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IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI
. , ,
BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM
IT(SS)A No.23/Mum/2012
( /Block Period: 01.04.1987 to 18.12.1997)
Dilip H. Chhabria Dy. CIT-8(1)
21, Sanjay Plaza, A. B. Nair Rd., Aaykar Bhawan, M. K. Marg,
/
Silver Beach Juhu, Mumbai-400 020
Mumbai-400 049 Vs.
. / . /PAN/GIR No. ADCPS 0642 D
( /Appellant) : ( / Respondent)
/ Appellant by : Shri Subhash S. Shetty &
Shri R. N. Vasani
/Respondent by : Shri Sanjay Punglia
/
: 19.05.2015
Date of Hearing
/
: 19.08.2015
Date of Pronouncement
/ O R D E R
Per Sanjay Arora, A. M.:
This is an Appeal by the Assessee directed against the Order by the
Commissioner of Income Tax (Appeals)-16, Mumbai (`CIT(A)' for short) dated
10.05.2012, dismissing the Assessee's appeal challenging the confirmation of penalty
under section 158BF(2) of the Income Tax Act, 1961 (`the Act' hereinafter) following
the assessee's block assessment u/s. 158BC of the Act.
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IT(SS)A No.23/Mum/2012
(BP: 01.04.1987 to 18. 12.1997)
Dilip H. Chhabria vs. Dy. CIT
2. The background facts of the case are that assessment u/s.158BC of the Act (for
the block period commencing 01.04.1987 to the date of search, i.e., 18.12.1997) was
completed on 31.01.2001 at an undisclosed income of `.58,18,970/-, as against a
returned undisclosed income of `.10 lacs. The matter travelled up to the Tribunal,
which confirmed the addition at `.10 lacs on a finding of repetitive additions vide its
Order dated 31.01.2006 (in IT(SS)A Nos. 61 and 75/Mum/2001/copy on record).
Notice u/s.158BFA(2), for the levy of penalty there-under, was accordingly issued on
20.02.2007. The assessee, in response, relied on the said order by the tribunal, stating
that the addition as finally sustained was under the peculiar circumstances of the case
and, accordingly, should not attract penalty u/s.158BFA(2). In appeal, the assessee,
relying on the tribunal's order in the quantum proceedings, the ld. CIT(A) reproduced
the relevant part thereof (para 10), to hold, after analyzing the same, that it was
completely incorrect to say that the addition as finally sustained by the tribunal had no
relevance with the material on record or the evidences gathered during the course of
search. On the contrary, the addition upheld by the tribunal proved the assessee to
have not disclosed his full income even in the search proceedings. All that it had done
was to eliminate the additions that had a multiplier or a repetitive effect. Aggrieved,
the assessee is in second appeal before us.
3. We have heard the parties, and perused the material on record.
The assessee, though raising the legal ground qua the time limitation for the
initiation of the penalty proceedings (vide ground no. 1), did not press the same during
hearing, so that the same is dismissed as not pressed.
On merits, we may begin by reproducing the relevant section, as under:
`
Levy of interest and penalty in certain cases.
158BFA. (1) ..............
(2) The Assessing Officer or the Commissioner (Appeals) in the course
of any proceedings under this Chapter, may direct that a person shall
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IT(SS)A No.23/Mum/2012
(BP: 01.04.1987 to 18. 12.1997)
Dilip H. Chhabria vs. Dy. CIT
pay by way of penalty a sum which shall not be less than the amount of
tax leviable but which shall not exceed three times the amount of tax so
leviable in respect of the undisclosed income determined by the
Assessing Officer under clause (c) of section 158BC :
Provided that no order imposing penalty shall be made in respect of a
person if--
(i) such person has furnished a return under clause (a) of section
158BC;
(ii) the tax payable on the basis of such return has been paid or, if the
assets seized consist of money, the assessee offers the money so
seized to be adjusted against the tax payable;
(iii) evidence of tax paid is furnished along with the return; and
(iv) an appeal is not filed against the assessment of that part of income
which is shown in the return:
Provided further that the provisions of the preceding proviso shall not
apply where the undisclosed income determined by the Assessing
Officer is in excess of the income shown in the return and in such cases
the penalty shall be imposed on that portion of undisclosed income
determined which is in excess of the amount of undisclosed income
shown in the return.'
The assessee's sole case, adverting our attention to paras 10 and 11 of the
tribunal's order supra, was that the addition as sustained was on an estimate basis, and
which could not therefore be subject to penalty. We are completely unable to
appreciate the assessee's case. The addition (or disallowance) in any assessment could
only be on the basis of some material/evidence, lest it is illegal, unable to stand the
test of judicial scrutiny. Further, assessment under Chapter XIV-B of the Act is only
of undisclosed income, i.e., which is not or would not have been, but for a search or
requisition, disclosed to the Revenue. In fact, the very assumption of jurisdiction for
assessment of such income is based on discovery of material indicating such income
of the assessee, or evidence relatable thereto. All that the tribunal has done is to
eliminate the addition/s that had the effect of inflating the quantum of the assessed
income superfluously, i.e., which is not backed by any independent material - nothing
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IT(SS)A No.23/Mum/2012
(BP: 01.04.1987 to 18. 12.1997)
Dilip H. Chhabria vs. Dy. CIT
more and nothing less. Rather, as observed during hearing, the tribunal had not
proceeded in a mathematical fashion, giving a specific finding qua each separate
addition deleted, even as the Revenue had tabulated each addition comprising the
assessed income separately. In fact, it is conscious of the same, explaining itself by
stating (at para 11 of its order) of restricting the addition to a reasonable sum of `.10
lacs. To therefore read its order to mean that the addition as sustained was based on no
material would be a complete misreading of, or misconstruing, its order. The law in
the matter is patently clear and the onus to show that he was entitled to a relief higher
than that allowed by the tribunal is squarely on the assessee. The ingredients of the
penal provision, which, as its reading would show, is strict, are satisfied, and no case
for non-imposition of the penalty has been made out. The same could only be by
leading evidence or even furnishing an explanation, exhibiting or establishing its case
on facts. Merely making a bald assertion of the assessment being based on an
estimate, which is de hors the material on record, would not assist the assessee. For
the same reasons, reliance on case law, which we have otherwise perused, would be of
little consequence. We decide accordingly.
4. In the result, the assessee's appeal is dismissed.
Order pronounced in the open court on August 19, 2015
Sd/- Sd/-
(D. Manmohan) (Sanjay Arora)
/ Vice President / Accountant Member
Mumbai; Dated : 19.08.2015
. ../Roshani, Sr. PS
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IT(SS)A No.23/Mum/2012
(BP: 01.04.1987 to 18. 12.1997)
Dilip H. Chhabria vs. Dy. CIT
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent
3. () / The CIT(A)
4. / CIT concerned
5. , , / DR, ITAT, Mumbai
6. / Guard File
/ BY ORDER,
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai
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