Debasish Pal, C/O-V.N. Purohit & Co.,C.A, Kolkata V. ITO, Ward-1(3), Midnapore

ITA 1105/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1623 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2013
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 26-07-2012
• Court: TRIBUNAL
• Department Lawyers: K N JANA LD
• Assessee Lawyers: V N PUROHIT FCA LD
• Keywords: Peak credit
• Section: 143(3); 147

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () , ! ' ! , ) [BEFORE HONBLE SHRI PRAMOD KUMAR, AM & HONBLE S RI MAHAVIR SINGH, JM # / I.T.A NO. 1105/KOL/2012 '$% &'/ ASSESSMENT YEAR : 2006-07 DEBASISH PAL VS. INCOME-TAX OFFICE PAN: AERPP 9985 WARD 1(3), MIDNAPORE ()* /APPELLANT ) +)*/ RESPONDENT ) DATE OF HEARING: 19-12-2012 DATE OF PRONOUNCEMENT: 31-01-201 3 FOR THE APPELLANT: SHRI V.N PUROHIT, FCA , LD. AR FOR THE RESPONDENT: SHRI K.N. JANA, LD. SR.DR - /ORDER ! ' !, SHRI MAHAVIR SINGH, JM THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), XXXVI, KOLKATA IN APPEAL NO.100/CIT(A)-XXXVI/KOL/ITO WD-1(3)/ MID/10-11 DATE D 01-06-2012. ASSESSMENT WAS FRAMED BY ITO, WARD 1(3), MIDNAPORE U/S. 147 R.W.S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEAR 2006-07 VIDE HIS ORDER DATED 24- 12-09 FOR ASSESSMENT YEAR 2006-07 PENALTY UNDER DI SPUTE WAS LEVIED BY ITO, WARD 1(3), MIDNAPORE U/S. 271(1)( C) OF THE ACT VIDE HIS OR DER DATED 24-06-2009 (AS NOTED BY THE CIT(A). 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) SUSTAINING THE PENALTY @ 200% AS AGAINST @300% LEVIED BY THE AO. THE ASSESSEES CLAIM IS THAT THE PENALTY SHOULD HAVE BEEN SUSTAINED ONLY UPTO 100%. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUNDS :- ITA NO.1105/KOL/12-B-MVS 2 1. THAT FOR THE FACTS AND UNDER THE CIRCUMSTANCES O F THE CASE THE LD. CIT(APPEAL) HAS ERRED IN SUSTAINING THE PENALTY IMP OSED BY THE ASSESSING OFFICER UPTO 200% OF THE TAX SOUGHT TO HA VE BEEN EVADED. 2. THAT FOR THE FACTS UNDER THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) SHOULD HAVE SUSTAINED THE PENALTY UPTO 100% OF THE TAX SOUGHT TO HAVE BEEN EVADED AS AGAINST 300% IMPOSED BY THE ASSESSING OFFICER. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND , ALTER OR WITHDRAW ANY OR ALL THE ABOVE GROUNDS ON OR BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. 4. BRIEF FACTS LEADING TO THE ABOVE ISSUES ARE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAD DENIED HAVING ANY DEMAT ACCOUNT I N HIS POSSESSION OR HOLDING ANY EQUITY SHARES OF PNB. BUT THE AO FOUND FROM THE DEMAT ACCO UNT MAINTAINED WITH SAHARA INDIA FINANCIAL CORPORATION LTD [ ACCOUNT NO. 10102417] THAT THE ASSESSEE IS HOLDING EQUITY SHARES OF VARIOUS COMPANIES. FOLLOWINGS ARE THE DET AILS NARRATED BY THE AO IN HIS ASSESSMENT ORDER:- 1. IN COURSE OF PROCEEDINGS, THE ASSESSEE HAD ST ATED VIDE LETTER DATED 07-12-09 THAT HE DID NOT HAVE ANY DEMAT ACCOUNT IN HIS POSS ESSION DURING THE PERIOD 2005- 06 AND ALSO DENIED OF HAVING ANY OTHER EQUITY SHARE S IN HIS POSSESSION EXCEPT THE 18 EQUITY SHARES OF PNB. BUT ON SCRUTINY, IT IS SEE N THAT THE ASSESSEE HAD A DEMAT ACCOUNT IN SAHARA INDIA FINANCIAL CORPORATION LTD ( A/C NO. 10102417) AND THE FOLLOWING EQUITY SHARES ARE FOUND TO BE HELD BY HIM IN ADDITION TO 18 SHARES OF PNB. THESE ARE.. S.NO. EQUITY SHARES HELD NO. OF SHAR ES DATE OF CREDIT/INVEST MENT VALUE PER SHARE TOTAL VALUE OF INVEST MENT 1. AXIS BANK LTD. EQ 100 24-08-05 247.70 24,770 2. GTL EQ 180 24-08-05 96.60 17388 3. HFCL EQ 100 24-08-05 23.60 2,360 4. HINDUSTAN UNILEVER EQ 100 18-04-05 130.10 13,010 5. SATYAM SERVICES EQ 100 18-04-05 384.17 38,410 ITA NO.1105/KOL/12-B-MVS 3 6. ZEE ENTERTAINMENT LTD EQ 100 24-08-05 166.35 16,635 TOTAL VALUE OF INVESTMENT ; 1,12,573/- FURTHER, THE ASSESSEE HAS NOT DISCLOSED THE PEAK BALANCE OF UNION BANK OF INDIA OF RS.3,18,370 AND THE AO HAS RECORDED THE FOLLOWING F INDINGS OF THE SAME :- THE ASSESSEE HAD A BANK ACCOUNT WITH THE UNION BAN K OF INDIA, R.N. MUKHERJEE BR. ON CLOSURE OF THE SAID BANK ACCOUNT D URING THE PERIOD 2005-06, THE BANK BALANCE HAD BEEN TRANSFERRED TO THE INDI A EXCHANGE PLACE BRANCH OF THE SAME BANK. BUT EITHER THE BANK ACCOUNT IN R.N MUKHERJEE BR OF INDIA EXCHANGE PLACE BR., HAD BEEN SHOWN BY THE ASSESSEE. EVEN THE BANK BALANCE AS ON 31-03-06 HAD NOT BEEN DISCLOSED BY THE ASSES SEE. THE BANK BALANCE AS ON 31-03-06 WAS OF RS. 6123/-, WHERE AS PEAK BALANC E IN RESPECT OF THE SAID ACCOUNT WAS OF RS. 3,18,370/-. AS THE ASSESSEE HAD NOT DISCLOSED THE BANK ACCOUNT, HE WAS ASKED TO EXPLAIN WHY RS. 3,18,370/- WOULD NOT BE ADDED BACK TO THE TOTAL INCOME AS UNDISCLOSED INVESTMENT NOT SHOWN AND PENAL PROCEEDINGS U/S. 271(1)( C) OF THE I.T ACT 1961 WOU LD NOT BE INITIATED FOR. FINALLY, THE AO ADDED THE AMOUNT AS UNDER:- RS. 1,12,573/- ON A/C OF UNDISCLOSED INVESTMENT RS. 3,18,370/- ON A/C OF UNDISCLOSED BANK BALANCE 5. THE AO CLEARLY INITIATED PENALTY PROCEEDINGS ON ACCOUNT OF CONCEALMENT OF INVESTMENT IN SHARES AND CONCEALMENT OF TRANSACTIO N OF UNDISCLOSED BANK ACCOUNT. IT WAS CATEGORICALLY STATED THAT THE ASSESSEE HAS NOT CHAL LENGED THE ASSESSMENT BEFORE THE HIGHER AUTHORITIES AND HE ACCEPTED THE SAME. DURING THE PENALTY PROCEEDINGS U/S. 271(1)( C) OF THE ACT THE ASSESSEE WAS PROVIDED OPPORTUNITY OF HEARIN G ON 13-2-10 AND IN RESPONSE TO THE SAME THE ASSESSEE, SRI DEBASHIS PAUL APPEARED ON 12 -2-10. AGAIN, HEARING WAS FIXED ON 26- 5-10 AND NONE APPEARED ON THAT DATE. FURTHER THE H EARING WAS FIXED ON 16-06-10 AND IN RESPONSE TO THE SAME AGAIN ASSESSEE, SHRI DEBASHIS PAUL APPEARED. HOWEVER, NO EVIDENCE WHATSOEVER WAS FILED BEFORE THE AO NOR ANY EXPLANAT ION WAS OFFERED. THUS, WHY PENALTY U/S. 271(1) SHOULD NOT BE LEVIED. AS THERE WAS N O EXPLANATION, THE AO LEVIED PENALTY @300 OF TAX SOUGHT TO BE EVADED U/S. 271(1)(C ) FO R CONCEALMENT OF TOTAL INCOME OF ITA NO.1105/KOL/12-B-MVS 4 RS.4,30,943/- BEING INVESTMENT IN SHARES OF RS.1,12 ,573/-AND BANK TRANSACTION OF RS. 3,18,370/-. 6. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE FAIRLY ADMITTED THAT THERE WAS CONCEALMEN T OF INCOME, BUT CONTENDED THAT QUANTUM OF PENALTY BE REDUCED FROM @300% TO @100%. THE LD. CIT(A) RESTRICTED THE SAME TO 200% BY GIVING FOLLOWING FINDINGS :- 2. MR. PANCHANAN BERA, C.A ATTENDED AND THE CASE IS DISCUSSED. THE MAIN GROUND OF THIS APPEAL IS REGARDING IMPOS ING OF PENALTY @300% U/S. 271(1)( C) OF THE I.T ACT 1961. THE A/R OF THE APPELLANT FILED A PETITION WHEREIN IT IS STATED THAT THE APPELLANT DOES NOT WANT TO CONTEST ON MERIT AND PRAYS FOR REDUCTION OF QUANTUM OF PENALTY TO 100% OF THE TAX SOUGHT TO BE EVADED. 3. IT IS SEEN FROM THE RECORDS THAT THE AO IMPOSED MAXIMUM PENALTY AT 300% OF THE TAX SOUGHT TO BE EVADED AMOUNTING TO RS . 3,38,952/-. APPELLANT DID NOT PREFER ANY APPEAL AGAINST THE ASSESSMENT OR DER PASSED BY AO. THE ADDITION WAS ON ACCOUNT OF UNDISCLOSED INVESTMENT. A/R DOES NOT WANT TO CONTEST PENALTY IMPOSED U/S. 271(1)( C) ON MERIT BU T JUST REQUESTED TO REDUCE THE QUANTUM OF PENALTY FROM 300% TO 100% OF THE TAX SOUGHT TO BE EVADED. CONSIDERING THE NATURE OF OFFENCE DONE BY APPELLANT , THE IMPOSITION OF PENALTY @300% OF THE AMOUNT OF TAX EVADED, IS EXCE SSIVE. KEEPING IN VIEW OF THIS AMOUNT OF PENALTY IS REDUCED FROM 300% TO 200% OF THE TAX SOUGHT TO BE EVADED. HENCE, PENALTY IS REDUCED FROM RS.3,38,952 /- TO RS.2,25,968/-. APPELLANT GETS RELIEF OF RS.1,12,984/-. 7. AGGRIEVED, NOW THE ASSESSEE IS IN APPEAL BEFORE US. 8. BEFORE US, SHRI V.N PUROHIT, FCA THE LD. COUNSEL APPEARED ON BEHALF OF THE ASSESSEE WHEREAS ON BEHALF OF REVENUE, SHRI K.N. J ANA, JCIT, LD. SR.DR APPEARED. THE LD. COUNSEL FOR THE ASSESSEE FAIRLY ADMITTED THAT HE DO ES NOT WANT TO CONTEST PENALTY IMPOSED U/S. 271(1)( C) ON MERIT BUT JUST URGED THE BENCH T O REDUCE THE QUANTUM OF PENALTY FROM 200% TO 100% OF THE TAX SOUGHT TO BE EVADED AS CON FIRMED BY THE CIT(A). ON REPEATED QUERY, THE LD. COUNSEL FAIRLY ACCEPTED THAT HE HAS NO EVIDENCE WHATSOEVER THAT HE HAS NOT CONCEALED THE INCOME. WHEN HE WAS ASKED, HE DISCLO SED DEMAT ACCOUNT HAVING BEEN MADE INVESTMENT IN SHARES AND BANK ACCOUNT WITH UNION BANK OF INDIA. MOREOVER, THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS MADE FALSE STATE MENT VIDE LETTER DATED 07-12-09. BUT HE DID NOT HAVE ANY DEMAT ACCOUNT IN HIS POSSESSION DU RING THE PERIOD 2005-06 AND ALSO DENIED ITA NO.1105/KOL/12-B-MVS 5 OF HAVING ANY OTHER EQUITY SHARES IN HIS POSSESSIO N EXCEPT THE 18 EQUITY SHARES OF PNB. THE ASSESSEES LD. COUNSEL HAS SHOWN PAGE 2 OF THE ASSESSMENT ORDER, WHEREIN THE AO HAS DETAILED OUT THE INVESTMENTS MADE IN DEMAT ACCOUNT WITH SAHARA INDIA FINANCIAL CORPORATION LTD [A/C NO.10102417) OF RS.1,12,573/ - AND PEAK BALANCE OF UNION BANK OF INDIA OF RS.3,18,370/- WERE DEPICTED. THE LD. COU NSEL HAS NOT OFFERED ANY EXPLANATION EITHER BEFORE THE AO OR THE CIT(A) AND EVEN BEFORE US. ON A QUERY RAISED BY THE BENCH, THE ASSESSEES LD. COUNSEL COULD NOT OFFER ANY EXPLANA TION WHY THE QUANTUM OF PENALTY BE REDUCED FROM 200% TO 100%. HE FAILS TO OFFER ANY E XPLANATION WITH ANY EVIDENCE. HE ONLY MADE MERCY PETITION. WE FIND FROM THE ASSESSMENT O RDER THAT THE ASSESSEE HAS CLEARLY ADMITTED VIDE LETTER DATED 07-02-09 THAT HE DID NO T HAVE ANY DEMAT ACCOUNT IN HIS POSSESSION AND ALSO DENIED OF HAVING ANY OTHER EQU ITY SHARES IN HIS POSSESSION EXCEPT THE 18 EQUITY SHARES OF PNB. THIS MEANS THAT THE ASSESS EE WANTED TO CONCEAL THE PARTICULARS OF INCOME, WHICH HAS BEEN ESTABLISHED BEYOND DOUBT AS ASSESSEE HAS FAILED TO OFFER ANY EXPLANATION. DESPITE OPPORTUNITIES GIVEN TO THE L D. COUNSEL FOR THE ASSESSEE THAT HE WAS NOT READY TO PRODUCE ANY EVIDENCE. IF FURTHER OPPORTUNI TY IS GIVEN TO HIM BY WAY OF ADJOURNMENT HE FAIRLY REFUSED TO DO SO BECAUSE HE DOES NOT HAVE ANY EVIDENCE FOR ANY EXPLANATION EITHER FOR DELETION OF PENALTY FOR CONC EALMENT OR REDUCTION OF QUANTUM OF PENALTY. WE HAVE NO REASON TO DELETE OR REDUCE TH E SAME. HENCE, WE CONFIRM THE ORDER OF THE CIT(A). 9. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31 ST JAN 2013.. SD/- SD/- [ , ] [ ! ' ! , ] ( PRAMOD KUMAR, ACCOUNTANT MEMBER) (MAHAVIR SINGH, JUDICIAL MEMBER) ( .) DATED :31/1 201 3 ITA NO.1105/KOL/12-B-MVS 6 *PP(SR.P.S.) /0 '$12 '3 - 4 ''5 65&7- COPY OF THE ORDER FORWARDED TO: 1. )* /APPELLANT SHRI DEBASISH PAL C/O V.N PUROHIT & CO. CA, DIAMOND CHAMBERS, UNIT III, 4 TH FL., SUIT NO.4G 4 CHOWRINGHEE LANE, KOL-16 2 +)* / RESPONDENT,: I.T.O W 1(3), JHARGRAM HOUSE, JHAOTA LA KUTIR, MIDNAPORE TOWN 721101. 3. '-$ ()/ THE CIT(A), 4. '-$/ CIT, 5. ='> '$ / DR, KOLKATA BENCHES, KOLKATA +5 '/ TRUE COPY, -$/ BY ORDER, ! 2 /ASSTT. REGISTRAR.