Pr Commissioner Of Income-Tax (Central)Nagpur v. Rajkumar Gulab Badgujar

Ladda IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL No. 897/2016WITHINCOME TAX APPEAL No. 898/2016WITHINCOME TAX APPEAL No. 901/2016WITH INCOME TAX APPEAL No. 907/2016WITH INCOME TAX APPEAL No.914/2016 Pr Commissioner of Income-tax(Central)Nagpur..Appellant.VsRajkumar Gulab Badgujar..Respondent. ..Respondent. Mr.Sham Walve for the Appellant.Mr. Jitendra Jain a/with Mr. Manoj Gopal Agre for the Respondent. CORAM : AKIL KURESHI & B. P. COLABAWALLA, JJ. DATED :- 8TH JANUARY, 2019. P.C.: 1The aforesaid appeals arise on common backgroundand concern the same assessee, challenge the judgment ofIncome-Tax Appellate Tribunal (“the Tribunal”for short). The (a) Whether on the facts and circumstances of thepresent case the Tribunal was justified in deleting thepenalty of Rs.4,473/- levied under Section 271 (1) (c)of the Income-Tax Act, 1961? (b) Whether on the facts of the case and in law,the Tribunal was justified in allowing the relief to theAssessee, ignoring the fact that the Assessee had notfiled return of income voluntarily but only the date ofsearch action which amounts to concealment ofincome with respect to the concerned year i.e.Assessment Year 2006-07? 2The record would show that search and seizureaction was carried out by the Revenue Authorities on SuyojitGroup of Nashik on 17[th] September, 2010. Accordingly, duringsuch search certain incriminating material pertaining to theassessee was found and seized by the Department. Theassessee filed return of income for assessment years 2008-09,2009-10 and 2010-2011 on 7[th] March 2011. This was doneeven before the Department issued notice under Section 153C ofthe Income Tax Act (“the Act” for short) declaring total incomeof Rs.60,74,594, Rs.78,434,31/- and 8,51,910/- respectively.For the remaining two Assessment Years 2005-06 and 2006-07which would also be within the purview of proceedings under Section 153C of the Act, the Assessee did not file the Returns ofIncome contending that for the said two Assessment Years theincome was below the taxable limit. Subsequently, in responseto notice under Section 153C of the Act, the Assessee also filedreturns for the said two years declaring total income ofRs.8,957/- and Rs.43,857/-. 3The Assessing Officer completed the assessmentunder Section 153C of the Act for all the assessment years.Admitted position is, in none of these years any addition wasmade over and above the declared income. The question ofpenalty under section 271C of the Act arises in background ofsuch facts. 4The Tribunal in the impugned judgment held thatsince there was no addition to the returned income of theassessee, penalty could not have been imposed, particularly,relying on Explanation 5A to Section 271(1)(c) of the Act. 5Having heard the learned Counsel for the parties andhaving perused the documents on record, what emerges as anundisputed position is that the Assessee had filed returns of income for three assessment years even before the notice underSection 153C of the Act was issued. For remaining two yearsthe Assessee contended that no such return was required to befiled since his income did not exceed the taxable limit. Thislater assertion of the Assessee also was found to be true andcorrect since the Assessing Officer accepted the Assessee’sdeclaration of meager income of Rs.l8,957/- and Rs.43,857/-respectively for the said two assessment years 2005-06 and2006-07. 5Having heard the learned Counsel for the parties andhaving perused the documents on record, what emerges as anundisputed position is that the Assessee had filed returns of income for three assessment years even before the notice underSection 153C of the Act was issued. For remaining two yearsthe Assessee contended that no such return was required to befiled since his income did not exceed the taxable limit. Thislater assertion of the Assessee also was found to be true andcorrect since the Assessing Officer accepted the Assessee’sdeclaration of meager income of Rs.l8,957/- and Rs.43,857/-respectively for the said two assessment years 2005-06 and2006-07. 6In view of such facts, we find no error in theTribunal holding that the penalty could not have been imposed.There was no question of the Assessee not declaring the incomeof the particulars of the income so as to invite penalty underSection 271C of the Act. The three returns had been filed evenbefore issuance of notice under Section 153C of the Act and inother two cases as accepted by the Assessing Officer theAssessee had no taxable income. When there was no addition tothe declared income in any of the years, penalty was correctlydeleted by the Tribunal. Explanation 5A below Section 271 ofthe Act would apply only in case of searched person. 7By virtue of such Explanation it may be open for theRevenue to levy penalty from such a person even in a casewhere there is no addition to the income declared by thesearched person in the return filed pursuant to search.Nevertheless this Section is confined to searched person andcannot be extended to the person other than the searchedperson. 8In the result, no question of law arises facts commonin all. All the aforesaid appeals are dismissed. (B. P. COLABAWALLA, J) (AKIL KURESHI, J)