Commissioner of Income-tax-VI v. Bhavinkumar M Dagli
[Citation -2015-LL-0216-2]

Citation 2015-LL-0216-2
Appellant Name Commissioner of Income-tax-VI
Respondent Name Bhavinkumar M Dagli
Court HIGH COURT OF GUJARAT AT AHMEDABAD
Relevant Act Income-tax
Date of Order 16/02/2015
Assessment Year 2005-06
Judgment View Judgment
Keyword Tags detection of concealment • concealment of income • voluntary disclosure • additional income • original return • oral order
Bot Summary: In appeal before the CIT, it was found by the CIT that before finalisation of the assessment, assessee had filed the letter on 02.10.2006 with the ITO Ward 1(4) on 03.10.2006 explaining that he had received certain money from different persons in the bank account in his name and that the said persons were not cooperating and therefore, the appellant was advised to offer to tax income based on such bank account transactions by filing revised return. After the above survey and recording of statement, only the assessee disclosed additional income by way of a revised return on 11 3 2003 and on these circumstances, the Hon'ble High Court found levy of penalty u/s. Whereas, in the instant case, there is no such material to show that the department had actually detected any income of the assessee which was not disclosed in the return prior to 31 3 2007, when the assessee disclosed its additional income. 1432 had already been issued and the assessee filed revised return thereafter, disclosing additional income towards capital gains, which was not correctly shown in the original return, that was not tantamount to detection of concealment of income u/s. In the light of view taken in the aforesaid decisions, it cannot be said that in the case before us, additional income disclosed during the course of assessment proceedings was not voluntary or that the assessee wanted to conceal the income. The A.O. did not bring any material on record that the declaration of income made by the assessee in his revised return or his explanation was not bona fide. The learned counsel for the Revenue attempted to contend that the second return which was titled as revised return was after the outer limit and therefore, it was no revised return in the eye of law and if such factor is considered, it can be said that there was concealment of the income on the part of the assessee coupled with the aspect that after the scrutiny notice was issued, the so called revised return was filed and therefore, he submitted that the approach of the Tribunal deserves to be further considered in light of the question raised by the Revenue in the present appeal.


O/TAXAP/29/2015 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 29 of 2015 ============================================================== COMMISSIONER OF INCOME TAX VI....Appellant(s) Versus BHAVINKUMAR M DAGLI....Opponent(s) ============================================================== Appearance: MR MANISH BHATT WITH MRS MAUNA M BHATT, ADVOCATE for Appellant(s) No. 1 ============================================================== CORAM: HONOURABLE MR.JUSTICE JAYANT PATEL and HONOURABLE MR.JUSTICE S.H.VORA Date : 16/02/2015 ORAL ORDER (PER : HONOURABLE MR.JUSTICE JAYANT PATEL) 1. Revenue has preferred present appeal on following question of law Whether Appellate Tribunal has substantially erred in deleting penalty of Rs.1,61,66,230/ u/s. 271(1)(c) of Act by ignoring facts that original return filed by assessee on 27/03/2006 for Rs.5,52,179/ cannot be revised u/s. 139(5) as held by Hon ble Supreme Court in case of Jagdishchandra Sinha 220 ITR 67 (SC) and F.C. Agarwal 186 ITR 57 (SC) and that if original return was deliberately filed wrong, penalty u/s. 271(1)(c) is leviable on admitted amount of concealed income of Rs.4.81 crores being peak credits in bank account of assessee and his family members? 2. We have heard Mr.Manish Bhatt, learned Senior Page 1 of 8 HC-NIC Page 1 of 8 Created On Wed Sep 30 15:45:20 IST 2015 O/TAXAP/29/2015 ORDER Advocate appearing for appellant. 3. facts are that initially, return was filed by assessee for assessment year of 2005 2006 on 27.03.2006 for taxable income of Rs.5,52,179/ . Later on, assessee filed revised return as on 31.03.2006 (which is stated by Mr. Bhatt for appellant that correct date should have been 31.03.2007) showing total income of Rs.4,44,82,930/ . There was scrutiny and ultimately, vide order dated 24.12.2007, income was assessed of Rs.4,81,14,680/ . matter was carried in appeal before CIT (Appeals), wherein on question of penalty, matter was relegated to AO. Thereafter, AO vide order dated 29.03.2010, found that 100% penalty of tax amount deserves to be imposed under section 271 (1)(c) of Income Tax Act, 1961 (hereinafter referred to as Act ) and hence, imposed penalty of Rs.1,61,66,230/ . In appeal before CIT (Appeals), it was found by CIT (Appeals) that before finalisation of assessment, assessee had filed letter on 02.10.2006 with ITO Ward 1(4) on 03.10.2006 explaining that he had received certain money from different persons in bank account in his name and that said persons were not cooperating and therefore, appellant was advised to offer to tax income based on such bank account transactions by filing revised return. It was also recorded that letter was inwarded vide register No.81 in office of ITO Ward Page 2 of 8 HC-NIC Page 2 of 8 Created On Wed Sep 30 15:45:20 IST 2015 O/TAXAP/29/2015 ORDER 1(4) Bhavnagar on 03.10.2006. contention of AO was considered by CIT (Appeals) that no such letter was found. CIT (Appeals), thereafter found that there is no justification in levying penalty under section 271 (1)(c) of Act and therefore, deleted same. In further appeal to Tribunal, Tribunal observed at paragraphs 12, 13 and 14 as under: 11. It is observed that investigation in instant case was commenced by A.O. only on 24 8 2007 by issue of 142[1] Notice. No material was brought before us to show that there was any material available with department prior to 31 3 2007 to show that there was some additional income then income disclosed in original return assessable in hands of assessee. In circumstances, in our considered view, it cannot be held that disclosure of additional income by assessee on 31 3 2007 was after its detection by department. 12. We find that decision of Hon'ble Gujarat High Court in case of Snita Transport [P] Ltd. V. Assistant Commissioner of Income Tax [2014] 42 Taxmann.com 54 [Gujarat] is not applicable on facts of instant case. In that case, Hon. Gujarat High Court observed that survey was conducted in case of assessee on 30 1 2003 wherein assessee accepted in statement recorded of having debited bogus expenditure in its Books of Account. After above survey and recording of statement, only assessee disclosed additional income by way of revised return on 11 3 2003 and on these circumstances, Hon'ble High Court found levy of penalty u/s. 271(1)(c) was Page 3 of 8 HC-NIC Page 3 of 8 Created On Wed Sep 30 15:45:20 IST 2015 O/TAXAP/29/2015 ORDER justified. Thus, it is observed in that case, assessee disclosed additional income after same was detected during course of survey by department. Whereas, in instant case, there is no such material to show that department had actually detected any income of assessee which was not disclosed in return prior to 31 3 2007, when assessee disclosed its additional income. 13. On other hand, we find that Delhi Bench of Tribunal in case of Assistant Commissioner of Income Tax v. Ashok Raj Nath [2013] 33 Taxmann.com 588 [Del. Tribunal] has held as under: "18. Merely because notice u/s. 143[2] had already been issued and assessee filed revised return thereafter, disclosing additional income towards capital gains, which was not correctly shown in original return, that was not tantamount to detection of concealment of income u/s. 271(1)(c) of Act. Hon. M.P. High Court in case of CIT v. S V Electricals {P} Ltd. [2005] 274 ITR 334/[2006] 155 Taxman 158 and Hon. Jharkhand High court in CIT V. Ashim Kumar Agarwal [2005] 275 ITR 48/[2006] 153 Taxman 226 held that there assessee surrenders his full income, though at later stage, there was no question of any concealment on his part and consequently, no penalty u/s. 271(1)(c) was leviable, and that omission from return of income did not amount to concealment. Hon. Jurisdictional High court while adjudicating issue of levy of penalty u/s. 271(1)(c) in case of CIT v. Harnarain in their decision dated 31 10 2011 in ITA No. 2072/2010 concluded that "surrender of amount by assessee after receipt of Page 4 of 8 HC-NIC Page 4 of 8 Created On Wed Sep 30 15:45:20 IST 2015 O/TAXAP/29/2015 ORDER questionnaire could not lead to inference that it was not voluntary, in absence of any material on record to suggest that it was bogus or untrue. It is further, evident that there was neither any detection nor any information in possession of revenue which might lead to conclusion that there was detection by Revenue of concealment. Accordingly, question of law framed is answered against revenue and in favour of assessee." 19. In instant case, assessee voluntarily disclosed additional income during course of assessment proceedings and paid tax thereon. In light of view taken in aforesaid decisions, it cannot be said that in case before us, additional income disclosed during course of assessment proceedings was not voluntary or that assessee wanted to conceal income. Even though revised return was found to be invalid, A.O. accepted income as declared in revised return and computation. A.O. did not bring any material on record that declaration of income made by assessee in his revised return or his explanation was not bona fide. In these circumstances, there appears to be no basis for imposition of penalty on ground that assessee furnished inaccurate particulars of income. Since revenue have not placed before us any material nor brought to our notice any contrary decision so as to enable us to take different view in matter, we are not inclined to interfere. Therefore, ground No. 1 in appeal is dismissed." 4. Tribunal found that case is covered by Page 5 of 8 HC-NIC Page 5 of 8 Created On Wed Sep 30 15:45:20 IST 2015 O/TAXAP/29/2015 ORDER decision of Tribunal in light of other decision referred to by Tribunal on aspect that there was no concealment of income and Tribunal accordingly dismissed appeal of Revenue. Under circumstances, present appeal. 5. learned counsel for Revenue attempted to contend that second return which was titled as revised return was after outer limit and therefore, it was no revised return in eye of law and if such factor is considered, it can be said that there was concealment of income on part of assessee coupled with aspect that after scrutiny notice was issued, so called revised return was filed and therefore, he submitted that approach of Tribunal deserves to be further considered in light of question raised by Revenue in present appeal. 6. We may record that as per order of CIT (Appeals), assessee has given justification for showing additional income in subsequent return vide letter dated 02.10.2006. Had letter not inwarded and it was mere say coupled with aspect that no such letter was available as per AO in file, matter may be different but when letter was already inwarded, whether it was sent to AO by concerned office would not impair aspect of bonafide or aspect of voluntary disclosure of taxable income. Page 6 of 8 HC-NIC Page 6 of 8 Created On Wed Sep 30 15:45:20 IST 2015 O/TAXAP/29/2015 ORDER Once bonafide is found of voluntary disclosure of income, that too in first appeal by CIT (Appeals), view taken by Tribunal, may be by referring to decision of Jharkhand High Court, without any reference to letter dated 02.10.2006 inwarded on 03.10.2006, would not be sufficient to conclude that finding on aspect of bonafide was perverse. In our view, aspect of bonafide or non concealment of income is essentially question of fact. When first appellate authority and second appellate authority, viz., Tribunal which is ultimate fact finding authority after consideration of evidence has found that there was no concealment of income, further scrutiny by way of re appreciation of evidence in appeal before this Court would be beyond scope of present appeal. 7. Under above circumstances, we find that no substantial question of law would arise for consideration in present appeal as canvassed by learned counsel for Revenue. 8. Hence, no interference is called for to impugned order of Tribunal. Under circumstances, present appeal can be said as meritless and hence, dismissed. (JAYANT PATEL, J.) Page 7 of 8 HC-NIC Page 7 of 8 Created On Wed Sep 30 15:45:20 IST 2015 O/TAXAP/29/2015 ORDER (S.H.VORA, J.) bjoy Page 8 of 8 HC-NIC Page 8 of 8 Created On Wed Sep 30 15:45:20 IST 2015 Commissioner of Income-tax-VI v. Bhavinkumar M Dagli
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