The Commissioner Of Income Tax, Madras v. Shri. A.s.thillai Nayagam

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 09.10.2018 Coram THE HON'BLE Mr. JUSTICE T.S.SIVAGNANAMandTHE HON'BLE Mrs. JUSTICE V.BHAVANI SUBBAROYAN Tax Case (A) No. 1547 of 2008 The Commissioner of Income Tax,Madras....AppellantVs.Shri. A.S.Thillai Nayagam,No. 2, 7th Street, Gopalapuram,Chennai � 600 086. ...Respondent Appeal filed under Section 260 - A of the Income Tax Act, 1961 against the order of the Income-taxAppellate Tribunal �A� Bench, Chennai dated 28.03.2008 passed in I.T.(SS).A.No. 82/Mds/2007. For Appellant : Mrs. K.G.Usha RaniFor Respondent : No appearance JUDGMENT [Judgment was delivered by T.S.SIVAGNANAM, J.] This appeal, by the Revenue filed under Section 206-A of the Income Tax Act, 1961, is directedagainst the order passed by the Income Tax Appellate Tribunal �A� Bench, Chennai (Tribunal) inI.T.(SS).A.No. 82/Mds/2007 dated 28.03.2008 for the Block Period 01.04.1989 to 25.11.1999.2.The appeal has been admitted vide order dated 26.09.2008 on the following substantial question oflaw: � Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right indeleting the penalty to the tune of Rs. 95,52,609/- imposed under Section 158-BFA(2) of the Income-Tax Act is valid?� 3.The question which falls for consideration is whether the Commissioner of Income Tax Appeal videorder dated 05.02.2007 was justified in deleting the penalty levied on the Assessee and whether theTribunal by the impugned order was right in confirming such order passed by the Commissioner ofIncome Tax (Appeals) [in short �CIT(A)�]. 4.We have noted the factual matrix of the matter and the findings recorded by the CIT(A) which wasbased on the stand taken by the Assessee in the appeal before the CIT(A). The CIT(A) took note ofthe letter furnished by Assessee before the Assessing Officer offering the entire deposits from thevillagers of Rasipuram as income of the Assessee and that in the offer letter, it was clearly statedthat the offer was made only to relieve the genuine depositors from the legal hassles of taxation andthis was offered on the condition that the penalty and prosecution should not be initiated. The CIT(A) further noted that the Assessee made such a categorical statement as a package and the offer wasmade to avoid protracted litigation and as a matter of good gesture to keep up his honour among thepeople of his own village and the Assessing Officer accepted the offer that there were no depositswhich were undisclosed income of the Assessee and this sum was assessed only on the basis ofdisclosure made by Assessee and not on the basis of any evidence or investigation conducted by theDepartment. 5.Taking note of the such stand taken by the Assessee, the CIT(A) held that the Assessee has paidtax on the returned income and therefore, the Assessee had the basis of estimate and there is noreason for the Assessee not to return atleast Rs.11,50,000/- as he was having full knowledge of thefact that he was running the business of hiring lorries. Thus, CIT(A) did not agree with the argumentof the Assessee that the addition of Rs.11,50,000/- was beyond the control of the Assessee. However,with regard to the other additions made by the Assessing Officer, the CIT(A) agreed with the standtaken by the Assessee that it was due to honest difference of opinion or due to inadvertence and inparticular, with regard to the addition of Rs.67,88,200/-, the CIT(A) factually noted that theDepartment had no evidence to show that this amount belongs to the Assessee and therefore, heldthat there is no valid reason for imposing penalty. The Revenue, being aggrieved by such order, filedappeal before the Tribunal. 6.Before the Tribunal the records were perused and the Tribunal held that the order passed by theCIT(A) was right, since the additions were offered on condition that penalty and prosecution shouldnot be initiated and the offer was made to avoid protracted litigation as a matter of good gesture tokeep up the Assessee among the people of his own village. Further, the Tribunal noted that therewas no assessed material found, as a result of search to the fact that the deposits were undisclosedby the Assessee and this was assessed only on the basis of disclosure made by the Assessee.Furthermore, the Tribunal noted that it is not on the basis of any evidence and investigationconducted by the Department and it was not unearthed by the act of the Department. Therefore, theTribunal held that there was no justification to interfere with the order passed by the CIT(A). 7.On a perusal of the orders passed by the CIT(A) as well as the Tribunal, we find that the entiredispute revolves on the factual matrix, which was considered by the CIT(A) and decided in favour ofthe Assessee and once again reappreciated by the Tribunal and concluded in favour of the Assesseeand in this appeal, we are not expected to reappreciate the factual position for arriving at a differentconclusion. Thus, in our considered view, no question of law much less a substantial question of lawarises for consideration in this appeal. Accordingly, the Appeal fails and it is dismissed. No costs. [T.S.S.J.] [V.B.S.J.]09.10.2018 mrm/Sgl Index : Yes/No Speaking/Non Speaking Order T.S.SIVAGNANAM, J.andV.BHAVANI SUBBAROYAN,J. Mrm/Sgl Tax Case (A)No. 1547 of 2008