Labh Singh, Kaithal V. ITO, Kaithal

ITA 1/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9216 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 12-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 01-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: PERMIL GOEL
• Section: 133A

Judgement Text

INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1& 2 /CHD/20 1 6 ASSESSMENT YEAR: 2006 - 07 AND 2007 - 08 LABH SINGH, KAITHAL VS. INCOME TAX OFFICE, WARD - 3, KAITHAL (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PERMIL GOEL, ADV REVENUE BY: SH. MANJIT SINGH, DR DATE OF HEARING 01 /0 8 /2016 DATE OF PRONOUNCEMENT 05 /0 8 /2016 O R D E R PER PRASHANT MAHARISHI, A. M. ITA NO 1/ CHD/2016 A Y 2006 - 07 1 . TH IS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (A) DATED 13/10/2015 CONFIRMING PENALTY OF RS. 658586/ - U/S 271 (1) ( C) OF THE INCOME TAX ACT, 1961 LEVIED BY THE AO VIDE ORDER DATED 28/3/2013 ON THE SOLITARY GROUND THAT THE AO ERRED IN IMPOSING THE PENALTY. 2 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL FILED HIS RETURN OF INCOME DECLARING INCOME OF RS. 99500/ - ON 29.03.2007. AS PER INFORMATION RECEIVED BY THE AO FROM CIB IT WAS FOUND THAT THE ASSESSEE HAS DEPOSITED A SUM OF RS. 4172853/ - IN BANK ACCOUNT NO. 20010462 AND BANK ACCOUNT NO. 20013626 WITH BANK OF BARODA AND KISAN CREDIT CARD NO. 55225. THIS ALSO IN CLUDED A SUM OF UNEXPLAINED CHEQUE DEPOSITS IN THE BANK ACCOUNT. ON ACCOUNT OF NON FURNISHING OF PROPER EXPLANATION LD. ASSESSING OFFICER MADE ADDITION ON THIS ACCOUNT CONSIDERING PEAK OF ONE BANK ACCOUNT AND UNEXPLAINED CHEQUE DEPOSITS OF RS. 2190527/ - V IDE ORDER DATED 7.10.2009. THE MATTER WAS CARRIED BY THE ASSESSEE BEFORE THE LD CIT(A), WHO CONSEQUENTLY, CONFIRMED ABOVE ADDITION. BEFORE ITAT ALSO THE ADDITION WAS CONFIRMED VIDE ORDER DATED 31 ST OF OCTOBER 2012 . T HEREFORE, THE PENALTY U/S 271(1)(C) WAS LEVIED BY THE AO AMOUNTING TO RS. 65 8586/ - IT WAS ALSO CONFIRMED BY THE LD CIT (A) AND T HEREFORE ASSESSEE IS IN APPEAL BEFORE US. PAGE 2 OF 4 SHRI LABH SINGH V ITO WAD 3 KAITHAL ITA NO 1 & 2/ CHD/2016 A Y 2006 - 07 & 2007 - 08 3 . BEFORE US IT WAS SUBMITTED THAT ASSESSEE HAS ISSUED DEMAND DRAFT FOR APPLICATION MADE BY SEVERAL PERSONS W ITH HOUSING BOARD OF CHANDIGARH AND BEHALF OF THOSE PERSONS THE ASSESSEE HAS DEPOSITED CASH INTO THE BANK ACCOUNTS. HE SUBMITTED THAT THE ASSESSEE HAS FURNISHED SOME NAMES OF CUSTOMERS FROM WHOM FULL CASH PAYMENT WAS RECEIVED AND ON WHOSE BEHALF THE DEMAND DRAFT WERE ISSUED. THEREFORE, HE SUBMITTED THAT HE HAS DISCHARGED HIS ONUS CAST UPON HIM AND THEREFORE THE PENALTY CANNOT BE LEVIED U/S 271(1)(C) OF THE ACT. HE FUR THER SUBMITTED THAT THE NOTICE DATED 27.10.2009 ALSO DID NOT SPECIFY WHETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF . HE FURTHER REFERRED TO HIS WRITTEN SUBMISSION AT PAGE 8 WHEREIN, HE SUBMITTED THAT HE WAS JUST EARNING COMMISSION I NCOME AND SUCH INCOME HAS ALREADY BEEN OFFERED FOR INCOME TAX. IN VIEW OF THIS HE SUBMITTED THAT PENALTY SHOULD NOT BE LEVIED. 4 . THE LD DR FURTHER SUBMITTED THAT IN CASE OF PENALTY NO FURTHER INDEPENDENT ENQUIRY IS RE QUIRED TO BE MADE. IN VIEW OF THE FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HIMSELF HAS SUBMITTED WHEN ASKED TO SUPPLY ALL THE NAMES OF THE CUSTOMERS THAT HE IS NOT IN A POSITION TO SUPPLY ALL THE NAMES OF THE CUSTOMERS . HE FURTHER RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT WHE RE THE ASSESSEE DID NOT PROVIDE ANY EVIDENCE ABOUT THE NATURE AND SOURCE OF AMOUNT RECEIVED THEN IN ABSENCE OF ANY EXPLANATION IT IS CONSIDERED AS AMOUNTING TO CONCEALMENT OF INCOME. HE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. M AK DATA 358 ITR 593 (SC). IN VIEW OF THIS HE SUBMITTED THAT PENALTY LEVIED MAY BE CONFIRMED. 5 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THE ASSESSEE IS FOUND HAVE BEEN DEPOSITING MONEY INTO HIS BANK ACCOUNT IN CASH AS WELL AS CHEQUE FOR WHICH THE ASSESSEE COULD NOT GIVEN ADEQUATE EXPLANATION A ND THEREFORE SUCH SUM WAS FOUND TO BE UNDISCLOSED INCOME OF THE ASSESSEE. FURTHER, THE ASSESSEE DID NOT GIVE COMPLETE NAME, ADDRESS OF THOSE PERSONS ON ACCOUNT OF WHOM HE HAS OBTAINED DEMAND DRAFT. FURTHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED THAT HE IS NOT IN A POSITION TO SUPPLY ALL THE NAMES OF THE CREDITORS. NO SUCH EVIDENCES WERE EVEN FILED DURING PENALTY PRO CEEDINGS ALSO. THEREFORE I N ABSENCE OF ANY PLAUSIBLE EXPLANATION THE ASSESSEE IS FOUND TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME AS HE HAS FAILED TO OFFER EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FURTHER HAS FAILED TO PROVE THAT SUCH EXPL ANATION IS BONAFIDE AND THAT THE RELEVANT AND MATERIAL FACTS RELATING TO THE COMPUTATION OF INCOME. IN VIEW OF THESE FACTS THE PROVISION OF SECTION 271(1)(C) GETS ATTRACTED . HON. SUPREME PAGE 3 OF 4 SHRI LABH SINGH V ITO WAD 3 KAITHAL ITA NO 1 & 2/ CHD/2016 A Y 2006 - 07 & 2007 - 08 COURT IN CASE OF CIT VS. MAK DATA (INDIA) PVT LTD ( 358 ITR 593 ) HA S HELD AS UNDER: - 9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT S ITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING OF SHARE APPLICATION FORMS, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, AFFIDA VITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SU RVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHIC H WAS SURRENDERED LATER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME . IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUN T, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICU LARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. 10. THE AO HAS TO SATISFY WHETHER THE PENALTY PROCEEDINGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE AO IS NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING. THE SCOPE OF SECTION 271(L)(C) HAS ALSO BEEN ELABORATELY DISCUSSED BY THIS COURT IN UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS [2008] 13 SCC 369 AND CIT V. ATUL MOHAN BINDAL [2009] 9 SCC 589. [UNDERLINE SUPPLIED BY US] 6 . IN VIEW OF THE ABOVE FACTS AND DECISION OF HONBLE SUPREME COURT IN CIT VS MAK DATA INDIA ( P ) LTD [SUPRA] WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) IN CONFIRMING THE PENALTY U/S 271(1)(C) OF THE ACT OF RS. 658586/ - . 7 . IN THE RESULT THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2006 - 07 IS DISMISSED. ITA NO 2 / CHD/ 2016 AY 2007 - 08 8 . NOW WE COME TO THE THE APPEAL FOR THE ASSESSMENT YEAR 2007 - 08 IN ITA NO. 2/CHD/2016. 9 . THIS APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. THAT CIT (A) KARNAL V IDE ORDER DATED 13/10/2015 WHEREIN HE HAS CONFIRMED PENALTY U/S 271(1) (C) OF THE IN COME TAX ACT OF RS. 247417/ - . 10 . FOR THE YEAR THE ASSESSEE HAS FILED RETURN OF INCOME ON 14.05.2007 SHOWING INCOME OF RS. 1L0,000/ - AND IN THE BANK ACCOUNT OF THE PAGE 4 OF 4 SHRI LABH SINGH V ITO WAD 3 KAITHAL ITA NO 1 & 2/ CHD/2016 A Y 2006 - 07 & 2007 - 08 ASSESSEE SUMS WERE FOUND TO HAVE BEEN CREDITED AND FOR WHICH THE ASSESSEE COULD NOT GIVE ANY EXPLANATION ABOUT THE NAME AND COMPLETE ADDRESS OF THE PERSONS AND THEREFORE A SUM OF RS. 860534/ - WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNDISCLOSED INCOME WHICH WAS CONTESTED BY THE ASSESSEE UP THE LEVEL OF THE TRIBUNAL UNSUCCESSFULLY . AS THE FACTS AND CIRCUMSTANCES AND THE ARGUMENTS OF THE PARTIES REMAINED THE SAME AS WERE ADVANCED BEFORE US IN APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 2006 - 07, THEREFORE APPLYING OUR OWN DECISION IN THE ABOVE APPEAL WHEREIN WE HAVE CONFIRMED THE PENALTY LEVIED U/S 271(1)(C), WE SIMILARLY CONFIRM THE PENALTY LEVIED OF RS. 247417/ - - U/S 271(1)(C) FOR THE ASSESSMENT YEAR 2007 - 08 ALSO. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. 11 . IN THE RESULT, BOTH THE APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 ARE DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 0 5 / 08 /2016. - S D / - - S D / - ( BHAVNESH SAINI ) (PRASHANT MAHARISHI) JUDICIA L MEMBER ACCOUNTANT MEMBER DATED: 0 5 / 08 /2016 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT , CHANDIGARH