The Principal Commissioner of Income-tax v. Shitalben Saurabh Vora
[Citation -2020-LL-1005-22]

Citation 2020-LL-1005-22
Appellant Name The Principal Commissioner of Income-tax
Respondent Name Shitalben Saurabh Vora
Court HIGH COURT OF GUJARAT AT AHMEDABAD
Relevant Act Income-tax
Date of Order 05/10/2020
Assessment Year 2003-04
Judgment View Judgment
Keyword Tags concealment of income • penalty • unexplained credit • source of cash deposit
Bot Summary: The assessee neither filed any return of income nor complied with the notice. Subsequently, penalty proceedings came to be initiated on the ground of concealment of income and the Assessing Officer levied penalty of Rs.2,44,90,900/-. The assessee being dissatisfied with the assessment order preferred appeal before the Commissioner of Income Tax ). The CIT restricted the penalty to the extent of the tax on income determined at the income computed at 8 of the turnover. The Appellate Tribunal held that the assessee had concealed THE particulars of income. The Tribunal further held that once the income is reduced, the penalty would also reduce proportionately. The Tribunal recorded the following findings in its order: 15.1 We also note that the income in the case on hand was worked out on estimated basis as discussed in detail in the quantum proceedings. Once the income has reduced then the penalty will also reduce proportionately.


C/TAXAP/282/2020 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 282 of 2020 PRINCIPAL COMMISSIONER OF INCOME TAX Versus SHITALBEN SAURABH VORA Appearance: MRS MAUNA M BHATT(174) for Appellant(s) No. 1 for Opponent(s) No. 1 CORAM:HONOURABLE CHIEF JUSTICE MR. VIKRAM NATH and HONOURABLE MR. JUSTICE J.B.PARDIWALA Date : 05/10/2020 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. This Tax Appeal under Section 260A of Income Tax Act, 1961 (for short Act, 1961 ) is at instance of Revenue and is directed against order passed by Income Tax Appellate Tribunal, Rajkot Bench, Rajkot dated 20.09.2020 in ITA No. 652/RJT/2014 for A.Y. 2003-04. 2. Revenue has proposed following question for consideration of this Court:- Whether on facts and in circumstances of Page 1 of 6 Downloaded on : Thu Oct 08 10:35:06 IST 2020 C/TAXAP/282/2020 ORDER case, Appellate Tribunal was justified in reducing penalty of Rs. 2,44,90,900 levied under section 271(1)(c) of Act to extent of Rs. 4,89,818/- by holding unexplained credits as turnover of assessee and accordingly proportionately reducing income and penalty? 3. We have heard Mr. M.R. Bhatt, learned Senior Counsel assisted by Ms. Mauna M. Bhatt, learned Senior Standing Counsel appearing for Revenue. 4. It appears that huge amount of cash credits was found in bank account of assessee. In such circumstances, notice under Section 148 of Act, 1961 was issued with request to furnish return of income for A.Y. 2003-04. Thereafter, notice under Section 143(1) of Act, 1961 was issued. However, assessee neither filed any return of income nor complied with notice. In such circumstances, show cause notice dated 04.12.2009 came to be issued, whereby assessee was asked to explain source of cash deposits of Page 2 of 6 Downloaded on : Thu Oct 08 10:35:06 IST 2020 C/TAXAP/282/2020 ORDER Rs.2,72,89,000/- in his current bank account No. 3575 of Riddhi Impex maintained with Nawanagar Co-operative Bank Ltd, Udyognagar, Jamnagar. 5. Ultimately, Assessing Officer framed assessment under Section 143(3) read with Section 147 of Act, 1961 on 15.12.2009 determining total income of Rs.7,78,35,500/- under Sections 68 and 69A respectively of Act, 1961 for huge cash deposits in saving bank accounts. Subsequently, penalty proceedings came to be initiated on ground of concealment of income and Assessing Officer levied penalty of Rs.2,44,90,900/-. 6. assessee being dissatisfied with assessment order preferred appeal before Commissioner of Income Tax (A) (for short CIT(A) ). CIT (A) restricted penalty to extent of tax on income determined at income computed at 8% of turnover. Page 3 of 6 Downloaded on : Thu Oct 08 10:35:06 IST 2020 C/TAXAP/282/2020 ORDER 7. Revenue being dissatisfied with order passed by CIT(A) preferred appeal before Appellate Tribunal. assessee preferred cross objections before Appellate Tribunal. Appellate Tribunal dismissed appeal of Revenue and allowed cross objectionS preferred by assessee. Appellate Tribunal held that assessee had concealed particulars of income. Tribunal further held that once income is reduced, penalty would also reduce proportionately. Accordingly, Appellate Tribunal restricted penalty to Rs.4,89,818/-. 8. Tribunal recorded following findings in its order: 15.1 We also note that income in case on hand was worked out on estimated basis as discussed in detail in quantum proceedings. Thus next question arises whether there can be penalty in event income is determined based on estimation. In this regard, we note that assessee has not maintained her books of accounts, filed her return of income. Thus there was no option available to learned CIT(A) Page 4 of 6 Downloaded on : Thu Oct 08 10:35:06 IST 2020 C/TAXAP/282/2020 ORDER except to estimate income based on materials available on record. Therefore, per se it cannot be concluded that income has been determined on estimated basis after finding out defect in books of accounts, expenses/income claimed/shown in return of incomer, lower gross profit etc. But income escaped from assessment has been computed in different manner. Thus, in our considered view assessee is guilty of concealing particular of income. Therefore, assessee is liable to be visited with penalty for 100% of amount of tax sought to be evaded. Regarding Revenue appeal restricting penalty to extent of tax to be computed @ of 8% of turnover, we note that penalty has to be computed with reference to income. Once income has reduced then penalty will also reduce proportionately. Hence ground of appeal of Revenue is dismissed and CO filed by assessee partly allowed. 9. Thus, Tribunal held that once income is reduced, penalty would also get reduced proportionately and thereby Tribunal restricted penalty to Rs. 4,89,818/-. If such is view of Tribunal, then, in our opinion, we should not Page 5 of 6 Downloaded on : Thu Oct 08 10:35:06 IST 2020 C/TAXAP/282/2020 ORDER disturb same. 10. question as proposed by Revenue in aforesaid set of circumstances cannot be termed as substantial question of law. 11. In result, this appeal fails and is hereby dismissed. (VIKRAM NATH, CJ) (J. B. PARDIWALA, J) A. B. VAGHELA/A.M.PIRZADA Page 6 of 6 Downloaded on : Thu Oct 08 10:35:06 IST 2020 Principal Commissioner of Income-tax v. Shitalben Saurabh Vora
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