Ita/588/2008 Of The Commissioner Of Income Tax v. The Estate

IN THB HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 23 DAY OF JUNE, 2014. PRESENT THR HON’BLE MR.JUSTICK N. KUMAR AN D THR HON’BLE MR.JUSTICEK B.MANOHAR INCOME TAX APPBAL NO.588 OFYAOVS BBRITIWE 1. THR COMMISSIONER OF INCOME TAX C.R.BUILDING QUEENS ROAD. BANGALORE 2. THERE INCOME TAX OFFICE WARD- 1 (1) C.R.BUILDING QUEENS ROAD. BANGALORE ... APPBKRLLANTS (BY SRI.K.V.ARAVIND, ADVOCATE) AND: M/S. THE ESTATE.SHERIFF CKHENIR! FLOOR, 73/1ST. MARKS ROAD.BANGALORE —. RESPONDENT (BY SRI.S.PARTHASARATHI, ADVOCATE) THIS INCOME TAX APPEAL IS FILED UNDER.SECTION 260-A OF INCOME TAX ACT, 1961 ARISING OUT|OFORDERDATERD12.12.2007PASSEDIN-ITA|NO.578/BNG/2006, FOR THE ASSESSMENT YEAR 2000-Ol,PRAYINGTO-KRORMULATETHE.SUBSTANTIALQUESTIONS OF LAW STATED THEREIN AND TO ALLOW|THR APPBAL AND SET ASIDE THR ORDERS PASSEKD BYTHE ITAT, BANGALORE IN ITA NO.978/BNG/2009 DATED|12.12.2007 AND CONFIRM THR ORDER PASSED BY THE)INCOME TAX OFFICER, WARD-1(1), BANGALORE. THIS APPEAL COMING ON FOR HEARING THIS DAY,N.KUMAR J., DELIVERED THE FOLLOWING:- JUDGMENT The Revenue has preferred this appeal against theorder passed by the Tribunal, which has set aside theorder passed by the Assessing Authority imposingpenalty under Section 271(1)(c) which was confirmed bythe Commissioner of Income Tax Appeals. oD The assessee is a real estate developer. He filedreturn of income tax for the assessment year 2000-01.on 18.3.2002 showing income of Rs.32,232/-. He has followed the method of revenue recognition on projectcompletion basis. The case was selected for scrutiny. —The statement of accounts were not audited and/analysis of the accounts were complex in nature. TheAssessing Authority recommended to the Commissionerot Income Tax that this case deserves to be audited in|view of the provisions contained in Section 142(2A), theCommissioner approved this proposal. One M/s.Radhakrishna and Associates, Chartered Accountants.were appointed to conduct the audit under Section142(2A) of the Act. They completed the audit andsubmitted the audit report on 29.8.2003. The auditorsrecommended that there was under statement of incomeunder the various counts totaling to Rs.98,69,607/4/-.The Assessing Officer forwarded the detailed comments.of the Chartered Accountants to the assessee for their/comment. TheaAsSSsSE€acceptedallthe.recommendations of the auditors and expressed their agreement for the additions to the total incomerecommended by the Chartered Accountants. On thatbasis, the assessment was completed on a total incomeof Rs.99,04,910/- on 9.9.2003. 3.|During the course of such assessment, penaltyproceedings under Section 271(1)(c) were initiated. Theassessee contested the penalty proceedings. The|Assessing Authority on careful examination of the auditreport item wise, found that had the Department notsought for expert opinion of the said auditor, the saidamount would have escaped taxation. It is a clear caseof concealment of income as well as furnishing incorrectparticulars and therefore he confirmed the penalty. —Agerieved by the said order, the assessee preferred anappeal which came to be dismissed. Aggrieved by theseorders, the assessee preferred an appeal to the Tribunal. 4The Tribunal only took into consideration, thedeposit of the BWSSB and the amount shown asamount recoverable from M/s. Titan Industries andcame to the conclusion that there are certain mistakes|and it was pointed out, the assessee has accepted thesame. Therefore, in those circumstances penalty was.uncalled for. Accordingly, they have quashed the entireorder. | 5.|We have heard the learned counsel for the parties. 6. The material on record discloses that the penaltywas imposed on careful examination of the detailedwas imposed on careful examination of the detailed report under various heads: (i) salary and wages debited to the Profit |and Loss accountand Loss account (11) sales tax debited to project expenses account,(111) BWSSB Deposit(111) BWSSB Deposit (iv) under statement of stock (v) residual inflation 5.|We have heard the learned counsel for the parties. 6. The material on record discloses that the penaltywas imposed on careful examination of the detailedwas imposed on careful examination of the detailed report under various heads: (i) salary and wages debited to the Profit |and Loss accountand Loss account (11) sales tax debited to project expenses account,(111) BWSSB Deposit(111) BWSSB Deposit (iv) under statement of stock (v) residual inflation TS|The Assessing Authority as well as the FirstAppellate Authority have dealt with these items in detailand they have recorded their finding. It is a concurrentfinding. The Tribunal were to interfere with the saidconcurrent finding, it has to come out with betterreasons and point out where the lower authorities havegone wrong. The said exercise has not been done by theAppellate Authority. Unless that exercise is done by theTribunal, it gets no jurisdiction to interfere withconcurrent finding of fact recorded by two authorities. —In that view of the matter, the impugned order cannotbe sustained. Hence, we pass the following ORDER The appeal is allowed. The order passed by theTribunal is set aside. The entire matter 1s remanded|back to the ‘Tribunal for fresh consideration in 4BB>7942B0�A;:/�<4A�429�;2�:/0�<;=/:�>8�:/0�>?50714:;>25� C490�4?>10�� �/0�647:;05�:>�?047�:/0;7�>A2�B>:5�� ���� ����������� �����������