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TMI Blog2010 (2) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... 5th May, 2008 the appeal is very much maintainable. He referred the contents of cl. (5) of the said instruction. 4. In rejoinder, the learned Authorised Representative placed reliance on the decision of Hon'ble jurisdictional High Court in the case of CIT vs. Madhukar K. Imandar (HUF) (2010) 229 CTR (Bom) 77: (2009) 27 DTR (Bom) 132: (2009) 185 Taxman 101(Bom). 5. Considering the above submissions we find that the issue raised in this objection is fully covered by the decision of Hon'ble jurisdictional High Court in the case of CIT vs. Madhukar K. Imandar (HUF) (supra) wherein after discussing the contents of cl. No. (5) of the CBDT Instruction No. 5 of 2008, dt. 15th May, 2008 the Hon'ble High Court has been pleased to observe as under vide para No. 6 of the judgment : "The aforesaid judicial verdict makes it clear that the Circular dt. 15th May, 2008 in general and para 5 thereof in particular lay down that even if the same issue, in respect of same assessee, for other assessment years is involved, even then the Department should not file appeal, if the tax effect is less than Rs. 4 lakhs. In other words, even if the question of law is of recurring nature even the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Aug., 2003. During the period, the assessee derived income from railway freight commission, trading in onion and truck plying. The assessees declared the said additional income in their returns of income filed in response to notices issued under s. 153A of the Act. The AO levied penalty under s. 271(1)(c) of the Act on additional income offered to tax by the assessees on account of investment in fixed deposits, interest on fixed deposits and undisclosed expenditure in the returns of income filed in response to notice issued under s. 153A of the Act. The assessees questioned the penalty levied before the first appellate authority with this explanation that during the course of search proceedings the Kalantri Group (assessees) had declared income of Rs. 75 lakhs in statements recorded under s. 132(4) of the Act on account of investment in fixed deposits in fictitious names, unrecorded building construction and renovation expenses, investment in furniture etc. It was further claimed that the income was offered to tax only to buy peace of mind and to avoid protracted litigation subject to condition that no concealment penalty under s. 271(1)(c) of the Act shall be levied. In support, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 271(1)(c) while completing the assessment under s. 153A(b) of the Act." The learned Authorised Representative at the outset pointed out that since the issue raised in the ground is fully covered in favour of the assessee by the decision of Pune Bench of the Tribunal in the case of Smt. Sarla M. Ahuja (supra), there is no reason to interfere with the first appellate order passed based on the said decision of the Tribunal. He also pointed out that the Pune Bench of the Tribunal in the cases of Dy. CIT vs. Narayandas Mulji Thakkar ITA Nos. 872 to 874/Pn/2009, (asst. yrs. 2000-01 to 2002-03) vide order dt. 30th Sept., 2009 and in Karsandas Mulji Thakkar ITA Nos. 875 to 879/Pn/2009, has decided an identical issue in favour of the assessee following its said earlier decision in the case of Smt. Sarla M. Ahuja (supra). 9. The learned Departmental Representative, on the other hand, placed reliance on the respective assessment orders with this submission that the learned CIT(A) has failed to appreciate the decision of Pune Bench of the Tribunal in the case of Smt. Sarla M. Ahuja (supra) in proper perspective and has wrongly applied the same. The learned Departmental Representative sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) 263 ITR 658(SC) on the rule of sub silentio holding it as an exception to the rule of precedent. He submitted that as per this decision a Court is not bound by an earlier decision if it was rendered without any argument, without reference to the crucial words of the rule and without any citation of the authority. 10. Further on the question of applicability of orders of the Pune Bench of the Tribunal on the same issue in other groups, the learned Authorised Representative submitted in rejoinder that when facts and circumstances are same and there is no change therein in the present appeals of the group, the Tribunal is not supposed to depart from its earlier order in the cases of Dy. CIT vs. Narayandas Mulji Thakkar (supra) and Karsandas Mulji Thakkar (supra) based on its earlier decision in the case of Smt. Sarla M. Ahuja (supra). The learned Authorised Representative submitted further that the decisions relied upon by the learned Departmental Representative having distinguishable facts are not applicable in the present case and the decision of Hon'ble Madras High Court in the case of CIT vs. S.D.V. Chandru (2004) 189 CTR (Mad) 272: (2004) 266 ITR 175(Mad) also supports th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Oct., 2007. We thus concur with the contention of the learned Departmental Representative that in view of the decision of Hon'ble Supreme Court in the case of S. Shanmugavel Nadar vs. State of Tamil Nadu & Anr. (supra) a Court is not bound by an earlier decision if it was rendered without any argument, without reference to the crucial words of the rule and without any citation of the authority. In the case of B. Shama Rao vs. Union Territory of Pondicherry (1967) 2 SCR 650 it was held as "It is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and principle laid down therein". This decision has been referred by Hon'ble Supreme Court in the case of S. Shanmugavel Nadar (supra) with this mentioning that their Lordships tendered an advice of wisdom'restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law. The contention of the learned Departmental Representative also found significant to the effect that the decision of the Co-ordinate Bench of the Tribunal in the case of Smt. Sarla M. Ahuja (supra) actually supports the case of Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te, at the time of hearing of the appeal in the cases of Narayandas Mulji Thakkar and Karsanbhai Mulji Thakkar, we, as discussed above, are not bound to simply follow the decision of Co-ordinate Bench in the said cases of Narayandas Mulji Thakkar and Karsandas Mulji Thakkar of the group. In this regard we also get support from the decision in the case of Distributors (Baroda) (P) Ltd. vs. Union of India & Ors. (1985) 47 CTR (SC) 349: (1985) 155 ITR 120(SC), wherein the Hon'ble Supreme Court taking strength from the words of Hon'ble Justice Bronson in Pierce vs. Delameter has been pleased to hold that to perpetuate an error is no heroism, to rectify it is the compulsion of the judicial conscience (p. 124). 12. While coming upon the merits of the case, on perusal of orders of the lower authorities, we find that the AO has levied penalty on additional income offered by the assessees to tax on account of investment in fixed deposits, interest on fixed deposits and undisclosed expenditure in the return of income filed in response to notices issued under s. 153A of the Act. It can be better understood with the assistance of following chart : In the case of Shri Omkareshwar R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied by the AO. In asst. yr. 2000-01 the difference of income between the income returned under s. 153A and the income assessed by the AO under s. 153A(b) was on account of stamp duty and registration charges paid by the assessee for purchase of shop Gala which was not declared as income by the assessee either in the original return of income or in the return filed under s. 153A of the Act. In the asst. yr. 2001-02 the difference was on account of rental income shown by the assessee in the return filed under s. 153A and the income assessed by the AO in the assessment. In asst. yr. 2002-03 the difference was on account of half share of stamp duty and registration charges added by the AO as unexplained expenses under s. 69C of the Act. In asst. yr. 2003-04 the difference was due to rental income shown by the assessee in the original return of income as well as in the return filed under s. 153A of the Act and the assessed income. In the penalty order of that case [Smt. Sarla Ahuja's (supra)] the AO stated that the assessee had failed to declare the expenditure on account of stamp duty and registration charges and has also failed to declare the correct rental income. He mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the return filed in response to notice under s. 153A of the Act. Therefore, the income declared by the assessee in the course of search under s. 132 and subsequently duly shown in the return of income filed in response to notice under s. 153A was not treated as concealed income for the purpose of initiating proceedings under s. 271(1)(c) of the Act. However, the Tribunal upheld the penalty levied by the AO on the amount in difference between the income returned under s. 153A and the income finally assessed under s. 153A(b) by the AO on the basis that the assessee has not been able to give any bona fide or reasonable explanation as to why the income added by the AO in the assessment completed under s. 153A(b) of the Act was not offered for taxation in the return of income filed in response to notice under s. 153A of the Act despite the fact that all these details were available with the assessee as a result of the search taken place. The Tribunal rejected the contention of the assessee that no penalty should be imposed in respect of income which has already been declared in the return of income filed in response to notice under s. 153A in absence of any substantive argument to exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC). It is apparent from the finding of the Tribunal from the contents of para No. 13 (bottom) and para No. 14. The relevant extract of para No. 13 is as "......Moreover, the assessee's explanation of not disclosing the rental income in the original return of income for the reason that the rental income was being derived by the joint owners and not by the assessee herself in her individual capacity, cannot be said to be a mala fide and dishonest one with a view to evade payment of taxes". The facts of the present case under our consideration involve this unanswered legal issue in the case of Smt. Sarla M. Ahuja (supra). Hence by following the same, extracting a portion thereof de hors the background, the learned CIT(A) has committed mistake. 14. In the present case before us as discussed above, we find that the AO has levied penalty on the difference of income shown in the original return and assessed income under s. 153A r/w s. 143(3) of the Act. We thus find that while dealing with the issue, the learned CIT(A) in the present case has not met out the basis on which the AO has levied the penalty that is the amount in difference between the income declared in the original re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn filed in response to notice under s. 153A, without examining this important aspect as to whether the conditions laid down under Expln. 5 to s. 271(1)(c) have been fulfilled or not. For a ready reference, Expln. 5 to s. 271(1)(c) of the Act is being reproduced hereunder : "Explanation 5 : Where in the course of a search initiated under s. 132 before the 1st June, 2007, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income,' (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under cl. (c) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal High Court in the case of Sheraton Apparels vs. Asstt. CIT (supra) has been pleased to define "Books of account". The Hon'ble High Court has been pleased to conclude that the term "Books of account" referred to in sub-cl. (i) of cl. (a) of Expln. 5 would mean those books of account whose main object is to provide credible data and information to file the tax returns. The credible accounting record provides the best foundation for filing return of both direct and indirect taxes, The Hon'ble High Court held that diaries or books recording facts but not maintained for computation of income cannot be treated as books of account and disclosure of amount recorded in such books cannot be accepted for granting immunity from penalty under Expln. 5 to s. 271(1)(c) of the Act. The Third Member Bench in its decision in the case of Asstt. CIT vs Kirit Dahyabhai Patel (supra) has held that unless additional income declared in returns filed in response to notice under s. 153A falls under the category of return mentioned in Expln. 5 to s. 271(1)(c), the assessee is not entitled to immunity from penalty. The relevant para No. 7.1 of the said order is being reproduced hereunder for read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , recovered in the course of search, from out of income of a previous year which has already ended before the date of the search or which is to end on or after the date of search." With assistance of foregoing discussion, we find that basically there is no difference in the approach on the issue decided in the case of Smt. Sarla M. Ahuja (supra) and Third Member Bench decision in the case of Kirit Dahyabhai Patel (supra). In both the cases it is held that the penalty with reference to the difference between the returned income under s. 153A and the assessed income under s. 153A(b) is leviable. The Tribunal in the case of Smt. Sarla M. Ahuja (supra) deleted these penalties giving benefit of Expln. 5 where assessee had declared the income found recorded in certain documents at the time of search and further offered the same for taxation in the return of income filed in response to the notice under s. 153A of the Act. The issue as to whether penalty is leviable on the difference between income returned in the original return of income under s. 139(1) and in the return of income under s. 153A/assessment under s. 153A(b) remained to be decided by the Tribunal in Smt. Sarla M. Ahuja' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en these assessees filed their original returns of total income on the dates mentioned. The Third Member Bench further opined that the assessment framed under s. 153A(1)(b) of the Act after the search, accepting the return of income as disclosed by the assessee during the course of search is over and above what was disclosed in the original return. Since the assessees had to disclose their real, total income in the original return filed under s. 139, if they had failed to do so but concealed or furnished inaccurate particulars in that return, the offence becomes complete. Thus the offence of the concealment is complete and final when the assessees had not disclosed the real income in their original returns. If the plea on behalf of the assessees that since there was no difference in the income returned after the search and the assessed income is accepted, an anomalous result will follow in certain glaring cases of concealment (para No. 7 of the order). Similar are the facts and circumstances in the present case before us. In the instant case, assessees filed original return prior to the search under s. 132. Assessees disclosed an additional income during the search and filed the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income offered to tax by the assessees in their returns of income filed under s. 153A for the asst. yrs. 2000-01 to 2005-06. The AO also levied penalties on the additions made to the income returned under s. 153A for these assessment years. Before the learned CIT(A) the assessees contended that penalty in question is not leviable on amount offered to tax in the returns filed in response to notice under s. 153A and cited the decision of Pune Bench of the Tribunal in the case of Smt. Sarla M. Ahuja & Ors. ITA Nos. 1301 to 1308/Pn/2007 dt. 26th Oct., 2007. Accepting this contention, the learned CIT(A) has deleted the penalty while placing reliance on the said decision of the Tribunal in the case of Smt. Sarla M. Ahuja (supra). 18. Similar arguments as advanced hereinabove by the parties in the case of Kalantri Group have been adopted by them in the present case. The additional argument of learned Authorised Representative was against the maintainability of those appeals having penalty effect below Rs. 2,00,000. He adopted above arguments as advanced on the issue in the case of Kalantri Group. The learned Departmental Representative, on the other hand, submitted that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority, which involves more than one year, appeal shall be filed in respect of all assessment years even if the tax effect is less than the prescribed limits in any of the year(s), if it is decided to file appeal in respect of the year(s) in which 'tax effect' exceeds the monetary limit prescribed. The Hon'ble High Court was pleased to hold that even if the question of law is of recurring nature even then, the Revenue is not expected to file appeals in such cases, if the tax impact is less than the monetary limit fixed by the CBDT. The Hon'ble High Court further held that it is applicable even in pending appeals. Even otherwise, we are of the view that in a composite appellate order when issue is common for all the assessment years it is not practical to deal with those assessment years having tax impact below Rs. 2,00,000 separately, as the very object of the instruction to save valuable time from dealing with small matters is not going to be achieved in disposing of such composite appellate order. The preliminary objection raised against the very maintainability of the appeals before the Tribunal having tax impact below Rs. 2,00,000 but part of the composite first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the income offered in the returns of income filed in response to notice under s. 153A. To this extent the facts of the present case are distinguishable from the facts in the cases of Kalantri Group. In Kalantri Group the AO in assessment under s. 153A has accepted the income shown in the return of income filed in response to notice under s. 153A and penalty has been levied on difference of amount between the return declared in original return and income assessed under s. 153A of the Act. Even in the case of Smt. Sarla M. Ahuja (supra) the Tribunal has upheld the penalty levied with reference to the difference between the returned income under s. 153A and the assessed income under s. 153A(b) in its concluding para No. 16 of the order. The action of the AO in imposing penalty on the amount in difference between the returned income under s. 153A and the assessed income under s. 153A(b), thus cannot be held unjustified also in view of the Third Member decision in the case of Kirit Dahyabhai Patel (supra) as discussed above. The learned CIT(A) while following the decision of the Tribunal in the case of Smt. Sarla M. Ahuja (supra) has mentioned the finding of the Tribunal in that c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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