Sh. Gajjan Singh Thind, Ludhiana V. ACIT, C-7, Ludhiana

ITA 1402/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9722 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 12-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK PAL GARG
• Keywords: Period of limitation; Time period of passing order; Revised return
• Section: 271(1)(c); 69C; 143(3); 142(1); 139(5); 69B; 68; 27; 148; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH , ! ' # $ %! , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.1402/CHD/2018 / ASSESSMENT YEAR : 2014-15 SH.GAJJAN SINGH THIND, H.NO. 85-C, UDHAM SINGH NAGAR, CIVIL LINES, LUDHIANA. THE A.C.I.T., CIRCLE-7, LUDHIANA. ./PAN NO: AANPT 4503 C /APPELLANT /RESPONDENT /ASSESSEE BY : SHRI ASHWANI KUMAR, CA ! / REVENUE BY : SHRI ABHISHEK PAL GARG, SR.DR ' # $ /DATE OF HEARING : 02.04.2019 %&'( $ /DATE OF PRONOUNCEMENT : 01.07.2019 /ORDER PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 3, LUDHIANA [(HEREINAFTER REFERRED TO AS CIT(A)] DATED 24.8.2018, AGITATING THE ACTION OF THE CIT(A) IN CO NFIRMING THE PENALTY OF RS.16,28,624/- LEVIED BY THE ASSESSING O FFICER (IN ITA NO.1402/CHD/2018 A.Y.2014-15 2 SHORT A.O.) U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). 2. THE BRIEF FACTS RELEVANT TO THE ISSUE ARE THAT F OR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE F ILED ORIGINAL RETURN OF INCOME ON 31.7.2014 DECLARING A NET TAXABLE INCOME OF RS.98,36,430/- AND CLAIMED AN EXEMPT INCO ME OF RS.41,45,665/- ON ACCOUNT OF LONG TERM CAPITAL GAIN S. THE ASSESSEE WAS SUMMONED BY THE DY. DIRECTOR OF INCOME TAX (INVESTIGATION) IN RESPECT OF AN ENTRY REGARDING LO NG TERM CAPITAL GAINS VIDE LETTER DATED 30.9.2015. THEREAFT ER THE ASSESSEE FILED A REVISED RETURN ON 8.10.2015 DECLAR ING THE SAID INCOME OF RS.41,55,876/- SHOWN IN THE ORIGINAL RETU RN AS LONG TERM CAPITAL GAINS, AS INCOME FROM OTHER SOURCES AND PAID THE DUE TAXES THEREUPON. THEREAFTER THE ASSESSMENT U/S 143(3) OF THE ACT WAS CARRIED OUT IN THE CASE OF THE ASSES SEE. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. OBSERVED THAT THE AFORESAID SURRENDER OF INCOME OF RS.41,55,876/- AS INCOME FROM OTHER SOURCES IN THE REVISED RETURN, WAS AN UNDISCLOSED INCOME OF THE ASSESSEE AS THE ASSESSEE IN THE ORIG INAL RETURN, HAD CLAIMED THE SAME TO BE TAX EXEMPT. HAD THE ASSE SSEE BEEN NOT SUMMONED BY THE INVESTIGATION WING, THE ASSESSE E WOULD NOT HAVE REVISED HIS RETURN TO OFFER FOR TAXATION T HE AFORESAID AMOUNT OF RS.41,55,876. THE A.O. FURTHER OBSERVED T HAT THOUGH ITA NO.1402/CHD/2018 A.Y.2014-15 3 THE ASSESSEE HAD SURRENDERED THE AFORESAID AMOUNT O F RS.41,55,876/- IN FRONT OF THE DDIT (INVESTIGATION) , LUDHIANA BUT DID NOT SUBMIT THE RETURN (ITR-V) ONLINE TO THE CENTRAL PROCESSING CENTRE (CPC), BANGALURU BUT DURING SCRUT INY ASSESSMENT PROCEEDINGS , THE ASSESSEE OFFERED THE SAID INCOME FOR TAXATION. THAT SINCE THE ASSESSEE HAD FILED THE REVISED RETURN AFTER COMMENCEMENT OF SCRUTINY ASSESSMENT PR OCEEDINGS AND ALSO DID NOT SUBMIT ITR-V ONLINE TO CPC, BANGAL URU, HE, THEREFORE, HELD THAT IT WAS A CASE OF CONCEALMENT O F INCOME. THE A.O. FURTHER NOTICED THAT THERE WAS A DIFFERENC E OF RS.2,00,015/- BETWEEN THE AMOUNT SHOWN BY THE ASSES SEE AS RECEIVED FROM SHARE PROFITS, WHICH WAS FURTHER OFFE RED AS INCOME FROM OTHER SOURCES AND THE AMOUNT ACTUALLY RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE. ON BEING ASKED TO EXPLAIN, THE ASSESSEE ACCEPTED THAT THE AMOUNT SHOWN IN COMP UTATION WAS LESS AND AGREED TO ADDITION OF THE DIFFERENCE, AMOUNTING TO RS.2,00,015/-. THE A.O. ACCORDINGLY, MADE AN ADDITI ON OF THE AFORESAID AMOUNT TOTALING RS.4,35,591/- INTO THE IN COME OF THE ASSESSEE U/S 68 OF THE ACT. THE A.O. ACCORDINGLY, I NITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. IN TH E PENALTY PROCEEDINGS, THE A.O. HELD THAT IN VIEW OF THE ABOV E FACTS, THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME AM OUNTING TO ITA NO.1402/CHD/2018 A.Y.2014-15 4 RS.43,55,891/- AND LEVIED THE PENALTY @ 110% OF THE TAX SOUGHT TO BE EVADED OF RS.16,28,624/-. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.C IT(A) BUT REMAINED UNSUCCESSFUL. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSSESSEE HAS SUBMITTED A CHART SHOWING THE SEQUENCE OF EVENTS, W HICH IS REPRODUCED AS UNDER: RETURN OF INCOME FILED ON DECLARING INCOME AT RS.98,36,430/- 31.07.2014 NOTICE U/S 143(2) ISSUED ON SERVED ON 19.09.2015 18.09.2015 CASE TRANSFERRED TO OTHER CHARGE AND ANOTHER NOTICE U/S 143(2) WAS RECEIVED ON 22.09.2015 SUMMONS ISSUED BY DDIT, LUDHIANA ON 30.09.2015 RETURN WAS REVISED AND DECLARED INCOME AT RS. 1,39,92,3107- (INCLUDING RS. 41,55,880/- ON ACCOUNT OF PROFIT ON SALE OF SHARES) 08.10.201 5 NOTICE U/S 142(1) ISSUED ON 01.04.2015 REPLY TO NOTICE U/S 142(1) DATED 01.04.16 FILED ON 11.04.2016 NOTICE U/S 142(1) ISSUED ON 09.05.2016 REPLY TO NOTICE U/S 142(1) DATED 09.05.16 FILED ON 26.05.2016 ORDER U/S 143(3) PASSED ON 20.06.2016 AFTER ADDING A SUM OF RS. 2,00,020/- ON ACCOUNT PURCHASE PRICE OF SHARES) ASSESSED AT RS. 1,41,92,330/- ITA NO.1402/CHD/2018 A.Y.2014-15 5 5. THE ASSESSEE HAS ALSO PLACED A COPY OF THE ITR-V ALONGWITH COMPUTERIZED ACKNOWLEDGEMENT OF RECEIPT O F ITR-V FROM CPC, BANGALURU TO SHOW THAT THE ASSESSEE HAD E -FILED THE REVISED RETURN ON 8.10.2015. THE LD.COUNSEL FOR THE ASSSESSEE HAS FURTHER INVITED OUR ATTENTION TO THE PROVISIONS OF SECTION 139(5) OF THE ACT, AS APPLICABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATION, WHICH READ AS UNDER: 139(5) IF ANY PERSON, HAVING FURNISHED A RETURN UNDER SUB-SECTION (1), OR IN PURSUANCE OF A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142, DISCOV ERS ANY OMISSION OR ANY WRONG STATEMENT THEREIN, HE MAY FURNISH A REVISED RETURN AT ANY TIME BEFORE THE EXP IRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER. 6. THE LD.COUNSEL FOR THE ASSSESSEE, THEREFORE, HAS SUBMITTED THAT AS PER THE RELEVANT PROVISIONS OF SE CTION 139(5) OF THE ACT, AN ASSESSEE IS ENTITLED TO FILE A REVIS ED RETURN WITHIN THE STIPULATED PERIOD AS PRESCRIBED UNDER TH E AFORESAID PROVISIONS OF SECTION 139(5) OF THE ACT, IF HE DISC OVERS ANY OMISSION OR ANY WRONG STATEMENT IN THE RETURN ORIGI NALLY FILED U/S 139(1) OF THE ACT. THAT IN THIS CASE, THE ASSES SEE HAS FILED THE REVISED RETURN ON 8.10.2015, WHICH WAS WITHIN T HE LIMITATION PERIOD PRESCRIBED FOR FILING THE REVISED RETURN. HENCE, THE REVISED RETURN FILED BY THE ASSESSEE WAS A VALID RETURN AND THE A.O. WAS SUPPOSED TO MAKE THE ASSESS MENT ITA NO.1402/CHD/2018 A.Y.2014-15 6 TAKING THE REVISED RETURN AS THE BASE RETURN OF THE ASSESSEE. SINCE THERE WAS NO ADDITION MADE BY THE ASSESSEE IN RESPECT OF THE INCOME OF RS.41,55,876 SHOWN IN THE REVISED RET URN AS INCOME FROM OTHER SOURCES AND DUE TAX WAS PAID TH EREUPON, HENCE NO ADDITION WAS MADE BY THE A.O. ON THIS ACCO UNT. SO FAR AS THE DIFFERENCE OF RS.2,00,015/- WAS CONCERNE D, THE ASSESSEE HAD VOLUNTARILY OFFERED THE SAID DIFFERENC E FOR TAXATION. HENCE, IT WAS NOT A CASE OF CONCEALMENT O F INCOME TO WARRANT LEVY OF PENALTY U/S 271(1)(C) OF THE I.T. A CT. 7. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED THA T SINCE THE REVISED RETURN WAS FILED BY THE ASSESSEE AFTER THE ASSESSEE WAS SUMMONED BY THE INVESTIGATION WING AND EVEN AFT ER THE ISSUANCE OF EARLIER NOTICE U/S 143(2) OF THE ACT ON 18.9.2015, HENCE THE ASSESSEE DECLARED THE AFORESAID INCOME WH EN HE WAS SHOW CAUSED. THAT IT WAS CLEAR-CUT CASE OF CONCEALM ENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND HAV E ALSO MINUTELY PERUSED THE RELEVANT PROVISIONS OF THE ACT . IN THE CASE IN HAND, THOUGH THE ASSESSEE HAD FILED THE REV ISED RETURN AFTER AN ENQUIRY WAS INITIATED BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT ABOUT THE LONG TERM CAPITAL G AINS DECLARED BY THE ASSESSEE, YET, THE REVISED RETURN F ILED BY THE ITA NO.1402/CHD/2018 A.Y.2014-15 7 ASSESSEE WAS WITHIN THE STIPULATED PERIOD PRESCRIBE D UNDER THE ACT. AS PER THE PROVISIONS OF SECTION 139(5) OF THE ACT, THERE IS NO BAR TO FILE A REVISED INCOME EVEN DURING ASSESSM ENT PROCEEDINGS BUT BEFORE COMPLETION OF THE ASSESSMENT SUBJECT TO THE CONDITION THAT THE PERIOD PRESCRIBED FOR FIL ING THE SAME HAS NOT EXPIRED. UNDER THESE CIRCUMSTANCES, THE REV ISED RETURN FILED BY AN ASSESSEE WILL BE A VALID RETURN. THE A.O. UNDER SUCH CIRCUMSTANCES NEITHER CAN, NOR IS SUPPOS ED TO MAKE FURTHER ADDITION INTO THE INCOME OF THE ASSESS EE IN RESPECT OF INCOME WHICH HAS ALREADY BEEN DECLARED B Y THE ASSESSEE IN THE VALIDLY FILED REVISED RETURN. IF TH ERE IS NO ADDITION MADE TO THE INCOME OF THE ASSESSEE, THERE WILL NOT BE ANY TAX SOUGHT TO BE EVADED BY AN ASSESSEE. IF THER E IS NO TAX SOUGHT TO BE EVADED, NO PENALTY CAN BE COMPUTED OR LEVIED UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THE RELIANCE IN THIS RESPECT CAN BE PLACED ON THE DECIS ION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CIT VS. KULWANT SINGH (2019) 104 TAXMANN.COM 340 (CHANDIGA RH - TRIB.), WHEREIN THE FOLLOWING OBSERVATIONS HAVE BEE N MADE BY THE COORDINATE CHANDIGARH BENCH OF THE TRIBUNAL: 15. BEFORE PROCEEDINGS FURTHER, WE DEEM IT FIT T O FIRST DISCUSS THE RELEVANT PROVISIONS OF SECTION 271(1)( C) OF THE ACT AS THEY STOOD DURING THE RELEVANT PERIOD / ASSESSMENT YEAR UNDER CONSIDERATION. ITA NO.1402/CHD/2018 A.Y.2014-15 8 271. (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON . (C ) HAS CONCEALED THE PARTICULARS OF HI S INCOME OR FURNISHED INACCURATE PARTICULARS OF [SUCH INCOM E, OR] HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, .. [( III) IN THE CASES REFERRED TO IN CLAUSE (C) OR CLAUSE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHIC H SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REA SON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR FRINGE BENEFITS OR THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME OR FRINGE BENEFITS. EXPLANATION 1.WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A ) SUCH PERSON FAILS TO OFFER AN EXPLAN ATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICE R OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FALSE, OR (B ) SUCH PERSON OFFERS AN EXPLANATION WH ICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLA NATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FO R THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REP RESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED. [EXPLANATION 3.WHERE ANY PERSON FAILS, WITHOUT RE ASONABLE CAUSE, TO FURNISH WITHIN THE PERIOD SPECIFIED IN SU B-SECTION (1) OF SECTION 153 A RETURN OF HIS INCOME WHICH HE IS REQUIRED TO ITA NO.1402/CHD/2018 A.Y.2014-15 9 FURNISH UNDER SECTION 139 IN RESPECT OF ANY ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 1989, AND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BEEN ISSUED TO HIM UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142 OR SECTION 148 AND THE ASSESSING OFFICER OR THE COMMISSIONER (APP EALS) IS SATISFIED THAT IN RESPECT OF SUCH ASSESSMENT YEAR S UCH PERSON HAS TAXABLE INCOME, THEN, SUCH PERSON SHALL, FOR THE PU RPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO HAVE C ONCEALED THE PARTICULARS OF HIS INCOME IN RESPECT OF SUCH ASSESS MENT YEAR, NOTWITHSTANDING THAT SUCH PERSON FURNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY OF THE PERIOD AFORESAI D IN PURSUANCE OF A NOTICE UNDER SECTION 148 .] EXPLANATION 4.FOR THE PURPOSES OF CLAUSE (III) OF THIS SUB- SECTION, THE EXPRESSION 'THE AMOUNT OF TAX SOUGHT T O BE EVADED', [( A) IN ANY CASE WHERE THE AMOUNT OF INCOM E IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTICULARS HAVE BEEN FURNISHED HAS THE EFFECT OF REDUCING THE LOSS DECLARED IN THE RETURN OR CONVERT ING THAT LOSS INTO INCOME, MEANS THE TAX THAT WOULD HAV E BEEN CHARGEABLE ON THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTICULARS HAVE BEEN FURNISHED HAD SUCH INCOME BEE N THE TOTAL INCOME; (B ) IN ANY CASE TO WHICH EXPLANATION 3 A PPLIES, MEANS THE TAX ON THE TOTAL INCOME ASSESSED [AS REDUCED BY TH E AMOUNT OF ADVANCE TAX, TAX DEDUCTED AT SOURCE, TAX COLLECTED AT SOURCE AND SELF-ASSESSMENT TAX PAID BE FORE THE ISSUE OF NOTICE UNDER SECTION 148 ; (C ) IN ANY OTHER CASE, MEANS THE DIFFER ENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT W OULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTICULARS HAVE BEEN FURNISHED. 16. A PERUSAL OF THE ABOVE REFERRED TO SECTION 271(1)(C) OF THE ACT REVEALS THAT THERE ARE TWO PAR TS OF THIS SECTION. THE FIRST PART SPEAKS ABOUT THE CHARG E WHICH MAY INVITE PENALTY I.E. A PERSON HAS CONCEALE D ITA NO.1402/CHD/2018 A.Y.2014-15 10 PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, HE MAY BE DIRECTED TO PAY CE RTAIN SUM BY WAY OF PENALTY AS PENALTY. NOW, THE SECOND PART SPEAKS ABOUT THE QUANTUM OF AMOUNT PAYABLE. AS PER CLAUSE (III), THE ASSESSING OFFICER MAY DIRECT SUCH A PERSON AGAINST WHOM THE ABOVE CHARGE IS ESTABLISHED TO PAY IN ADDITION TO THE TAX, IF ANY, PAYABLE A SUM W HICH IS NOT LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO THE EVADED BY A REASON OF SUCH CONCEALMENT OF PARTICULARS OF INCOME OR FURNIS HING OF INACCURATE PARTICULARS OF INCOME. 17. NOW, EXPLANATION 1 STRONGLY RELIED UPON BY THE LD. DR SPEAKS ABOUT OF DEEMING FICTION REGARDING THE CONCEALMENT OF PARTICULARS OF INCOME WHICH SPEAKS T HAT IF A PERSON FAILS TO OFFER AN EXPLANATION OR WHIC H IS FOUND BY THE CONCERNED INCOME TAX AUTHORITIES TO BE FALSE OR SUCH PERSON COULD NOT SUBSTANTIATE IN RESP ECT OF ANY FACT MATERIAL TO THE COMPUTATION OF HIS TOTAL I NCOME, THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING TO TAL INCOME OF SUCH PERSON AS A RESULT THEREOF, SHALL B E DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. FURTHER, AS PER T HE EXPLANATION 3, WHERE A PERSON FAILS TO FURNISH WITH IN THE STIPULATED PERIOD HIS RETURN OF INCOME FOR ANY ASSESSMENT YEAR AND THEREAFTER, THE CONCERNED INCOM E TAX AUTHORITY, EITHER THE ASSESSING OFFICER OR THE CIT (A) FINDS THAT IN RESPECT OF SUCH ASSESSMENT YEAR, SUCH PERSON HAS TAXABLE INCOME, THEN SUCH PERSON SHALL B E DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME IN RESPECT OF SUCH ASSESSMENT YEAR, NOTWITHSTANDING THAT SUCH PERSON FURNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER EXPIRY OF THE PERIOD AFORESAID IN PURSUANCE O F A NOTICE U/S 148 OF THE ACT. VIDE EXPLANATION 4, THE TERM THE AMOUNT OF TAX SOUGHT TO BE EVADED HAS BEEN DEFINED / EXPLAINED FOR THE PURPOSE OF COMPUTATION OF LEVY OF PENALTY. 18. A PER CLAUSE (A) TO EXPLANATION 4, WHERE THE AMOUNT OF INCOME TAX IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED OR INACCURATE PARTICULARS OF INCOME HAVE BEEN FURNISHED, HAS THE EFFECT OF REDUC ING THE LOSS DECLARED IN THE RETURN OR CONVERTING THAT LOSS INTO TAXABLE INCOME, THEN THE TAX SOUGHT TO BE EVAD ED ITA NO.1402/CHD/2018 A.Y.2014-15 11 WILL THE AMOUNT WHICH WOULD HAVE BEEN CHARGEABLE ON THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEE N CONCEALED OR INACCURATE PARTICULARS OF INCOME HAVE BEEN FURNISHED HAD SUCH INCOME BEEN THE TOTAL INCO ME; MEANING THEREBY THERE SHOULD BE A RESULTANT EFFECT OF REDUCING THE LOSS DECLARED OR CONVERTING THAT LOSS INTO INCOME BY THE ACT OR OMISSION OF THE CONCERNED PER SON FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURA TE PARTICULARS OF INCOME. THEN AS PER THE CLAUSE (B) O F EXPLANATION 4, WHEREIN, IN A CASE TO WHICH EXPLANAT ION 3 APPLIES I.E. WHERE THE CONCERNED PERSON FAILS TO FILE WITHIN THE STIPULATED PERIOD A RETURN OF INCOME DES PITE HAVING TAXABLE INCOME, IN THAT CASE, THE TAX SOUGH T TO BE EVADED WILL BE THE TAX ON THE TOTAL INCOME ASSES SED BUT REDUCED BY THE AMOUNT OF ADVANCE TAX, TAX DEDUC TED AT SOURCE, TAX COLLECTED AT SOURCE AND SELF-ASSESSM ENT TAX PAID BEFORE THE ISSUE OF NOTICE U/S 148 OF THE ACT. AS PER THE ABOVE SAID PROVISION WHAT IS MATERIAL I S THE EVASION OF THE TAX AND IN THAT SCENARIO, IF A P ERSON DOES NOT FILE A RETURN AND, HENCE, DOES NOT DISCLOS E HIS PARTICULARS OF INCOME AND MEANING THEREBY CONCEALED HIS PARTICULARS OF INCOME BUT IF HE BEFORE THE ISSU ANCE OF NOTICE FOR THE REOPENING OF THE ASSESSMENT U/S 1 48 OF THE ACT, HAD DEPOSITED DUE TAXES AND THE RESULTANT ADDITION AFTER ASSESSMENT DOES NOT CREATE ANY LIABI LITY TO PAY ANY FURTHER TAX, THERE WILL BE NO TAX SOUGHT TO BE EVADED. 19. NOW COMING TO THE RELEVANT CLAUSE (C) TO EXPLANATION 4, WHICH IS RESIDUARY CLAUSE WHICH SPEA KS THAT IN ANY OTHER CASE, THE DIFFERENCE BETWEEN THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE, HAD SUCH TOTAL INCOME BEEN REDUCED BY T HE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS H AVE BEEN CONCEALED WHICH MEANS THAT THE TAX PAYABLE ON THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTICULARS OF INCOME FURNISHED. 20. A COLLECTIVE READING OF ALL THE THREE CLAUSES R EVEAL THAT FOR THE CALCULATION OF THE QUANTUM OF PENALTY, IT IS NOT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR FURNISHED OR INACCURATE PARTICULARS OF ITA NO.1402/CHD/2018 A.Y.2014-15 12 INCOME FURNISHED THAT IS RELEVANT BUT IT IS THE RES ULTANT ADDITION TO THE INCOME OF THE ASSESSEE ON ACCOUNT O F SUCH CONCEALED PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IF DESPITE THE DETECTION OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, IN THE RESULTANT EFFECT, THERE IS NO ADDITION INTO THE INCOME OF THE ASSESSE E OR THE ASSESSEE HAS ALREADY PAID TAXES ON SUCH INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTICULARS OF INCOME HAVE BEEN FURNISHE D, THEN, AS PER EXPLANATION 4, THERE WILL BE NO TAX SO UGHT TO BE EVADED AND THEREBY NO PENALTY WILL BE LEVIABL E U/S 271(1)(C) OF THE ACT. IN OUR VIEW, CLAUSE (C) TO EXPLANATION 4 IS A RESIDUARY CLAUSE AND CAN NOT BE SEGREGATED AND INDEPENDENTLY INTERPRETED IN DIVORCE TO CLAUSES (A) OR (B) OF EXPLANATION 4 TO GIVE GIVING IT AN ENTIRELY DIFFERENT MEANING AND ANY SUCH AN INTERPRETATION, WILL NOT BE A CORRECT INTERPRETATIO N OF THE STATUTORY PROVISION. A COLLECTIVE READING OF TH E ENTIRE PROVISIONS OF SECTION 271(1)(C) OF THE ACT R EVEAL BEYOND DOUBT THAT WHAT IS MATERIAL IS THE RESULTANT ADDITION TO THE TAXABLE INCOME OF AN ASSESSEE WHICH MAY INVITE PENALTY UNDER THE RELEVANT PROVISIONS OF SEC TION 271(1)(C) OF THE ACT. THOUGH THE WORDS USED IN THE FIRST PART, I.E. CHARGING PROVISION ARE PARTICULARS OF INCOME, HOWEVER, FOR LEVY OF PENALTY IT IS NOT THE PARTICULARS OF INCOME BUT RATHER THE QUANTUM OF INCOME ITSELF, THAT IS ADDED TO THE TAXABLE INCOME OF THE ASSESSEE IS RELEVANT FOR THE PURPOSE OF CALCULATION OF THE AMOUNT OF PENALTY LEVIABLE AS PER THE AFORESAID PROVISION. EXPLANATION 4 TO SECTION 271(1)(C) WAS INTRODUCED VIDE TAXATION LAW AMENDMENT ACT, 1975. THE RELEVANT PART OF CIRCULAR NO. 204 DATED 24.7.19 76 GIVING EXPLANATORY NOTE ON THE AFORESAID INSERTED PROVISIONS READS AS UNDER:- 61.11 NEW EXPLANATION 4 DEFINES THE AMOUNT OF TAX SOUGHT TO BE EVADED. ACCORDING TO THE DEFINITION, THIS EXPRESSION WILL ORDINARILY MEAN THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. IN A CASE, ITA NO.1402/CHD/2018 A.Y.2014-15 13 HOWEVER, WHERE ON SETTING OFF THE CONCEALED INCOME AGAINST ANY LOSS INCURRED BY THE ASSESSEE UNDER OTHER HEAD OF INCOME OR BROUGHT FORWARD FROM EARLIER YEARS, THE TOTAL INCOME IS REDUCED TO A FIGURE LOWER THAN THE CONCEALED INCOME OR EVEN TO A MINUS FIGURE, THE TAX SOUGHT TO BE EVADED WILL MEAN THE TAX CHARGEABLE ON THE CONCEALED INCOME AS IF IT WERE THE TOTAL INCOME. ANOTHER EXCEPTION TO THE GENERAL DEFINITION OF THE EXPRESSION TAX SOUGHT TO BE EVADED GIVEN EARLIER IS A CASE TO WHICH EXPLANATION 3 APPLIES. HERE, THE TAX SOUGHT TO BE EVADED WILL BE THE TAX CHARGEABLE ON THE ENTIRE TOTAL INCOME ASSESSED. 21. EVEN IN THE EXPLANATION 1, WHAT IS RELEVAN T IS ANY FACT MATERIAL TO COMPUTATION OF TOTAL INCOME OF ANY PERSON REGARDING WHICH SUCH PERSON FAILS TO OFFER A N EXPLANATION OR EXPLANATION WHICH IS FOUND TO BE FALSE BY THE INCOME-TAX AUTHORITIES OR AN EXPLANATION WHI CH IS NOT ABLE TO SUBSTANTIATE, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. S O, FIRSTLY WHAT IS RELEVANT IS THE MATERIAL FACT TO TH E COMPUTATION OF TOTAL INCOME. THE WORD COMPUTATION HERE IS RELEVANT WHICH MEANS THAT THE FACT MUST BE MATERIAL WHICH HAS THE EFFECT OF ANY ADDITION OR DISALLOWANCE IN THE INCOME TO BE COMPUTED AFTER THE ASSESSMENT PROCEEDINGS AND IT HAS ALSO BEEN PROVIDE D THAT THE AMOUNT ADDED OR DISALLOWED INTO THE SELF- ASSESSED INCOME REPRESENTS THE INCOME, PARTICULARS OF WHICH HAS BEEN CONCEALED AND FURTHER A COMBINED READING OF THE SUB SECTIONS (A), (B) (C) AND EXPLAN ATION 4 WOULD SHOW THAT TAX SOUGHT TO BE EVADED IS THE TA X PAYABLE ON SUCH AMOUNT IN RESPECT OF WHICH PARTICUL ARS HAVE BEEN CONCEALED. THE WORD EXPLANATION HERE IS NOT TO BE APPLIED BROADLY TO INCLUDE EXPLANATION REGARDING EACH AND EVERY FACT OR PARTICULARS OF INC OME SUCH AS THE SOURCE OF INCOME, MANNER OF EARING OF INCOME ETC., RATHER, THE WORD EXPLANATION HERE HA S A LIMITED SCOPE, WHEREBY, IT HAS RESTRICTED THAT THE OFFERING OF EXPLANATION THAT THE MATERIAL FACT WHIC H HAD BEEN DETECTED BY THE ASSESSING OFFICER HAS A RESUL T OF ITA NO.1402/CHD/2018 A.Y.2014-15 14 ADDITION OF DISALLOWANCE INTO THE INCOME OF THE ASS ESSEE AND THE ASSESSEE HAS NO EXPLANATION THAT WHY THE SA ME BE NOT TREATED AS TAXABLE INCOME OF THE ASSESSEE F OR THAT RELEVANT YEAR. THE WORDS PARTICULARS OF INCOM E THOUGH IN GENERAL WILL HAVE A WIDE AND BROADER ASPE CT AS TO OF THE RELEVANT PARTICULARS SUCH AS THE SOURC E OF INCOME, MANNER OF EARNING OF INCOME AND GENUINENESS OF TRANSACTION ETC., HOWEVER, THE SECOND PART OF THIS SECTION 271(1)(C) OF THE ACT HAS LIMITED THE ABOVE WIDER SCOPE AND FOR THE PURPOSE OF COMPUTATION OF PE NALTY, STRESS IS GIVEN ON THE RESULTANT ADDITION OF AN AMO UNT TO THE INCOME OF THE ASSESSEE. THE TAX THEREUPON REPRE SENTS THE TAX SOUGHT TO BE EVADED AND THE PENALTY CAN BE LEVIED UPON SUCH CONCEALED INCOME EQUAL TO A SUM WHICH MAY BE 100% OF 300% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED. 22. SO FAR AS THE ARGUMENTS OF THE LD. DR THAT S UCH AN INTERPRETATION WOULD DEFEAT THE PURPOSE OF PROVISIO NS OF SECTION 115BBE SUBSTITUTED BY TAXATION LAW (2 ND AMENDMENT) ACT, 2016 W.E.F. 1.4.2017 AND SECTION 271AAC OF THE ACT W.E.F. 1.4.2017. IN OUR VIEW, TH E ABOVE CONTENTION OF THE LD. DR IS NOT TENABLE. TH E RELEVANT SECTION 115 BBE AND SECTION 271AAC FOR THE SAKE OF CONVENIENCE ARE REPRODUCED AS UNDER;- 115BBE. (1) WHERE THE TOTAL INCOME OF AN ASSESSEE, (A) INCLUDES ANY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTIO N 69D AND REFLECTED IN THE RETURN OF INCOME FURNISHED UNDER SECTION 139; OR (B) DETERMINED BY THE ASSESSING OFFICER INCLUDES A NY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTION 69D, IF SUCH INCOME IS NOT COVERED UNDER CLAUSE (A), THE INCOME-TAX PAYABLE SHALL BE THE AGGREGATE OF (I) THE AMOUNT OF INCOME-TAX CALCULATED ON THE IN COME REFERRED TO IN CLAUSE (A) AND CLAUSE (B), AT THE RA TE OF SIXTY PER CENT; AND ITA NO.1402/CHD/2018 A.Y.2014-15 15 (II) THE AMOUNT OF INCOME-TAX WITH WHICH THE ASSES SEE WOULD HAVE BEEN CHARGEABLE HAD HIS TOTAL INCOME BEEN REDU CED BY THE AMOUNT OF INCOME REFERRED TO IN CLAUSE (I). (2) NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, NO DEDUCTION IN RESPECT OF ANY EXPENDITURE OR ALLOWANCE 16 [OR SET OFF OF ANY LOSS] SHALL BE ALLOWED TO THE ASSESSEE UNDER ANY PR OVISION OF THIS ACT IN COMPUTING HIS INCOME REFERRED TO IN CLAUSE ( A) 16A [AND CLAUSE (B)] OF SUB-SECTION (1). SECTION 271AAC 271AAC. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT OTHER THAN THE PROVI SIONS OF SECTION 271AAB, DIRECT THAT, IN A CASE WHERE THE INCOME DET ERMINED INCLUDES ANY INCOME REFERRED TO IN SECTION 68, SECT ION 69, SECTION 69A, SECTION 69B , SECTION 69C OR SECTION 69D FOR ANY PREVIOUS YEAR, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX PAYABLE UNDER SECTION 115BBE, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE TAX PAYABLE UNDER CLAUSE (I) OF SUB -SECTION (1) OF SECTION 115BBE: PROVIDED THAT NO PENALTY SHALL BE LEVIED IN RESPECT OF INCO ME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTION 69D TO THE EXTENT SUCH INCOME HAS BEEN INCLUDED BY THE ASSESSEE IN THE RETURN OF INCO ME FURNISHED UNDER SECTION 139 AND THE TAX IN ACCORDANCE WITH TH E PROVISIONS OF CLAUSE (I) OF SUB-SECTION (1) OF SECTION 115BBE HAS BEEN PAID ON OR BEFORE THE END OF THE RELEVANT PREVIOUS YEAR. (2) NO PENALTY UNDER THE PROVISIONS OF SECTION 270A SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE INCOME REFERRED TO IN SUB-SECTION (1). (3) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, A S FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. 23. PRIOR TO SUBSTITUTION OF SUB SECTION (1) OF SECTION 115BBE W.E.F. 14.2017, THE SECTION 115 BBE WAS INSE RTED BY FINANCE ACT 2012 W.E.F. 1.4.2013, WHICH READS AS UNDER:- ITA NO.1402/CHD/2018 A.Y.2014-15 16 (1) WHERE THE TOTAL INCOME OF AN ASSESSEE INCLUDES ANY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTION 69D, THE INCOME-TAX PAYABLE SHALL BE THE AGGREGATE OF (A) THE AMOUNT OF INCOME-TAX CALCULATED ON INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 6 9C OR SECTION 69D, AT THE RATE OF THIRTY PER CENT; AND (B) THE AMOUNT OF INCOME-TAX WITH WHICH THE ASSESS EE WOULD HAVE BEEN CHARGEABLE HAD HIS TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME REFERRED TO IN CLAUSE (A). 16. INSERTED BY FINANCE ACT, 2016 W.E.F, 1-4-2017 16A INSERTED BY FINANCE ACT, 2018 W.E.F. 1-4-2017 24. IT IS PERTINENT TO MENTION HERE THAT PRIOR TO 1.4.2013, THERE WAS NO SECTION 115BBE. SECTION 115 BBE WAS INSERTED VIDE FINANCE ACT 2012 TO TAX THE INCOME REFERRED TO IN SECTION 68, 69, 69A, 69 B, 6 9 C OR 69D AT A FLAT RATE OF 30%. PRIOR TO 1.4.2013, ANY UNEXPLAINED INCOME OF THE ASSESSEE EITHER OFFERED B Y HIMSELF OR DETECTED BY THE ASSESSING OFFICER ARE TO BE TAXED AS PER THE NORMAL RATE AS PRESCRIBED FROM TIM E TO; TIME. HOWEVER, DURING THE PERIOD OF DEMONETARIZATIO N IN THE YEAR 2017, IT WAS NOTICED THAT THE ASSESSEES HA D STARTED TAKING BENEFIT OF THE PROVISIONS OF SECTION S 68, 69, 69A AND STARTED DEPOSITING THEIR UNACCOUNTED FO R / UNDISCLOSED INCOME IN THE BANK ACCOUNT DECLARING TH E SAME AS THEIR INCOME OF THE ASSESSMENT YEAR UNDER CONSIDERATION IN THE RETURN OF INCOME AND PAYING TA XES @ 30% AS PROVIDED U/S 115BBC OF THE ACT, ACT OF T HE ASSESSEE WAS TAKEN AS CONTRIBUTORY FACTOR IN FAILUR E OF THE VOLUNTARY DISCLOSURE SCHEME. HENCE, TO CURB THI S PRACTICE, THE GOVERNMENT SUBSTITUTED SUB SECTION (1 ) OF SECTION 115 BBE TO PROVIDE THAT WHEREIN IN THE RET URN OF INCOME FURNISHED BY THE ASSESSEE, THE TOTAL INCO ME OF AN ASSESSEE INCLUDES AN INCOME REFERRED TO IN SECT IONS 68, 69, 69A, 69B AND 69 C OR SECTION 69D, OR OTHERW ISE ADDED OR DETERMINED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS UNDER THE ABOVE PROVISIONS, THEN THE TAX AT THE FLAT RATE OF 60% WILL BE PAYABL E ON SUCH AN INCOME DISCLOSED OR DETERMINED. FURTHER T O MARK A DIFFERENCE BETWEEN THE SELF-DECLARED INCOME IN ITA NO.1402/CHD/2018 A.Y.2014-15 17 THE AFORESAID PROVISIONS AND THE CASES WHERE THE ASSESSING OFFICER DETERMINED /DETECTED SUCH INCOME IN THE AFORESAID SECTIONS 68, 69, 69A, 69B AND 69 C OR SECTION 69D, THE PENALTY PROVISIONS OF SECTION 271 AAC COMES INTO OPERATION WHICH PROVIDES THAT IF SUCH AN INCOME IS SUO MOTO DECLARED BY THE ASSESSEE IN HIS RETURN, THEN NO PENALTY IS LEVIABLE AND IF IT IS OT HERWISE DETECTED BY THE ASSESSING OFFICER, IN ADDITION TO T HE TAX PAYABLE U/S 115BBC, SUCH AN ASSESSEE WILL BE LIABL E TO PAY PENALTY EQUAL TO A SUM COMPUTED @ 10% OF THE TA X PAYABLE ON SUCH UNEXPLAINED INCOME AS PER THE PROVISIONS OF SECTION 115BBE OF THE ACT. A CUMULATI VE READING OF SECTION 271(1)(C) READ WITH SECTION 115 BBE AND 271AAC, WOULD REVEAL THAT IT IS NOT BARRED UNDE R THE ACT FOR AN ASSESSEE TO DECLARE AN INCOME IN HI S RETURN AS AN UNEXPLAINED INCOME. IT MAY OTHERWISE B E DETECTED OR FOUND BY THE ASSESSING OFFICER ALSO DUR ING THE ASSESSMENT PROCEEDINGS. PRIOR TO 1.4.2013, THE TAX ON SUCH UNEXPLAINED INCOME EITHER DECLARED BY THE ASSESSEE OR DETECTED BY THE ASSESSING OFFICER WAS PAYABLE AT A NORMAL RATES APPLICABLE. HOWEVER, IF SUCH AN UNEXPLAINED INCOME WAS DECLARED BY THE ASSESSEE HIMSELF IN A RETURN FILED U/S 139(1) OF THE ACT, AN D THEN NO PENALTY WAS LEVIABLE. HOWEVER, IF SUCH AN UNEXPLAINED INCOME IS DETERMINED BY THE ASSESSING OFFICER ON ACCOUNT OF CONCEALMENT OF MATERIAL FACTS OR ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME RELATING TO THE COMPUTATION OF INCOME WHICH HAS THE RESULTANT EFFECT OF SOME ADDITION INTO THE TAXA BLE RETURNED INCOME THEN THE PENALTY IS LIABLE TO BE IM POSED AND COMPUTED TAKING INTO CONSIDERATION THE AMOUNT O F TAX SO PAYABLE BY THE ASSESSEE ON THE SUCH UNEXPLAI NED INCOME DETECTED OR ADDED BY THE INCOME TAX AUTHORIT IES. 25. IT IS PERTINENT TO MENTION HERE THAT EVEN THO UGH, THE GOVERNMENT NOTICED THAT THE AFORESAID PROVISION S OF SECTIONS 68, 69A, 69B, 69C AND 69D CAN BE MISUSED B Y THE ASSESSEES TO CIRCUMVENT THE VOLUNTARY DISCLOSU RE SCHEME AND TO GET THEIR INCOME INTO ROTATION / ACCOUNTED FOR BY PAYING 30% TAX AND DECLARING THE S AME UNDER THE AFORESAID SECTIONS IN THE RETURN OF INCO ME YET, THE GOVERNMENT STILL HAS NOT COME WITH THE PEN ALTY PROVISIONS IN RESPECT OF SUCH VOLUNTARILY DECLARED ITA NO.1402/CHD/2018 A.Y.2014-15 18 INCOME IN THE RETURN OF INCOME, RATHER HAS CHOSEN T O ENHANCE THE TAX RATE FORM 30% TO 60%. THE PENALTY U/S 271AAC OF THE ACT IS LEVIABLE ONLY IF SUCH AN INCO ME IS NOT DECLARED IN THE RETURN OF INCOME. IN VIEW OF O UR ABOVE DISCUSSION OF THE MATTER, SINCE IN THESE CASE S THE ASSESSE HAVE DECALED THE INCOME IN QUESTION IN THE RETURN OF INCOME ITSELF, THE TAX AT THE MAXIMUM RAT E SLAB DULY PAID THEREUPON, THE RETURNED INCOME ACCEPTED A S SUCH WITHOUT ANY ADDITION ON THIS ISSUE, HENCE, THE RE WAS AMOUNT OF TAX SOUGHT TO BE EVADED, HENCE, IT CA NNOT BE SAID TO BE A FIT CASE FOR LEVY OF PENALTY U/S 27 1(1)(C) OF THE ACT. 26. EVEN OTHERWISE, A PERUSAL OF CLAUSE (III) TO S ECTION 271(1) REVEALS THAT AS PER THE RELEVANT PROVISIONS, THE ASSESSING OFFICER MAY DIRECT A PERSON WHO AS PER CL AUSE (C) HAS CONCEALED THE PARTICULARS OF INCOME OR FURN ISHED INACCURATE PARTICULARS OF SUCH INCOME TO PAY BY WAY OF PENALTY, A SUM WHICH SHALL NOT BE LESS THAN BUT WHI CH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOU GHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULA RS OF HIS INCOME. SO AS PER THE ABOVE PROVISIONS FOR THE LEVY OF PENALTY THERE MUST BE SOME AMOUNT OF TAX SO UGHT TO BE EVADED WHICH SHOULD BE BY REASON OF THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME OF SUCH INCOME BY THE ASSESSEE. HENCE, IF THERE IS NO AMOUNT OF TAX SOUGH T TO BE EVADED BY REASON OF CONCEALMENT OF PARTICULARS O F INCOME OR INACCURATE PARTICULARS OF INCOME, THE PEN ALTY CANNOT BE COMPUTED OR TO SAY THAT THE PENALTY UNDER THE PROVISIONS WILL BE NIL. IT IS PERTINENT TO MENTIO N HERE THAT EXPLANATION1 TO SECTION 271(1)(C) OF THE ACT ALSO PROVIDES THAT IF A PERSON FAILS TO OFFER AN EXPLANA TION OR EXPLANATION OFFERED IS FOUND TO BE FALSE BY THE INC OME- TAX AUTHORITY OR HE FAILS TO SUBSTANTIATE SUCH EXPLANATION, AND THAT FAILS TO PROVE THE SUCH EXPLA NATION IS BONAFIDE, THEN THE AMOUNT ADDED OR DISALLOWED I N COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESU LT THEREOF, SHALL FOR THE PURPOSE OF CLAUSE (C) BE DE EMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICU LARS HAVE BEEN CONCEALED. IT BECOMES CLEAR FROM THE READ ING OF EXPLANATION -1 THAT THERE MUST BE SOME ADDITION OR DISALLOWANCE IN COMPUTING THE TOTAL INCOME OF SUCH ITA NO.1402/CHD/2018 A.Y.2014-15 19 PERSON IN RESPECT TO WHICH IT IS DEEMED THAT HE HAS EVADED THE PAYMENT OF TAX FOR COMPUTING THE PENALTY SO LEVIABLE. . HOWEVER, IF THERE IS NO ADDITION TO TH E INCOME OF THE ASSESSEE EITHER BY WAY OF THE POSITIV E ADDITION OR BY WAY OF REDUCING THE LOSSES ETC., THE N THERE MAY BE NO AMOUNT OF TAX WHICH THE ASSESSEE WH ICH CAN BE SAID TO BE SOUGHT TO BE EVADED BY THE ASSESS EE, THEN UNDER THE CIRCUMSTANCES, THERE WILL NOT BE ANY PENALTY LEVIABLE OR PAYABLE BY THE ASSESSEE AS PER THE PROVISIONS OF THE ACT AND IN THE CIRCUMSTANCES, NO PENALTY WILL BE LEVIABLE U/S 271(1)(C) OF THE ACT. 9. THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT A RE PENAL IN NATURE AND THEY ARE REQUIRED TO BE STRICTLY CONSTRU ED. THESE CANNOT BE EXTENDED BY WAY OF LIBERAL INTERPRETATION TO INCLUDE THE CASES, WHICH OTHERWISE, DO NOT FALL WITHIN THE PURVIEW AND SCOPE OF THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. IN VIEW OF THIS, SINCE THE INCOME OF RS.41,55,876/- HAS ALR EADY BEEN DECLARED IN THE REVISED RETURN, WHICH WAS VALID AND FILED WITHIN THE LIMITATION PERIOD PRESCRIBED FOR FILING THE SAME, HENCE, IN VIEW OF OUR DISCUSSION MADE ABOVE, THE PE NALTY IN RESPECT OF THE AFORESAID INCOME DECLARED IS NOT LEV IABLE AND THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. 10. SO FAR AS THE DIFFERENCE OF AN AMOUNT OF RS.2,0 0,015/- BETWEEN THE INCOME SHOWN IN THE REVISED RETURN AND THE AMOUNT ACTUALLY RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE IS CONCERNED, THE LD.COUNSEL FOR THE ASSSESSEE COU LD NOT ADDRESS CONVINCING ARGUMENTS IN THIS RESPECT. THE S AID DIFFERENCE BETWEEN THE AMOUNT OFFERED FOR TAXATION AND THE ITA NO.1402/CHD/2018 A.Y.2014-15 20 AMOUNT ACTUALLY RECEIVED BY THE ASSESSEE WAS FOUND BY THE A.O. DURING THE ASSESSMENT PROCEEDINGS. HENCE, THER E WAS CONCEALMENT OF INCOME IN RESPECT OF THE AFORESAID A MOUNT. HENCE THE PENALTY IN RESPECT OF THE INCOME DETECTED DURING SCRUTINY ASSESSMENT PROCEEDINGS AMOUNTING TO RS.2,0 0,015/- IS CONFIRMED @ 100% OF THE TAX AMOUNT SOUGHT TO BE EVADED ON THE SAID INCOME. IN VIEW OF OUR FINDINGS GIVEN ABOV E, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED . 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.07.2019. SD/- SD/- ' # $ %! (ANNAPURNA GUPTA) (SANJAY GARG) &' / ACCOUNTANT MEMBER / JUDICIAL MEMBER )' /DATED: 01/JULY, 2019 * ! * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, / ASSISTANT REGISTRAR