017 - Notification

Highlight: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg. - Circular

Highlight: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 - Public Notice

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Circular: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20

Notification: Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Notification: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017

News: Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

Circular: Promote the officers of the Indian Revenue Service (Customs and Central Excise) to the grade of Principal commissioner of customs, GST & CX

Circular: Allocate the charges amongst the Members of the Central Board of Excise and Customs

Circular: Strategy for audits in 2017-18 consequent to GST - Audit by Central Excise and service Department to continue for the accounting year 2016-17 and for the past period

Circular: Appoint the IRS (C&CE) officers as Principal Commissioner (Revision Application) and ex-officio Additional Secretary

Circular: Time limit for filing intimation for composition levy under Rule 3(1) of the CGST Rules, 2017 extended to 16-8-2017

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

Circular: C.B.E. & C. Advisory on Customs related matters on introduction of Goods and Services Tax regime

Circular: List of Reduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates

Circular: Works Contract for construction of Flats, Complex — Builders to pass on GST benefit to buyer otherwise anti-profiteering provisions of Section 171 of GST Act to apply

Circular: Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports – Regarding.

Circular: Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding

News: RBI Reference Rate for US $

Highlight: Addition u/s 23(1)(a) - deemed rent - once the property is let out and at any point of time this remained vacant during the same cannot be brought to tax under the head House properties income.

News: Haryana constitutes screening committee on anti-profiteering

Highlight: Valuation of imported goods - it is necessary to re-examine the matter of both license agreement as well as supply contract simultaneously, to see if the enhanced royalty was in the guise of adjustment of the price of components.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

Highlight: Cenvat credit availed on Club Membership for the Director is not admissible as it cannot be said to be remotely connected with the activity of manufacture

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Jaitley asks biz not to wait till last day to file GST returns

Circular: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg.

Article: 20 Things You must know about E Way Bills in GST Law

Article: ‘DUTY DRAWBACK’ CANNOT BE EQUATED WITH ‘REBATE OF DUTY’

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version