Mr. Vijay Kumar Gupta, Agra V. I.T.O.-4(4), Agra

ITA 194/AGR/2013

• Counselvise Citation: 19420314 RSA 2013
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANURADHA
• Assessee Lawyers: P K SEHGAL
• Keywords: Income from undisclosed sources; Search and seizure; Initiation of penalty proceedings; Reasonable cause; Corroborative evidences; Valuation report; Revised return
• Section: 148; 143(3); 142(1); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMB ER ITA NO. 194/AGRA/2013 ASST. YEAR :2008-09 MR. VIJAY KUMAR GUPTA, VS. INCOME-TAX OFFICER, PROP. M/S. SHYAMJI HARDWARE, 4(4), AGRA. B-782, KAMLA NAGAR, AGRA. PAN: ABXPG 2447 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.K. SEHGAL, ADVOCATE RESPONDENT BY` : SMT. ANURADHA, JR. D.R. DATE OF HEARING : 25.02.2014 DATE OF PRONOUNCEMENT : 28.02.2014 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-II, AGRA DATED 19.03.2013 FOR THE ASSESSMENT YEAR 2008- 09, CHALLENGING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO I MPOSED 200% PENALTY U/S. 271(1)(C) OF THE IT ACT ON UNDISCLOSED INCOME OF RS .7,53,703/-. IN THIS CASE, THE RETURN OF INCOME WAS FILED ON 29.09.2008 DECLARING TOTAL INCOME OF RS.1,74,878/-. THE ASSESSMENT U/S. 143(3) WAS COMPLETED ON AN INCO ME OF RS.9,60,580/- BY ITA NO. 194/AGRA/2014 2 MAKING VARIOUS ADDITIONS, WHICH INCLUDED UNDISCLOSE D INVESTMENT IN BUSINESS OF RS.2,16,736/- AND UNDISCLOSED INCOME FROM BUSINESS OF RS.5,36,967/-. THE AO IN THE PENALTY ORDER DATED 29.06.2011 NOTED THAT THE A SSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME IN AS MUCH THAT HE DELIBE RATELY AVOIDED TO DISCLOSE THAT HE HAS MAINTAINED A BANK ACCOUNT WITH ICICI BANK LTD. AGRA EVEN THOUGH IN THIS ACCOUNT THE ASSESSEE DEPOSITED A SUM OF RS.30,65,73 5/- DURING THE YEAR UNDER CONSIDERATION. IN THIS REGARD, IT HAS BEEN NOTICED THAT THE ASSESSEE WAS REQUIRED TO GIVE THE DETAILS OF ALL THE BANK ACCOUNTS MAINTAINE D BY HIM DURING THE YEAR UNDER CONSIDERATION BY LETTER OF THE AO DATED 27.04.2010 ISSUED U/S. 142(1) OF THE IT ACT. IN RESPONSE TO THIS NOTICE, THE ASSESSEE FILED WRIT TEN REPLY DATED 22.10.2010 AND ASSESSEE HAS STATED THAT HE HAS MAINTAINED ONE BANK ACCOUNT IN BANK OF BIKANER & JAIPUR AND APART FROM THIS, HE HAS NOT MAINTAINED A NY OTHER BANK ACCOUNT. THUS, THE ASSESSEE HAS AVOIDED TO DISCLOSE HIS OTHER BANK ACC OUNT MAINTAINED WITH ICICI BANK EVEN THOUGH HE WAS SPECIFICALLY ASKED TO DISCL OSE ALL HIS BANK ACCOUNTS. SUBSEQUENTLY, INFORMATION IN RESPECT OF CASH DEPOSI T OVER RS.10 LACS HAS BEEN GATHERED BY THE DEPARTMENT AND HAS COME TO THE NOTI CE THAT THE ASSESSEE IN THE AFORESAID BANK ACCOUNT WITH ICICI BANK DEPOSITED CA SH OVER RS.30 LACS DURING THE YEAR UNDER CONSIDERATION. COPY OF THE BANK ACCOUNT HAS BEEN OBTAINED FROM ICICI BANK. THE AO ISSUED OFFICE LETTER DATED 10.12.2010 REQUESTING THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH DEPOSITED IN ICICI BANK WITH SUPPORTING EVIDENCES. THE ITA NO. 194/AGRA/2014 3 ASSESSEE FILED THE REPLY TO THIS NOTICE ON 13.12.20 10, IN WHICH THE ASSESSEE ADMITTED TO HAVE DEPOSITED CASH OF RS.30,65,735/- IN ICICI B ANK LTD. WITH THE HELP OF APPROXIMATELY 144 NUMBERS OF CREDIT TRANSACTIONS. M INIMUM AND MAXIMUM CREDIT BALANCE WAS EXPLAINED. IT WAS EXPLAINED THAT FUNDS WERE DEPOSITED IN THIS BANK ACCOUNT OUT OF PETTY SAVINGS. IT WAS ALSO STATED TH AT TO PURCHASE PEACE OF MIND AND ESCAPE FROM PENALTY, THE ASSESSEE DISCLOSED THE ABO VE BANK ACCOUNT AND DID NOT OBJECT TO THE ADDITION. THE AO, CONSIDERING THE ABO VE FACTS AND THE MATERIAL ON RECORD FOUND THAT THE ASSESSEE HAS NOT GIVEN SOURCE OF THE BANK DEPOSIT IN THIS BANK ACCOUNT AND NO REASONS HAVE BEEN EXPLAINED AS TO WH Y THE ASSESSEE CONCEALED THE BANK ACCOUNT WITH ICICI BANK LTD. TO THE REVENUE DE PARTMENT AND WHY INCOME FROM UNACCOUNTED BUSINESS WAS NOT DISCLOSED. THE AO MADE ADDITION OF RS.2,16,736/- ON ACCOUNT OF PEAK INVESTMENT MADE IN THE AFORESAID BANK ACCOUNT AND ALSO MADE ADDITION OF RS.5,36,967/- ON ACCOUNT OF PROFIT EARNED FROM UNDISCLOSED BUSINESS COMPUTED BY APPLYING PROFIT RA TE ON THE TOTAL DEPOSITS. THE AO ALSO NOTED THAT DURING THE COURSE OF PENALTY PRO CEEDINGS, ENQUIRY WAS ALSO MADE FROM THE BANK IN RESPECT OF DEBIT AND CREDIT E NTRIES MADE OTHERWISE THAN CASH DEPOSITS/WITHDRAWALS. ICICI BANK INFORMED THAT THE ASSESSEE HAS MADE PAYMENTS BY CHEQUES TO VARIOUS PARTIES. DETAILS OF THE SAME ARE NOTED IN THE IMPUGNED ORDER. ON PERUSAL OF THE SAME, IT WAS FOUND THAT THERE WAS NO CORRESPONDING ENTRIES WITH THESE PARTIES, THEREFORE, THE EXPLANATION GIVEN BY THE ASSESSEE WAS NOT CORRECT. THE ITA NO. 194/AGRA/2014 4 EXPLANATION OF THE ASSESSEE WAS CALLED FOR REGARDIN G THE NAMES AND ADDRESS AND CLARIFICATION, BUT THE ASSESSEE HAS NOT FURNISHED A NY DETAILS AS DESIRED BY THE AO. THE AO, THEREFORE, CONCLUDED THAT THE ASSESSEE HAS WILLFULLY EVADED THE DISCLOSURE OF INCOME TO THE TUNE OF RS.7,53,703/- (2,16,736 + 5,36,967) AS STATED ABOVE BY CONCEALING THE PARTICULARS OF INCOME. 200% PENALTY BEING A SUM OF RS.4,64,116/- WAS IMPOSED U/S. 271(1)(C) OF THE IT ACT. 3. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THA T THE PENALTY ON ESTIMATE BASIS WAS NOT JUSTIFIED AND TAX HAS BEEN PAID AND T HE ACCOUNT WAS DISCLOSED TO PURCHASE PEACE OF MIND TO ESCAPE FROM PENALTY. THE LD. CIT(A) DID NOT CONSIDER THE EXPLANATION OF THE ASSESSEE FAVOURABLY AND CONF IRMED THE PENALTY. THE LD. CIT(A) ALSO FOUND THAT THE ASSESSEE HAS NOT DISCLOS ED BANK ACCOUNT MAINTAINED WITH ICICI BANK IN WHICH MORE THAN RS.30 LACS CASH WAS DEPOSITED DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS NOT FURNISHED ANY PARTICULARS OF HIS INCOME AND SOURCE OF DEPOSIT IN THE BANK ACCOUNT. FURTHER, THE ASSESSEE HAS NOT FILED ANY SATISFACTORY EXPLANATION ON THE ISSUE, THEREFORE, T HE LD. CIT(A) WAS OF THE VIEW THAT THE AO WAS CORRECT IN HOLDING THAT THE ASSESSEE HAS WILLFULLY CONCEALED THE PARTICULARS OF HIS INCOME BY NOT DISCLOSING THE FAC T OF MAINTAINING BANK ACCOUNT WITH ICICI BANK. THE APPEAL WAS, ACCORDINGLY, DISMI SSED. ITA NO. 194/AGRA/2014 5 4. THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING CONFIRMATION OF PENALTY U/S. 271(1)(C) OF THE IT ACT. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MA TERIAL AVAILABLE ON RECORD. 5.1 IT IS ADMITTED FACT THAT THE BANK ACCOUNT IN QU ESTION WITH ICICI BANK LTD., SANJAY PLACE, AGRA WAS CONCEALED BY THE ASSESSEE FR OM THE REVENUE DEPARTMENT. IT IS THE ASSESSING OFFICER, WHO HAS OBTAINED DETAI LS FROM THIS BANK OTHERWISE, THE DETAILS WOULD NOT HAVE COME ON RECORD OF THE REVENU E. THE ASSESSEE IN HIS INITIAL REPLY TO THE NOTICE ISSUED BY THE AO DELIBERATELY D ID NOT DISCLOSE THE BANK ACCOUNT MAINTAINED WITH ICICI BANK LTD. AND REPLIED BEFORE THE AO THAT HE HAS MAINTAINED ONLY ONE BANK ACCOUNT IN BANK OF BIKANER & JAIPUR. THE AO AGAIN CONFRONTED THE DETAILS COLLECTED FROM ICICI BANK LTD. TO THE ASSES SEE THROUGH SHOW CAUSE NOTICE AND CORNERED THE ASSESSEE THAT THE ASSESSEE HAS MAI NTAINED UNACCOUNTED BANK ACCOUNT WITH ICICI BANK LTD. THE ASSESSEE ON CONFR ONTING THE DETAILS AND CORNERED BY THE AO HAD NO OPTION BUT TO ADMIT THE U NACCOUNTED BANK ACCOUNT WITH ICICI BANK LTD. NO SOURCE OF THE DEPOSITS OR WHY TH IS BANK ACCOUNT WAS CONCEALED FROM THE DEPARTMENT WAS NOT AT ALL EXPLAINED AT ANY STAGE. THERE IS, THEREFORE, NO QUESTION TO DISCLOSE UNACCOUNTED BANK ACCOUNT VOLUN TARILY TO PURCHASE PEACE OF ITA NO. 194/AGRA/2014 6 MIND. THERE IS NO ACCEPTANCE BY THE DEPARTMENT THAT NO PENALTY WOULD BE LEVIED. THERE CANNOT BE ESTOPPEL AGAINST LAW BECAUSE THE AO CANNOT GIVE ANY ASSURANCE NOT TO LEVY PENALTY IN SUCH CIRCUMSTANCES. IT MAY B E THE SUBMISSION OF THE ASSESSEE ONLY, THEREFORE, NO LEGAL IMPORTANCE CAN BE ATTACHE D TO THE SUBMISSIONS OF THE ASSESSEE. HONBLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD. VS. CIT, 358 ITR 593 HELD THAT THERE IS NO AUTOMATIC IMMUNITY FROM P ENALTY ON VOLUNTARY SURRENDER OF INCOME. THE SURRENDER SUBJECT TO NON-INITIATION OF PENALTY PROCEEDINGS AND PROSECUTION DOES NOT ABSOLVE ASSESSEE FROM LIABILIT Y TO PENALTY. IT WAS FURTHER HELD THAT SATISFACTION OF THE AO ABOUT CONCEALMENT OF IN COME NEED NOT BE RECORDED IN A PARTICULAR MANNER. 5.2 HONBLE BOMBAY HIGH COURT IN THE CASE OF JYOTI LAXMAN KONKAR VS. CIT, 292 ITR 163 HELD THE ASSESSEE HAD FILED A RETURN FOR THE ASSESSMENT YEAR 1999- 2000 DECLARING AN INCOME OF RS.7,40,510. NOT SATISF IED THEREWITH, THE ASSESSING OFFICER CARRIED OUT A SURVEY UNDER SECTIO N 133A OF THE INCOME-TAX ACT, 1961, AND DURING THE SURVEY FOUND T HAT THERE WAS A DISCREPANCY IN STOCK TO THE TUNE OF RS.18,28,706 WH ICH WAS BROUGHT TO THE NOTICE OF THE ASSESSEE, AND THE ASSESSEE FILED A REVISED RETURN DISCLOSING ADDITIONAL INCOME OF RS.18,28,706. THE A SSESSING OFFICER IMPOSED PENALTY UNDER SECTION 271(1)(C) AND THIS WA S UPHELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT : HELD, DISMISSING THE APPEAL, THAT THE QUESTION WHETHER TH ERE IS CONCEALMENT OF INCOME OR NOT HAS TO BE DECIDED WITH REFERENCE TO THE FACTS OF A GIVEN CASE AND THE FACT FINDING AUTHORIT IES UNDER THE ACT ITA NO. 194/AGRA/2014 7 HAVING COME TO THE CONCLUSION THAT IN THE FACTS OF THE CASE, THE ASSESSEE HAD CONCEALED THE INCOME INITIALLY WITH A VIEW TO AVOID THE PAYMENT OF TAX, THE IMPOSITION OF PENALTY WAS VALID . 5.3 HONBLE JURISDICTIONAL ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAKESH SURI 331 ITR 458 HELD THE ASSESSEE FILED HIS RETURN FOR THE ASSESSMENT Y EAR 2004-05 DISCLOSING TOTAL OF RS. 1,17,600. THE CASE WAS SELE CTED FOR SCRUTINY. IT WAS FOUND THAT THE ASSESSEE HAD SHOWN LONG-TERM CAP ITAL GAINS ON SALE OF SHARES. HE HAD CONSTRUCTED A HOUSE BETWEEN FINANCIAL YEARS 2001-02 AND 2004-05 INVESTING RS.56,74,567. THE INC OME-TAX AUTHORITIES REPEATEDLY REQUIRED THE ASSESSEE TO FUR NISH THE CONTRACT NOTE OF PURCHASE AND SALE OF SHARES SOLD WITH A COP Y OF BILL OF BROKER, JUSTIFY HOLDING OF SHARES, WHICH WERE SOLD, YEAR-WI SE INVESTMENT IN THE HOUSE PROPERTY, VALUATION REPORT OF THE APPROVED VA LUER, CONFIRMATION OF SALARY RECEIVED FROM THE COMPANY AND OTHER DOCUM ENTS. THE ASSESSEE DID NOT FURNISH FULL DETAILS. HIS STATEMEN T THAT THE SHARES HAD BEEN SOLD THROUGH THE DELHI STOCK EXCHANGE WAS FOUN D TO BE FALSE. THE ASSESSEE WAS DIRECTED TO FURNISH REPLY IN TERMS OF THE ORDER DATED NOVEMBER 9, 2006. HE WAS FURTHER DIRECTED TO FURNIS H THE NAME OF THE STOCK EXCHANGE THROUGH WHICH SHARES WERE PURCHASED AND SOLD, RATE OF SHARES IN THE STOCK EXCHANGE ON DATE OF PURCHASE AND SALE ON OR BEFORE DECEMBER 6, 2006. ON DECEMBER 6, 2006, THE A SSESSEE SURRENDERED THE ENTRY APPEARING IN HIS BANK ACCOUNT ON SALE OF SHARES AMOUNTING TO RS. 61,35,844 ON AGREED BASIS. THE ASS ESSING OFFICER TREATED THE SUM OF RS. 61,35,844 AS INCOME FROM UND ISCLOSED SOURCES UNDER SECTION 69A OF THE INCOME-TAX ACT, 1961, AND ALSO LEVIED PENALTY. THE COMMISSIONER (APPEALS) CANCELLED THE P ENALTY AND THIS WAS CONFIRMED BY THE TRIBUNAL. ON APPEAL TO THE HIG H COURT: HELD, ALLOWING THE APPEAL, THAT THE ASSESSEE HAD CO NCEALED THE MATERIAL FACTS AND GIVEN INCORRECT STATEMENT OF FAC TS IN THE APPLICATION AND ALSO NOT PROVIDED INFORMATION REQUIRED BY THE A SSESSING OFFICER, AFTER RECEIPT OF NOTICE. ACCORDINGLY THE ACTION OF THE ASSESSEE WAS NEITHER BONA FIDE NOR VOLUNTARY. THE MANNER IN WHIC H THE ASSESSEE HAD TRIED TO PROLONG THE CASE BEFORE THE ASSESSING OFFICER BY NOT ITA NO. 194/AGRA/2014 8 PROVIDING INFORMATION IMMEDIATELY AND BY NARRATING INCORRECT FACTS IN THE LETTER DATED DECEMBER 6, 2006 SHOWED THAT THE A SSESSEE HAD CONCEALED THE INCOME AND DISCLOSURE WAS NOT VOLUNTA RY BUT UNDER COMPULSION BEING CORNERED BY THE ASSESSING OFFICER. PENALTY HAD TO BE IMPOSED. 5.4 HONBLE GUJRAT HIGH COURT IN THE CASE OF LMP P RECISION ENGG.. CO. LTD. VS. DCIT, 330 ITR 93 HELD THE DEPUTY DIRECTOR OF INCOME-TAX (INVESTIGATION), BOMBAY UNDERTOOK SURVEY ACTION SOME TIME IN SEPTEMBER, 198 8 AND ON VERIFICATION OF CERTAIN PURCHASES MADE BY THE ASSES SEE IT WAS FOUND THAT THE PURCHASES DID NOT APPEAR TO BE GENUINE. BE FORE THE PROCEEDINGS COULD BE FINALLY CONCLUDED THE ASSESSEE FILED A DECLARATION UNDER SECTION 273A OF THE ACT DISCLOSIN G ADDITIONAL INCOME OF RS. 54,71,463 AS BEING RELATABLE TO ASSES SMENT YEAR 1985- 86. ON THE SAME DAY, DECLARATION WAS ALSO MADE OF A SUM OF RS.18 LAKHS EACH FOR ASSESSMENT YEARS 1986-87, 1987-88 AN D 1988-89. THIS APPLICATION UNDER SECTION 273A OF THE ACT WAS FOLLO WED BY REVISED RETURNS FILED ON FEBRUARY 14, 1989 FOR ALL THE THRE E ASSESSMENT YEARS DECLARING IDENTICAL ADDITIONAL INCOME IN THE REVISE D RETURNS. BEFORE ASSESSMENTS COULD BE FINALISED, AFTER REGULARISING THE SAME BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT, TH E ASSESSEE CAME FORWARD WITH ANOTHER APPLICATION DECLARING ADDITION AL INCOME OF RS. 78,56,613. THE FIRST DECLARATION WAS IN RELATION TO PURCHASES FROM ISC WHILE THE SECOND DISCLOSURE WAS IN RELATION TO PURC HASE MADE FROM SC, NB AND NPST. THE ASSESSMENTS WERE NOT CHALLENGE D BY THE ASSESSEE. THE ASSESSING OFFICER INITIATED PENALTY P ROCEEDINGS UNDER SECTION 271(L)(C). THE EXPLANATION OF THE ASSESSEE FOR ALL THE THREE YEARS WAS THAT REVISED RETURNS WERE VOLUNTARY, ADDI TIONAL INCOME IN EACH OF THE REVISED RETURNS WAS DECLARED TO PURCHAS E PEACE AND NO CONCEALMENT WAS INVOLVED. IT WAS SUBMITTED THAT THE RETURNS WERE REVISED EVEN BEFORE ISSUANCE OF NOTICE UNDER SECTIO N 148 OF THE ACT. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATIO N OF THE ASSESSEE AND LEVIED PENALTIES. SUCCESSIVE APPEALS FILED BY T HE ASSESSEE BEFORE THE COMMISSIONER (APPEALS) AND THE TRIBUNAL WERE DI SMISSED BY THE TWO APPELLATE AUTHORITIES CONFIRMING THE PENALTIES LEVIED BY THE ITA NO. 194/AGRA/2014 9 ASSESSING OFFICER. HOWEVER, THE TRIBUNAL CAME TO TH E CONCLUSION THAT THE ASSESSEE HAD CO-OPERATED IN FINALISATION OF THE ASSESSMENT AND ACCEPTED THE ASSESSMENT OF ADDITIONAL INCOME AND SO , THE TRIBUNAL REDUCED THE PENALTY LEVIED FROM THE MAXIMUM TO THE MINIMUM. ON A REFERENCE: HELD, THAT IT WAS ONLY AFTER THE STATEMENT OF THE C HAIRMAN AND MANAGING DIRECTOR WAS RECORDED BY THE DEPUTY DIRECT OR OF INCOME- TAX (INVESTIGATION MUMBAI, THAT THE FIRST DISCLOSUR E DATED OCTOBER 20,1988, RS. 54,71,463 WAS MADE ACCOMPANIED BY ANOT HER DISCLOSURE OF RS. 54 LAKHS IN A ROUND FIGURE BEING DIVIDED INT O THREE SEGMENTS OF RS. 18 LAKHS EACH FOR ASSESSMENT YEAN 1986-87, 1987 -88 AND 1988-89. THE REVISED RETURN DECLARING A SUM OF RS.78,56,613 CAME ABOUT AS A CONSEQUENCE OF FOLLOW-UP PROCEEDINGS UNDERTAKEN BY THE DEPUTY DIRECTOR OF INCOME-TAX IN RELATION TO THE OTHER THR EE SUPPLIERS, VIZ., SC, NB AND NPST. THEREFORE, THE ASSESSEE COULD NOT BE STATED TO HAVE VOLUNTARILY COME FORWARD TO DISCLOSE INCOME WHICH H AD UNINTENTIONALLY BEEN OMITTED FROM THE ORIGINAL RETU RN OF INCOME. THE IMPOSITION OF PENALTY WAS VALID. 6. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F ABOVE DECISION IT IS CLEAR CASE OF CONCEALMENT OF INCOME BECAUSE THE ASSESSEE HAS C ONCEALED THE BANK ACCOUNT MAINTAINED WITH ICICI BANK LTD. FROM THE REVENUE DE PARTMENT. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, SUBMITTED ALTERNATIVELY THAT EVEN IF IT IS A CASE OF CONCEALMENT OF PARTICULARS OF INCOME, BUT AS AGAINS T ADDITION OF RS.5,36,967/-, THE ADDITION MAINTAINED BY THE AO ON ACCOUNT OF GROSS P ROFIT SHOULD HAVE BEEN COMPUTED BY APPLYING NET PROFIT RATE. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON CERTAIN DECISIONS ON THE LEGAL PROPOSITION THA T SALES CANNOT BE REGARDED AS PROFIT OF THE ASSESSEE. IT IS THE NET PROFIT RATE W HICH HAS TO BE ADOPTED IN SUCH CASES. ITA NO. 194/AGRA/2014 10 HE HAS ALSO SUBMITTED THAT SINCE QUANTUM AND PENALT Y PROCEEDINGS ARE INDEPENDENT, THEREFORE, FINDING GIVEN IN THE QUANTU M PROCEEDINGS ARE NOT BINDING. AS REGARDS THE LEGAL PROPOSITION THAT SALES CANNOT BE REGARDED AS PROFIT OF THE ASSESSEE AND NET PROFIT RATE HAS TO BE APPLIED, THE RE IS NO QUARREL WITH THE SAME, BUT THE SAME PROPOSITION WOULD NOT APPLY TO THE FACTS A ND CIRCUMSTANCES OF THE CASE. THE ASSESSEE ADMITTEDLY ACCEPTED THE ORDER OF THE A O IN MAINTAINING THE ADDITION OF RS.5,36,987/- BECAUSE NO APPEAL WAS PREFERRED BE FORE ANY AUTHORITY AGAINST THE SAID ADDITION. THE ASSESSEE, THEREFORE, ADMITTED TH AT HE HAS EARNED UNACCOUNTED INCOME FROM UNDISCLOSED BUSINESS. THEREFORE, IN THE PENALTY PROCEEDINGS, FINDING OF FACT RECORDED BY THE AO WHICH HAVE REACHED FINAL ITY CANNOT BE DISTURBED. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT WHEN PEAK ADDITION OF THE SAME BANK ACCOUNT IS MAINTAINED, THE GROSS PROFIT ADDITI ON SHOULD ALSO NOT BE ADDED. BUT THE ASSESSEE DID NOT CHALLENGE ANY ADDITION MADE BY THE AO IN FURTHER APPEAL BEFORE ANY AUTHORITY AND FURTHER IN THE PENALTY PRO CEEDINGS, NO SUCH POINTS HAVE BEEN ADMITTEDLY RAISED. FINDINGS GIVEN IN THE ASSES SMENT ORDER HAVE PROBATIVE VALUE AND SHALL HAVE TO BE CONSIDERED IN THE LIGHT OF FACTS OF THE CASE. THEREFORE, THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE HAVE NO MERITS AND ARE ACCORDINGLY REJECTED. ITA NO. 194/AGRA/2014 11 6.1 THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT THE AO HAS NOWHERE RECORDED IN THE IMPUGNED ORDERS WHETHER IT IS A CAS E OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF I NCOME. THEREFORE, CONDITIONS OF SECTION 271(1)(C) ARE NOT SATISFIED. HE HAS RELIED UPON THE DECISION OF HONBLE GUJRAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGIN EERING CO. VS. CIT, 282 ITR 642, IN WHICH IT WAS HELD THAT ORDER OF PENALTY MUS T CLEARLY STATE WHETHER IT IS FOR CONCEALMENT OR FOR FURNISHING INACCURATE PARTICULAR S. THE AO IN THE QUANTUM ORDER HAS SPECIFICALLY MENTIONED THAT HE WAS SATISFIED TH AT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME. IN PARA 9 OF THE PENALTY ORDER ALSO THE AO AFTER DISCUSSING THE MERITS OF THE ADDITION HAS HELD THAT ASSESSEE HAS WILLFULLY CONCEALED THE PARTICULARS OF HIS INCOME. THE AO ALSO HELD THA T EXPLANATION 1(A) OF SECTION 271(1)(C) IS ALSO SQUARELY APPLICABLE IN THE CASE O F ASSESSEE AND IN FACT THE EXPLANATION OFFERED BY THE ASSESSEE WAS FOUND TO BE FALSE. THE FINDINGS OF THE AO IN THE QUANTUM AND PENALTY ORDER, THUS, CLEARLY REV EAL THAT THE AO HAS SPECIFICALLY HELD THAT THE ASSESSEE HAS WILLFULLY CONCEALED THE PARTICULARS OF INCOME AND EXPLANATION 1 (A) TO SECTION 271(1)(C) SQUARELY APP LIES IN THE CASE OF ASSESSEE. WE MAY NOTE HERE THAT EXPLANATION 1(A) TO SECTION 271( 1)(C) IS APPLICABLE TO CONCEALED INCOME. THEREFORE, CLEAR CUT FINDING HAS BEEN GIVEN BY THE AO IN THE PENALTY ORDER THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. THE LD. CIT(A) ALSO IN PARA 3.4 OF THE IMPUGNED ORDER FOUND THAT THE ASSES SEE HAS NOT FILED ANY ITA NO. 194/AGRA/2014 12 SATISFACTORY EXPLANATION BEFORE HIM. THEREFORE, HE WAS OF THE OPINION THAT THE AO IS CORRECT IN HOLDING THAT THE ASSESSEE HAS WILLFUL LY CONCEALED THE PARTICULARS OF HIS INCOME BY NOT DISCLOSING THE FACT OF MAINTAINING BA NK ACCOUNT WITH ICICI BANK. THEREFORE, THE FINDINGS RECORDED BY THE AO AND THE LD. CIT(A) CLEARLY SUGGEST THAT IT IS A CASE OF CONCEALMENT OF PARTICULARS OF INCOM E. THEREFORE, THE DECISION RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE IS CLEARLY DISTINGUISHABLE ON FACTS OF THE CASE. THE CONTENTION OF THE LD. COUNSEL FOR THE ASS ESSEE IS, THEREFORE, REJECTED. 6.2 THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT THE BANK ACCOUNT WHICH WAS NOT SHOWN IN THE ASSESSMENT YEAR UNDER AP PEAL, WAS SHOWN IN THE SUBSEQUENT ASSESSMENT YEAR BECAUSE THE ASSESSEE WAS DEPENDENT UPON THE PERFORMANCE OF THE ACCOUNTANT OR THE TAX EXPERTS AN D NO LITIGANT SHOULD SUFFER FOR THE MISTAKE OF HIS ACCOUNTANT OR COUNSEL. WE ARE AF RAID TO ACCEPT SUCH ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE IN THE PENALTY PRO CEEDINGS U/S. 271(1)(C) OF THE IT ACT. THE CONCEPT OF REASONABLE CAUSE OR EXCEPTION AS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE HAS NO APPLICABILITY TO TH E PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE IT ACT. THE ASSESSEE WAS MAINTAINI NG UNACCOUNTED BANK ACCOUNT AND MADE HUGE CASH DEPOSITS IN THE BANK ACCOUNT IN QUESTION AND WHEN THE DETAILS WERE CALLED FOR FROM THE BANK, THE ASSESSEE HAD TO MAKE SURRENDER OF SUCH INCOME. THEREFORE, THE CONTENTION OF THE LD. COUNSEL FOR TH E ASSESSEE IS REJECTED. ITA NO. 194/AGRA/2014 13 6.3 THE LD. COUNSEL FOR THE ASSESSEE LASTLY CONTEND ED THAT CONSIDERING THE FACTS OF THE CASE, IT IS NOT A CASE OF LEVY OF 200% PENALTY AND SUBMITTED THAT WHEN TAXES HAVE BEEN PAID AND THE ACCOUNT IS DISCLOSED IN THE NEXT YEAR, A LENIENT VIEW MAY BE TAKEN AGAINST THE ASSESSEE. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. ON CONSIDERATION OF THE SUBM ISSIONS AND ORDERS OF THE AUTHORITIES BELOW, WE ARE OF THE VIEW THAT THE ASSE SSEE WOULD BE ENTITLED FOR SOME RELIEF ON THIS ISSUE. THE AO HAS CALCULATED MAXIMUM AND MINIMUM IMPOSABLE PENALTY IN THE IMPUGNED ORDER, I.E., 100% OR 300%, BUT AT THE END OF THE ORDER, HE HAS IMPOSED 200% PENALTY AGAINST THE ASSESSEE WITHO UT GIVING ANY REASONS. IT IS A CASE WHERE THE ASSESSEE ADMITTED UNACCOUNTED BANK A CCOUNT AND UNACCOUNTED INCOME HAS BEEN ASSESSED AGAINST THE ASSESSEE, WHIC H HAVE NOT BEEN CHALLENGED BEFORE ANY APPELLATE AUTHORITIES AND THAT WHEN THE SAME BANK ACCOUNT HAS COME ON RECORD, WE ARE OF THE VIEW THAT IT MAY NOT BE A CAS E OF LEVY OF MAXIMUM PENALTY OR AT LEAST 200% PENALTY. THE INTEREST OF JUSTICE REQU IRES THAT MINIMUM PENALTY AT THE RATE OF 100% MAY BE LEVIED IN THIS CASE. WE ACCORDI NGLY MODIFY THE ORDERS OF THE AUTHORITIES BELOW TO THE EXTENT ONLY THAT AO WILL L EVY MINIMUM PENALTY AT THE RATE OF 100% AT RS.2,32,058/- AS AGAINST RS.4,64,116/-. THE APPEAL OF THE ASSESSEE ON THIS POINT IS ALLOWED PARTLY. ITA NO. 194/AGRA/2014 14 7. CONSIDERING THE ABOVE DISCUSSION, THE APPEAL OF THE ASSESSEE IS DISMISSED ON MERITS. HOWEVER, PENALTY IS REDUCED TO MINIMUM PENA LTY AT THE RATE OF 100% AS HELD ABOVE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (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