Devendra Babulal Patel, Surat V. The Dy. Commissioner of Income Tax, Circle-2(3), Surat

ITA 1785/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2101 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 04-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J K CHANDANI
• Assessee Lawyers: ISHAN ASLOT
• Section: 271(1)(c); 250

Judgement Text

PAGE 1 OF 7 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T.A NO.1785/AHD/2016 / ASSESSMENT YEAR : 2012-13 SHRI DEVENDRABHAI BABUBHAI PATEL, PROPRIETOR SHREEJI TRADERS NEAR. RAJ COMPANY MANDHI MANDVI ROAD TALUKA- MANDVI SURAT PAN:ABJPP2260P VS. DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE -2 SURAT APPELLANT /RESPONDENT /ASSESSEE BY SHRI ISHAN ASLOT, CA /REVENUE BY SHRI J. K. CHANDANI, JCIT , SR. D.R. / DATE OF HEARING: 25.04.2018 /PRONOUNCEMENT DATE 26.04.2018 /O R D E R PER O. P. MEENA, ACCOUTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-1, SURAT (IN SHORT THE CIT(A)) DATED 28.04.2016 WHICH IN TURN HAS ARISEN FROM THE PENALTY ORDER UNDER SECTION 271(1)(C) OF INCOME TAX ACT,1961 ( IN SHORT OF THE ACT) PASSED BY THE ASSESSING OFFICER (IN SHORT THE AO). PAGE 2 OF 7 2. GROUND NO. 1 TO 4 RELATES TO CONFIRMATION OF THE PENALTY UNDER SECTION 271(1) (C) OF THE ACT AMOUNTING TO RS.92,700. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 28.09.2012 DECLARING TOTAL INCOME OF RS. 11,56,630 WHICH WAS ASSESSED UNDER SECTION 143 (3) BY MAKING ADDITION OF RS. 3 LAKHS ON ACCOUNT OF UNSECURED LOAN RECEIVED FROM SHRI DINESH KUMAR PATEL. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED FOR FILING INACCURATE PARTICULARS OF INCOME. IT WAS NOTICED THE CHEQUE OF RS. 1.50 LAKH WAS RECEIVED FROM SHRI DINESH PATEL AND RS. 1.50 LAKH ON 20.07.2011. HOWEVER, BEFORE ISSUE OF CHEQUES ON RELEVANT DATES THERE IS CASH DEPOSIT OF EQUAL AMOUNT IN THE BANK ACCOUNT OF SHRI DINESH BHAI PATEL. THEREFORE, THE AO TREATED THIS AS UNEXPLAINED. FURTHER, THE ASSESSEE HAS ALSO AGREED FOR ADDITION AND NO APPEAL AGAINST SAME IS FILED. IN REPLY TO SHOW-CAUSE NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(C), IT WAS EXPLAINED BY THE ASSESSEE THAT THE SOURCE OF CASH DEPOSIT WAS OUT OF AGRICULTURAL INCOME OF THE FATHER AND FILED PROOF OF AGRICULTURAL LAND OF THE FAMILY. THE AO NOTICED THAT AS ON 15.04.2011, SHRI PATEL HAD OPENING BALANCE OF RS. 1,000 ONLY. AFTER THAT HE DEPOSITED CASH OF RS. 1,50,000 ON 15.04.2011 AND THE SAME PAGE 3 OF 7 DAY CHEQUE WAS ISSUED TO THE ASSESSEE. SIMILARLY CASH OF RS. 1,50,000 WAS DEPOSITED ON 20.07.2011 AND ON NEXT DAY ANOTHER CHEQUE OF RS. 1,50,000 WAS ISSUED TO THE ASSESSEE. THUS, THE SOURCE OF CASH WAS NOT EXPLAINED. THE ASSESSEE HAS ALSO FAILED TO PROVE CREDITWORTHINESS OF SHRI DINESH PATEL AND WAS HIMSELF AGREED FOR ADDITION OF RS. 3 LAKH MEANS THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME ATTRACTING PENALTY UNDER SECTION 271(1)(C) OF THE ACT. AFTER APPLYING THE RATIO OF JUDGEMENT OF HON`BLE SUPREME COURT DECISION IN THE CASE OF M/S. DHARMENDRA TEXTILE PROCESSORS AND OTHERS 166 TAXMAN 65(SC) WHEREIN HONBLE SUPREME COURT HAS SAID THAT LIABILITY IMPOSED UNDER SECTION 271(1) (C) IS PURELY A CIVIL LIABILITY AND THERE IS NO REQUIREMENT TO ESTABLISH MEN-S-REA BEFORE LEVYING PENALTY, A ND OTHERS AS DISCUSSED IN PENALTY ORDER. THE AO LEVIED A PENALTY OF RS. 92,700 FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). THE CIT (A) OBSERVED THAT THE ASSESSEE HAS FAILED TO PROVE CREDITWORTHINESS OF LENDER SHRI DINESH K PATEL, THEREFORE, HE WAS GUILTY OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE HON`BLE PAGE 4 OF 7 SUPREME COURT IN THE CASE OF CIT V. MUSSADILAL RAM BHAROSE [ 1987] 165 ITR 14(SC) / 30 TAXMAN 546 (SC) HAS HELD THE BURDEN PLACED UPON THE ASSESSEE IS NOT DISCHARGED BY ANY FANTASTIC EXPLANATION. IT MUST BE EXPLANATION ACCEPTABLE BY FACT FINDING AUTHORITY. IT WAS HELD IN THE CASE OF CIT V. GUBACHANLAL 250 ITR 157(DEL) THAT THE EXPLANATION OF THE ASSESSEE FOR THE PURPOSE OF AVOIDANCE OF PENALTY MUST BE AN ACCEPTABLE EXPLANATION. IN THE PRESENT CASE, NEITHER THE EXPLANATION WAS COGENT NOR SUPPORTED BY ANY MATERIAL /EVIDENCE. HENCE, CONSIDERING THE FACT, THE PENALTY WAS CONFIRMED. 5. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SHRI DINESH K PATEL IS MEMBER OF AGRICULTURAL FAMILY AND HAVE SUFFICIENT AGRICULTURAL INCOME OF KHUSHBHAI PATEL BEING FATHER OF DINESH K PATEL. THE ASSESSEE HAS SUBMITTED ALL NECESSARY DOCUMENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN FORM OF BANK STATEMENT, COPY OF RETURN OF INCOME OF DINESH PATEL, PAN,ITR, HENCE, ONUS AND LIABILITY OF CREDITOR WAS DISCHARGED BY THE ASSESSEE. HOWEVER, THE EXPLANATION WAS NOT FOUND ACCEPTABLE AND THE ASSESSEE HAS AGREED FOR ADDITION TO BUY MENTAL PEACE. THEREFORE, NO PENALTY IS LEVIABLE . THE LEARNED PAGE 5 OF 7 COUNSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON NUMBER OF CASE LAWS INCLUDING CIT V. P. K. NOORJAHAN [1999] 237 ITR 570 (SC)/ 103 TAXMAN 382/ 155 CTR 509 (SC) WHERE THE FACTS OF THE CASE WERE THAT A MUSLIM LADY PURCHASED THE LAND FOR RS. 25,901/- AND EXPLAINED THAT SAME WERE OUT OF HER SAVINGS FROM INCOME FROM PROPERTIES LEFT BY HER FIRST HUSBAND. THE ADDITION WAS MADE AS UNDISCLOSED INCOME. IT WAS HELD THAT IT WAS NOT POSSIBLE FOR THE ASSESSEE TO EARN THE AMOUNT INVESTED IN THE PROPERTIES AND HENCE, THE EXPLANATION OF THE ASSESSEE HAS TO BE ACCEPTED. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT PENALTY WAS INITIATED FOR CONCEALMENT OF INCOME BUT LEVIED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME HENCE, NOT TENABLE IN LAW IN VIEW OF DECISION IN THE CASE OF CIT V. SSA`S EMERALD MEADOWS [ 2016] 242 TAXMAN 180 : [2016] 73 TAXMANN.COM 248 (SC) [2016] 8 TMI 1145(SC) AND CIT V. MANU ENGG. WORKS [1980] 122 ITR 306 (GUJ). 6. PER CONTRA, THE LD. SR. D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE ASSESSMENT ORDER AND PENALTY ORDER REVEALS THAT THE AO HAS REJECTED THE PAGE 6 OF 7 CONTENTIONS OF THE ASSESSEE ON THE BASIS THAT THE CREDITWORTHINESS OF SHRI DINESH K PATEL WAS NOT FOUND TO BE GENUINE. THE SOURCE OF AGRICULTURAL INCOME WAS CLAIMED TO BE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE AS HE HAS NOT SHOWN ANY AGRICULTURAL INCOME IN HIS RETURN OF INCOME. IT IS ALSO SEEN THAT HE WAS HAVING MEAGRE BALANCE OF RS. 1500 AS ON 15.04.2011 AND THEREAFTER, CASH OF RS. 1,50,000 DEPOSITED IN HIS BANK ACCOUNT. SHRI DINESH HAS ISSUED CHEQUE OF SAME AMOUNT IN FAVOUR OF THE ASSESSEE. SIMILAR CHEQUE OF RS. 1.50 LAKH WAS ISSUED IN FAVOUR OF THE ASSESSEE AFTER RECEIVING DEPOSITS IN CASH IN HIS BANK ACCOUNT. THIS MAKES CLEAR THAT THERE IS CONCEALMENT OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME ALSO. FURTHERMORE, THE ASSESSEE HAS AGREED FOR THE ADDITION AND NOT FILED ANY APPEAL AGAINST THE SAID ADDITION U/S.68 OF THE ACT. THEREFORE, IN SUCH CIRCUMSTANCES IT IS CLEAR CASE OF TAX AVOIDANCE AND FURNISHED INACCURATE PARTICULARS OF INCOME OF INCOME. THE ARGUMENT THAT NOTICE ISSUED FOR CONCEALMENT OF INCOME AND LEVIED TO FURNISHED INACCURATE PARTICULARS OF INCOME IS DEVOID OF MERITS AS NO SUCH GROUNDS OF APPEAL IS TAKEN BY THE ASSESSEE. IN ABSENCE OF SUCH SPECIFIC GROUND WE CANNOT ADJUDICATE UPON SUCH GROUND. FURTHER, IN THIS CASE THERE IS PAGE 7 OF 7 CONCEALMENT OF INCOME AS WELL AS FURNISHED INACCURATE PARTICULARS OF INCOME, HENCE ALSO ON MERIT AND THIS CONTENTION IS NOT TENABLE. THEREFORE, THE AO AND CIT (A) WERE JUSTIFIED IN IMPOSING PENALTY OF RS. 92,700. IN THE LIGHT OF ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT (A). ACCORDINGLY THE GROUNDS OF APPEAL OF THE ASSESSEE ON ALL 4 GROUNDS ARE THEREFORE, DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. 9. THE ORDER PRONOUNCED IN THE OPEN COURT ON 26.04.2018 SD/- SD/- ( . . ) /(C.M. GARG) ( . . ) /(O.P.MEENA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER / SURAT: / DATED : 26 APRIL, 2018/OPM COPY SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT