Gujarat Incatel Telecommunication Ltd., Baroda V. The Income tax Officer,Ward-1(3), Baroda

ITA 1216/AHD/2012

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1342 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 08-08-2019
• Assessment Year: 1994-1995
• Appeal Filed On: 04-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIRENDER SINGH
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Unexplained cash credit
• Section: 271(1)(c); 27

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 1216/AHD/2012 ( ASSESSMENT YEAR : 1994-95) GUJARAT INCATEL TELECOMMUNICATION LTD. 3 RD FLOOR, PANORAMA, R. C. DUTTA ROAD, BARODA / VS. INCOME TAX OFFICER WARD 1(3), BARODA ./ ./ PAN/GIR NO. : AAACG7700L ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MEHUL K. PATEL, A.R. / RESPONDENT BY : SHRI VIRENDER SINGH, SR.D.R. DATE OF HEARING 08/08/2019 !'# / DATE OF PRONOUNCEMENT 11/09/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, BARODA (CIT(A) IN SHORT), DATED 01.03.2012 ARISING IN TH E PENALTY ORDER PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 271(1)(C) OF TH E INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 1994-95. 2. THE CAPTIONED APPEAL HAS BEEN FILED BY THE ASSES SEE AGAINST THE IMPOSITION OF PENALTY UNDER S. 271(1)(C) OF THE ACT ON UNEXPLAINED CASH CREDIT OF RS.1,90,000/-. ITA NO. 1216/AHD/12 [GUJARAT INCATEL TELECOMMUNICATION LTD. VS. ITO] A.Y. 1994-95 - 2 - 3. BRIEFLY STATED, THE QUANTUM ASSESSMENT FOR AY 19 94-95 IN QUESTION WAS FINALIZED UNDER S.143(3) OF THE ACT. THE ASSES SED INCOME INTER ALIA INCLUDED A SUM OF RS.1,90,000/- TAX AS UNEXPLAINED CREDIT. THE ASSESSEE CONTESTED ADDITION MADE TO THE RETURN INCOME BEFORE THE CIT(A) ON THE AFORESAID AMOUNT WITHOUT ANY SUCCESS. 4. THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNA L AGAINST THE AFORESAID ORDER OF THE CIT(A) IN QUANTUM PROCEEDING S BUT WAS DISMISSED IN LIMINE OWING TO NON-REPRESENTATION FROM THE ASSESSEE. IN VIEW OF THE ADDITIONS MADE IN THE QUANTUM PROCEEDINGS, THE PENA LTY HAS BEEN IMPOSED BY THE AO UNDER S. 271(1)(C) OF THE ACT ON THE AFOR ESAID UNEXPLAINED CASH CREDIT, THE PENALTY SO IMPOSED BY THE AO WAS ALSO C ONFIRMED BY THE CIT(A) WITH FOLLOWING OBSERVATIONS: 2.2.1 REGARDING ADDITION OF RS.1,90,000/- I.E. UNE XPLAINED CASH DEPOSITS IN THE BANK ACCOUNTS, NEITHER DURING ASSESSMENT PRO CEEDINGS NOR BEFORE CIT(A) IN THE QUANTUM ADDITION PROCEEDINGS, ANY EXP LANATION REGARDING SOURCE OF CASH DEPOSIT WAS FURNISHED. EVEN BEFO RE ME, NO EXPLANATION IS FURNISHED IN THIS REGARD. SINCE APPELLANT HAS NO T FURNISHED ANY EXPLANATION REGARDING SOURCE OF CASH DEPOSIT IN THE BANK ACCOUNTS, IT IS A CASE FALLING UNDER EXPLANATION 1 BELOW SECTION 27 1(1)(C). DECISION IN THE CASE OF NATIONAL TEXTILE V CIT, 114 TAXMAN 203 IS NOT APPLICABLE IN VIEW OF SUPREME COURT'S DECISION IN THE CASE OF DHA RMENDRA TEXTILES PROCESSORS THAT MENS REA IS NOT AN ESSENTIAL INGRED IENT FOR LEVY OF PENALTY U/S 271(L)(C). LEVY OF PENALTY U/S 271(1)(C) IS UPHELD. TO SUM UP, AO IS DIRECTED TO RECOMPUTE PENALTY U/S 271(1)(C) BY TAKING THE CONCEALED INCOME TO BE RS.1,90,000/- ONLY. 5. AGGRIEVED BY THE AFORESAID ACTION OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LEARNED AR FOR THE ASSESSEE AT THE OUTSET SU BMITTED THAT THE ORIGINAL NAME OF THE ASSESSEE WAS GUJARAT INVESTMEN T CASTINGS LTD., WHICH WAS RE-NAMED AS GUJARAT INCATEL TELECOMMUNICATION L TD. IT WAS POINTED OUT THAT THE MATTER IS VERY OLD AND CONCERNS AY 199 4-95 AND THEREFORE, HE IS IN POSSESSION OF VERY LIMITED INFORMATION. THE LEARNED AR FURTHER SUBMITTED THAT WHILE THE ASSESSEE COULD NOT ESTABLI SH THE SOURCE OF CASH DEPOSIT IN THE QUANTUM PROCEEDINGS AS HELD BY VARIO US AUTHORITIES, NEVERTHELESS, THE MATTER REQUIRES TO BE LOOKED AFRE SH FOR THE PURPOSE OF ITA NO. 1216/AHD/12 [GUJARAT INCATEL TELECOMMUNICATION LTD. VS. ITO] A.Y. 1994-95 - 3 - IMPOSITION OF PENALTY UNDER S. 271(1)(C) OF THE ACT . IT WAS SUBMITTED BY THE LEARNED AR THAT THE AFORESAID AMOUNT ACTUALLY R EPRESENTED THE SHARE APPLICATION MONEY RECEIVED FROM SOME OF THE SHAREHO LDERS TO WHOM THE SHARES WERE ACTUALLY ISSUED. ON BEING INQUIRED BY THE BENCH HOWEVER, THE LEARNED AR COULD NOT ESTABLISH THE AFORESAID ASSERT ION. A FURTHER INQUIRY WAS MADE AS TO WHETHER SUCH STAND WAS TAKEN AT ANY STAGE BEFORE THE LOWER AUTHORITIES EITHER IN QUANTUM PROCEEDINGS OR IN PEN ALTY PROCEEDINGS. THE LEARNED AR FOR THE ASSESSEE DREW BLANK AND COULD NO T POINT OUT ANYTHING IN THIS REGARD. THE LEARNED AR HOWEVER URGED FOR DELE TION OF PENALTY. 7. THE LEARNED DR, ON THE OTHER HAND, STRONGLY RELI ED UPON THE ORDER OF THE CIT(A) CONFIRMING THE PENALTY AND SUBMITTED THA T THE NARRATIVES FRAMED ON BEHALF OF THE ASSESSEE HAS NO SUBSTANCE AND WAS NOT PLEADED AT ANY STAGE. IT WAS FURTHER SUBMITTED THAT ASSESSEE HAS FAILED TO PROVIDE THE SOURCE OF CREDIT TILL TODAY AND THEREFORE THE FINDI NGS IN THE QUANTUM PROCEEDINGS BECOMES A VERY GOOD EVIDENCE FOR THE PU RPOSES OF PENALTY PROCEEDINGS AS WELL. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE C ORRECTNESS OF PENALTY IMPOSED UNDER S. 271(1)(C) OF THE ACT BY TH E REVENUE ON ALLEGED UNEXPLAINED CASH DEPOSITS, IS IN CONTROVERSY. BEFO RE WE PROCEED TO DEAL WITH MERITS, WE CONSIDER IT EXPEDIENT TO NOTE THAT THE MATTER WAS FIRST CALLED FOR HEARING ON 02.08.2012 BY THE TRIBUNAL AND THERE AFTER WAS LISTED FOR HEARING NUMEROUS TIMES TILL TODAY. THE ASSESSEE HA S TAKEN ADJOURNMENT ON ONE PRETEXT OR THE OTHER WHICH REFLECTS INDOLENT AT TITUDE OF THE ASSESSEE. THE MATTER CONCERNS AY 1994-95 AND THE APPEAL WAS F ILED IN THE TRIBUNAL IN 2012 MORE THAN SIX YEARS HAVE LAPSED BEFORE THE TRIBUNAL. WE ALSO SEE THAT THE RECORDS BEFORE THE TRIBUNAL ARE ONLY PARTL Y COMPLETE. IT IS ALSO NOTICED THAT THE ASSESSEE HAS DODGED THE NOTICES IN THE ASSESSMENT PROCEEDINGS AS WELL, WHICH IMPEDED REQUISITE INQUIR Y. IN VIEW OF THE INDIFFERENT BEHAVIOR, WE PROCEED TO DISPOSE OF THE APPEAL ON THE BASIS OF SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT(A). THE CIT(A) HAS REPRODUCED THE SUBMISSIONS MADE BY THE ASSESSEE AS PER PARA 2.1 OF ITS ORDER. WE DO NOT FIND ANYTHING SUBSTANTIVE TO REBU T THE ALLEGATION OF CASH ITA NO. 1216/AHD/12 [GUJARAT INCATEL TELECOMMUNICATION LTD. VS. ITO] A.Y. 1994-95 - 4 - DEPOSITS OF RS.1,90,000/- IN AGGREGATE AS AN EXPLAI NED. THE CIT(A) HAS ALSO OBSERVED THAT ASSESSEE HAS FAILED TO EXPLAIN T HE SOURCE OF CASH DEPOSIT. NOTHING HAS BEEN BROUGHT ON RECORD BEFORE THE TRIBU NAL TO REBUT THE AFORESAID FINDINGS OF THE CIT(A). WE THUS SEE NO R EASON TO INTERFERE WITH THE ORDER OF THE CIT(A) CONFIRMING THE PENALTY OF T HE AFORESAID AMOUNT. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. SD/- SD/- (RAJPAL YADAV) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 11/09/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 11/09/2 019