D. Ramarao v. The A.C.I.T., Circle-III, Vijayawada
[Citation -2014-LL-0917-92]

Citation 2014-LL-0917-92
Appellant Name D. Ramarao
Respondent Name The A.C.I.T., Circle-III, Vijayawada
Court HIGH COURT OF HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
Relevant Act Income-tax
Date of Order 17/09/2014
Assessment Year 1995-96
Judgment View Judgment
Keyword Tags additional income • survey conducted • levy of penalty • revised return
Bot Summary: For the assessment year in question, he filed a return declaring his income as Rs.75,780/-. On noticing the same, the appellant filed a revised return showing the additional income of Rs.1,75,000/- after claiming the expenditure. An order under Section 143(3) of the Act was passed on 15.02.1996 accepting the returns, together with the revised returns and adding a sum of Rs.20,000/- towards unapproved expenditure. The appellant filed an explanation stating the circumstances under which the revised return had to be filed. Heard Sri A.V.Siva Kartikeya, learned counsel for the appellant and Sri J.V.Prasad, learned Standi/ng Counsel for the respondent. It is, no doubt, true that the appellant filed a revised return on 30.11.1995 as a sequel to the survey conducted in his premises. Obviously with a view to purchase peace and to avoid a delicate situation before the competitors in the field, the appellant filed a revised return showing the income, after deducting the expenditure.


HON BLE SRI JUSTICE L. NARASIMHA REDDY AND HON BLE SRI JUSTICE CHALLA KODANDA RAM I.T.T.A No.180 of 2003 JUDGMENT:- (Per Hon ble Sri Justice L.Narasimha Reddy) This appeal is filed by assessee, feeling aggrieved by order, dated 17.09.2002, passed by Income Tax Appellate Tribunal, Visakhapatnam in I.T.A.No.640/H/97 referable to assessment year 1995-96. appellant is Proprietor of private educational institution, established at Vijayawada. He is assessee under Income Tax Act (for short Act). For assessment year in question, he filed return declaring his income as Rs.75,780/-. Survey was conducted by Department on 23.11.1995 under Section 133A of Act. It was pointed out that appellant may have collected sum of Rs.9,22,810/- for academic year 1994- 95, whereas receipt of fees was shown in return only as Rs.3,91,390/-. On noticing same, appellant filed revised return showing additional income of Rs.1,75,000/- after claiming expenditure. order under Section 143(3) of Act was passed on 15.02.1996 accepting returns, together with revised returns and adding sum of Rs.20,000/- towards unapproved expenditure. Assessing Officer initiated proceedings under Section 271(1) (c) of Act and sought to impose penalty. appellant filed explanation stating circumstances under which revised return had to be filed. explanation was not accepted and order was passed imposing penalty of Rs.73,578/-. appeal was filed before Commissioner (Appeals) aggrieved by order of penalty. Commissioner allowed appeal through order, dated 28.01.1997 taking view that there was no justification for levying penalty in facts of case. Revenue filed I.T.A.No.640/H/97 before Tribunal. appeal was allowed by Tribunal. Hence, this further appeal. Heard Sri A.V.Siva Kartikeya, learned counsel for appellant and Sri J.V.Prasad, learned Standi/ng Counsel for respondent. It is, no doubt, true that appellant filed revised return on 30.11.1995 as sequel to survey conducted in his premises. It is not case where any search was conducted or any definite amount was unearthed in course of same. figures pointed out against appellant are on basis of projections based upon strength in school and fee payable by students. No finding as such was recorded to effect that amount of Rs.9,22,810/- was collected. Obviously with view to purchase peace and to avoid delicate situation before competitors in field, appellant filed revised return showing income, after deducting expenditure. That was accepted. Here itself, it needs to be mentioned that though Department pointed out that even after revised return was filed, sum of Rs.5,30,790/- was not included, ultimately, order under Section 143(3) of Act was passed accepting facts and figures furnished by appellant. This only indicates that figures mentioned, on basis of survey, were not accurate. levy of penalty cannot be resorted to as matter of course. By their very nature, returns are bound to be at variance from what is contemplated under Act or estimates of Assessing Officers. Many time, understanding of given provision in particular way, itself would lead to considerable difference as to income or corresponding tax. very fact that quite large number of remedies in form of appeals at various stages is provided for, discloses that even understanding of assessing or adjudicatory authorities; not absolute. levy of penalty is not going to leave matter at that. It would expose assessee to prosecution also by treating him as economic offender. assessee can be made to suffer such far reaching consequences, if only facts of case support, and it emerges that assessee had clear intention to suppress income. We do not find such elements in instant case. appeal is accordingly allowed and order of Tribunal is set aside. There shall be no order as to costs. Miscellaneous petitions, if any, filed in this appeal shall also stand disposed of. L. NARASIMHA REDDY, J CHALLA KODANDA RAM, J Date:17.09.2014 kdl D. Ramarao v. A.C.I.T., Circle-III, Vijayawada
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