Ms. Anita Aggarwal, Mandi Gobindgarh V. ITO, Mandi Gobindgarh

ITA 1104/CHANDI/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9805 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 13-07-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 12-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: RAJ KAMAL; SURJIT BHADU
• Keywords: Gift; Initiation of penalty proceedings; Accommodation entries; Onus to prove
• Section: 147; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 365/CHD/2011 ASSESSMENT YEAR: 2002-03 ITA NO. 1104/CHD/2014 ASSESSMENT YEAR: 2004-05 & ITA NO. 1060/CHD/2014 ASSESSMENT YEAR: 2002-03 SMT. ANITA AGGARWAL, VS. THE ITO, WARD-1, C/O M/S DHIMAN INDUSTRIES, CHANDIGARH MANDI GOBHINDGARH (PUNJAB) PAN NO. ABCPA1086F (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI SURJIT BHADU, & RAJ KAMAL RESPONDENT BY : SHRI S.K. MITTAL DATE OF HEARING : 13.07.2015 DATE OF PRONOUNCEMENT : 27.07.2015 ORDER PER H.L.KARWA, VP THESE THREE APPEALS CONCERN THE SAME ASSESSEE AND, THEREFORE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRSTLY, I WILL TAKE UP ITA NO. 365/CHD/2011 RELATING TO ASSESSMENT YEAR 2002-03. IN THIS APPEAL THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS:- 1. THAT THE LEARNED CIT (APPEALS) PATIALA HAS ERRED IS NOT QUASHING THE RE-ASST. ORDER. NO FINDING HAS BEEN GI VEN ON LEGALITY OF RE-ASST. ORDER. SINCE NO NOTICE U/S 148 WAS SERVED 2 ON THE APPELLANT AS SUCH THE RE-ASST. ORDER SHOULD HAVE BEEN ANNULLED. THUS RE-ASST. ORDER IS LIABLE TO BE QUASH ED. 2. WITHOUT PREJUDICE TO THE ABOVE CLAIM THE LEARNED CI T (A) HAS FURTHER ERRED IN NOT DELETING ADDITION OF RS. 50000 0/- . FACTS OF THE CASE HAVE NOT BEEN APPRECIATED PROPERLY. REA SONS FOR RE-OPENING THE ASST. ARE DIFFERENT FROM THE BASIS O N WHICH ADDITION WAS MADE BY THE A.O. COPY OF BANK ACCOUNT WAS FILLED DURING THE COURSE OF RE-ASST. PROCEEDINGS. EARLIER TO THAT THE DEPTT HAD NOTHING ON RECORD. NO ACCOMMODATION ENTR Y WAS RECEIVED OR PROVED TO HAVE BEEN RECEIVED. THUS THE ADDITION RETAINED IS LIABLE TO BE DELETED. 3. AT THE TIME OF HEARING OF THE APPEAL, SHRI SURJI T SINGH BHADU, LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR GROUND NO.1 OF T HE APPEAL AND HENCE THE SAME IS DISMISSED AS NOT PRESSED. 4. VIDE GROUND NO. 2 THE ASSESSEE HAS CHALLENGED TH E ACTION OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS. 5 LAKHS AND HAS ALSO CHALLENGED THE REOPENING OF THE ASSESSMENT ON THE GROUND THAT REASONS FOR REOPE NING ARE DIFFERENT FROM THE BASIS ON WHICH ADDITION WAS MADE BY THE ASSESSING O FFICER. 5. THE FACTS OF THE PRESENT CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME ON 30.07.2002 DECLARING TOTAL INCOME AT RS. 70,755/ -. INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER FROM THE INVESTIGATION WIN G OF THE DEPARTMENT TO THE EFFECT THAT ASSESSEE HAD RECEIVED HAWALA PAYMENT OF RS. 3,00,750/- THROUGH DRAFT DATED 31.10.2001 FROM SHRI N.K. GARG, C.A. CHANDIGA RH. AFTER RECORDING REASONS FOR REOPENING THE ASSESSING OFFICER ISSUED A NOTICE U/S 148 OF THE ACT TO THE ASSESSEE. THE ASSESSEE DEMANDED A COPY OF REASO NS RECORDED BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT W HICH WAS SUPPLIED TO HER BY THE ASSESSING OFFICER. THE REASONS RECORDED ARE RE PRODUCED HEREINBELOW: ON VERIFICATION OF HAWALA PAYMENT, IT WAS FOUND TH AT THE ASSESSEE HAS RECEIVED THE FOLLOWING PAYMENT THROUGH DRAFT FROM T HE FOLLOWING PERSONS:- 3 DATE AMOUNT PERSONS FROM WHOM PAYMENT HAS BEEN RECEIVED. 31.10.2001 3,00,750/- SHRI N.K. GARG, C.A. CH ANDIGARH THE ASSESSEE HAS CREDITED THE AFORESAID SUM IN ITS BOOKS OF ACCOUNTS FOR THE YEAR 2001-02 RELEVANT TO ASSESSMENT YEAR 2002-0 3. SHRI N.K. GARG FROM WHOM THESE ACCOMMODATION ENTRIES WERE OBTAINE D IN A CHARTERED ACCOUNTANT OF CHANDIGARH WHO WAS CLAIMING REFUND ON THE BASIS OF THE FAKE TDS CERTIFICATES AND WAS ALSO INDULGING IN GIV ING ENTRIES ON LARGE SCALE BY INTRODUCING UNACCOUNTED MONEY OF OTHER PER SONS IN DIFFERENT BANK ACCOUNTS IN HIS NAME OR IN THE NAME E OF HIS F AMILY MEMBERS, RESULTING INTO ESCAPEMENT OF INCOME CHARGEABLE TO T AX. THE ASSESSING OFFICER OBSERVED THAT AS PER THE BANK STATEMENT OF THE ASSESSEE IN SBOP, MANDI GOBINDGARH BRANCH BEARING ACCOUNT NO. 0 1190005887 TWO CREDIT ENTRIES SHOWING AMOUNT OF RS. 3 LAKHS ON 5.11.2001 AND RS. 2 LAKS ON 8.11.2001 WERE DEPICTED. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTIONS MADE. IN RESPONSE TO THE SAID QUERY, THE ASSESSEE SUBMITTED THAT PRESUMPTION OF THE REVENUE THAT AMOUNT OF RS. 3,00,750/- WAS ACCOMMODA TION ENTRY OBTAINED FROM SHRI N.K. GARG, C.A. IS TOTALLY INCORRECT. IT WAS F URTHER EXPLAINED THAT THERE WERE ONLY TWO ENTRIES AS MENTIONED ABOVE IN THE BAN K ACCOUNT AND THESE AMOUNTS WERE NEVER RECEIVED FROM THE SAID PERSON. I T WAS ALSO STATED THAT THE AMOUNTS GIVEN IN THE REASONS RECORDED FOR REOPENING U/S 148 DID NOT TALLY WITH THE AMOUNTS GIVEN IN THE NOTICE DATED 5.11.2009. TH E ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION GIVEN BY THE ASSESSEE AND HE LD THAT TWO AMOUNTS MENTIONED (SUPRA) WERE GIFTS FROM SHRI BHIM SAIN G OYAL AND SHRI BHIWANI SHANKAR BOTH RESIDENTS OF DELHI. COPIES OF THE GIFT DEEDS EXECUTED WERE FURNISHED AND ADDRESSES OF DONOR WERE MENTIONED IN THE SAID DEED. THE ASSESSEE FAILED TO PRODUCE THE DONORS FOR VERIFICATION AND S UMMONS WERE RECEIVED BACK UNSERVED. WHEN ASKED TO FILE CONFIRMATION FROM T HE DONORS AND PRODUCED THEM FOR VERIFICATION, THE ASSESSEE SHOWN HER INABI LITY TO PRODUCE THE DONORS AS WELL AS FILE THEIR CONFIRMATIONS. ADMITTEDLY, THERE WAS NO DIRECT OR INDIRECT RELATION OF THE DONEE WITH THE DONORS. THERE WAS NO OCCASION FOR MAKING THE 4 GIFTS. THE ASSESSING OFFICER RELYING ON THE JUDGEM ENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JASPAL SINGH V CIT (2007) 290 ITR 306 (P&H) HELD THAT ONUS IS ON THE ASSESSEE TO PROVE THE IDENTITY OF THE DONOR AND HIS CAPACITY TO MAKE GIFT WHICH THE ASSESSEE HAS FAILED TO PROVE. THE ASSESSING OFFICER ALSO RELIED ON THE JUDGEMENT OF HON'BLE JURISDICTIONAL H IGH COURT IN THE CASE OF LAL CHAND KALRA V CIT (1981) 22 CTR (P&H)135. THE ASSES SING OFFICER CONCLUDED THAT WHY A STRANGER WOULD GIFT TO A PERSON WHEN THE RE IS NO OCCASION TO MAKE THE GIFT. HE, THEREFORE, MADE THE ADDITION OF RS. 5 LA KHS TREATING THE SAME AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. 6. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION FOR THE REASONS STATED IN PARA 5.1 OF THE IMPUGNED ORDER. 7. AFTER HEARING LD. REPRESENTATIVES OF BOTH THE PA RTIES AT LENGTH I FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVE NUE AND AGAINST THE ASSESSEE BY THE DECISION OF HON'BLE JURISDICTIONAL HIGH COUR T IN THE CASE OF JASPAL SINGH VS CIT (2007) 290 ITR 306 (P&H), WHEREIN IT HAS BEE N HELD THAT MERE IDENTIFICATION OF THE DONOR AND SHOWING THE MOVEMEN T OF THE GIFT AMOUNT THROUGH BANKING CHANNEL IS NOT ENOUGH TO PROVE GENU INENESS OF THE GIFT. THE ASSESSEE IS REQUIRED TO ESTABLISH THAT THE DONOR HA D THE MEANS AND THE GIFT WAS GENUINE, FOR NATURAL LOVE AND AFFECTION. THE FACTS OF THE PRESENT CASE ARE ALMOST SIMILAR TO THE FACTS OF THE CASE OF JASPAL SINGH VS . CIT REFERRED TO ABOVE. RESPECTFULLY FOLLOWING THE JUDGEMENTS OF THE JURISD ICTIONAL HIGH COURT IN THE CASE OF JASPAL SINGH V CIT AND IN THE CASE OF LAL C HAND KALRA V CIT (SUPRA), I DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE LO WER AUTHORITIES ON THIS ISSUE. 8. THE NEXT LIMB OF THE GROUND NO.2 OF THE APPEAL I S THAT REASONS FOR REOPENING OF THE ASSESSMENT ARE DIFFERENT FROM THE BASIS ON WHICH ADDITION WAS 5 MADE BY THE ASSESSING OFFICER. SHRI SURJIT SINGH B HADU, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSING OFFICER HAD REOPE NED THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT ON THE GROUND THA T THE ASSESSEE HAD RECEIVED HAWALA PAYMENT OF RS. 3,00,750/- FROM SHRI N.K. GAR G, C.A. AND THEREON HAD ESCAPED ASSESSMENT. THE COUNSEL FOR THE ASSESSEE ST ATED THAT ASSESSING OFFICER, HOWEVER, WHILE PASSING REASSESSMENT ORDER HAD MADE THE ADDITION OF ANOTHER AMOUNT I.E. RS. 3 LAKHS AND RS. 2 LAKHS AS APPEARIN G THE BANK ACCOUNT OF THE ASSESSEE WITHOUT ANY ADDITION HAVING MADE ON THE GR OUND ON THE BASIS OF WHICH REASSESSMENT HAVE BEEN INITIATED. IT IS OBSERVED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE AND AGAINST THE AS SESSEE BY THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MA JINDER SINGH KANG V CIT AND ANOTHER (2012) 344 ITR 358 (P&H) WHEREIN ON SIMILAR FACTS AND CIRCUMSTANCES THE HON'BLE HIGH COURT HELD AS UNDER:- WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE AND DO NOT FIND ANY MERIT IN THE SAME. EXPLANATION 3 TO SECTION 147 HAS BEEN INSERTED BY T HE FINANCE (NO. 2) ACT, 2009, RETROSPECTIVELY WITH EFFECT FROM APRIL 1, 1989. IT READS THUS : '147. INCOME ESCAPING ASSESSMENT.. . . EXPLANATION 3.FOR THE PURPOSE OF ASSESSMENT OR REASSESSMENT UNDER THIS SECTION, THE ASSESSING OFFI CER MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISS UE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PRO CEEDINGS UNDE R THIS SECTION, NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB - SECTION (2) OF SECTION 148.' A PLAIN READING OF EXPLANATION 3 TO SECTION 147 CL EARLY DEPICTS THAT THE ASSESSING OFFICER HAS POWER TO MAK E ADDITIONS EVEN ON THE GROUND ON WHICH REASSESSMENT NOTICE MIG HT NOT HAVE BEEN ISSUED IN CASE DURING THE REASSESSMENT PR OCEEDINGS, HE ARRIVES AT A CONCLUSION THAT SOME OTHER INCOME H AS ESCAPED ASSESSMENT WHICH COMES TO HIS NOTICE DURING THE COU RSE OF PROCEEDINGS FOR REASSESSMENT UNDER SECTION 148 OF T HE ACT. THE PROVISION NOWHERE POSTULATES OR CONTEMPLATES TH AT IT IS ONLY WHEN THERE IS SOME ADDITION ON THE GROUND ON W HICH REASSESSMENT HAD BEEN INITIATED, THAT THE ASSESSING OFFICER CAN MAKE ADDITIONS ON ANY OTHER GROUND ON THE BASIS OF WHICH INCOME MAY HAVE ESCAPED ASSESSMENT. THE REASSESSMEN T 6 PROCEEDINGS, THUS, IN THE PRESENT CASE CANNOT BE HE LD TO BE VITIATED. 13. REFERRING TO THE JUDGMENT OF THIS COURT IN ATLA S CYCLE INDUSTRIES' CASE [1989] 180 ITR 319 (P&H) AND THE RAJASTHAN HIGH COURT IN SHRI RAM SINGH'S CASE [2008] 306 ITR 343 , IT MAY BE NOTICED THAT THESE WERE THE JUDGMENTS RENDER ED BY THE COURTS PRIOR TO THE INSERTION OF EXPLANATION 3 TO S ECTION 147 OF THE ACT. IN VIEW OF THE INSERTION OF EXPLANATION 3 TO SECTION 147 BY THE FINANCE (NO. 2) ACT, 2009, WITH EFFECT F ROM APRIL 1, 1989, THE AFORESAID JUDGMENTS DO NOT ADVANCE THE CA SE OF THE ASSESSEE ANY LONGER. 9. IN THE ABOVE DECISION THE HON'BLE HIGH COURT HEL D THAT ASSESSING OFFICER HAS POWER TO MAKE ADDITIONS EVEN ON THE GROUND ON W HICH REASSESSMENT NOTICE MIGHT NOT HAVE BEEN ISSUED IN CASE DURING REASSESSM ENT PROCEEDINGS, HE ARRIVES AT A CONCLUSION THAT SOME OTHER INCOME HAS ESCAPED ASSESSMENT WHICH COMES TO HIS NOTICE DURING THE COURSE OF PROCEEDINGS FOR REA SSESSMENT UNDER SECTION 148 OF THE ACT. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAJINDER S INGH KANG VS CIT (SUPRA), I HOLD THAT REOPENING OF THE ASSESSMENT WAS VALID AND , THEREFORE, GROUND RAISED BY THE ASSESSEE IN THIS APPEAL DESERVES TO BE REJECTED . IN VIEW OF THE ABOVE, I DO NOT SEE ANY MERIT IN THE APPEAL FILED BY THE ASSESSEE AND THEREFORE, THE SAME IS DISMISSED. ITA NO. 1104/CHD/2014 (ASSESSMENT YEAR 2004-05) 10. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT THE COMMISSIONER HAS ERRED IN BOTH FACTS AND I N LAW WHILE PASSING THIS ORDER. 2. THAT THE LD. CIT(A) HAS ERRED IN NOT QUASHING THE REASSESSMENT ORDER. NO FINDING HAS BEEN GIVEN ON LE GALITY OF REASSESSMENT ORDER, SINCE NO NOTICE U/S 148 WAS SER VED ON THE APPELLANT. 3. THAT THE LD. CIT(A) HAS ERRED ON FACT BY NOT APPREC IATED THE FACTS PROPERLY. GIFT RECEIVED BY THE APPELLANT OF R S. 5,00,000/- IS DULY PROVED BEYOND THE REASONABLE DOU BT, FILED 7 GIFT DEED OF DONORS, RECEIVED BY DRAFT AND THESE FA CTS NOT APPRECIATED PROPERLY AND PASSED AN ORDER WITHOUT AN Y SPECIFIC FINDING. 4. THAT THE LD. CIT(A) ALSO IGNORED THE FACT THAT LD. A.O. HAS NOT SUMMONED TO DONORS U/S 131 TO CLARIFY THE PICTU RE. AND WITHOUT APPLICATION OF MIND LD. A.O. MADE THE ADDIT ION OF RS. 5,00,000/- WHICH WAS WITHOUT PROPER INQUIRY FROM DO NORS. 5. THAT THE LD. CIT(A) FAILED TO APPRECIATE THE FACTS THAT APPELLANT HAS PROVED GENUINENESS OF GIFT BY SUBMITT ING THE INCOME TAX RETURNS AND GIFT DEEDS OF THE DONORS. TH E APPELLANT DULY DISCHARGES THE ONUS TO PROVE THE GEN UINENESS OF GIFT AND ONUS SHIFTED TO THE DEPARTMENT TO PROVE IT WAS NOT GENUINE WHICH WAS NOT DISCHARGED BY THE A.O. AND AL SO NOT APPRECIATED BY THE LD. CIT(A). 6. THAT THE LD. COMMISSION HAD ERRED IN NOT PASSING A SPEAKING ORDER. 11. GROUND NO. 1 RAISED BY THE ASSESSEE IS GENERAL AND DOES NOT NEED SEPARATE ADJUDICATION. 12. DURING THE COURSE OF HEARING GROUND NO.2 WAS NO T PRESSED BY THE LD. COUNSEL OF THE ASSESSEE, THEREFORE, THE SAME IS DIS MISSED AS NOT PRESSED. 13. AS REGARDS GROUND NOS. 3 TO 6 OF THE APPEAL, LD . COUNSEL FOR THE ASSESSEE SHRI SURJIT BHADU SUBMITTED THAT THE ISSUES RAISED VIDE ABOVE GROUNDS ARE IDENTICAL TO THE ISSUE RAISED IN THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2002-03 IN ITA NO. 365/CHD/2011. IN THIS CASE, THE ASSESSING OFFICER RECEIVED AN INFORMATION FROM INVESTIGATION WING OF THE REVEN UE DEPARTMENT THAT THE ASSESSEE HAD RECEIVED HAWALA PAYMENT OF RS. 5,01,25 0/- THROUGH DRAFT. THEREAFTER, THE CASE WAS REOPENED U/S 148 OF THE AC T. THE ASSESSEE HAD RECEIVED RS. 3,00,000/- AND RS. 2,00,000/- ON 25.5.2003 AND 27.5.2003 FROM SHRI BHAWANI SHANKAR AND MS. SARSHWATI DEVI. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THESE AMOU NTS ARE RECEIVED AS GIFT. THE DONORS ARE ASSESSED TO INCOME TAX AND WEALTH TAX AN D THEIR AFFIDAVITS WERE 8 SUBMITTED IN CONFIRMATION. HOWEVER, THE PERSONS COU LD NOT BE PRODUCED DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER, THEREAFTER RELYING ON THE CASE OF JASPAL SINGH V CIT 290 ITR 304 (P&H) AND LA L CHAND KALRA V CIT 172 ITR 50(P&H) ADDED THESE AMOUNT TO THE INCOME OF THE ASSESSEE. THE CIT(A) CONFIRMED THE ADDITION OF RS. 3,00,000/- AND RS. 2, 00,000/- = RS. 5,00,000/- OBSERVING THAT THE GENUINENESS OF THE TRANSACTIONS IS NOT PRO VED. THE PERSONS ALSO WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER DESPITE THE ASSESSING OFFICER HAVING ASKED THE ASSESSEE TO PRODUCE THE PE RSONS. NO DETAILS REGARDING RELATIONSHIP OF THE SO CALLED DONORS WITH THE ASSES SEE HAVE BEEN FILED. 14. ON GOING THOUGH THE MATERIALS AVAILABLE ON RECO RD I FIND THAT THE ISSUE RAISED VIDE GROUNDS IN QUESTION AND THE FACTS AND C IRCUMSTANCES OF THE CASE ARE SIMILAR TO THE ISSUE RAISED AND ADJUDICATED ABOVE I N THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2002-03 IN ITA NO. 265/CHD/2011 . THEREFORE, THE FINDINGS GIVEN IN ITA NO. 365/CHD/2011 FOR ASSESSMENT YEAR 2 002-03 SHALL APPLY WITH EQUAL FORCE TO THESE GROUNDS OF APPEAL ALSO. ACCORD INGLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. 15. IN THE RESULT, APPEAL IS DISMISSED. ITA NO. 1060/CHD/2014 (ASSESSMENT YEAR 2002-03) 16. THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), PATIALA DATED 26.9.2014 RELATING TO ASSESSMENT YEAR 2002-03 . 17. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED BOTH IN FACTS AND IN LAW WHILE PASSING THE ORDER. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN APPLYING PROVISIONS OF SECTION 271(1)(C), WHICH IS CLEARLY NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 9 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN HOLDING THAT ASSESSEE HAS CONCEALED THE INCOME AND HAS FILED IN ACCURATE PARTICULARS. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS FAILED TO RECORD SATISFACTION DURING THE COURSE OF ASSESSMENT PROCEEDINGS EITHER IN RESPECT OF CONCEALMENT OF ANY INCOME OR F URNISHING OF INACCURATE PARTICULARS OF SUCH INCOME WHICH IS MAND ATORY UNDER THE LAW. THAT THE LD. A.O. HAS ERRED IN IMPOSING PENALTY OF RS. 1,43,032/- U/S 271(1)(C) WITHOUT APPRECIATING THE FACTS AND DE SPITE THE COMPLETE DETAILS OF IDENTITY AND GENIUSES OF CREDIT S ARE VERIFIABLE FROM INCOME TAX AND WEALTH TAX RETURNS. 5. THAT APART FROM REJECTING THE EXPLANATION RENDERED BY THE ASSESSEE APPELLANT, NO OTHER POSITIVE MATERIAL HAS BEEN BROUGHT ON RECORD TO HOLD THAT THERE IS ANY CONCEAL THIS AC TION OF IDENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME WARR ANTING IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. 18. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT ASSESSEE HAD SHOWN GIFTS OF RS. 3,00,000/- & RS. 2,00,000/- FROM SHRI CHANDER B AHN AND SHRI BHAWANI SHANKAR RESPECTIVELY BUT ASSESSEE HAS FAILED TO FI LE THE CONFIRMATION FROM THE DONORS AND ALSO COULD NOT PRODUCED THEM. THERE WAS NO DIRECT OR INDIRECT RELATIONSHIP OF THE ASSESSEE WITH THE DONORS. FURT HER, SUMMONS ISSUED TO BOTH THE DONORS U/S 131 OF THE ACT WERE RECEIVED BACK UN SERVED. ACCORDINGLY, THE ASSESSING OFFICER ADDED GIFTS AS UNEXPLAINED INCOME OF THE ASSESSEE RELYING ON THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN THE CASES OF JASPAL SINGH V CIT IN (2007) 290 ITR 306 (P&H) AND LAL CHAND KALRA V C IT (1981) 22 CTR (P&H)135. THE ASSESSING OFFICER IMPOSED A PENALTY OF RS. 1,43,032/- U/S 271(1)(C) OF THE ACT AND THE CIT(A) UPHELD THE ORDE R OF ASSESSING OFFICER. 19. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE BY THE DECISIO N OF HON'BLE JURISDICTIONAL 10 HIGH COURT IN THE CASE OF CIT VS. DEEP CHAND (2011) 336 ITR 292 (P&H) WHEREIN THE FACTS STATED BY THE HON'BLE COURT ARE A S FOLLOWS (PAGE 293):- THE FACTS, IN BRIEF, NECESSARY FOR ADJUDICATION AS NARRATED IN THE APPEAL, ARE THAT DURING THE ASSESSMENT YEAR UND ER CONSIDERATION, THE ASSESSEE HAD RECEIVED A GIFT AMO UNTING TO RS. 1,75,000 ON PAYMENT OF AN EQUAL AMOUNT IN CASH, ALONG WITH PREMIUM FOR ARRANGING THAT GIFT. DURING PROCEE DINGS UNDER SECTION 148 OF THE ACT INITIATED AGAINST THE ASSESSEE, THE AMOUNT EQUAL TO THE AMOUNT OF THE GIFT, I.E., R S. 1,75,000 AND RS. 17,500 ON ACCOUNT OF PREMIUM AT THE RATE OF 10 PER CENT. WERE ADDED TO THE INCOME OF THE ASSESSEE. THE COMMISSIONER OF INCOME-TAX (APPEALS) (IN SHORT 'THE CIT(A)'), CONFIRMED THE ORDER OF THE ASSESSING OFFI CER WHEREAS THE TRIBUNAL ACCEPTED THE APPEAL OF THE ASS ESSEE AND DELETED THE PENALTY, VIDE ORDER DATED SEPTEMBER 22, 2005. MEANWHILE PROCEEDINGS UNDER SECTION 271(1)(C) OF TH E ACT WERE ALSO INITIATED AGAINST THE ASSESSEE WHEREBY A PENALTY OF RS. 82,000 WAS IMPOSED ON THE ASSESSEE. THE ASSESSE E PREFERRED APPEAL AGAINST IMPOSITION OF PENALTY. THE COMMISSIONER OF INCOME-TAX (APPEALS) CANCELLED THE PENALTY IMPOSED, VIDE ORDER DATED OCTOBER 26, 2005. THE APP EAL CARRIED BY THE REVENUE WAS DISMISSED BY THE TRIBUNA L VIDE ORDER UNDER APPEAL AND IT WAS OBSERVED THAT SINCE T HE ASSESSING OFFICER HAD NOT RECORDED HIS SATISFACTION BEFORE INITIATING THE PENALTY PROCEEDINGS, THE ORDER OF PE NALTY COULD NOT BE SUSTAINED. THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD AS U NDER:- THE POINT FOR CONSIDERATION IN THIS CASE IS, WHETH ER THE TRIBUNAL WAS JUSTIFIED IN DELETING THE PENALTY LEVI ED AGAINST THE ASSESSEE UNDER SECTION 271(1)(C) OF THE ACT. 7. THE GIFT AMOUNTING TO RS. 1,75,000 SAID TO HAVE BEEN RECEIVED BY THE ASSESSEE WAS HELD TO BE BOGUS. ONCE THAT IS SO, THE ONLY CONCLUSION IS THAT THE ASSESSEE HAD FU RNISHED INACCURATE PARTICULARS OF HIS INCOME AND THE ORDER OF THE TRIBUNAL DELETING THE PENALTY IS UNSUSTAINABLE IN L AW. ACCORDINGLY, IT IS HELD THAT THE ASSESSEE HAD CONCE ALED THE PARTICULARS OF INCOME AND, THUS, PENALTY WAS LIABLE TO BE LEVIED AGAINST HIM UNDER SECTION 271(1)(C) OF THE A CT. FURTHER, THE ISSUE REGARDING RECORDING OF SATISFACT ION FOR INITIATION OF PENALTY PROCEEDINGS IN THE COURSE OF ASSESSMENT PROCEEDINGS STANDS CONCLUDED AGAINST THE ASSESSEE I N THE JUDGMENT OF THIS COURT REPORTED IN CIT V. PEAREY LA L AND SONS (EP) LTD. [2009] 308 ITR 438 (P&H). 8. IN VIEW OF THE ABOVE, THE SUBSTANTIAL QUESTION O F LAW IS ANSWERED IN FAVOUR OF THE REVENUE AND THE APPEAL IS ALLOWED ACCORDINGLY. 11 20. IN VIEW OF THE DIRECT JUDGEMENT OF THE JURISDIC TIONAL HIGH COURT ON THE ISSUE AT HAND, I DO NOT FIND ANY MERIT IN THE SUBMI SSIONS MADE ON BEHALF OF THE ASSESSEE BY SHRI SHRI SURJIT SINGH BHADU, LD. COUN SEL. THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IS BINDING UPON THIS BENC H OF THE TRIBUNAL. RESPECTFULLY FOLLOWING THE JUDGEMENT OF HON'BLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF CIT V DEEP CHAND (SUPRA), I UPHOLD THE ORDER OF LD. CIT(A) AND THE APPEAL OF THE ASSESSEE IS DISMISSED. 21. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.07.2015 SD/- (H.L.KARWA) VICE PRESIDENT DATED : 27 TH JULY, 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR FIT FOR PUBLICATION SD/- (H.L.KARWA) VICE PRESIDENT 12