Sh. Balkar Singh, Jalandhar V. The Assistant Commissioner of Income Tax, Jalandhar

ITA 186/ASR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8694 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift; Opportunity of being heard
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, (CIRCUIT BENCH AT JALANDHAR) BEFORE : SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI T.S. KAPOOR,ACCOUNTANT MEMBER ITA NO.412 & 414(ASR.)/2016 ASSESSMENT YEARS: 1994-95 & 2011-12 SHRI K.D. BALI, C/O M/S. MAHILPUR OIL STORE, MAHILPUR, TEHSIL GARHSHANKAR, HOSHIARPUR. PAN- ABUPB 1368D (APPELLANT) VS.. INCOME-TAX OFFICER, WARD-2, HOSHIARPUR (RESPONDENT) ITA NO.186(ASR.)/2016 ASSESSMENT YEARS: 2009010 SHRI BALKAR SINGH, PROP. M/S. JEEVAN PETROLIUM, SUCHI PIND BYE PASS, JALANDHAR. PAN- AVCPS 8790C (APPELLANT) VS.. A.C.I.T., CIRCLE 2(1), JALANDHAR. (RESPONDENT) ASSESSEES BY SH. SURINDER MAHAJAN, C.A. REVENUE BY SMT. BALVINDER KAUR, D.R. ORDER PER A.D. JAIN, J.M.: A COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS AND, TH EREFORE, THESE APPEALS ARE BEING DECIDED TOGETHER. FOR CONVENIENCE, F ACTS ARE TAKEN FROM ITA NO. 412/ASR./2016. DATE OF HEARING 24.01.2017 DATE OF PRONOUNCEMENT 28.02.2017 ITA NOS. 412, 414 & 186/ASR./2016 2 ITA NO. 412/ASR./2016: 2. THIS IS THE ASSESSEES APPEAL FOR A.Y. 1994-95 AGAINS T THE CONFIRMATION OF CONCEALMENT PENALTY. THE ASSESSMENT U/S. 143(3) OF THE IT ACT WAS COMPLETED VIDE ORDER DATED 25.03.2014 AT A TOTAL INCOME OF RS.52,91,828/- + RS.25,000/- AGRICULTURAL INCOME, AGAINST THE INCOME DEC LARED AT RS.1,04,829/- + RS.25,000/- AGRICULTURAL INCOME. THE ORIGINAL ASSESSMENT HAD BEEN COMPLETED VIDE ORDER DATED 31.12.1999 IN WH ICH, APART FROM OTHER ADDITIONS, THE ADDITION OF RS.4,12,502/- HAD BEEN MADE ON ACCOUNT OF UNEXPLAINED GIFTS. THE LEARNED CIT(A) CONFIRMED THE AD DITIONS. VIDE ORDER DATED 24.01.2012, THE ITAT DIRECTED THE AO TO EXAMINE THE DONORS AND TO RE-DECIDE THE MATTER. THE ASSESSMENT IN THE SECOND RO UND WAS FRAMED BY MAKING ADDITION OF RS.1,73,000/- BEING THE GIFT RECEI VED BY THE ASSESSEE FROM SHRI KEWAL SINGH BAINS. CONCEALMENT PENALTY OF RS. 77,504/- WAS IMPOSED QUA THIS ADDITION. WHILE INITIATING THE PENALTY PROCEEDINGS, THE AO OBSERVED AS FOLLOWS : SINCE THE ASSESSEE HAS FURNISHED INACCURATE PARTI CULARS OF INCOME IN THE RETURN FILED, PENALTY PROCEEDINGS U/S. 271(1)(C ) ARE BEING INITIATED SEPARATELY ON ACCOUNT OF FURNISHING INACCURATE PART ICULARS OF INCOME IN RESPECT OF THE ALLEGED GIFT AMOUNTING TO RS.1,73,00 0/-. 3. AT THE BOTTOM OF THE ASSESSMENT ORDER, THE AO OBS ERVED THUS PENALTY PROCEEDINGS U/S. 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME ARE BEING INITIATED SEPARATEL Y. ITA NOS. 412, 414 & 186/ASR./2016 3 4. THE PENALTY WAS IMPOSED, OBSERVING AS UNDER : ACCORDINGLY, IN VIEW OF THE FACTS BROUGHT ON RECOR D THAT THE ASSESSEE HAS WILLFULLY CONCEALED AND FURNISHED INACCURATE PA RTICULARS OF HIS INCOME TO THE TUNE OF RS.1,73,000/- AND CONSENT GIV EN BY THE ASSESSEE FOR LEVY OF MINIMUM PENALTY. 5. ON BEHALF OF THE ASSESSEE, IT HAS BEEN CONTENDED T HAT THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE IT ACT CAN BE INIT IATED IF THE ASSESSING OFFICER IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT, THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME, OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME; THAT ONCE THAT PRI MA FACIE SATISFACTION HAS BEEN ARRIVED AT, THE AO DERIVES JURISDI CTION U/S. 271 TO COMMENCE THE PENALTY PROCEEDINGS, BUT UNDER SECTION 274, THE ORDER IMPOSING PENALTY CAN ONLY BE PASSED AFTER THE ASSESSEE H AS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD; THAT AS A PART OF T HAT REASONABLE OPPORTUNITY OF BEING HEARD, THE ASSESSEE MUST BE TOLD AS TO WHAT IS THE PARTICULAR SATISFACTION THE AO HAS ARRIVED AT, NAMELY, WHE THER THE SATISFACTION IS THAT THE ASSESSEE HAS CONCEALED THE PARTIC ULARS OF HIS INCOME, OR WHETHER IT IS THAT HE HAS FURNISHED INACCURATE PARTIC ULARS OF SUCH INCOME; THAT IN CASE THERE IS ANY NON-COMPLIANCE OF THESE CONDI TIONS, PENALTY IMPOSED U/S. 271(1)(C) OF THE ACT WILL BE BAD IN LAW . RELIANCE HAS BEEN PLACED ON THE FOLLOWING CASE LAWS : (I) CIT VS. MANJUNATHA COTTON & GINNING FACTORY (2013) 92 D TR 111(KAR.) (II) CIT VS. LAKHDHIR LAL JI, 85 ITR 77 (GUJ) ITA NOS. 412, 414 & 186/ASR./2016 4 (III) PADMA RAM BHARALI VS CIT (IV) TRISTAR INTECH P. LTD. VS. ACIT, 174 TTJ 284 (DEL.) (V) ROSHAN LAL TILAK RAJ & CO. VS. ITO, ITA NO. 28(ASR)/20 14. (VI) JAYESGH R. KUMANI VS. ITO, ITA NO.453(ASR)/2007 (VII) MEHANGA RAM SHARMA VS. ITO, ITAT AMRITSAR, ITA NO. 26 DTR(ASR)(TRIB)386 (VIII) CIT VS. MANU ENGINEERING WORKS, 122 ITR 306 (GUJ.) (IX) NEW SORATHIA ENGINEERING CO. VS. CIT, 282 ITR 642 (GU J) 6. ON THE OTHER HAND, THE LEARNED DR HAS PLACED STRON G RELIANCE ON THE IMPUGNED ORDER. 7. IT IS SEEN THAT WHEREAS THE INITIATION OF PENALTY IN THIS CASE WAS FOR ALLEGED FURNISHING OF INACCURATE PARTICULARS OF INCOME, THE IMPOSITION OF THE PENALTY CAME ABOUT FOR CONCEALMENT OF PARTICULARS OF INCO ME AND FOR FURNISHING INACCURATE PARTICULARS THEREOF. 8. IN THE CASE LAWS CITED BY THE ASSESSEE, IT HAS BEEN HELD THAT THE PENALTY U/S. 271(1)(C) OF THE IT ACT CAN ONLY BE LEVI ED IF THE SATISFACTION OF THE ASSESSING OFFICER IS SPECIFIC, I.E., AS TO WHET HER THE AO IS SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME , OR IF THE SATISFACTION OF THE AO IS THAT THE ASSESSEE HAS FURNISHE D INACCURATE PARTICULARS OF HIS INCOME. IT CANNOT BE BOTH WAYS. IN MANJUNATHA COTTON AND GINNING FACTORY (SUPRA), THE HONBLE KARNATAKA HIGH C OURT HAS HELD THAT THE AO IS EMPOWERED UNDER THE ACT TO INITIATE PE NALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS THAT THERE IS ANY CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTI CULARS OF TOTAL INCOME; THAT CONCEALMENT AND FURNISHING INACCURATE PARTI CULARS OF INCOME ITA NOS. 412, 414 & 186/ASR./2016 5 ARE DIFFERENT; THAT THUS, THE AO, WHILE ISSUING NOTIC E, HAS TO COME TO THE CONCLUSION THAT WHETHER IT IS A CASE OF CONCEALMENT OF INCOME OR ONE OF FURNISHING OF INACCURATE PARTICULARS; THAT THE HONBLE S UPREME COURT, IN THE CASE OF ASHOK PIE, 292 ITR 11 (SC), HAS HELD THAT C ONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIF FERENT CONNOTATIONS; THAT THE HONBLE GUJRAT HIGH COURT IN TH E CASE OF MANU ENGINEERING WORKS (SUPRA) AND THE HONBLE DELHI HIGH COURT IN THE CASE OF VIRGO MARKETING PVT. LTD., 171 TAXMAN 156, HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND IF THE POSITION IS UNCLEAR, PENALTY IS NOT SUSTAINABLE; THAT THEREFORE, WH EN THE AO PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT, THEN NOTICE HAS TO BE PROPERLY MARKED; AND THAT SIMILAR IS THE CASE FOR FURNISHING INAC CURATE PARTICULARS OF INCOME AND STANDARD PROFORMA WITHOUT STRIKING OFF THE R ELEVANT CLAUSE WILL LEAD TO AN INFERENCE AS TO NON-APPLICATION OF MIND. 9. THIS BENCH, IN ROSHAN LAL TILAK RAJ & CO. VS. ITO , 46 CCH 130 (ASR.) (TRIB), HAS FOLLOWED MANJUNATHA COTTON AND GINNING FACTO RY (SUPRA), UNDER SIMILAR CIRCUMSTANCES. 10. TO REITERATE, THE OTHER DECISIONS RELIED ON BY T HE ASSESSEE ARE TO THE SAME EFFECT. THEREFORE, THE PENALTY IMPOSED IN THE PR ESENT CASE IS CANCELLED. ITA NOS. 412, 414 & 186/ASR./2016 6 11. AS NOTED AT THE BEGINNING OF THIS ORDER, THE ISS UE IN ALL THESE THREE CASES IS COMMON. WHEREAS THE PENALTY IN ALL THESE CASES WAS INITIATED FOR ONE LIMB OF THE SECTION, IT HAS BEEN IMPOSED FOR BOT H THE LIMBS. HENCE, OUR ABOVE OBSERVATIONS SHALL, MUTATIS MUTANDIS, APPLY TO THE OTHER TWO APPEALS ALSO AND THE PENALTIES LEVIED IN THESE TWO CASES ARE CANC ELLED TOO. 12. IN THE RESULT, ALL THE THREE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2017 SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28.02.2017 *AKS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR, ITAT ASSISTANT REGISTRAR