Sh. Rajeev Agrawal, Mathura V. A.C.I.T.-3, Mathura

ITA 187/AGR/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7679 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-07-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 23-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: M M AGARWAL
• Keywords: Gross profit estimation; Business income; Opportunity of being heard; Question of law
• Section: 260A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 187/AGRA/2011 ASSTT. YEAR : 2005-06 RAJEEV AGARWAL, VS. A.C.I.T. 3, 9A/3, KRISHNA NAGAR, MATHURA. MATHURA. (PAN : ABDPA 0179 N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.M. AGARWAL, C.A. RESPONDENT BY : SHRI A.K. SHARMA, JR. D.R. DATE OF HEARING : 19.07.2012 DATE OF PRONOUNCEMENT OF ORDER : 27.07.2012 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-I, AGRA DATED 24.01.2011 FOR THE ASSESSMENT YEAR 2005- 06, CHALLENGING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME AT RS.5,02,190/-. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSEE APPEARED BEFORE THE AO IN RESPONSE TO STATUTORY NOTICES AND FILED SOME DETAILS AND DOCUMENTS AND PART OF THE BOOKS WERE PRODUCED, WHICH WERE TEST CHECKED BY THE AO. THE ASSESSEE IS A ITA NO. 187/AGRA/2011 2 CIVIL CONTRACTOR AND HAS SHOWN GROSS RECEIPTS AT RS .1,60,23,545/- AND NET PROFIT WAS DECLARED AT RS.5,02,186/-. DURING THE ASSESSMENT PR OCEEDINGS, THE BOOKS OF ACCOUNT AND COMPLETE SUPPORTING DOCUMENTS WERE NOT PRODUCED . THE ASSESSEE VIDE LETTER DATED 19.12.2007 SURRENDERED RS.4,00,000/- IN ADDIT ION TO THE INCOME DECLARED IN THE RETURN WHICH WAS FURTHER REVISED TO RS.4,50,000 /- AND ULTIMATELY, RS.5,00,000/- WAS SURRENDERED BEFORE THE AO AS ADDITIONAL INCOME WITH THE REQUEST THAT LIBERAL AND LENIENT ACTION MAY BE TAKEN WHILE CONSIDERING T HE PENAL PROVISIONS. THE AO, THEREFORE, NOTED THAT THE SURRENDER OF INCOME OF RS .5,00,000/- IS CONSIDERED APPROPRIATE TO COVER THE POSSIBLE LEAKAGE OF REVENU E IN RESPECT OF TRADING AND PROFIT & LOSS ACCOUNT. ADDITION OF RS.5,00,000/- WAS, ACCO RDINGLY MADE. 2.1 THE AO FURTHER NOTED THAT A SUM OF RS.75,912/- HAS BEEN SHOWN AS UNSECURED LOAN OUTSTANDING IN THE NAME OF SHRIRAM I NVESTMENTS FOR WHICH NO EXPLANATION WITH DETAILS AND EVIDENCES HAVE BEEN FU RNISHED TO PROVE THE GENUINENESS OF SUCH CREDIT BALANCES. IN THE ABSENCE OF ANY EVIDENCE, SUCH CASH CREDITS WERE TREATED AS BOGUS LIABILITY AND ADDITIO N OF RS.75,912/- WAS ALSO MADE TO THE INCOME OF THE ASSESSEE. THE TOTAL INCOME WAS CO MPUTED AT RS.10,78,100/- AND THE AO INITIATED THE PENALTY PROCEEDINGS U/S. 271(1 )(C) OF THE IT ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. ITA NO. 187/AGRA/2011 3 2.2. THE AO VIDE SEPARATE PENALTY ORDER DATED 13.06 .2008 LEVIED PENALTY U/S. 271(1)(C) OF THE ACT. IN THE PENALTY ORDER, THE AO NOTED THAT THE ASSESSEE DID NOT FURNISH ANY REPLY TO THE SHOW CAUSE NOTICE ISSUED F OR LEVY OF PENALTY. EXPLANATION- 1 TO SECTION 271(1)(C) IS CLEARLY APPLICABLE IN THE CASE OF THE ASSESSEE AND ACCORDINGLY, FOR FURNISHING INACCURATE PARTICULARS IN A SUM OF RS.5,75,912/-, PENALTY OF RS.61,970/- WAS IMPOSED. THE LD. CIT(A) CONFIRME D THE PENALTY ORDER ON MERITS IN THE ABSENCE OF ANY REPRESENTATION FROM THE SIDE OF THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE CHALLENGED THE CONFIRMATION OF PENALTY ORDER AND SUBMITTED THAT THE LD. CIT(A) WITHOUT CON SIDERING THE FACTS CONFIRMED THE ADDITION AND PENALTY WAS ENHANCED WITHOUT GIVING AN Y SHOW CAUSE NOTICE TO THE ASSESSEE. HE HAS SUBMITTED THAT THE ASSESSEE HAS NO T FURNISHED ANY INACCURATE PARTICULARS OF INCOME. NO SPECIFIC DETAILS HAVE BEE N BROUGHT ON RECORD FOR MAKING ADDITION ON ACCOUNT OF SURRENDER BY THE ASSESSEE. I F THE ASSESSEE HAS NOT PRODUCED COMPLETE BOOKS AND DOCUMENTS BEFORE THE AO, PROPER COURSE SHOULD HAVE BEEN TO APPLY THE PROVISIONS OF SECTION 145(3) OF THE IT AC T READ WITH SECTION 144 TO COMPUTE THE BUSINESS INCOME ACCORDINGLY, WHICH PROC EDURE HAS NOT BEEN FOLLOWED BY THE AO. THERE IS NO INDICATION IN THE ASSESSMENT ORDER AS TO WHICH OF THE PARTICULARS WERE INACCURATE. THE AO MADE ADHOC ADDI TION TO COVER UP POSSIBLE LEAKAGE OF REVENUE. THEREFORE, THERE WAS NO SATISFA CTION RECORDED BY THE AO THAT ITA NO. 187/AGRA/2011 4 THE ASSESSEE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. HE HAS RELIED UPON THE ORDER OF ITAT, JO DHPUR BENCH IN THE CASE OF HEMAN DAS KORANI VS. ITO IN ITA NO. 563/JODH/10 DAT ED 13.07.2012 AND ALSO SUBMITTED THAT THE AO INITIATED PENALTY PROCEEDINGS FOR FILING INACCURATE PARTICULARS. THEREFORE, IT COULD NOT BE TREATED AS ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. HE HAS ALSO RELIED UPON THE ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF ACIT VS. VARUN FINSTOCK (P) LT D., 5 ITR (TRIBUNAL) 271, IN WHICH IT WAS HELD THAT THE EXPLANATION SUBMITTED BY THE ASSESSEE PROVES THAT THE ASSESSEE DISCHARGED HIS ONUS AND HAS REBUTTED THE P RESUMPTION AVAILABLE TO THE REVENUE UNDER EXPLANATION-1 TO SECTION 271(1)(C) OF THE ACT. THEREFORE, NO PENALTY IS LEVIABLE. HE HAS ALSO RELIED UPON THE OR DER OF ITAT, AGRA BENCH IN THE CASE OF M/S. SARVESH KUMAR SOHAN LAL VS. DCIT IN IT A NO. 80/AGRA/2011 DATED 22.06.2012, IN WHICH IT WAS HELD THAT WHEN THE ASSE SSEE DISCLOSED ALL THE PARTICULARS OF INCOME AT THE ASSESSMENT STAGE, THER EFORE, MERELY ON ESTIMATE OF INCOME, PENALTY IS NOT LEVIABLE. HE HAS SUBMITTED T HAT EXPLANATION-1 TO SECTION 271(1)(C) IS NOT APPLICABLE IN THE CASE OF THE ASSE SSEE. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND RELIED UPON THE DECISION OF MADRAS HIGH COURT IN THE CASE OF RATHNAM AND CO. VS . INSPECTING ACIT, 124 ITR 376, IN WHICH IT WAS HELD - PENALTY CONCEALMENT ASSESSEE AGREEING TO ADDIT ION TO LOW GROSS PROFITS DISCLOSED WITHOUT DEMUR LEVY OF PEN ALTY JUSTIFIED ITA NO. 187/AGRA/2011 5 APPLICABILITY OF PENAL PROVISIONS NOT DEPENDENT ON CONSENT OR OTHERWISE OF ASSESSEE. HE HAS ALSO RELIED UPON THE DECISION OF HONBLE ALL AHABAD HIGH COURT IN THE CASE OF MIRZAPUR CONSTRUCTION CO. ,122 ITR 828, IN WHICH IT WAS HELD HELD, ON THE FACTS, THAT THE CASH CREDITS IN THE ACCOUNT BOOKS OF THE ASSESSEE ON THE FINDINGS RECORDED BY THE TRIBUN AL WAS ITS CONCEALED INCOME. FURTHER, THE RECORD DID NOT DISCL OSE THAT THE ITO HAD AGREED NOT TO TAKE LEGAL ACTION IN CASE THE ASS ESSEE AGREED TO BE ASSESSED AT A HIGHER RATE. THE FACTS RELIED UPON BY THE TRIBUNAL FOR REACHING ITS CONCLUSION WERE RELEVANT AND CONSTITUT ED SUFFICIENT MATERIAL ON THE BASIS OF WHICH SUCH A CONCLUSION CO ULD BE REACHED. THE ASSESSEE HAD NOT BEEN ABLE TO DISCHARGE THE ONU S THAT LAY ON IT IN VIEW OF THE EXPLANATION TO S. 271(1)(C) AND AS SUCH PENALTY HAD BEEN RIGHTLY IMPOSED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. WE FIRST TAKE THE ISSUE OF LEVY OF PENALTY ON THE ADDI TION OF RS.5,00,000/-. THE AO NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE IS A CONTRACTOR AND AT THE TIME OF ASSESSMENT PROCEEDINGS, SOME DETAILS AND DOCUMENTS WERE PRODUCED AND PART BOOKS PRODUCED WERE TEST CHECKED. HOWEVER, COMPLETE SUPPORTING DOCUMENTS AND BOOKS OF ACCOUNT WERE NOT PRODUCED. THEREAFTER NOTH ING IS MENTIONED IN THE ASSESSMENT ORDER AS TO WHAT HAPPENED IN THE ABSENCE OF COMPLETE BOOKS OF ACCOUNT AND DOCUMENTS. IT IS NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE SURRENDERED INITIALLY RS.4,00,000/-, BUT LATER ON AGREED TO SUR RENDER RS.5,00,000/-. THE AO ITA NO. 187/AGRA/2011 6 TREATED THE SURRENDER OF RS.5,00,000/- AS INCOME TO COVER UP POSSIBLE LEAKAGE OF REVENUE IN RESPECT OF TRADING AND PROFIT & LOSS ACC OUNT. SECTION 145(3) OF THE IT ACT PROVIDES THAT WHERE THE AO IS NOT SATISFIED ABO UT THE CORRECTNESS OR COMPLETENESS OF THE ACCOUNTS OF THE ASSESSEE OR WHE RE METHOD OF ACCOUNTING PROVIDED IN SUB-SECTION (1) OR ACCOUNTING STANDARD AS NOTIFIED IN SUB-SECTION (2), HAVE NOT BEEN REGULARLY FOLLOWED BY THE ASSESSEE, T HE AO MAY MAKE AN ASSESSMENT IN THE MANNER PROVIDED IN SECTION 144 OF THE IT ACT . SECTION 144 OF THE ACT PROVIDES ABOUT THE BEST JUDGMENT ASSESSMENT MADE BY THE AO AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL, WHICH THE AO HAS GAT HERED AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE FOR MAKING THE ASSES SMENT OF THE TOTAL INCOME OR LOSS OF THE ASSESSEE. IF IN THE CASE OF ASSESSEE COMPLET E BOOKS AND DOCUMENTS WERE NOT PRODUCED, THE AO SHOULD HAVE PROCEEDED TO COMPUTE T HE INCOME OF THE ASSESSEE ON THE BASIS OF BEST JUDGMENT ASSESSMENT ON THE MATERI AL AVAILABLE ON RECORD BY REJECTING THE BOOK RESULTS U/S. 144 AND 145(3) OF T HE IT ACT. HOWEVER, THE AO DID NOT RESORT TO THE COURSE OF ACTION LEGALLY PROVIDED UNDER LAW. THE AO DID NOT MENTION ANYTHING IN THE ASSESSMENT ORDER TO INDICAT E HOW RS.5,00,000/- WERE SURRENDERED BY THE ASSESSEE AS ADDITIONAL INCOME. A O MERELY NOTED THAT THE SURRENDER OF RS.5,00,000/- WOULD COVER UP POSSIBLE LEAKAGE OF REVENUE IN RESPECT OF TRADING AND PROFIT & LOSS ACCOUNT. THUS, THE AO FAILED TO POINT OUT ANY SPECIFIC INSTANCE AS TO FOR WHICH SURRENDER WAS MADE BY THE ASSESSEE OF ADDITIONAL INCOME. ITA NO. 187/AGRA/2011 7 THE AO INITIATED THE PENALTY FOR FILING INACCURATE PARTICULARS OF INCOME, BUT IN THE ASSESSMENT ORDER, THE AO FAILED TO POINT OUT ANY SP ECIFIC INSTANCE OF INACCURATE PARTICULARS OF INCOME OR INSTANCE OF CONCEALING THE PARTICULARS OF INCOME, FOR WHICH ASSESSEE MADE SURRENDER OF INCOME. IT WOULD MEAN TH AT THE AO WAS NOT SURE WHICH PARTICULARS OF INCOME WAS INACCURATE. NO SPECIFIC F INDING OF FACT OF POSSIBLE LEAKAGE OF REVENUE HAS BEEN MENTIONED. IT, THEREFOR E, PROVES THAT THE AO INSTEAD OF PASSING THE ASSESSMENT ORDER AS PER PROVISIONS OF S ECTION 144/15(3) OF THE ACT, MADE THE ADHOC ADDITION ON THE ASSESSEE AGREED TO S URRENDER RS.5,00,000/- WITHOUT CITING ANY INSTANCE AS TO UNDER WHICH HEAD SUCH AN ADDITION HAS BEEN MADE. SUCH AN ADDITION COULD NOT BE BASED EVEN ON BEST JUDGMEN T ASSESSMENT. THEREFORE, IT WAS AN ESTIMATE OF INCOME WITHOUT ANY BASIS OR MATE RIAL ON RECORD AND WAS MERELY ADDITION MADE ON THE BASIS OF SURRENDER MADE BY THE ASSESSEE WITHOUT EXPLAINING AS TO UNDER WHICH HEAD SURRENDER OF ADDITIONAL INCOME HAS BEEN MADE. THEREFORE, ON ADHOC AND ESTIMATED ADDITION WITHOUT ANY JUSTIFICAT ION OR CAUSE AND WITHOUT FOLLOWING PROPER PROCEDURE OF THE ACT, AS MENTIONED ABOVE, THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE HAS FURNISHE D INACCURATE PARTICULARS OF INCOME. MERELY BECAUSE THE ASSESSEE MADE SURRENDER OF RS.5, 00,000/- WITHOUT ASSIGNING ANY REASON, WOULD NOT CONSTITUTE THAT THE ASSESSEE CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. SIMILAR LY, THE AO HAS NOT POINTED OUT AS TO WHICH OF THE INCOME HAS BEEN CONCEALED AND WH ICH OF THE INACCURATE ITA NO. 187/AGRA/2011 8 PARTICULARS OF INCOME HAVE BEEN FILED. THEREFORE, T HE DECISION IN THE CASE OF HEMAN DAS KORANI (SUPRA) WOULD APPLY TO THE CASE OF THE ASSESSEE. 4.1 THE LD. CIT(A) NOTED THAT THE SURRENDER MADE BY THE ASSESSEE WOULD ESTABLISH THAT THE ASSESSEE WAS FORCED TO MAKE SURR ENDER BECAUSE HE WAS NOT HAVING COMPLETE SET OF ACCOUNTS SUPPORTED BY VALID BILLS/V OUCHERS. THESE FINDINGS ARE NOT BASED ON ANY MATERIAL BECAUSE THE AO HAS NOT RECORD ED ANYTHING IN THE ASSESSMENT ORDER IN THIS REGARD. FURTHER, ON REJECTION OF THE BOOKS OF ACCOUNT, IT IS NOT NECESSARY FOR THE ASSESSEE TO MAKE SURRENDER AT THE ASSESSMENT STAGE. IN THE ABSENCE OF ANY DETAILS EITHER IN THE PENALTY ORDER OR ASSESSMENT ORDER, WE ARE OF THE VIEW THAT THERE WAS NO BASIS, WHATSOEVER, TO EXPLAI N SURRENDER OF RS.5,00,000/- AND AS SUCH, IT IS DIFFICULT TO BELIEVE THAT THE ASSESS EE FURNISHED INACCURATE PARTICULARS OF INCOME ON SUCH A SURRENDER OF ADDITIONAL INCOME. IN THE ABSENCE OF ANY SPECIFIC FINDING OF FACT RECORDED IN THE ASSESSMENT ORDER, W E ARE OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S. 271(1)(C) ON THE SURRENDER OF ADDITIONAL INCOME AS ABOVE. THEREFORE, CONSIDERING THE PECULIAR FACTS OF THE CASE NOTED ABOVE AND IN ABSENCE OF ANY SPECIFIC INSTANCE OF FURNISHING OF I NACCURATE PARTICULARS OF INCOME, IN ORDER, WE ARE OF THE VIEW THAT THE PENALTY IS NO T LEVIABLE ON SUCH ADDITION. THE DECISION CITED BY THE LD. DR WOULD NOT SUPPORT THE CASE OF THE REVENUE ON THIS ISSUE. WE THEREFORE, SET SIDE THE ORDERS OF THE AUT HORITIES BELOW FOR LEVY OF PENALTY ITA NO. 187/AGRA/2011 9 FOR SURRENDER OF RS.5,00,000/- IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, NOTED ABOVE. SINCE WE HAVE CANCELLED THE SUBSTANTIA L PENALTY, THE ISSUE OF ENHANCEMENT OF PENALTY WOULD NOT BE RELEVANT AND AS SUCH, THE PLEA OF THE ASSESSEE NEEDS NO FURTHER ADJUDICATION. 5. AS REGARDS THE LEVY OF PENALTY ON THE ADDITION O F RS.75,912/-, THE AO SPECIFICALLY NOTED THAT IT WAS UNSECURED LOAN IN TH E NAME OF SHREE RAM INVESTMENTS, FOR WHICH THE ASSESSEE HAS NOT FURNISH ED ANY EXPLANATION, DETAILS AND EVIDENCES. THEREFORE, SAME CASH CREDIT WAS TREATED AS BOGUS LIABILITY. THE ASSESSEE DID NOT FURNISH ANY EXPLANATION AT THE PENALTY STAG E BEFORE THE AO AS WELL AS BEFORE THE LD. CIT(A). THUS, THE ASSESSEE FAILED TO REBUT THE FINDING OF FACT RECORDED BY THE AUTHORITIES BELOW. THE ASSESSEE ALSO FAILED TO EXPL AIN THE ISSUE EVEN IN THE PENALTY PROCEEDINGS. THEREFORE, THE DECISION OF ALLAHABAD H IGH COURT IN THE CASE OF MIRZAPUR CONSTRUCTION CO. (SUPRA) RELIED UPON BY TH E LD. DR WOULD APPLY AGAINST THE ASSESSEE. FURTHER, EXPLANATION-1 TO SECTION 271 (1)(C) OF THE ACT WOULD BE READ AGAINST THE ASSESSEE BECAUSE THE ASSESSEE FAILED TO OFFER ANY EXPLANATION BEFORE THE AUTHORITIES BELOW. THEREFORE, THE AMOUNT ADDED TO T HE COMPUTATION OF TOTAL INCOME SHALL BE DEEMED TO REPRESENT THE INCOME, IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED FOR THE PURPOSE OF SECTION 271(1)(C) OF T HE IT ACT. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. HARPARSHAD AND COMPANY LTD., 328 ITR 53 HELD ITA NO. 187/AGRA/2011 10 HELD, THAT THE REASONS GIVEN BY THE TRIBUNAL FOR QUASHING THE PENALTY PROCEEDINGS WERE IRRELEVANT, N OT GERMANE TO THE ISSUE AND THE TRIBUNAL HAD LOST SIGHT OF ASPECTS WH ICH HAD BEEN CONCLUSIVELY ESTABLISHED IN THE QUANTUM PROCEEDINGS . THE TRIBUNAL HAD FAILED TO TAKE NOTE OF THE FACT THAT PART OF TH E CLAIM AS COMMISSION WAS ALLOWED TO THE ASSESSEE NOT BECAUSE R HAD RENDE RED ANY SERVICES BUT BECAUSE J HAD RENDERED SERVICES FOR WHICH IT WA S PAID 1 PER CENT OF THE COMMISSION BY R OUT OF THE 3 PER CENT RECEIV ED BY HER. AS FAR AS COMMISSION TO R WAS CONCERNED, IT WAS ACCEPTED BY T HE TRIBUNAL IN THE QUANTUM PROCEEDINGS THAT SHE DID NOT RENDER ANY SERVICES AT ALL. THE ASSESSEE HAD FAILED TO OFFER ANY EXPLANATION IN RESPECT OF THE ADDITION OF RS.1,83,078 AND IT COULD BE DEEMED TO H AVE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS THEREOF, BY VIRTUE OF THIS EXPLANATION. THE TRIBUNAL WAS NOT JU STIFIED IN DELETING THE PENALTY IMPOSED BY THE INCOME-TAX OFFICER UNDER SECTION 271 (1) (C) OF THE ACT. THE FINDINGS GIVEN IN ASSESSMENT PROCEEDINGS ARE RE LEVANT AND HAVE PROBATIVE VALUE. WHERE THE ASSESSEE PRODUCES N O FRESH EVIDENCE OR PRESENTS ANY ADDITIONAL OR FRESH CIRCUMSTANCES I N PENALTY PROCEEDINGS, HE WOULD BE DEEMED TO HAVE FAILED TO D ISCHARGE THE ONUS PLACED ON HIM AND THE LEVY OF PENALTY COULD BE JUST IFIED. EVEN IF THERE IS NO CONCEALMENT OF INCOME OR FURNIS HING OF INACCURATE PARTICULARS, BUT ON THE BASIS THEREOF TH E CLAIM WHICH IS MADE IS EX FACIE BOGUS, IT MAY STILL ATTRACT PENALT Y PROVISION. THE EXPLANATION APPENDED TO SECTION 271 (1) (C ) OF THE ACT ENTIRELY INDICATE THE ELEMENT OF STRICT LIABILITY O N THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WH ILE FILING RETURN. THE OBJECT BEHIND ENACTMENT OF SECTION 271 (1) (C) READ WITH THE EXPLANATIONS INDICATE THAT THE SECTION HAS BEEN ENA CTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PENALTY UNDER THA T PROVISION IS A CIVIL LIABILITY. WILLFUL CONCEALMENT IS NOT AN ESSE NTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MA TER OF PROSECUTION UNDER SECTION 276C OF THE ACT. ITA NO. 187/AGRA/2011 11 5.1 HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SOM ENGINEERING CORPORATION VS. CIT 277 ITR 92 (ALL) HELD HELD, THAT THE EXPLANATION TO SECTION 271(1)(C) OF THE INCOME- TAX ACT, 1961, WAS CLEARLY ATTRACTED IN THE PRESENT CASE INASMUCH AS THE ASSESSED INCOME WAS MORE THAN 80 PER CENT. OF T HE RETURNED INCOME, BEING RS.1,63,850 AS AGAINST THE RETURNED I NCOME OF RS.71,870. THE ONUS WAS ON THE ASSESSEE WHICH IT HA D FAILED TO DISCHARGE AS NO EXPLANATION WHATSOEVER WAS GIVEN BY IT BEFORE THE ASSESSING OFFICER. MOREOVER, THE TRIBUNAL HAD RECOR DED A CLEAR FINDING THAT BY DEBITING THE AMOUNT OF PURCHASE OF GOODS AT RS.51,314.74 TWICE, THE PROFITS HAD BEEN REDUCED. T HE LEVY OF PENALTY WAS THEREFORE JUSTIFIED. 5.2 HONBLE DELHI HIGH COURT IN THE CASE OF KAMAL C HAND JAIN VS. ITO, 277 ITR 429 (DEL.) HELD IN PARA 6 & 7 OF THE JUDGMENT A S UNDER : 6. WE ARE CONCERNED WITH THE ASST. YR. 1991-92. TH E EXPLANATION TO THE PROVISIONS OF S. 271 OF THE ACT WAS IN FORCE AT THE RELEVANT TIME. EXPLANATION 1 TO THIS SECTION WAS MA DE EFFECTIVE FROM 1ST APRIL, 1976. UNDER THE EXPLANATION WHERE AN EXP LANATION OFFERED BY THE ASSESSEE IS FOUND BY THE AO, OR EVEN THE CIT (A) TO BE FALSE OR THAT THE EXPLANATION WAS BONA FIDE AND FAILS TO SUB STANTIATE SUCH EXPLANATION, THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF WOU LD DEEM TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. IN OTHER WORDS, THERE IS A DEEMED ADDITI ON IN THE EVENT THE CONCERNED AUTHORITIES RECORD THEIR SATISFACTION THA T THERE IS NO PROPER AND PLAUSIBLE EXPLANATION OFFERED BY THE ASSESSEE O R HE HAS FAILED TO SUBSTANTIATE SUCH EXPLANATION. OBVIOUSLY, THE LAW P LACES AN OBLIGATION UPON THE ASSESSEE TO SUBSTANTIALLY SUPPORT HIS EXPL ANATION IN ALL REASONABLE MANNERS. 7. IT IS SETTLED LAW THAT THE TRIBUNAL IS A FINAL A UTHORITY IN RELATION TO FACTS AND NORMALLY THIS COURT WHILE EXA MINING THE MATTER WITHIN THE PURVIEW AND SCOPE OF S. 260A OF THE ACT, WOULD NOT INTERFERE WITH THE FINDINGS OF FACT RECORDED BY THE AUTHORITI ES. IN THE PRESENT ITA NO. 187/AGRA/2011 12 CASE, THE AO HAD RECORDED A FINDING WHICH HAS BEEN AFFIRMED BY THE TRIBUNAL, WHILE UPSETTING THE FINDINGS RECORDED BY THE CIT(A). THUS, IN OUR VIEW, NO QUESTION OF LAW, MUCH LESS A SUBSTA NTIAL QUESTION OF LAW ARISES IN THE PRESENT APPEAL FOR OUR CONSIDERAT ION. 5.3 CONSIDERING THE ABOVE FACTS OF THE CASE IN THE LIGHT OF ABOVE DECISIONS, IT IS CLEAR THAT THE ASSESSEE FAILED TO FILE ANY EXPLANAT ION REGARDING BOGUS LIABILITY SHOWN IN THE BOOKS OF ACCOUNT. THEREFORE, LEVY OF P ENALTY IS JUSTIFIED AGAINST THE ASSESSEE. THE ORDERS OF THE AUTHORITIES BELOW FOR L EVY OF PENALTY ON THE ADDITION OF RS.75,912/- ARE, ACCORDINGLY CONFIRMED. THIS PART O F THE APPEAL OF THE ASSESSEE IS, ACCORDINGLY, DISMISSED AND THE AO WILL LEVY MINIMUM PENALTY ON THE SAME. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY