SMT. SARLA MUNDRA , Kota V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL, Kota

ITA 1102/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8235 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 09-09-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: C M BIRLA
• Keywords: Unexplained investment; Principle of natural justice; Initiation of penalty proceedings; Revised return
• Section: 271(1)(c)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1102/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2012-13 SMT. SARLA MUNDRA C-150, I.P.I.A. KOTA, 324005 CUKE VS. DCIT, CENTRAL, KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACSPM7909C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. C. M. BIRLA (CA) JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 23/07/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 27/07/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, UDAIPUR DATED 28.06.2019 CONFIRMING THE LEVY OF PEN ALTY U/S 271(1)(C) FOR A.Y 2012-13. 2. DURING THE COURSE OF HEARING, THE LD. AR DRAWN O UR REFERENCE TO THE NOTICE U/S 271(1)(C) DATED 29.01.2016 AND IT WAS SU BMITTED THAT IN THE SAID NOTICE, THE ASSESSING OFFICER HAS ASKED THE ASSESSE E TO SHOW CAUSE AS TO WHY PENALTY SHOULD NOT BE LEVIED U/S 271(1)(C) OF THE A CT FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. IT WAS SUBMITTED THAT DURING THE PENALTY PROCEEDINGS, THE ASSESSEE HAS RAISED THE CONTENTION BEFORE THE ASSESSING OFFICER STATING THA T NO SPECIFIC CHARGE FOR LEVY OF PENALTY HAS BEEN SPECIFIED IN THE SHOW CAUSE NOT ICE. HOWEVER, THE ASSESSING OFFICER IGNORED THE SUBMISSION AND LEVIED THE PENAL TY ON CHARGE OF ITA NO. 1102/JP/2019 SMT. SARLA MUNDRA, KOTA VS. DCIT, CENTRAL, KOTA 2 CONCEALMENT OF PARTICULARS OF INCOME AND THE RELEVA NT FINDINGS OF THE AO READS AS UNDER:- IN VIEW OF THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE, THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT AND IN T HE LIGHT OF ABOVE DISCUSSION, I HOLD THE ASSESSEE IS DEFAULTER FOR CO NCEALING PARTICULARS OF HIS INCOME AND FIND HER TO BE A FIT CASE FOR IMPOSI TION OF PENALTY AS PROVIDED FOR IN SECTION 271(1)(C) OF THE ACT. 3. IT WAS FURTHER SUBMITTED THAT DURING THE APPELLA TE PROCEEDINGS BEFORE THE LD. CIT(A), REFERENCE WAS DRAWN TO THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF SHWETA CONSTRUCTION COMPANY PVT. L TD. VS. ITO, WARD 3(4), JAIPUR (IN D.B.I.T. APPEAL NO. 634/2008 DATED 06.12.2016) LAYING DOWN THE PROPOSITION THAT WHERE THE AO FAILED TO SPECIFY THE CHARGE WHILE INITIATING THE PENALTY PROCEEDINGS, THE PROCEEDINGS ARE VITIATED. THE LD. CIT(A) DID NOT ACCEPT THE ASSESSEES SUBMISSION AND RELIED ON THE HONBLE SUPREME COURT DECISION IN CASE OF SUNDRAM FINANCE LIMITED DATED 2 3.04.2018 WHEREIN THE SPECIAL LEAVE PETITION AGAINST THE HONBLE MADRAS H IGH COURT DECISION HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT AND NO SPEAK ING ORDER HAS BEEN PASSED. IT WAS SUBMITTED THAT IN THE PRESENT CASE, BOTH IN THE ASSESSMENT ORDER AS WELL AS THE PENALTY SHOW CAUSE NOTICE, THE PENALTY HAS BEEN INITIATED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISH ING INACCURATE PARTICULARS OF INCOME. HOWEVER, THE PENALTY IS LEVIED BY THE AO FO R CONCEALING PARTICULARS OF INCOME. SINCE, THERE IS VARIATION IN THE CHARGE LEV IED IN THE SHOW CAUSE VIZ A VIZ THE PENALTY ORDER, THE PENALTY SO LEVIED IS NOT SUS TAINABLE IN VIEW OF THE DECISION OF HONBLE APEX COURT DECISION IN CASE OF SSAS EMERALD MEADOW. IT WAS SUBMITTED THAT THE SIMILAR VIEW HAS BEEN TAKEN BY THE CO-ORDINATE BENCHES AND OUR REFERENCE WAS DRAWN TO THE CO-ORDINATE BENC H DECISION IN CASE OF B. D. MUNDRA & SONS, KOTA VS. DCIT, CENTRAL, KOTA IN ITA NO. 826/JP/2019 DATED ITA NO. 1102/JP/2019 SMT. SARLA MUNDRA, KOTA VS. DCIT, CENTRAL, KOTA 3 25/10/2019. IT WAS ACCORDINGLY SUBMITTED THAT THE P ENALTY SO LEVIED MAY KINDLY BE QUASHED. 4. PER CONTRA, THE LD. DR SUBMITTED THAT THE ASSES SEE WAS WELL AWARE OF THE REASONS FOR INITIATION OF PENALTY PROCEEDINGS A ND SUBMITTED REPLY ACCORDINGLY DURING THE PENALTY PROCEEDINGS. THEREFO RE, EVEN ASSUMING THERE WAS A DEFECT IN THE PENALTY NOTICE, IT DID NOT RESU LT IN DENIAL OF NATURAL JUSTICE TO THE ASSESSEE AND IN SUPPORT, RELIANCE WAS PLACED ON THE HONBLE SUPREME COURT DECISION IN CASE OF M/S SUNDRAM FINANCE LIMITED DAT ED 23.04.2018. IT WAS FURTHER SUBMITTED THAT THE PROVISION OF SECTION 5A TO SECTION 271(1)(C) ARE SQUARELY APPLICABLE IN THE INSTANT CASE AND NOTWITH STANDING THE FACT THAT THE INCOME OF RS. 4,50,000/- IS DECLARED BY THE ASSESSE E IN THE RETURN OF INCOME FILED ON 03.12.2013, SINCE SUCH RETURN HAS BEEN FIL ED AFTER THE DATE OF SEARCH, I.E. 13.08.2013, THERE IS DEEMED CONCEALMENT OF INC OME RS. 4,50,000/-. ACCORDINGLY, THERE IS NO INFIRMITY IN THE ORDER OF THE LOWER AUTHORITIES AND THE LEVY OF PENALTY ON THIS ISSUE BE CONFIRMED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFI CER IN THE AFORESAID SHOW- CAUSE NOTICE DATED 29.01.2016 HAS INITIATED THE PEN ALTY PROCEEDINGS FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHED I NACCURATE PARTICULARS OF SUCH INCOME AND SUBSEQUENTLY, WHILE PASSING THE PE NALTY ORDER, THE ASSESSING OFFICER HAS LEVIED PENALTY FOR CONCEALING THE PARTICULARS OF INCOME. WE THEREFORE FIND THAT THOUGH THE ASSESSING OFFICER HAS INITIATED THE PENALTY PROCEEDINGS ON BOTH THE CHARGES, WHILE LEVYING THE PENALTY, THE ASSESSING OFFICER HAS LEVIED THE PENALTY ON A SPECIFIC AND CL EAR-CUT CHARGE FOR CONCEALING THE PARTICULARS OF INCOME. THEREFORE, IT IS NOT A CASE WHERE THE PENALTY HAS BEEN INITIATED FOR A PARTICULAR CHARGE AND THEREAFTER, PENALTY HAS BEEN FINALLY LEVIED ON A DIFFERENT CHARGE. THE ASS ESSEE WAS MADE AWARE OF ITA NO. 1102/JP/2019 SMT. SARLA MUNDRA, KOTA VS. DCIT, CENTRAL, KOTA 4 BOTH THE CHARGES AT THE TIME OF INITIATION OF PENAL TY PROCEEDINGS AND WHILE FINALLY LEVYING THE PENALTY, THE AO HAS GIVEN A SPE CIFIC FINDING THAT IT IS A CASE OF CONCEALMENT OF PARTICULARS OF INCOME. EVEN WHERE IT IS HELD THAT THE CHARGE IS UNCERTAIN AT THE INITIATION STAGE, THE SAME HAS BEEN MADE DEFINITE WHILE PASSING THE PENALTY ORDER, THEREFORE, IT IS NOT A C ASE OF LACK OF OPPORTUNITY TO THE ASSESSEE AS WELL AS LACK OF APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER. IT IS NOT A CASE OF THE ASSESSE E THAT THE CHARGE OF CONCEALMENT OF PARTICULARS OF INCOME IS NOT ATTRACT ED IN THE FACTS OF THE PRESENT CASE. THE AO HAS INVOKED THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) WHICH HAS BEEN CONFIRMED BY THE L D CIT(A). THE LD. CIT(A) HAS DISMISSED THE CONTENTION OF THE ASSESSEE OF SUO MOTU FILING THE REVISED RETURN OF INCOME FOR THE REASON THAT SUCH RETURN HA S BEEN FILED, EVEN THOUGH THE DISCLOSING UNEXPLAINED INVESTMENT IN JEWELLERY FOUND DURING THE COURSE OF SEARCH, SUBSEQUENT TO THE DATE OF SEARCH. IN CASE O F B.D MUNDRA & SONS (SUPRA) RELIED UPON BY THE LD AR, WE FIND THAT IN T HAT CASE, THOUGH THE ASSESSING OFFICER HAS NOT INITIATED THE PENALTY ON A SPECIFIC CHARGE, HOWEVER, EVEN WHILE LEVYING THE PENALTY, NO SPECIFIC FINDING HAS BEEN GIVEN AS TO THREE SEPARATE DISALLOWANCES MADE DURING THE ASSESSMENT P ROCEEDINGS AND THE ASSESSING OFFICER HAS MERELY GONE BY THE ORDER OF T HE TRIBUNAL IN THE QUANTUM PROCEEDINGS WHERE ADDITIONS HAVE BEEN SUSTAINED AND HAS NOT GIVEN ANY SPECIFIC FINDING AS TO HOW THE DISALLOWANCES SO MAD E AND SUSTAINED RESULTS IN LEVY OF PENALTY. IN THAT BACKGROUND, THE PENALTY W AS HELD NOT JUSTIFIED AS THERE WAS NO SPECIFIC CHARGE AND FINDING EVEN WHILE LEVYI NG THE PENALTY. HOWEVER, IN THE INSTANT CASE, THE CHARGE AS WELL AS FINDING IS SPECIFIC AT THE TIME OF LEVY OF PENALTY, THEREFORE, THE SAID DECISION IS DISTINGUIS HABLE ON FACTS AND DOESNT SUPPORT THE CASE OF THE ASSESSEE. SIMILAR IS THE PR OPOSITION LAID DOWN BY THE HONBLE RAJASTHAN HIGH COURT IN CASE OF SHWETA CONS TRUCTION (SUPRA) THAT THE AO HAS TO RECORD A SPECIFIC FINDING IN THE PENALTY ORDER AND SUCH FINDING CANNOT BE UNCERTAIN AT THE TIME OF LEVY OF PENALTY. IN THE RESULT, WE DONOT ITA NO. 1102/JP/2019 SMT. SARLA MUNDRA, KOTA VS. DCIT, CENTRAL, KOTA 5 FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHOR ITIES AND THE PENALTY SO LEVIED BY THE ASSESSING OFFICER IS HEREBY CONFIRMED . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/07/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27/07/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. SARLA MUNDRA, KOTA 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CENTRAL, KOTA 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1102/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR