2015 (12) TMI 699

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....rse 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 cash gifts received from the in-laws of Shri Praful Mittal and other relatives and friends. However, no other 'positive evidence' has been added with this affidavit. The A.R. of the appellant has contended that during the course of statement u/s 132(4) the appellant has surrendered the amount in absent of any positive evidence. But even while filing the affidavit no 'positive evidence' has been adduced to substantiate the averments made in the affidavit by the appellant. No details of the names, addresses, 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 aff....

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....ed by ITAT in assessee's own case in ITA No. 420/JP/2012 vide order dated 26/08/2013. (The copy of order placed on paper book). 2.3 Adverting to penalty proceedings in question ld. Counsel contends that assessee in order to get rid of any other issue which may be racked by ld. AO, pursuant to notice u/s 153A, suo motu offered, further income over and above the statement taken during search as under:- AY Date 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 statement u/s 132(4) on account of repairs and renovation of house   a) The assessments for AY 2003-04, AY 2005-06 and AY 2006-07 were framed u/s 153A by Ld. AO vide his orders dated 31.05.2010 accepting the....

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....n 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 furnished before the said date but such income has not been declared therein; or (b) the due date for filing the return of income for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished 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 t....

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.... should be accepted correct. Reliance is placed on the following decisions:- (i) Mehta Parikh & Co v CIT [1958] 30 ITR 181 (SC) (ii) Dilip Kumar Rao Vs CIT (1974) 94 ITR 1 (Bom); (iii) Malwa Knitting Works Vs CIT (1977) 107 ITR 379, 381 MP and (iv) Sri Krishna Vs CIT (1983) 142 ITR 618 (All). Additional income declared in return filed u/s 153A is part of the declaration of Rs. 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 Rs. 10,84,897/- as unaccounted expenses in marriage and renovation in house in these years. The fact that despite there being no incriminating material found during the course of search assessee are made to declare additional income itself indicates the arbitrary methods adopted by the search officers. Even CBDT by circulars has warned search parties not to extract such statements and declaration without incriminating m....

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....or 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 section 271(1)(C) ; that the incriminating materials found during the search were not used by the departmental authorities in making the assessments ; and the revised returns should, therefore, be considered to have been filed in good faith. The Tribunal referred to the High Court the question whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the Commissioner (Appeals) in cancelling the penalty under section 271(1)(C). The High Court answered 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 su....

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....owards the Supreme Court decision in the case of Hindustan Steels Ltd. Vs. State of Orissa, 83 ITR 26 (SC). Hon'ble Apex Court has held that "An order imposing penalty for failure to carry out a statutory obligation is the result of a 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 relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute." It is submitted penalties confirmed by the ld. CIT(A) u/s 271(1)(c) may be deleted. 2.6 L....

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....y for house renovation expenses can be sustained on merits as no incriminating material, evidence or nature of renovation is ever inquired. Assessee's affidavit also remains uncontroverted on record. 2.8 In view of these facts, circumstances and legal provisions and respectfully following the judicial precedents cited by the assessee, impugned penalties confirmed by the ld. CIT(A) u/s 271(1)(c) are deleted. 3.0 In the result assessee's appeals are allowed. Order pronounced in the open court on 4 /12/2015 ============= Document 1 प्रश्न. 6 आप द्वारा उपलक्ष्य कराये गये कम्प्यूटर प्रिंट आउट से पता लगता है कि 01.04.04 को Sundry Creditors 380872/- थे एवं इनमें से किसी को कोई भुगतान विà....

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....‡ अभाव में Sundry Creditors के दायित्व आयकर अधिनियम की 41 (1) के तहत आय में क्यों नहीं मान लिया गया? उत्तर मैं सत्यापित करने में असमर्थ हूँ) प्रश्न. 9 वित्तिय वर्श 2004-05 की रोकड़ बही पेश करे ताकि रोकड़ी Transaction का verification हो सके। उत्तर मैं रोकड़ बही पेश करने मे असमर....

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....¥ˆà¥¤ प्रश्न 12. कृपया बतायें कि आपके पुत्र सौरभ की शादी में किये गये खर्चे की एवज में आपके निवास पर पाई हैं। उसका क्या स्त्रोत हैं ? एवं इस प्रकार की और कितनी आय है? उत्तर मेरी आय इन एक मात्र स्त्रोत Pharmaceutical Co. के विभिन्न items की जतंकपदह एवं इस व्à....