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Ranka Jewellers Private Limited Versus DCWT, Central Circle-1 (2) , Pune

2016 (5) TMI 613 - ITAT PUNE

Penalty u/s 18(1)(c) of the W.T. Act - Held that:- In the instant case, although the assessee has filed the return disclosing the amount of ₹ 90 lakhs prior to issue of notice u/s.17, however, the same was already detected by the department during the course of search and the assessee had admitted the same to be unaccounted cash. Thus the filing of the return was not a voluntary one but after detection by the department. In none of those cases there was detection of unaccounted cash or oth .....

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assessee. - WTA No. 12/PN/2015 - Dated:- 29-4-2016 - Shri R. K. Panda, AM And Shri Vikas Awasthy, JM For the Petitioner : Shri Suhas Bora For the Respondent : Shri Achal Sharma ORDER Per R. K. Panda, AM This appeal filed by the assessee is directed against the order dated 15-10-2015 of the CIT(A)-11, Pune relating to Assessment Years 2003-04. 2. The assessee in the grounds of appeal has challenged the order of the CWT(A) in upholding the penalty of ₹ 1,01,721/- levied by the AO u/s.18(1)( .....

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03-2003 pertaining to A.Y.2003-04. In response to the said notice the assessee vide letter dated 20-07-2007 requested the AO to treat the return of wealth filed on 29-03-2006 vide Acknowledgement No.174 as return filed in response to notice u/s.17. According to the AO, the return filed on 29-03-2006 for A.Y. 2003-04 is beyond the time allowed u/s.14(1)/15 of the Wealth Tax Act, i.e. on or before 31-03-2005. He, therefore, treated the return filed earlier as non-est and filed for no action. He ac .....

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t committed any default. There is no concealment in the return filed on 29-03-2006. Notice u/s.17 of the Wealth Tax Act was issued on 10-11-2006 for regularising the return submitted on 29-03-2006. It was further submitted that the returned income has been assessed as such and no further addition has been made. 4. However, the AO was not satisfied with the explanation given by the assessee. According to him, the return filed on 29-03-2006 is nonest. There was no valid return on record on the dat .....

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through the penalty order, the appellant's submissions and the case laws cited by the appellant. It is an admitted fact of the case that the cash of ₹ 90,00,000/ had been found during the search and was admitted by the appellant to be unaccounted cash. Thus the wealth to the extent of the cash unearthed during the search can hardly be considered as disclosed wealth. In his submissions dated 2.04.2009 made in appeal proceedings the appellant has mentioned that the reasons recorded u/s 1 .....

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on of the unaccounted cash. Therefore I hold that the AO has rightly levied the penalty. 7. The appellant has relied upon the decision of the Mumbai ITAT in the case of Shanti B Raheja. However I find that the facts of that case were different from the appellant's case. In the case of Shanti Raheja there is no mention of detection of unaccounted wealth during the search action. Following submissions were considered by the honorable Tribunal while cancelling the penalty in the case of Shanti .....

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was further submitted in that case that : "AR also submitted that in present case assessee had filed return voluntarily before issue of notice under section 17. It was submitted by him that there is no material on record, according to which it can be said that any action was contemplated by the Department in respect of wealth tax returns to be filed by the assessee before the assessee filed these returns voluntarily. Thus, it was submitted by Ld. AR that the facts of the present case are e .....

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he belated payment of the taxes. There is no material on record to suggest that before the assessee filed the returns of wealth, any action for the default of non-filing of wealth tax returns by the assessee was contemplated by the Department as it has been the contention of the assessee right from the beginning that the returns filed by the assessee are voluntary. After filing of the wealth tax returns these have been regularized by issue of notice under section 17. Thus, According to the facts .....

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ability of the same as unaccounted wealth was already under contemplation by the AO. !t cannot be said that the appellant was prevented from' disclosing the unaccounted cash because of ignorance of the law. It was a deliberate act of concealment of income and consequentially concealment of wealth. Thus the facts of the appellant s case are entirely different from those before the Honourable Mumbai Tribunal. 10. To conclude the levy of penalty by the AO is confirmed and the appeal filed by th .....

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leted the Wealth Tax assessment on a total wealth of ₹ 1,01,72,101/- which was declared in the return filed on 29-03- 2006. Merely because the return was filed belatedly, it cannot be said that the facts have not been disclosed. He submitted that the AO and the CWT(A) have wrongly invoked the provisions of Explanation 3 to section 18(1)(c) which is incorrect. Relying on the following decisions he submitted that levy of penalty u/s.18(1)(c) is not justified. 1. CIT Vs. Sheikh Hassan Hotels .....

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of the Wealth Tax Act for initiation of the proceedings. The various decisions relied on by the Ld. Counsel for the assessee are not applicable to the facts of the present case. He submitted that CWT(A) has already distinguished the various decisions cited before him. Therefore, the order of the CWT(A) should be upheld. 9. We have considered the rival arguments made by both the sides, perused the orders of the AO and CWT(A) and the paper book filed on behalf of the assessee. We have also consid .....

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rn filed earlier on 29-03-2006 may be treated as return filed in response to notice u/s.17. According to the AO, the return filed on 29-03-2006 was a belated return and non-est. He therefore treated the return filed on 29-03-2006 as return filed in response to notice u/s.17 and completed the assessment accepting the net wealth declared therein. Subsequently, the AO levied penalty proceedings u/s.18(1)(c) of the I.T. Act. It is the submission of the Ld. Counsel for the assessee that the return wa .....

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igh Court in the case of Sheikh Hassan Hotels (Supra) penalty is not leviable is concerned, we are of the opinion that the same is not correct. We have gone through the decision and find that the Hon ble High Court while upholding the order of the Tribunal in deleting the penalty levied u/s.271(1)(c) of the Act has observed as under : From the facts, it is clear that the penalty was imposed on the assessees because they were charged with concealment of income. However, the Tribunal found that th .....

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t the assessees failed to prove that the explanation is bona fide and all facts relating to the some material have been disclosed by them. We are unable to accept this contention in the facts of the present case. The Tribunal was justified in coming to the conclusion that there is no deliberate concealment. Indeed, it was not possible to arrive at the finding that the assessees deliberately concealed the income even though they had disclosed the material relevant to the computation of their inco .....

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