Ita/24/2009 Of The Commissioner Of Income Tax, Trichur v. K.abbas Haji

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 27TH OCTOBER 2009 / 5TH KARTHIKA 1931 ITA.No. 24 of 2009() -------------------- (ITA NO.925/COCH/07 OF ITA TRIBUNAL COCHIN BENCH) APPELLANT -------------------- THE COMMISSIONER OF INCOME TAX, TRICHUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT ------------------------- SHRI.K. ABBAS HAJI, KURUMBATHUR HOUSE, THIRUVAZHAMKUNNU, MANNARGHAT, PALAKKAD DISTRICT. BY ADV. SRI.P.RAGHUNATH & SRI.PREMJIT NAGENDRAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON ON 27/10/2009, ALONG WITH ITA NOS.15, 17,19, 22, 23, 28, & 34 OF 2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N. RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. ---------------------------------------- I.T.A. Nos.24,15, 17, 19, 22, 23, 28 & 34 of 2009 ---------------------------------------- Dated, the 27th day of October , 2009 JUDGMENT Ramachandran Nair, J. All the above appeals are filed by the Revenue against theorders of the Income Tax Appellate Tribunal disposing of theassessment and penalty appeals of the assessee for theassessment years 2001-02 to 2004-05. The facts leading to thecase are the following: 2. The assessee, a Non-Resident Indian, was found tohave made various investments, the sources of which weresought for in the course of income tax assessments for theabove 4 years. Even though the assessee contended that anamount of Rs. 12 lakhs was received by him every year from hisfarm land as agricultural income, on detailed enquiry, he could notprove having earned agricultural income for so much amount orprove the receipts and expenditure claimed by him.However, the assessee agreed for an addition of Rs.3,39,000/- inthe assessment for all these years. In other words, hisexplanation for the source of investment in excess of Rs.3,39,000/-, Rs.8,61,000/- was accepted by the officer merelybecause he agreed for addition of balance amount ofRs.3,39,000/-. However, after completing assessments in allthese years, on an agreed basis, the assessing officer proposedpenalty under section 271(1)(c) of the I.T.Act for concealment ofincome to the tune of Rs.3,39,000/-. The assessee specificallyraised objection stating that assessments were agreedassessments and additions for the first three years at the rate ofRs.3,39,000/- and for 2004-05, Rs.3.5 lakhs were agreed by theassessee. However overruling the objection by the assessee, theassessing officer levied penalty under section 27(1)(c) of the Act.Besides this, it seems that for 2002-03 assessee had agreed forsome other additions. In the appeals filed, the appellate authorityallowed the appeals against which the Departmental appeals filedwere dismissed by the Tribunal. While for the three years, caseswere not decided on merits, for the remaining years, the Tribunalconfirmed the order of the C.I.T (Appeals). It is against these ordersof the Tribunal, Revenue has filed these appeals. 3. We have heard the Standing Counsel appearing for theappellants, and Sri P. Raghunath, the counsel appearing for therespondent. 3. We have heard the Standing Counsel appearing for theappellants, and Sri P. Raghunath, the counsel appearing for therespondent. 4. We are in agreement with the contention of the assesseethat the assessments were agreed assessments and so much so,there was no justification to levy penalty under section 271(1)(c) ofthe IT Act. Since the assessments were agreed assessments, noappeals are maintainable against the assessment orders andassessee was in fact compelled to challenge assessments onlybecause he had to defend penalty orders which could be effectivelydone by challenging assessments. The Tribunal's finding thatappeals are not maintainable, because the tax amount involved isbelow the threshold limit fixed by the CBDT circular is notapplicable in these cases where the assessments are agreedassessments against which assessee has filed appeals. This isbecause, if assessee had not agreed for specific addition, theofficer was not bound to maintain addition at the level agreed bythe assessee. However, the assessee cannot be blamed for filingappeals because the officer levied penalty based on addition madein agreed assessments. It is obvious that the assessee agreed forspecific additions in assessments to purchase piece andobviously no penalty could have been levied against assessee. Inthis view of the matter we dispose of these appeals by vacating theorders of the Tribunal, first appellate authority and by restoring ITA 24,15,17,19,22,23,28 &34/09 -:4:- assessments but by confirming cancellation of penalty orders forall the years. C.N.RAMACHANDRAN NAIR JUDGE V.K.MOHANAN, JUDGE kvm/- ITA 24,15,17,19,22,23,28 &34/09 -:5:- V.K.MOHANAN, J. O.P.No. JUDGMENT Dated:..