Mr. Manak Chand Aggarwal, Faridabad V. ITO, Faridabad

ITA 1297/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3457 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-07-2010
• Assessment Year: 1991-1992
• Appeal Filed On: 25-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTHY
• Assessee Lawyers: ASHWANI TANEJA; DR RAKESH GUPTA
• Keywords: Difference of opinion
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA ITA NO. 1297/DEL/2010 A.YR. 1991-92 MR. MANAK CHAND AGGARWAL, VS. INCOME-TAX OFFICER, PROP. M/S GUPTA STEEL CO. WARD 11(1), FARIDABAD. 247, JAWAHAR COLONY, FARIDABAD. ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : DR. RAKESH GUPTA ADV. & SH. ASHWAN I TANEJA ADV. RESPONDENT BY : MS. MONA MOHANTHY DR O R D E R PER R.P. TOLANI , J.M : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF CIT (A), FARIDABAD DATED 9-2- 2010, CHALLENGING THE IMPOSITION OF PENALTY U/S 271 (1)(C), JURISDICTION AND LIMITATION FOR A.Y. 1991-92. 2. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT T HE ASSESSEE DEALS IN SCRAP. AO MADE ADDITIONS ON ACCOUNT OF INFLATED PURCHASES IN A.Y. 1991-92 AND 1992-93 FROM M/S VIJAY BOTTLE STORE, SOHNA OWNED BY SHRI GU RGIAN SINGH. THERE WAS DIFFERENCE IN BALANCES OF ACCOUNTS MAINTAINED BY T HE ASSESSEE AND THE SAID M/S VIJAY BOTTLE STORE. ADDITIONS IN BOTH THE YEARS WER E MADE. APPEAL FOR A.Y. 1992- 93 CAME UP BEFORE THE ITAT EARLIER AND WAS DECIDED ON 16-3-2007. ADDITION WAS BIFURCATED IN TWO YEARS I.E. RS. 3,25,000/- FOR A. Y. 1991-92 AND RS. 73,524/- FOR A.Y. 1992-93. ADDITION IN RESPECT OF A.Y. 1992-93 W AS DELETED BY ITAT, BY FOLLOWING OBSERVATIONS: 1297/D/10 MANAK CHAND AGGARWAL VS. ITO 2 5. ADDITION OF RS. 3,98,524 M/S VIJAY BOTTLE STO RE THIS ADDITION IS DISCUSSED IN PARA 4 OF THE ASSESSMENT O RDER. IN THE ACCOUNT OF VIJAY BOTTLE STORE IN THE BOOKS OF THE A SSESSEE, THERE WAS AN OPENING CREDIT BALANCE OF RS. 3,75,049 AND CLOSI NG BALANCE OF RS. 18,651/- AS ON 31.3.1992. IN THE ASSESSEES ACCOUNT IN THE BOOKS OF VIJAY BOTTLE STORES, THE CLOSING BALANCE MATCHED BU T THE OPENING BALANCE WAS SHOWN ONLY AT RS. 50,049. THERE WAS A D IFFERENCE OF RS. 3,25,000 AS ON 1.4.1991. THE ASSESSING OFFICER NOTI CED THAT THE TRANSACTIONS BETWEEN THE TWO PARTIES ENTERED INTO D URING THE YEAR TALLIED AND THE DIFFERENCE WAS ONLY WITH REGARD TO THE OPENING BALANCE. HAVING SAID SO, HE EXAMINED GURGIAN SINGH, THE PROPRIETOR OF VIJAY BOTTLE STORES AND RECORDED A STATEMENT FRO M HIM. THE ASSESSEE ALSO CROSS-EXAMINED HIM. 6. WE HAVE PERUSED THE STATEMENT OF GURGIAN SINGH ( PAGES 59- 61 OF THE PAPER BOOK). IN RESPONSE TO THE CROSS EXA MINATION, HE HAS STATED THAT HE DID NOT HAVE THE BOOKS OF ACCOUNT FO R THE RELEVANT PERIOD AND COULD NOT TELL THE REASON FOR THE DIFFER ENCE. HE ALSO ADMITTED THAT HE NEVER ISSUED ANY RECEIPT FOR PAYME NTS RECEIVED BY HIM IN CASH FROM THE ASSESSEE. HE FURTHER STATED TH AT HIS ACCOUNTANT WAS WRITING THE ACCOUNTS ON THE BASIS OF INSTRUCTIO NS ISSUED BY HIM FROM MEMORY. HE ALSO STATED THAT THE ACCOUNTS WERE WRITTEN AS PER THE CONVENIENCE OF THE ACCOUNTANT. HE CONFIRMED THA T HE HAD RECEIVED ALL THE PAYMENTS FROM THE ASSESSEE, BUT EX PRESSED HIS INABILITY TO PRODUCE THE BOOKS OF ACCOUNT AS THEY M IGHT HAVE BEEN DESTROYED. 7. FROM THE ABOVE STATEMENT OF CROSS-EXAMINATION AN D AFTER HEARING BOTH THE SIDES, IT APPEARS TO US THAT THERE IS NO JUSTIFICATION FOR THE ADDITION. THOUGH THE ASSESSING OFFICER HAS FOLLOWED THE DIRECTIONS OF THE TRIBUNAL AND HAS PRODUCED THE PRO PRIETOR OF VIJAY BOTTLE STORES AND HAS ALSO AFFORDED THE ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE HIM, WE FIND THAT GURGIAN SINGH HAS C ONFIRMED THAT HE HAS RECEIVED THE PAYMENTS AND THAT THERE IS NO B ALANCE OUTSTANDING AGAINST THE ASSESSEE. HE COULD HOWEVER VERIFY THE DATES OF PAYMENTS BECAUSE THE BOOKS OF ACCOUNT WERE NOT A VAILABLE WITH HIM. THERE IS THEREFORE NO MATERIAL TO CONTRADICT T HE CLAIM OF THE ASSESSEE. THE MANNER IN WHICH GURGIAN SINGH WAS MAI NTAINING ACCOUNTS DOES NOT INSTPITE MUCH CONFIDENCE. FIRSTLY , THE ACCOUNTS WERE NOT WRITTEN UP CONTEMPORANEOUSLY BUT AS PER TH E CONVENIENCE OF THE ACCOUNTANT. SECONDLY, GURGIAN SINGH USED TO GIVE INSTRUCTIONS TO THE ACCOUNTANT ACCORDING TO HIS MEMORY REGARDING PAYMENTS RECEIVED FROM THE ASSESSEE AND HIS MEMORY CANNOT BE RELIED UPON AND THERE IS A STRONG POSSIBILITY OF ERRORS BEING C OMMITTED BY HIM, ESPECIALLY WHEN THE ACCOUNTS WERE NOT WRITTEN UP 1297/D/10 MANAK CHAND AGGARWAL VS. ITO 3 CONTEMPORANEOUSLY. THIRDLY, HE DID NOT ISSUE ANY RE CEIPTS TO THE ASSESSEE. FINALLY, HE COULD NOT PRODUCE THE BOOKS O F ACCOUNT. FOR ALL THESE REASONS, IT WOULD NOT BE APPROPRIATE TO RELY UPON HIS STATEMENT TO MAKE THE ADDITION. IN FACT, HE HAS NOT DENIED AN Y RECEIPTS FROM THE ASSESSEE. MOREOVER, WE SEE FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE SOURCE OF THE PA YMENTS MADE BY THE ASSESSEE TO VIJAY BOTTLE STORES IS NOT UNPROVED OR UNKNOWN. THEY ARE ENTRIES MADE IN THE ASSESSEES ACCOUNTS. I T IS NOT THE CASE OF THE ASSESSING OFFICER THAT ON THE DATES WHEN THE PAYMENTS WERE MADE THE ASSESSEE DID NOT HAVE SUFFICIENT CASH BALA NCE. IT IS THEREFORE NOT POSSIBLE TO UPHOLD THE FINDING OF THE INCOME-TA X AUTHORITIES THAT THE AGGREGATE PAYMENTS OF RS. 4,54,092/- MADE BY TH E ASSESSEE TO VIJAY BOTTLE STORES FINDS A PLACE IN THE ASSESSEES ACCOUNT IN THE BOOKS OF VIJAY BOTTLE STORES ONLY TO THE EXTENT OF RS. 55,567/- AND THEREFORE THE BALANCE OF RS. 3,98,524/- HAS NOT BEE N SATISFACTORILY EXPLAINED BY THE ASSESSEE. HOWEVER, OUT OF THE DIFF ERENCE OF RS. 3,98,524/- A SUM OF RS. 3,25,000 IS ON ACCOUNT OF T HE DIFFERENCE IN THE OPENING BALANCE AS ON 1.4.1991. WE WERE INFORME D THAT THE ADDITION OF RS. 3,25,000 IS THE SUBJECT MATTER OF A PPEAL BEFORE THE TRIBUNAL IN THE ASSESSMENT YEAR 1991-92 WHICH IS PE NDING DISPOSAL. WE THEREFORE DELETE THE BALANCE OF RS. 73,524. THIS GROUND IS THUS PARTLY ALLOWED. 2.1. IT WAS PLEADED THAT ITAT HAS GIVEN CLEAR FIND INGS TO THE EFFECT THAT: (I) THAT GURGIAN SINGH PROPRIETOR OF M/S VIJAY BOTTLE S TORE WAS NOT MAINTAINING HIS ACCOUNTS PROPERLY AND CONTEMPORANEO USLY BUT AS PER CONVENIENCE OF THE ACCOUNTANT (II) INSTRUCTIONS TO ACCOUNTANT WERE GIVEN BY HIM ON THE BASIS OF MEMORY REGARDING THE PAYMENTS RECEIVED FROM ASSESSEE. (III) NO RECEIPTS WERE ISSUED BY HIM TO THE ASSESSEE. (IV) GURGIAN SINGH COULD NOT PRODUCE THE ACCOUNTS BEFORE AO. ON THESE OBSERVATIONS, ITAT DELETED THE ADDITION FO R A.Y. 1992-93. 2.2. MATTER FOR A.Y. 1991-92 CAME UP FOR HEARING BE FORE THE ITAT THEREAFTER WHICH WAS DECIDED ON 6-6-2008. THOUGH THE ITAT NOTI CED SIMILAR INFIRMITIES IN THE STATEMENT OF SHRI GURGIAN SINGH, SURPRISINGLY C ONFIRMED THE ADDITION BY FOLLOWING OBSERVATIONS: 1297/D/10 MANAK CHAND AGGARWAL VS. ITO 4 10. WE HAVE CAREFULLY CONSIDERED THE RELEVANT FACT S AND ARGUMENTS ADVANCED. WE HAVE ALSO PERUSED THE ORDER OF THE TRI BUNAL PERTAINING TO THE ASSESSMENT YEAR 1992-93 OF THIS ASSESSEE. WH EREAS THE ASSESSEE SHOWS OUTSTANDING LIABILITY OF RS. 3,75,04 9/- PAYABLE TO M/S VIJAY BOTTLE STORES, SOHNA, THE SAID SUPPLIER HAS S HOWN THE AMOUNT RECEIVABLE ONLY TO THE EXTENT OF RS. 50,049/-, M/S VIJAY BOTTLE STORES IS STATED TO HAVE RECEIVED A SUM OF RS. 3,25,000/- DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 1991-92 ITSELF WHEREAS THE ASSESSEE IS NOT SHOWING THE SAID PAYMENTS. THIS FAC T WAS CONFIRMED BY SHRI GURU GYAN SINGH IN HIS STATEMENT DATED 30 TH JANUARY 2001. THOUGH HE DID NOT HAVE HIS BOOKS OF ACCOUNTS OR DID NOT REMEMBER THE TRANSACTION BUT HE CONFIRMED THAT HE WAS MAINTA INING BOOKS OF ACCOUNT AT THAT TIME WHEREIN THE RECEIPTS RECEIVED WERE ACCOUNTED FOR. HE ALSO CONFIRMED THAT HE WAS NOT ISSUING RECE IPTS FOR CASH RECEIVED FROM CUSTOMERS. THIS STATEMENT WAS RECORDE D IN THE PRESENCE OF ASSESSEE. THE ASSESSEE WAS AFFORDED AN OPPORTUNITY TO CROSS-EXAMINE SHRI GURU GYAN SINGH. IN THE CROSS-EX AMINATION SHRI GURU GYAN SINGH REITERATED THAT HE DID NOT POSSESS THE BOOKS OF ACCOUNTS AS ON THE DATE. HENCE, HE WAS UNABLE TO SA Y ANYTHING REGARDING THE DIFFERENCE. HE CONFIRMED THAT BOOKS O F ACCOUNTS WERE WRITTEN BY PART-TIME ACCOUNTANT AS PER HIS CONVENIE NCE. HOWEVER, HE CONFIRMED THAT HE USED TO KEEP ACCOUNTS AT THAT TIM E IN THE FINANCIAL YEAR 1991-92. HE CONFIRMED THAT AS ON THE DATE OF S TATEMENT THERE WAS NO OUTSTANDING BALANCE DUE. HOWEVER, THERE IS N OTHING IN THE STATEMENT, WHICH GIVES AN IMPRESSION THAT THE ACCOU NTS AS PREPARED BY SHRI GURU GYAN SINGH AND SIGNED BY HIM WERE INCO RRECT. ON THE CONTRARY HE CONFIRMED THAT THE BALANCE AS ON 1.4.19 91 WAS AS PER THE ACCOUNT STATEMENT GIVEN BY THE ACCOUNTANT AND SIGNE D BY HIM. THIS STATEMENT WAS NOT PROVED TO BE INCORRECT IN THE CRO SS-EXAMINATION CONDUCTED ON BEHALF OF THE ASSESSEE. JUST AS SHRI G URU GYAN SINGH COULD NOT PRODUCE HIS BOOKS, THE ASSESSEE ALSO DID NOT PRODUCE HIS BOOKS OF ACCOUNTS. SHRI GURU GYAN SINGH IS NOT UNDE R OBLIGATION TO MAINTAIN HIS BOOKS OF ACCOUNTS BEYOND CERTAIN PERIO D WHEREAS THE ASSESSEE IS UNDER OBLIGATION, AS HIS ASSESSMENT WAS NOT COMPLETED. THOUGH THE ASSESSEE RELIES ON HIS OWN BOOKS OF ACCO UNT TO ARGUE THAT PAYMENT WAS MADE BY HIM ONLY IN THE SUBSEQUENT YEAR , HOWEVER, SUCH BOOKS OF ACCOUNTS WERE NEVER PRODUCED FOR VERI FICATION. THIS IS FOR THE REASON BEST KNOWN TO THE ASSESSEE BUT SINCE THE BOOKS OF ACCOUNTS WERE NOT PRODUCED, THE ASSESSING OFFICER I S JUSTIFIED IN DRAWING AN ADVERSE INFERENCE AS, IF SUCH BOOKS OF A CCOUNTS WERE PRODUCED, THE CONTENTION OF THE ASSESSEE MIGHT BE P ROVED TO BE INCORRECT. THEREFORE, THE ASSESSING OFFICER WAS JUS TIFIED IN DRAWING SUCH ADVERSE INFERENCE AGAINST THE ASSESSEE. THE AS SESSEE AHS NOT 1297/D/10 MANAK CHAND AGGARWAL VS. ITO 5 PROVED THE SOURCE OF PAYMENT STATED TO HAVE BEEN MA DE TO M/S VIJAY BOTTLE STORES DURING FINANCIAL YEAR RELEVANT TO ASS ESSMENT YEAR 1991- 92. THEREFORE, THE ASSESSING OFFICER WAS JUSTIFIED IN HOLDING THAT SUCH PAYMENT WAS MADE OUT OF UNDISCLOSED SOURCES AN D HENCE TO BE ADDED AS INCOME UNDER SECTION 69 OF THE ACT. 11. THE CONCEPT OF PROTECTIVE ASSESSMENT HAS BEEN R ECOGNIZED BY THE HONBLE SUPREME COURT IN THE CASE OF LALJI HARI DAS VS. ITO 43 ITR 387 AND THAT BY THE HONBLE DELHI HIGH COURT IN THE CASE OF SOHAN SINGH V. CIT 158 ITR 174 AND IN THE CASE OF R . DALMIA VS. UNION OF INDIA 84 ITR 616. WHERE THE ASSESSING OFFI CER IS NOT CERTAIN ABOUT THE FACT WHETHER THE INCOME BELONGS T O A OR B, THE ASSESSING OFFICER CAN MAKE PROTECTIVE ASSESSMENT IN SUCH A SITUATION AS HELD IN THE AFORESAID CASES. SIMILARLY IF THE AS SESSING OFFICER IS NOT CERTAIN AS TO THE YEAR IN WHICH THE INCOME IS A SSESSABLE, HE CAN MAKE PROTECTIVE ASSESSMENT IN ONE OF THE YEAR. THER E IS NOTHING ILLEGAL ABOUT IT. 12. AS REGARDS THE CONTENTION OF THE ASSESSEE THAT OPPORTUNITY TO CROSS-EXAMINE WAS NOT GIVEN DURING ASSESSMENT PROCE EDINGS FOR ASSESSMENT YEAR 1991-92, THE SAME IS NOT TENABLE. T HE STATEMENT OF SHRI GURU GYAN SINGH WAS RECORDED IN THE PRESENCE O F THE ASSESSEE AND IMMEDIATELY THEREAFTER THE ASSESSEE WAS AFFORD ED OPPORTUNITY FOR CROSS-EXAMINATION, WHICH WAS AVAILED BY HIM. NO SEPARATE STATEMENT WAS RECORDED OF SHRI GURU GYAN SINGH DURI NG ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 1991-92. ORIGINALLY THE SAME WAS RECORDED FOR ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 1992-93 BUT SINCE THE TRANSACTION THEREIN REVEALED THAT INC OME FOR ASSESSMENT YEAR 1991-92 HAS ESCAPED ASSESSMENT, THE VERY SAME STATEMENT IS USED IN ASSESSMENT FOR ASSESSMENT YEAR 1991-92 ALSO . HOWEVER, USING THE VERY SAME STATEMENT ONCE AGAIN DOES NOT R EQUIRE ANY FRESH OPPORTUNITY FOR CROSS-EXAMINATION. 13. FOR THE REASONS STATED ABOVE, WE FIND THAT THE ASSESSEE FAILED TO OFFER ANY EXPLANATION AS REGARDS SOURCES OF PAYM ENT MADE TO M/S VIJAY BOTTLE STORES DURING THE FINANCIAL YEAR RELEV ANT TO ASSESSMENT YEAR 1991-92 AND HENCE THE ASSESSING OFFICER WAS JU STIFIED IN MAKING ADDITION UNDER SECTION 69 OF THE ACT. 3. LEARNED COUNSEL CONTENDS THAT ITAT HAS GIVEN FI NDINGS WHICH ARE CONTRARY TO EARLIER JUDGMENT. THOUGH IT HAS BEEN OBSERVED TH AT SHRI GURGIAN SINGH WAS NOT KEEPING BOOKS OF ACCOUNT AND DID NOT REMEMBER THE T RANSACTIONS BUT CONFIRMED 1297/D/10 MANAK CHAND AGGARWAL VS. ITO 6 THAT HE WAS MAINTAINING BOOKS OF ACCOUNT AT THE TIM E OF RECEIPT, THESE ACCOUNTS ALSO HAVE NOT BEEN PRODUCED. WHEN ASSESSEE WAS MAIN TAINING ACCOUNTS AND SHRI GURGIAN SINGH HAS BEEN OBSERVED TO BE NOT MAINTAIN ING THE BOOKS OF ACCOUNT, IT IS UNJUSTIFIED TO MAKE THE ADDITION IN THE HANDS OF TH E ASSESSEE. THE ITAT IN THESE CIRCUMSTANCES HAS GIVEN CONTRARY FINDINGS ON THE SA ME SET OF FACTS. LEARNED COUNSEL CONTENDS THAT ASSESSMENT AND PENALTY PROCEE DINGS ARE DISTINCT AND SEPARATE. MERE SUSTENANCE OF ADDITION DOES NOT MEC HANICALLY LEAD TO IMPOSITION OF PENALTY. IN A.Y. 1991-92 ON SAME SET OF FACTS, AS W ERE IN A.Y. 1992-93, TRIBUNAL HAS UPHELD THE ADDITION, THIS CLEARLY SHOWS THAT TH ERE IS A DIFFERENCE OF OPINION ON CONCLUSION OF FACTS ON THE SAME CIRCUMSTANCES IN TH E ITAT ITSELF. THEREFORE, IN ANY CASE THE FACTS OF THE ASSESSEES CASE CANNOT LEAD T O ONE CONCLUSION ONLY AND TWO VIEWS ARE CLEARLY POSSIBLE. 3.1. LEARNED COUNSEL PLEADS THAT THERE BEING TWO D IFFERENT ITAT JUDGMENTS ON SAME SET OF FACTS, PENALTY U/S 271(1)(C) WAS NOT L EVIABLE. THE ASSESSEES EVIDENCE I.E. BOOKS OF ACCOUNT WAS MORE RELIABLE THAN THE ST ATEMENT OF SHRI GURGIAN SINGH WHO, THOUGH STATED TO HAVE MAINTAINED BOOKS OF ACCO UNT AT THE RELEVANT TIME, COULD NOT PRODUCE AND FURTHER STATED THAT HIS ACCOUNTANT USED TO RECORD ENTRIES ON THE BASIS OF HIS MEMORY. IN VIEW OF THESE FACTS, PENALT Y DESERVES TO BE DELETED ON MERITS. 3.2. ON THE ISSUE OF JURISDICTION, OUR ATTENTION WA S DRAWN TO PROVISO TO S. 275(1)(A) INSERTED BY THE FINANCE ACT, 2003, W.E.F. 1 ST JUNE, 2003 AS PER WHICH ORDER FOR IMPOSING PENALTY SHALL BE PASSED BEFORE T HE EXPIRY OF FINANCIAL YEAR IN WHICH PROCEEDINGS, IN THE COURSE OF WHICH ACTION FO R IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR WITHIN ONE YEAR F ROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OF THE CIT(A) IS RECEIVED BY THE CHIEF CIT/CIT, WHICHEVER IS LATER. HE SUBMITTED THAT IN THIS CASE, PENALTY PROC EEDINGS WERE INITIATED BY THE AO AT THE TIME OF COMPLETING THE ASSESSMENTS ON 6 TH MARCH, 2003. THE LEARNED CIT(A) 1297/D/10 MANAK CHAND AGGARWAL VS. ITO 7 DECIDED THE QUANTUM APPEALS VIDE HIS ORDER DT. 27 TH JUNE, 2003. THUS, AS PER PROVISO TO S. 275(1)(A), THE ORDERS FOR IMPOSING TH E PENALTY SHOULD HAVE BEEN PASSED ON OR BEFORE 30 TH APRIL, 2004, IN THE PRESENT CASES, THE ORDERS FOR IMPOSING THE PENALTY WERE PASSED ON 30 TH NOV., 2005. THUS, HE SUBMITTED THAT PENALTY PROCEEDINGS WERE TIME BARRED AND DESERVES TO BE QUA SHED. 3.3. THE LEARNED COUNSEL FURTHER CONTENDS THAT PENA LTY HAS BEEN INITIATED BY THE AO FOR CONCEALING THE PARTICULARS OF INCOME, WHEREA S THE PENALTY HAS BEEN IMPOSED NOT FOR CONCEALING THE PARTICULARS OF INCOM E BUT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSEE HAD REPRESENTE D ITS CASE BASED ON CHARGE OF CONCEALMENT OF INCOME WHEREAS THE PENALTY HAS BEEN FINALLY LEVIED ON FURNISHING OF INACCURATE PARTICULARS. THERE BEING A CHANGE IN THE CHARGE, THE PENALTY WAS LIABLE TO BE QUASHED. 4. LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORD ERS OF LOWER AUTHORITIES ON MERITS. IT IS CONTENDED THAT PENALTY ORDER IS NOT T IME BARRED AND RELIED ON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE O F RAYALA CORPORATION (P) LTD. VS. UNION OF INDIA & OTHERS (2007) 288 ITR 452 (MAD.). REGARDING THE THIRD ISSUE IT WAS PLEADED THAT ONCE THE SECTION IS INVOK ED THE NATURE OF CHARGE CAN BE VARIED BY APPELLATE AUTHORITIES I.E. CIT(A) OR ITAT , THEREFORE PENALTY CAN BE HELD TO BE LEVIED FOR FURNISHING OF INACCURATE PARTICULA RS. 5. LEARNED COUNSEL FOR THE ASSESSEE IN REPLY CONTEN DS THAT MADRAS HIGH COURT JUDGMENT WAS GIVEN AT THE CONCESSION OF THE PARTIE S IN A WRIT PETITION AND THEREFORE CANNOT BE APPLIED TO ASSESSEES CASE. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. FACTS OF THE CASE HAVE BEEN NA RRATED ABOVE. WE FIND THAT THE ITAT IN ASSESSEES OWN CASE FOR A.Y.1992-93 HAS HEL D THAT STATEMENT OF SHRI 1297/D/10 MANAK CHAND AGGARWAL VS. ITO 8 GURGIAN SINGH WAS NOT FULLY CREDITWORTHY INASMUCH HE WAS MAINTAINING BOOKS ON HIS MEMORY AT THE TIME CONVENIENT TO HIM AND NOT CONTEMPORANEOUS, ACCOUNT BOOKS WERE NOT PRODUCED AND IT WAS STATED THAT THE BOOKS WERE WRITTEN ON HIS MEMORY BASED INSTRUCTIONS BY THE ACCOUNTANT. BASED ON THESE OBSERVATIONS THE ITAT IN QUANTUM APPEAL FOR A.Y. 1992-93 DID NOT UPH ELD THE FINDING OF INCOME- TAX AUTHORITIES FOR MAKING ADDITION IN THAT YEAR. I N VIEW OF THE DIFFERENCE IN THE FINDINGS OF ITAT IN A.Y. 1992-93 & 1991-92, IT CLEA RLY EMERGES THAT TWO VIEWS ARE POSSIBLE IN THE ASSESSEES CASES WHICH HAVE COM MON FACTS. 6.1. IN VIEW OF ITATS OBSERVATION FOR A.Y. 1992-9 3AND THE STATEMENT OF SHRI GURGIAN SINGH ON RECORD, IT CANNOT BE HELD THAT ASS ESSEES CASE IS A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C). THE STATEMENT OF GURGIAN SINGH KEEPING HIS ACCOUNT BOOKS ON THE BASIS OF MEMORY AND AT THE CONVENIENCE OF THE ACCOUNTANT AND NON- PRODUCTION OF BOOKS OF ACCOUNT, IN OUR VIEW, DO NOT SUPPORT THE CASE OF THE REVENUE FOR IMPOSITION OF PENALTY U/S 271(1)(C), WH ICH IS DELETED. 6.2. APROPOS SECOND ISSUE REGARDING TIME BARRED PEN ALTY PROCEEDING, WE ARE UNABLE TO AGREE WITH THE LEARNED COUNSEL FOR THE AS SESSEE THAT THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF RAYLA CORP ORATION (P) LTD. (SUPRA)), CANNOT BE APPLIED BECAUSE IT IS IN WRIT PETITION AN D ON A CONCESSION. INTERPRETATION OF LAW BY THE HONBLE MADRAS HIGH COURT BEING ONLY ON THIS ISSUE HAS A BINDING EFFECT. THEREFORE, CONTENTION OF THE LEARNED COUNSE L FOR THE ASSESSEE ON THIS POINT IS REJECTED. 6.3. REGARDING DIFFERENCE IN INITIATION AND IMPOSI TION, IN OUR VIEW THERE IS NO SUCH DIFFERENCE INASMUCH THE EXPLANATION AND MAIN C LAUSE ARE COMPLEMENTARY TO EACH OTHER. IN REPLY TO PENALTY ALSO ASSESSEE HAS N OWHERE MENTIONED THAT THE REPLY IS BEING FURNISHED FOR NON-CONCEALMENT OF PARTICULA RS. IN ANY CASE, IF THE PENALTY IS 1297/D/10 MANAK CHAND AGGARWAL VS. ITO 9 INITIATED THE APPELLATE AUTHORITY CAN INTERCHANGE THE WORDS INACCURATE PARTICULARS AND CONCEALMENT. CONSEQUENTLY, THIS CONTENTION OF ASSESSEE IS ALSO REJECTED. 7. IN THE NET RESULT, WE DELETE THE PENALTY LEVIED U/S 271(1)(C) ON MERITS AND ALLOW THE APPEAL FILED BY THE ASSESSEE IN ABOVE MAN NER. PRONOUNCED IN OPEN COURT ON 30 TH JULY, 2010. SD/- SD/- (B.C. MEENA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH JULY 2010. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR