Itta/356/2013 Of Commissioiner Of Income Tax-Iii v. Shri Ravi Teja Restaurant And Resorts Private Limited

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH ATHYDERABAD THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAAND THE HON’BLE SRI JUSTICE K.C. BHANU I.T.T.A. No. 356 of 2013 DATE: 22.08.2013 Between: Commissioner of Income Tax-III,Hyderabad. … Appellant And Shri Ravi Teja Restaurant & Resorts Pvt., Ltd.,Hyderabad. … Respondent This Court made the following: THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDTHE HON’BLE SRI JUSTICE K.C. BHANU I.T.T.A. No. 356 of 2013 JUDGMENT:(Per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) We have heard Sri B. Narasimha Sarma, learned counsel for theappellant and have gone through the impugned judgment and order of the learned Tribunal. This appeal is sought to be admitted on the following suggested questions of law. “i) In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in holding that penaltyunder Section 271(1)(c) of the Act is not leviable, even though theconcealment of income is deliberate and willful in as much as therespondent-assessee suppressed the income which could nothave surfaced but for the material seized during search andseizure/survey operations conducted, on the basis of which thecorrect income has been arrived at in the assessments? ii) In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law deleting the penalty leviedunder Section 271(1)(c) of the Act, oblivious of the fact that mereacceptance by the respondent-assessee of estimation ofincome, for its culpable act of suppression of income, would notabsolve the respondent-assessee from penal provisions andpenalty under Section 271(1)(c) of the Act is very much leviable?” The learned Tribunal has discarded the findings and decision of the Assessing Officer on a clear-cut finding, which is reproduced as follows: “On a careful perusal of the findings given by the AssessingOfficer would show that the Assessing Officer has arrived at theconclusion about the concealment of income by comparing the trialbalance of two different periods of the same financial year viz., 2006-07 relevant to the assessment year 2007-08. The Assessing Officerhas not brought on record any material to show that the expenses booked in the second half of the year was either bogus or inflated. Thus, it is evident that he has reached conclusions about the inflationof expenses on the basis of surmises and conjectures. Further, theAssessing Officer has arrived at the above said conclusions for theassessment year 2007-08 and he has applied the same for all thefour years under consideration. It is well settled that the income taxproceedings of each year is distinct and separate and hence thedecision has to be taken on each of the issue on the basis of factsprevailing in each year. Hence, we are of the view that theAssessing Officer was not right in law in applying the conclusionsreached by him for the assessment year 2007-08, that too on thebasis of surmises and conjectures, to the four years underconsideration. Thus, in effect, the Assessing Officer has not provedthat there was concealment of particulars of income or furnishing ofinaccurance particulars of income in all the four years underconsideration.” In view of the aforesaid fact finding, this Court is not obliged to reachfurther fact finding, as there is no allegation against the aforesaid finding asbeing perverse. The learned Tribunal has also found that the penaltyproceedings is not justified, as the assessee has satisfied the deemingprovision given in Explanation 1 to Section 271 of the Act. It was alsorecorded that the assessee did not conceal any particulars. In view of the aforesaid situation, we dismiss the appeal. _____________________ K.J. SENGUPTA, CJ ________________ K. C. BHANU, J