Negun Union Co- Op Agricultural Credit Society Ltd, Burdwan V. I.T.O Wd - 2(2),Burdwan, Burdwan

ITA 1100/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4834 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-04-2016
• Assessment Year: misc
• Appeal Filed On: 07-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL JCITSRDR
• Keywords: Deemed to accrue or arise in india; Non passing of speaking order; Onus to prove
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 1099 - 1100 / KOL / 2013 ASSESSMENT YEARS :2003-04 & 2004-05 NEGUM UNION CO-OP. AGRI. CREDIT SOCIETY LTD., NIGUN STATION ROAD, P.O. NIGN, BURDWAN 713 166 [ PAN NO. AAABN 0143 R ] V/S . ITO WARD-2(2), AAYKAR BHAWAN, KACHARI ROAD, BURDWAN 713 143 /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI SHUVO CHAKRABORTY, ADVOCATE /BY REVENUE SHRI RAJAT KUMAR KUREEL, JCIT-SR-DR /DATE OF HEARING 28-04-2016 ! /DATE OF PRONOUNCEMENT 18-05-2016 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- BOTH APPEALS BY ASSESSEE ARE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-DURGAPUR ALL DATED 31.01.2013. ASSESSMENTS WERE FRAMED BY ITO WARD-2(2), BURDWAN U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ERS DATED 31.03.2006 & 30.11.2006 FOR ASSESSMENT YEARS 2003-04 & 2004-05 R ESPECTIVELY. THE PENALTY UNDER DISPUTE WAS LEVIED BY THE ITO VIDE OR DER DATED 21.05.2009 U/S 271(1)(C) OF THE ACT. ITA NO.1099-00/KOL/2013 A.YS 03- 04 & 04-05 NEGUN UNION CO-OP. AGRI CREDIT SOCIETY LTD. V. IT O WD-2(2) BWN PAGE 2 SHRI SHUVO CHAKRABORTY, LD. AUTHORIZED REPRESENTATI VE APPEARING ON BEHALF OF ASSESSEE AND SHRI RAJAT KUMAR KUREEL, LD. DEPART MENTAL REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. 2. SINCE COMMON GROUNDS ARE INVOLVED IN BOTH THE AP PEALS, THEREFORE WE HEARD THEM TOGETHER AND DEEM IT APPROPRIATE TO DISP OSE OF THEM BY WAY OF COMMON ORDER. EXCEPT FIGURE THEREFORE TAKING THE FA CTS OF THE CASE FOR AY 2003-04 AS A LEAD CASE FOR THE SAKE OF CONVENIENCE, WE PASS A CONSOLIDATED ORDER FOR BOTH THE APPEALS. GROUNDS RAISED BY ASSES SEE ARE REPRODUCED BELOW:- ITA NO.1099/KOL/2013 (A.Y 03-04) 1. FOR THAT THE CONFIRMATORY APPELLATE ORDER BY LD. CIT(A) IS FULLY NON SPEAKING AND SHALLOW. NO SPECIFIC JUSTIFICATION OF SUCH CONFIRMATION OF PENALTY ON ADDITION BASE HAS GIVEN BY LD. CIT(A) . HENCE SUCH NON SPEAKING ORDER IS BAD IN LAW AND CONTUMACIOUS. THEREFORE, PENALTY IS LIABLE TO BE DELETED. 2. FOR THAT PART ALLOWANCE OF ADDITION U/S 40A(3) B Y LD. CIT(A) ITSELF PUT THE JUSTIFICATION OF PENALTY IMPOSED SINCE APPELLAN TS VIEW ON SUCH ADDITION WAS PARTLY ACCEPTED. SO IT IS SELF CONTRAD ICTORY. THEREFORE, SPECTRE OF CONCEALMENT IS FULLY ABSENCE IN THIS CAS E. 3. FOR THAT APPELLANTS CONTENTION ABOUT EXCEPTIONAL CIRCUMSTANCE PREVAIL ON CASH PAYMENT (COVERED U/R 6DD(J) AND CIR CULAR NO. 220 DT. 31.05.1977) AND CONTRADICTORY PROPOSITION TAKEN BY AO BY IMPART TWO CONNOTATION OF CONCEALMENT AND INACCURATE PARTI CULARS OF INCOME REMAIN TOTALLY UNADDRESSED IN SUCH CRYPTIC A ND BLURRED APPELLATE ORDER. 4. FOR THAT NO PENALTY FOR CONCEALMENT IS IMPOSABLE ON ANY STATUTORY PART DISALLOWANCE OF APPELLANTS CLAIM AS IN THIS CA SE WHERE APPELLANTS 100% DEDUCTION CLAIM U/S 80P(2)(A)(I) W AS ALLOWED TO THE TUNE OF 500%. THEREFORE SUCH STATUTORY DISALLOW ANCE CANNOT BE A FIT CASE FOR CONCEALMENT AND SUCH PENALTY IS LIAB LE TO BE QUASHED. 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY IMPOSED U/S.271(1)(C) OF THE ACT BY THE ASSESSING OFFICER ARE AS FOLLOWS: THE ASSESSEE IS AN AGRICULTURAL CREDIT CO-OPERATIVE SOCIETY AND ENGAGED IN THE ACTIVITY OF PROVIDING CREDIT FACILITIES AND TRADING OF AGRICULTURAL PRODUCTS. DURING THE YEAR UNDER CONSIDERATION ASSE SSEE FILED ITS RETURN OF ITA NO.1099-00/KOL/2013 A.YS 03- 04 & 04-05 NEGUN UNION CO-OP. AGRI CREDIT SOCIETY LTD. V. IT O WD-2(2) BWN PAGE 3 INCOME NIL. THE AO HAS MADE THE ASSESSMENT U/S 143( 3) OF THE ACT BY MAKING THE CERTAIN ADDITION/ DISALLOWANCES AS DETAI LED UNDER:- 1) THE ASSESSEE HAD MADE THE PAYMENT IN CASH FOR TH E PURCHASE OF PESTICIDES AND FERTILIZERS AND VIOLATED THE PROVISI ONS OF SECTION 40A(3) OF THE ACT FOR AN AMOUNT OF RS.2.30 LAKHS AND THE ADDI TION WAS CONFIRMED FOR RS.46,000/- BUT AT THE APPELLATE STAGE LD. CIT( A) REDUCED THE ADDITION AT RS. 20,000/-. 2) THE ASSESSEE, DURING THE YEAR ALSO EARNED ITS IN COME FROM THE NON- MEMBERS WHICH IS IN CONTRAVENTION OF THE PROVISIONS OF SECTION 80P(2)(A)(I) OF THE ACT. THE AO ACCORDINGLY DISALLO WED THE ENTIRE DEDUCTION CLAIMED U/S 80P OF THE ACT. HOWEVER, AT T HE APPELLATE STAGE LD. CIT(A) ALLOWED THE DEDUCTION ON THE INCOME AROS E FROM THE DEALING OF THE MEMBERS BUT THE INCOME WHICH WAS FROM NON-ME MBERS WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 3.1 THE AO INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF FURNISHING THE INACCURATE PARTICU LARS OF INCOME AND CONFIRMED THE SAME BY PASSING THE PENALTY ORDER ON DATED 21.05.2009. 4. MATTER WAS CARRIED TO LD. CIT(A) WHERE CONTENTIO NS WERE RAISED ON BEHALF OF ASSESSEE AND HAVING CONSIDERED THE SAME T HE LD. CIT(A) CONFIRMED THE ACTION OF AO. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BEFORE US LD AR SUBMITTED THAT THERE IS NO SUCH CONCEALMENT OF INCOME ON ACCOUNT OF INACCURATE PARTICULARS AND REQ UESTED THE BENCH TO QUASH THE PENALTY ORDER. ON THE CONTRARY, LD. VEHEM ENTLY RELIED ON THE ORDERS ITA NO.1099-00/KOL/2013 A.YS 03- 04 & 04-05 NEGUN UNION CO-OP. AGRI CREDIT SOCIETY LTD. V. IT O WD-2(2) BWN PAGE 4 OF AUTHORITIES BELOW. FROM THE FACTS OF THE CASE, W E FIND THAT PENALTY U/S 271(1)(C) OF THE ACT CAN BE LEVIED EITHER FOR:- (I) CONCEALING THE PARTICULARS OF INCOME; (II) FURNISHING INACCURATE PARTICULARS OF INCOME; THESE TWO OFFENCES MENTIONED ABOVE ARE NOT CUMULATI VE BUT ARE MUTUALLY EXCLUSIVE. PENALTY MAY BE LEVIED U/S 271(1)(C) FOR EITHER OR BOTH OF THE OFFENCES. PENALTY IS TO BE IMPOSED ON THE BASIS OF THE TAX SOUGHT TO BE EVADED AS A RESULT OF EITHER OR BOTH OF THE DEFAULTS. BUT PROCEEDINGS FOR PENALTY INITIATED FOR ONE TYPE OF OFFENCE CANNOT BE SUSTAIN ED OR JUSTIFIED ON THE BASIS OF THE OTHER. THE WORD ` CONCEAL ' MEANS TO HIDE, TO KEEP SECRET. ` CONCEALMENT ' INVOLVES A DELIBERATE A CT. IT IMPUTES KNOWLEDGE TO THE PERSON CONCEALING. CONCEALING THE PARTICULARS OF INCOME WOULD INCLUDE CLAIMING FALSE EXEMPTIONS OR DEDUCTIONS. A PERSON SHALL ALSO BE DEEMED GUILTY OF CONCEALMENT HIS INCOME WHERE HE DOES NOT INCLUDE DEEMED INCOME AS P ART OF HIS INCOME. 5.1 THE MERE FACT THAT THE ASSESSEE AGREED TO THE INCLU SION OF CERTAIN ADDITION AND DISALLOWANCE OR OTHER AMOUNTS IN THE T OTAL INCOME ON ACCOUNT OF HIS INABILITY TO PROVE THE SOURCE OR TO AVOID PROTR ACTED LITIGATION WITH THE DEPARTMENT OR THAT HIS REPRESENTATIVE CONSENTED IN THE IMPOSITION OF THE MINIMUM PENALTY BEFORE THE LOWER AUTHORITIES DOES N OT BY ITSELF JUSTIFY THE LEVY OF PENALTY. THE OBSERVATIONS OF THE SUPREME COURT I N THE CASE OF CIT VS. SIR SHADILAL SUGAR MILLS (1987) 64 CTR (SC) 199 : (1987 ) 168 ITR 705 (SC) ARE VERY RELEVANT IN THIS REGARD. THE SUPREME COURT OBS ERVED ' .............FROM AGREEING TO ADDITION IT DOES NOT FOLLOW THAT THE AM OUNT AGREED TO BE ADDED WAS CONCEALED INCOME. THERE MAY BE HUNDRED AND ONE REASONS FOR SUCH ADMISSION BUT THAT DOES NOT ABSOLVE THE REVENUE FRO M PROVING THE MENS REA OF A QUASI CRIMINAL OFFENCE' . IT IS THEREFORE, NOT POSSIBLE TO LEVY PENALTY AUTOMATICALLY IN A CASE WHERE THE ASSESSEE HAS AGRE ED TO CERTAIN ADDITIONS. MERE FACT THA T CERTAIN ADDITIONS HAVE BEEN ACCEPTED OR IN RESPEC T OF THE INCOME ADDED, THE EXPLANATIONS TO SECTION 271 ARE ATTRACTED WILL NOT AUTOMATICALLY RESULT IN THE LEVY OF PENALTY. THERE ARE A NUMBER OF EXPLANATIONS ITA NO.1099-00/KOL/2013 A.YS 03- 04 & 04-05 NEGUN UNION CO-OP. AGRI CREDIT SOCIETY LTD. V. IT O WD-2(2) BWN PAGE 5 TO U/S 271(1)(C) WHICH DEAL WITH THE CONCEPT OF CONCEALMENT. THESE EXPLANATIONS DEAL WITH THE BURDEN OF PROOF. THEY AR E THEREFORE, MERELY RULES OF EVIDENCE. FURTHER THEY ARE REBUTTABLE. MERE AGREEME NT OF ADDITION TO INCOME WILL ALONE NOT JUSTIFY PENALTY. IN EVERY CASE IT WI LL BE THE FACTS ALONE THAT WI LL BE RELEVANT. THESE EXPLANATIONS HAVE BEEN INTRODUCED A ND HAVE UNDERGONE CHANGES IN VIEW OF CERTAIN JUDICIAL DECISIONS. THE EXPLANATIONS, IN THEIR EVOLUTION AND DEVELOPMENT HAVE SOUGHT TO MAKE THE A SSESSEE MORE AND MORE RESPONSIBLE IN THE DISCHARGE OF TH E BURDEN OF PROOF. IT IS POSSIBLE THAT THE ASSESSEE MAY NOT BE WANTING TO PRESS FOR AN EXPLANA TION OR ITS ACCEPTANCE EITHER WITH A VIEW TO AVOID EMBARRASSMENT TO THIRD PARTIES OR BECAUSE THE ASSESSEE WANTS TO AVOID PROTRACTED LITIGATION WITH THE DEPARTMENT . HE MAY NOT WANT TO OFFER AN EXPLANATION TO PURCHASE PEACE. IN SUCH SITUATIONS WHERE THERE IS NO POSITIVE EVIDENCE AGAINST THE ASSESSEE, PENAL TY WILL NOT BE LEVIABLE. IN THE INSTANT CASE WE FIND THAT THE AO DURING THE COU RSE OF ASSESSMENT GATHERS THE INFO RMATION FROM THE DETAILS/ RECORDS SUBMITTED BY THE ASSESSEE THAT THE CERTAIN PROVISIONS OF THE ACT HAVE BEEN CONTRAVENED . THERE WAS NO INDEPENDENT FINDING OF THE AO REGARDING THE CONCEAL ED INCOME OF THE ASSESSEE. WE ALSO FIND THE CIVIL APPEAL NO. 2463 OF 2 010 DATED 17.03.2010 IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. THE RELEVANT PORTION WHICH READS AS UNDER:- WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THER E IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION O F INVITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTA INABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNIS HING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. TAKING A CONSISTENT VIEW IN CIVIL APPEAL NO. 2463 O F 2010 IN T HE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) AND FACTS AND CIRCUMSTANCES OF THE PRESENT APPEAL, WE REVERSE THE ORDERS OF AUTHORITIE S BELOW AND DELETE THE PENALTY ACCORDINGLY. ITA NO.1099-00/KOL/2013 A.YS 03- 04 & 04-05 NEGUN UNION CO-OP. AGRI CREDIT SOCIETY LTD. V. IT O WD-2(2) BWN PAGE 6 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED . COMING TO ITA NO.1100/KOL/2013 FOR A.Y.04-05. 7. THE FACTS AND ISSUE ARE SAME AS IN ITA NO.10 99/KOL/2013 OF ASSESSEES APPEAL FOLLOWING OUR DECISION ON THIS ISSUE AS EMBO DIED IN PARA- 5 AND 5.1 OF THIS ORDER, WE HOLD ACCORDINGLY. 8. IN COMBINE RESULT, BOTH APPEALS OF ASSESSEE ARE ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT 18/ 05/2016 SD/- SD/- (S.S.VISHWANETHRA RAVI) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP '#$- 18 / 05 /201 6 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-NEGUN UNION CO-OP. AGRI. CREDIT SOCIETY L TD., NIGUN STATION ROAD, P.O. NIGU, BURDWA N-717166 2. /REVENUE-ITO WARD-2(2), AAYKAR BHAWA, KACHARI ROAD, BURDWAN-713143 3.#,#-. / / CONCERNED CIT DURGAPUR 4. /- / CIT (A) DURGAPUR 5.2 3455-., -.!, / DR, ITAT, KOLKATA 6.489:; / GUARD FILE. BY ORDER/ , /TRUE COPY/ / # -.!,