RAMESH L PATEL, MUMBAI V. ITO RG 24(3)(4), MUMBAI

ITA 1125/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92985 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 12-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LOVE KUMAR
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' D ' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI SANJAY ARORA , ACCOUNTANT MEMBER ITA NO S . 1125 & 1136 /MUM/2013 (ASSESSMENT YEAR: 2006 - 07 ) SHRI RAMESH L. PATEL VS. INCOME TAX OFFICER - 24(3)(4) 259, ASHIRWAD INDL. ESTATE BLDG. NO. 5, RAM MANDIR ROAD GOREGAON (W), MUMBAI 400014 PRATYKSHA KAR BHAVAN BANDRA KURLA COMPLEX MUMBAI 400051 PAN - AAQK6782P APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI LOVE KUMAR DATE OF HEARING: 17.06. 2015 DATE OF PRONOUNCEMENT: 26 .06.2015 O R D E R PER D. MANMOHAN, V.P. THESE TWO APPEALS ARE FILED BY THE ASSESSEE, AGAINST THE ORDERS PASSED BY THE CIT(A) - 34, MUMBAI. ITA NO. 1125/MUM/2013 IS QUANTUM APPEAL WHEREAS ITA N O. 1136/MUM/2013 IS APPEAL FILED AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE QUANTUM APPEAL IS BARRED BY LIMITATION BY 1105 DAYS. 2. THE CASE WAS LAST POSTED FOR HEARING ON 13.03.2015 AND AT THE REQUEST OF THE ASSESSEE THE CASE WAS ADJOURNED TO 17.06.2015 BUT ON THIS DAY NONE APPEARED ON BEHALF OF THE ASSESSEE. WE, THEREFORE, PROCEEDED TO DISPOSE OF THESE APPEALS EXPARTE, QUA ASSESSEE. 3. IT IS NOT IN DISPUTE THAT THE ORDER PASSED BY THE CIT(A), IN THE QUANTUM PROCEEDINGS, WAS COMMUNICATED TO THE ASSESSEE ON 0 1.12.2009. WITH REGARD TO THE DELAY IN FILING THE APPEAL ASSESSEE FILED AN AFFIDAVIT STATING THAT IN THE COURSE OF PREPARATION OF THE APPEAL AGAINST THE ORDER OF THE CIT(A) CONFIRMING THE PENALTY UNDER SECTION 271(1)(C), IT WAS NOTICED THAT THE ASSESSMENT ORDER CONTAINED VARIOUS INCORRECT FACTS WHICH NEED TO BE ITA NO. 1125 &1136 /MUM/2013 SHRI RAMESH L. PATEL 2 CHALLENGED BEFORE THE APPELLATE AUTHORITY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE BEING NOT EDUCAT ED HE COULD NOT PROPERLY UNDERSTAND THE ORDER OF THE CIT(A) DATED 16.11.2009, THEREFORE FAILED T O FILE AN APPEAL BEFORE THE ITAT. 4. IT MAY BE NOTICED THAT THE ASSESSEE IS REPRESENTED BY A CHARTERED ACCOUNTANT IN ALL THE PROCEEDINGS. IN FACT IN THE PENALTY PROCEEDINGS SHRI B. SHARMA APPEARED. SIMILARLY, IN THE QUANTUM PROCEEDINGS ALSO SHRI PAWAN SHARMA, CHARTERED ACCOUNTANT APPEARED BEFORE THE CIT(A). THE ORDER PASSED BY THE CIT(A) WAS TAKEN INTO CONSIDERATION IN THE PENALTY PROCEEDINGS SINCE THE AO, IN THE ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT, MADE CLEAR MENTION OF THE OUTCOME OF THE QUA NTUM PROCEEDINGS BEFORE THE CIT(A). THUS IT CANNOT BE SAID THAT THE ASSESSEE WAS NOT AWARE OF THE PROCEDURE. IN FACT HE HAS FILE D AN EXPLANATION DATED 27.04.2010 IN THE PENALTY PROCEEDINGS AND WHILE NEGATING THE CONTENTIONS OF THE ASSESSEE , THE OFFICER MADE A CATEGORICAL ME NTION ABOUT THE FACT THAT THE ADDITION MADE BY THE AO WAS CONFIRMED BY THE CIT(A) AND THUS THE ASSESSEE HAS COMMITTED DEFAULT WITHIN THE MEANING OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE WE ARE OF THE V IEW THAT THE SUBSTANTIAL DELAY , OF FILING THE APPEAL AGAINST THE QUANTUM PROCEEDINGS , IS NOT ON ACCOUNT OF ANY SUFFICIENT CAUSE. WE, THEREFORE, DISMISS THE APPEAL AS UNADMITTED. 5. WITH REGARD TO THE LEVY OF PENALTY, THE CASE OF THE ASSESSEE IS THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY OF ` 10,60,016/ - . IT MAY BE NOTICED FROM THE ASSESSMENT ORDER AS WELL AS THE ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT THAT THE MAJOR ADDITION WAS THAT CASH DEPOSITS APPEARING IN ASSESSEES BANK ACCOUNT TO THE T UNE OF ` 33,15,849/ - WAS TREATED AS UNEXPLAINED CASH CREDIT. PENALTY PROCEEDINGS WERE INITIATED ON THE GROUND THAT ASSESSEE HAS FURNISHED INCORRECT PARTICULARS OF INCOME AND ALSO CONCEALED HIS INCOME WITH A DELIBERATE INTENTION TO AVOID TAX LIABILITY. ASSES SEE DID NOT FURNISH ANY SATISFACTORY EXPLANATION EITHER BEFORE THE AO OR BEFORE THE CIT(A) TO PROVE THAT THE ADDITION MADE BY THE AO IS NOT MAINTAINABLE AND IT IS NOT A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF ITA NO. 1125 &1136 /MUM/2013 SHRI RAMESH L. PATEL 3 INCORRECT PARTICULARS. IN FACT THE LEARN ED CIT(A), IN THE PENALTY PROCEEDINGS, ANALYSED THE FACTS OF THE CASE AND OBSERVED IN PARA 2.3.3 AS UNDER: - 2.3.3 THE ABOVE CLEARLY INDICATES THAT THE APPELLANT WAS NOT ABLE TO RECONCILE THE ALLEGED CASH DEPOSITS IN THE BANK ACCOUNTS AND HENCE THE ADVANC ES ALLEGED TO HAVE BEEN RECEIVED FROM THE DEBTORS WERE PROVED TO BE BOGUS. HAD THE ASSESSMENT WAS NOT SELECTED FOR SCRUTINY THE ISSUE OF BOGUS DEBTORS WOULD NOT HAVE COME TO LIGHT. WHEN THE SOURCES OF THE CASH DEPOSITS WERE NOT ABLE TO EXPLAIN BY THE APPEL LANT, THE NATURAL COROLLARY IS THE UNACCOUNTED CASH EARNED BY THE APPELLANT WAS PLOUGHED BACK IN THE GUISE OF ADVANCES FROM CUSTOMERS. THUS THE APPELLANT HAD MANIPULATED THE ACCOUNTS AND THEREBY EITHER IT INFLATED THE ADVANCES OR ADVANCES WERE SHOWN IN THE NAME OF NON EXISTING/FICTITIOUS CUSTOMER. THUS THE ACCOUNTS WERE FUDGED, AND BASED ON THESE COOKED UP ACCOUNTS ONLY THE INCOME WAS OFFERED. HENCE THE INCOME DECLARED IN THE RETURN OF INCOME TO THIS EXTENT WAS INCORRECT. WHEN THE AMOUNTS WERE BEYOND THE SC OPE OF RECONCILIATION, THE APPELLANT HAD TO ADMIT THE SAME AS INCOME. IT IS NOT A CASE OF MAKING AN INCORRECT CLAIM. THE INFORMATION GIVEN IN THE RETURN OF INCOME AND INCOME COMPUTED ON THIS BASIS IS INCORRECT. HENCE THE APPELLANT FILED A RETURN OF INCOME WHICH IS INCORRECT OR ERRONEOUS OR FALSE. THUS NOT ONLY THE INFORMATION IN THE RETURN OF INCOME IS INCORRECT OR INACCURATE, BUT THE INCOME DECLARED ITSELF IS ALSO INCORRECT. HENCE IT IS A CLEAR CASE OF NOT ONLY FILING OF INACCURATE PARTICULARS OF INCOME BU T ALSO CONCEALMENT OF INCOME. THIS THE REASON WHY THE APPELLANT DID NOT AGITATE THE ORDER OF THE CIT(A) BEFORE THE ITAT. THE APPELLANT HAD RELIED ON VARIOUS CASE LAWS IN THE ABOVE SUBMISSION BUT THE FACT IN THE APPELLANTS CASE ARE NOT THE SAME AND HENCE TH EY ARE ALL DISTINGUISHED. IN VIEW OF THE ABOVE, MINIMUM PENALTY LEVIED IS HEREBY CONFIRMED. 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, AND IN THE ABSENCE OF ANY FRESH MATERIAL BROUGHT ON RECORD BEFORE US, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASS ED BY THE CIT(A). WE, THEREFORE, DISMISS THE APPEAL FILED BY THE ASSESSEE. 7. IN THE RESULT, ITA NO. 1125/MUM/2013 IS DISMISSED AS UNADMITTED ON THE GROUND THAT IT WAS BARRED BY LIMITATION AND ITA NO. 1136/MUM/2013 IS DISMISSED ON MERITS. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JUNE, 2015. SD/ - SD/ - ( SANJAY ARORA ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 26 TH JUNE, 2015 ITA NO. 1125 &1136 /MUM/2013 SHRI RAMESH L. PATEL 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 34 , MUMBAI 4. THE CIT 24 , MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.