Ita/5016/2011 Of The Commissioner Of Income Tax v. M/S Vega Auto Accessories Pvt Ltd

IN THE HIGH COURT OF KARNATAKACIRCUIT BENCH AT DHARWAD DATED THIS THE O8 DAY OF AUGUST, 2012PRESENT THE HON’BLE MR. JUSTICE N. KUMAR AND THE HON’BLE MR. JUSTICE H. S. KEMPANNA I.T.A. Nos.5014 TO 5016 OF 2011 BETWEEN: 1.THE COMMISSIONER OF INCOME TAX,DR. AMBEDKAR ROAD,BRLGAUM2.THR ASSISTANT COMMISSIONER OFINCOME TAX, CIRCLE-I,BRLGAUM.. APPBLLANICOMMON|(By Sri. Y V RAVIRAJ ADV.) AND:M/S VEGA AUTO ACCESSORIES PVT. LTD.,VITHALDEO LANE, SHAHAPUR,BBRLGAU — RESPONDENTICOMMON| (By Sri. S.PARTHASARATHI : P.DINESH &H.R.KAMBIYAVAR ADVs.) ITA No.5014/2011 IS FILED U/SEC.2600A OF THINCOME-TAX ACT, 1961 AGAINST ORDER PASSED INITA.NO.78/PNJ/2010 DTD:18-02-2011 ON THE FILE OFTHE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH,PANAJI, ALLOWING THE APPEAL FILED BY THE ASSESSEEKHOR THER ASSHSSMENT YEAR S 2004-05 TO 2006-0 ITA No.5015/2011 IS FILED U/SEC.2600A OF THINCOME-TAX ACT, 1961 AGAINST ORDER PASSED INITA.NO.79/PNJ/2010 DTD:18-02-2011 ON THE FILE OFTHE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH,PANAJI,ALLOWING|THERAPPHKALRILBDBY|THEASSESSEE. ITA No.5016/2011 IS FILED U/SEC.2600A OF THINCOME-TAX ACT, 1961 AGAINST ORDER PASSED INITA.NO.80/PNJ/2010 DTD:18-02-2011 ON THE FILE OFTHE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH,PANAJI,ALLOWING|THERAPPHKALRILBDBY|THEASSESSHE> These appeals coming on forAdmission'§=3 (day,N.Kumar J.,delivered the following: JU DGMENT As the questions involved in all theseappeals are one and the same and between the same parties for different assessment years,they are taken up for consideration together anddisposed off by this common order, 2. The assessee is a manufacturer of safetyhead-gear being helmets and sells their goods inthe name of ‘Vega’ branded helmet. There was aSurvey action in the business premises on17.10.2007 wherein the suppression of saleswas detected by the Asssessing Officer, based onthe search conducted in the assessee’s premisesbytheDirectorGeneralot|Central Excise(intelligence),|Bangalore,OT)O7.02.2006.Therefore, consequent upon the survey, theassessee filed the revised returns on 05.12.2007for the assessment year 2004-05 to 2006-07declaring the additional income on account oftheinitialcapitalot|46,90,000/-—5:>suppression|oT sales.ot|434,94,129/- for -4~-— assessment.Year2004-05,=66,279/-forassessment year 2005-06 and482,85,/03/- forassessment year 2006-07. Aiter the said revisedreturns were filed, the assessing officer issued anotice under Section 148 of the Income Tax Act,1961 [for short ‘the Act‘1. 3. The case ot the Revenue is the afore-said facts clearly demonstrates the concealmentof income by way of suppression with intentionto evade tax and even failed to revise the incomeaiter the date of survey conducted by theCentral Excise Department. Therefore, theAssessing Officer finalised the assessment undersection 143(3) read with Section 147 of the Actmaking the additions. He also called upon theaSSECSSFCTO show-cause.whythepenaltyproceedings should not be initiated. In reply tothe same, the assessee contended that there was no concealment involved as to additional incomeWaSfoundatthetimeot|Survey,4H846=additional sales declared before the CentralBxeise authorities. 4. Secondly, he contended that he has filedrevised returns upon the completion of theproceedings under the Central Excise Act. Notonly he filed the revised returns, he has alsopaid taxes and interest payable thereon. Over-ruling the said objections, the additions weresustained. 5 |Agegrievedby|thesaidorder,=34ASSESSEEpreferredaf)appeal|LO =34Commissioner of Income Tax (Appeals), whoconfirmed the order and dismissed the appeal.It iS against the said order, the assessee preferred a second appeal to the Tribunal, no concealment involved as to additional incomeWaSfoundatthetimeot|Survey,4H846=additional sales declared before the CentralBxeise authorities. 4. Secondly, he contended that he has filedrevised returns upon the completion of theproceedings under the Central Excise Act. Notonly he filed the revised returns, he has alsopaid taxes and interest payable thereon. Over-ruling the said objections, the additions weresustained. 5 |Agegrievedby|thesaidorder,=34ASSESSEEpreferredaf)appeal|LO =34Commissioner of Income Tax (Appeals), whoconfirmed the order and dismissed the appeal.It iS against the said order, the assessee preferred a second appeal to the Tribunal, 6. On consideration ot the afore-saidmaterials, the Tribunal was of the view thatwhen once the return was filed before the issueof notice and taxes due with interest is paid, asthe income was not suppressed, the impositionof penalty was not proper. Therefore, it setasidetheOrder|ot.impositionot.penalty.Aggrieved by the said order, the Revenue is inappeal. T. The learned counsel for the Revenueassailing the impugned order contends thatadmittedly, the assessee admitted before theCentral Excise Authorities the suppression ofturn-over and the suppression of payment ofexcise duty. After the same was detected, he didnot file the income-tax returns. He waited tillthere was a survey of his premises by the Income Tax Department. It is only thereaiter hehas filed the returns, ofcourse, before the issueof notice under Section 148 of the Act. Thesefactsclearlydemonstratesthat.the.revisedreturns filed by the assessee is not voluntaryand bona fide, and there was an intention toavoid payment of tax. In those circumstances,the Tribunal was not justified in interfering withthewell-consideredorders|passedby|=34appellate authority as well as the originalauthority and therefore, he submits that theimpugned order requires to be interfered with. 8. In support of his contention, he reliedupon a judgment of the Gujarat High Court intheCASEoT LMPPRECISION|BHNGINBEARICOMPANY LIMITED Vs. DEPUTY COMMISSIONEROF INCOME TAX(2ZO11) 330 ITR 9!, where ithas been held as under: “9. The law on the subject oftreating a revised return of incomeas voluntary or otherwise is well-settled. Merely because a return isrevised that fact by itself cannot leadto any presumption as toconcealment in the original return ofincome, because legislature itselfhas provided for furnishing a revisedreturn in case of any omission in theoriginal return. Albeit such omissionhas to be inadvertent and bona fide.If the omission is intentional, therevised return cannot absolve anassessee. The fact that theDepartment has initiated certaininquiries per se would not besufficient to treat the revised returnas not being voluntary. This woulddepend on facts of each caseconsidering the stage at which theinvestigation has progressed, thesubject-matter of investigation by theDepartment, and the evidence available in the course of suchinvestigation.” 9. There is no quarrel with the afore-saidproposition of law. As is clear from the saidlaw, in the background of the afore-said law, wehave to look into the tacts oft the case and theto apply the said law. Therefore, merely becausethereWaSaiSUTVCY_by|theIncome.TaxDepartment and it is only aiter a survey, arevised return is filed, is not a ground to holdthat there was suppression of income. In theinstant case, first there was a search by theExcise Department. It is in the course of thatsearch, the assessee admitted the suppression ofturn-over. Thereafter, he paid tax and interestto the Excise Department. Then, he went beforethe Settlement Commissioner seeking for waiverof penalty and prosecution. It is only after theorder passed by the Settlement Commissioner -10- andaftertheSurvey|by|theIncome.TaxDepartment of his premises, to bring it inconformity with the orders passed under theExcise Act, he filed the revised returns, paid thetaxes as well as the interest. It is thereafter theRevenue issued him the notice under Section148 of the Act. -10- andaftertheSurvey|by|theIncome.TaxDepartment of his premises, to bring it inconformity with the orders passed under theExcise Act, he filed the revised returns, paid thetaxes as well as the interest. It is thereafter theRevenue issued him the notice under Section148 of the Act. 10. In reply to the same, he contended thatthe revised returns field may be treated as thereturns in pursuance of the said notice and hepleaded before them that as he has already paidtax and interest, and as there is no suppressionof income, he is not liable to pay the penalty, 11.)Thesuppression|ot|TUrN-OVET| (different from the suppression of income. Ifthere is suppression of turn-over, there isliability to pay excise duty. Merely because the excise duty is paid, there is no presumption thatit leads to taxable income in the hands ot theassessee. The tax under the Income Tax Act isipayable for the income in excess of the limitprescribed under the Act. It is in this context,atter the Settlement Commissioner under theExcise Act resolved the dispute between theparties, which waived the penalty, then whetherhe had income or not, he was forced to filerevised returns and then pay tax as well as theinterest for delayed payment of tax. All this wasdone prior to issue of notice under Section 148of the Act or may be aiter the survey wasconducted by the Income Tax Department. Thatby itself would not lead to a conclusion thatthere was concealment of income, as rightly heldby the Tribunal. �)����:�=35=�? 4@�*<�=34�95==4���@4�>*�:*=< :>�5:��(BC(=5:= 57�AB4(= *:�*<�75@�@3 83�5� (4<*��8*:( >4�5= *:� :�=34�<58=(�*<�=34�85(4����*94� =(����) &) *+� ��%�#���� ���%� ��%�#����