Ita/145/2013 Of The Commissioner Of Income Tax (Central), Kochi v. M/S.parthas Power House Road, Trivandrum

Kss IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE MONDAY, THE 11TH DAY OF NOVEMBER 2013/20TH KARTHIKA, 1935 ITA.No. 145 of 2013 ----------------------- ITA NO. 367/2011 OF INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH DATED 16-11-2012 ..... APPELLANT(S):APPELLANT: -------------------------------------------- THE COMMISSIONER OF INCOME TAX (CENTRAL), COCHIN. BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, INCOME TAX RESPONDENT(S):RESPONDENT: -------------------------------------------------- M/S.PARTHAS, POWER HOUSE ROAD, TRIVANDRUM - 695 036. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 11-11-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ON 11-11-2013, THE COURT ON THE SAME DAY DELIVERED THE ITA.NO.145/2013 APPENDIX APPELLANT'S ANNEXURES: ANNEX.A:COPY OF PENALTY ORDER U/S 260A OF I.T.ACT. RESPONDENT'S ANNEXURES:N I L /TRUE COPY/ P.S.TO JUDGE MANJULA CHELLUR, C.J. & A.M.SHAFFIQUE, J. ---------------------------------------------------- I.T. Appeal No. 145 of 2013 --------------------------------------------------- Dated this the 11[th] November, 2013 J U D G M E N T Shaffique, J. The appeal is filed by the revenue against the order passed in ITA No. 367/Coch/2011 of the Income TaxAppellate Tribunal, Cochin Bench. 2. The facts of the case would disclose that asearch was conducted under S. 132 of the Income Tax Actat the business premises of the assessee on 11.10.2007.Pursuant to the same, the assessee had filed return ofincome on 30.9.2008 declaring a total income ofRs. 8,39,77,210/- which includes a sum of Rs. 1.22 croresoffered by the assessee to cover any possible omissionsand commissions. Notice under S. 143 (2) wasissued on 25.3.2009 and the assessment was completed I.T. Appeal No. 145 of 2013 under S. 143(3) on 31.12.2009 determining the incomeat Rs. 8,41,37,212/-. 3. Subsequently, a penalty was imposed on the assessee for concealment of income under S. 271AAA foran amount of Rs. 12,26,000/-. 4. Assessee filed an appeal before the Commissionerof Income Tax (Appeal) against the order of penalty. Theappeal was allowed on the ground that there is no violationof S. 271AAA. The revenue preferred further appealbefore the Tribunal and the appeal came to be dismissed. 5. While impugning the order passed by the Tribunal,it is inter alia contended that the Tribunal was not justifiedin coming to the conclusion that Section 271AAA has noapplication in the facts and circumstances of the case. It iscontended that during the course of penalty proceedings,it was noticed that there was discrepancy in the accountsaggregating to Rs. 39,30,732/- for the assessmentyear 2008-2009. Since the assessee had admitted I.T. Appeal No. 145 of 2013 Rs. 1.21 crores as additional income in their return, noseparate additions were made. Therefore according tothe revenue, the imposition of penalty was justified. 6. The First Appellate Authority found that 5. While impugning the order passed by the Tribunal,it is inter alia contended that the Tribunal was not justifiedin coming to the conclusion that Section 271AAA has noapplication in the facts and circumstances of the case. It iscontended that during the course of penalty proceedings,it was noticed that there was discrepancy in the accountsaggregating to Rs. 39,30,732/- for the assessmentyear 2008-2009. Since the assessee had admitted I.T. Appeal No. 145 of 2013 Rs. 1.21 crores as additional income in their return, noseparate additions were made. Therefore according tothe revenue, the imposition of penalty was justified. 6. The First Appellate Authority found that Section 271AAA postulates a 10% penalty on theundisclosed income with reference to the books of accountsor other documents or transactions found in the course ofsearch. Since the Managing Partner of the assessee firmhad admitted by giving a statement that to avoidprotracted litigations, they have offered to file return ofincome for the assessment year 2008-2009 by declaringincome of Rs. 2 crores more than the income return forthe assessment year 2007-2008 and nothing was un-earthed as undisclosed income as a result of search andsince the assessee had remitted Rs. 1.21 crores to cover anypossible omissions and commissions, there was no reasonto come to a conclusion that the assessee had violatedS.271AAA. The Tribunal also found that while filing the I.T. Appeal No. 145 of 2013 4 return the assessee has shown a sum of Rs.1.2 croresover and above what was returned in the earlier yearsand after assessment when it is found that the incomewas only Rs. 8,41,37,212/- as against the admitteddisclosed income of Rs.8,39,77,210/-, there was no reasonto impose any penalty. 7. The learned standing counsel appearing for therevenue contends that substantial questions of law arisesfor consideration especially in regard to the applicabilityof Section 271AAA. Having regard to the nature of findingsentered into by the appellate authorities, the decisiontaken is purely on the basis of factual circumstancesinvolved in the matter. It is found that the differencebetween the disclosed income and the assessment wasvery meagre. There was no material to indiciate that theassessee has not disclosed the proper income. Whereasin this case the assessee had offered to show an additionalincome of 1.21 crores to avoid unnecessary controversy in I.T. Appeal No. 145 of 2013 5 the matter. It is under these circumstances that the Tribunal came to a finding that the imposition of penaltywas bad in law. We do not have a different view and we donot think that any question of law arises for considerationin this matter. Accordingly, the appeal is dismissed. Sd/- MANJULA CHELLUR, CHIEF JUSTICE Sd/-JUDGE A.M.SHAFFIQUE, rka /true copy/