M/s Chhidi Lal Kashiram, Morena V. I.T.O.-2(2), Gwalior

ITA 207/AGR/2010

• Counselvise Citation: 20720314 RSA 2010
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 26-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: RADHEY SHYAM GUPTA
• Keywords: Unexplained cash credit; Rectification of order; Opportunity of being heard; Peak credit; Question of law; Assessment record
• Section: 143(3); 260A; 68; 154; 15; 6

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. 206 & 207/AGRA/2010 ASSTT. YEAR : 2001-02 M/S. CHHIDILAL KASHIRAM, VS. INCOME-TAX OFFICER , JIWAJI GANJ, MORENA. 2(2), GWALIOR. (PAN : AABFG 0537 H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RADHEY SHYAM GUPTA, ADVOCATE RESPONDENT BY : SHRI A.K. SHARMA, JR. D.R. DATE OF HEARING : 30.07.2012 DATE OF PRONOUNCEMENT OF ORDER : 09.08.2012 ORDER PER BHAVNESH SAINI, J.M.: BOTH THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST DIFFERENT ORDERS OF LD. CIT(A), GWALIOR DATED 10.02.2010 FOR THE ASSESSMENT YEAR 2001-02, CHALLENGING THE ORDER OF THE AO U/S. 154 OF THE IT ACT AS WELL AS LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT. 2. EARLIER, BOTH THE APPEALS OF THE ASSESSEE WERE D ISMISSED IN LIMINE VIDE ORDER OF THE TRIBUNAL DATED 08.08.2011 FOR NON-PROSECUTIO N. THE ASSESSEE PREFERRED M.A. NOS. 12/12 & 21 OF 2011 SEEKING RECALL OF THE EARLI ER ORDER, WHEREBY BOTH THE APPEALS WERE DISMISSED IN LIMINE. THE MISCELLANEOUS APPLICATIONS OF THE ASSESSEE ITA NO. 206 & 207/AGRA/2010 2 WERE ALLOWED VIDE ORDER DATED 01.06.2012 AND EARLIE R ORDER WAS RECALLED. BOTH THE APPEALS WERE FIXED FOR FINAL HEARING ON 30.07.2012. 3. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE FINDINGS OF THE AUTHORITIES BELOW. BOTH THE APPEALS ARE DECIDED AS UNDER : ITA NO. 206/AGRA/2010: 4. IN THIS APPEAL, THE ASSESSEE CHALLENGED THE ORDE R OF THE LD. CIT(A) IN CONFIRMING THE ORDER PASSED BY THE AO U/S. 154/254/ 250 OF THE IT ACT DATED 25.03.2009 PASSED BY THE ITO, 2(2), GWALIOR. THE BR IEF FACTS OF THE CASE ARE THAT VIDE ORDER U/S. 143(3) DATED 29.03.04 ASSESSMENT HA S BEEN MADE ON TOTAL INCOME OF RS.62,58,281/- AGAINST RETURNED INCOME OF RS.26,885 /-. IN APPEAL FILED BY THE ASSESSEE, THE THEN CIT(A) VIDE ORDER DATED 08.02.20 07 CONFIRMED THE ADDITION OF RS.9,69,055/- AND DELETED THE ADDITION OF RS.52,52, 341/-. IN THE SECOND APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASS ESSEE, THE TRIBUNAL VIDE ORDER DATED 29.08.2008 HAS CONFIRMED THE ADDITION OF RS.5 7,66,421/- WHEREBY ADDITION OF RS.4,64,965/- HAS BEEN DELETED. WHILE GIVING EFFECT TO THE SAID APPELLATE ORDER OF ITAT U/S. 250 OF THE IT ACT PASSED ON 20.10.2008, T HE AO HAS COMPUTED THE INCOME OF THE ASSESSEE AT RS.51,885/- INSTEAD OF CO RRECT INCOME OF RS.57,93,306/- (RS.26,885 + 57,66,421). ON BEING MADE AWARE OF THE SAID MISTAKE, THE AO HAS ITA NO. 206 & 207/AGRA/2010 3 ISSUED NOTICE U/S. 154 TO THE ASSESSEE ON 04.03.200 9, FIXING THE CASE FOR 18.03.2009. VIDE LETTER DATED 09.03.2009, RECEIVED IN DAK OF THE AO ON 13.03.2009, THE ASSESSEE HAS ASKED FOR THE DETAILS OF MISTAKE WHICH IS SOUGHT TO BE CORRECTED BY THE AO. VIDE LETTER DATED 17.03.2009, RECEIVED BY THE ASSESSEE ON 23.03.2009, THE AO HAS GIVEN THE SAID DETAILS OF MI STAKE WHICH IS PROPOSED TO BE RECTIFIED U/S. 154. ACCORDINGLY, VIDE ORDER U/S. 15 4/254/250 OF THE IT ACT, THE AO HAS COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT RS .57,93,306/-. THE ASSESSEE OBJECTED TO THE SAID ORDER U/S. 154 ON THE GROUND T HAT THERE WAS NO MISTAKE IN THE ORDER U/S. 250 DATED 20.10.2008 AND PROPER OPPORTUN ITY HAS NOT BEEN GIVEN TO HIM FOR PASSING OF THE SAID ORDER. FURTHER, THE AO SHOU LD HAVE SOUGHT CLARIFICATION FROM HONBLE ITAT BEFORE PASSING THE ORDER U/S. 154. 4.1 THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSE SSEE AND HIS FINDINGS IN PARA 4 & 4.1 OF THE APPELLATE ORDER ARE REPRODUCED AS UN DER : 4. APPELLANTS SUBMISSIONS ALONGWITH THE RECTIFICATION ORDER HAVE BEEN CONSIDERED CAREFULLY. ASSESSMENT RECORDS HAVE ALSO BEEN PERUSED. IT IS CLEAR FROM THE RECORDS AND FACTS MEN TIONED ABOVE THAT THE APPELLANT HAS BEEN GIVEN SUFFICIENT OPPORTUNITI ES BY THE AO BY ISSUANCE OF NOTICES AND CLARIFICATIONS BEFORE RECTI FICATION ORDER U/S. 154 HAS BEEN PASSED. THE APPELLANT HAS ALSO BEEN GI VEN THE DETAILS OF THE MISTAKE WHICH IS PROPOSED TO BE RECTIFIED BY TH E AO. HENCE, THE APPELLANTS CONTENTION THAT HE WAS NOT AWARE OF THE MISTAKE SOUGHT TO BE RECTIFIED DOES NOT HOLD GOOD. THIS GROUND OF THE APPELLANT IS DISMISSED. 4.1. BY THE SAID RECTIFICATION ORDER, THE AO HAS B ROUGHT TO TAX THE INCOME OF THE APPELLANT WHICH BY MISTAKE HAS BE EN OMITTED IN THE ITA NO. 206 & 207/AGRA/2010 4 ORDER U/S. 250 DTD. 20.10.08. THIS COMES WITHIN THE PURVIEW OF SECTION 154/155 OF THE IT ACT. THE RECTIFICATION MAY HAVE T HE EFFECT OF REDUCING OR ENHANCING THE LIABILITY OF AN ASSESSEE. IT IS IMPLICIT IN THE NATURE OF THE POWER U/S. 154 AND IT IS ENTRUSTMENT TO THE AUTHORITY INVESTED WITH QUASI-JUDICIAL FUNCTIONS UNDER THE AC T, THAT TO DO JUSTICE TO THE ASSESSEE OR TO THE REVENUE, IT SHALL BE EXER CISED WHEN A MISTAKE APPARENT FROM THE RECORD & BROUGHT TO THE NOTICE BY A PERSON CONCERNED WITH, OR INTERESTED IN THE PROCEEDINGS. T HIS POWER IS NOT DISCRETIONARY. THE CONFERMENT OF THE POWER TO RECTI FY HAS BEEN HELD NOT TO BE INCONSISTENT WITH AN INHERENT POWER TO CO RRECTION OF HIS MISTAKE. IN VIEW OF ABOVE, I FIND THAT THE AO WAS J USTIFIED IN PASSING THE ORDER U/S. 154/250 CORRECTING THE MISTAKE, COMM ITTED EARLIER, WHILE GIVING EFFECT TO THE APPEAL ORDER OF HONBLE ITAT. 5. THE LD. COUNSEL FOR THE ASSESSEE FILED WRITTEN S UBMISSIONS DATED 30.07.2012 AND ALONG WITH THE SAME COPY OF THE SHOW CAUSE NOTI CE U/S. 154 AND OTHER LETTERS AND AFFIDAVIT HAVE BEEN ATTACHED. IN BRIEF, THE SUB MISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE ARE THAT NO PROPER OPPORTUNITY HAS BEEN GI VEN BY THE AO AT THE TIME OF PASSING OF THE ORDER U/S. 154 OF THE IT ACT AND FUR THER WHATEVER POINTS WERE RAISED BY THE ASSESSEE HAVE NOT BEEN TAKEN INTO CONSIDERAT ION BY THE AO AND FURTHER IT WAS NOT EXPLAINED TO THE ASSESSEE AS TO WHAT WAS THE MI STAKE ON RECORD, WHICH WAS SOUGHT TO BE RECTIFIED AND NO INFORMATION HAS BEEN SUPPLIED TO THE ASSESSEE. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF TH E AUTHORITIES BELOW AND SUBMITTED THAT SINCE THERE WAS MISTAKE IN GIVING AP PEAL EFFECT TO THE ORDER OF THE TRIBUNAL, THEREFORE, AS PER THE DECISION OF THE TRI BUNAL, THE MISTAKE WAS RECTIFIED IN THE ORDER AND THE ADDITION CONFIRMED BY THE TRIBUNA L ON UNEXPLAINED CASH CREDIT ITA NO. 206 & 207/AGRA/2010 5 WAS CORRECTLY TAKEN AT RS.57,66,421/-. THEREFORE, T HE LD. CIT(A) RIGHTLY DISMISSED THE APPEAL OF THE ASSESSEE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. THE LD. CIT(A) DEALT WITH T HE ISSUE OF UNEXPLAINED CASH CREDIT U/S. 68 OF THE IT ACT VIDE ORDER DATED 08.02 .2007 AND OUT OF THE TOTAL ADDITION OF RS.57,66,421/-, HE HAS DELETED THE ADDI TION OF RS.52,52,341/- BEING THE OPENING BALANCE COMING UP FROM EARLIER YEAR ON ACCO UNT OF UNEXPLAINED CASH CREDIT AS ON 31.03.2000. THE REVENUE PREFERRED APPEAL BEFO RE THE TRIBUNAL IN ITA NO. 289/AGRA/2007 AND VIDE ORDER DATED 29.08.2008, THE DEPARTMENTAL APPEAL WAS ALLOWED ON THIS ISSUE CONFIRMING THE ORDER OF THE A O ON ACCOUNT OF UNEXPLAINED CASH CREDIT. COPY OF THE ORDER OF THE TRIBUNAL IS A VAILABLE ON RECORD. THE TRIBUNAL REJECTED EACH AND EVERY PLEA OF THE ASSESSEE ON ACC OUNT OF UNEXPLAINED CASH CREDIT. THE ASSESSEE TOOK THE PLEA OF DENIAL OF PROPER OPPO RTUNITY BEFORE THE TRIBUNAL AND ALSO SUBMITTED THAT IT WAS A TRADE CREDITOR, SO THE ADDITION IS UNJUSTIFIED AND PEAK ADDITION HAS TO BE MADE. FURTHER, THE OPENING BALAN CE OF THE CASH CREDIT CANNOT BE ADDED. ALL THE SUBMISSIONS OF THE ASSESSEE WERE REJ ECTED AND ADDITION WAS CONFIRMED. IT WAS ALSO FOUND THAT THE ISSUE OF CASH CREDIT OF EARLIER YEAR IS AGAINST THE ASSESSEE BECAUSE THE AMOUNT WAS CREDITED FOR TH E FIRST TIME DURING THE ASSESSMENT YEAR UNDER APPEAL. HOWEVER, ON ESTIMATE BASIS PART RELIEF OF ITA NO. 206 & 207/AGRA/2010 6 RS.25,000/- WAS ALLOWED FOR MEETING DAY-TO-DAY REQU IREMENT OF BUSINESS. THUS, THE ISSUE OF CASH CREDIT WAS DECIDED AGAINST THE ASSESS EE. THE AO WAS, THEREFORE, BOUND TO PASS AN ORDER GIVING APPEAL EFFECT AS PER ORDER OF THE TRIBUNAL. THE AO IN THE IMPUGNED ORDER U/S. 154 OF THE IT ACT CORRECTLY MADE THE ADDITION OF CASH CREDIT AS WAS DIRECTED BY THE TRIBUNAL. THE LD. CIT (A) HAS TAKEN INTO CONSIDERATION ALL THE FACTS AND CIRCUMSTANCES WHILE DISMISSING TH E APPEAL OF THE ASSESSEE. THUS, THERE WAS A BASIS FOR PASSING THE RECTIFICATION ORD ER IN CONSEQUENCE WITH THE DECISION OF THE TRIBUNAL. THE ASSESSEE WAS GIVEN SH OW CAUSE NOTICE BEFORE PASSING THE RECTIFICATION ORDER AND IT WAS ONLY THE DECISIO N OF THE TRIBUNAL WHICH HAS BEEN IMPLEMENTED AGAINST WHICH THE ASSESSEE HAS NOT ARGU ED AT ALL DURING THE COURSE OF ARGUMENTS. IT IS, THEREFORE, DUTY OF THE AO TO IMPL EMENT THE ORDER OF THE TRIBUNAL, WHICH THE AO HAS RIGHTLY DONE IN THIS CASE IN THE P ROCEEDINGS U/S. 154 OF THE IT ACT. THUS, THE SUBMISSIONS OF THE LD. COUNSEL FOR T HE ASSESSEE HAVE NO MERIT AND ARE LIABLE TO BE REJECTED. THE LD. COUNSEL FOR THE ASSE SSEE ADMITTED DURING THE COURSE OF ARGUMENTS THAT THE LD. CIT(A) HAS GIVEN FULL OPPORT UNITY OF HEARING AT THE APPELLATE STAGE IN WHICH ALSO, THE LD. COUNSEL FOR THE ASSESS EE COULD NOT POINT OUT ANY MISTAKE IN THE ORDER OF THE AO. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. THE SAME IS ACCORDINGLY DISMISSED. IN THE RESULT, ITA NO. 206/AGRA/2010 IS DISMISSED. ITA NO. 206 & 207/AGRA/2010 7 ITA NO. 207/AGRA/2010 : 7. IN THIS APPEAL, THE ASSESSEE CHALLENGED CONFIRMI NG OF LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT ON THE ADDITION MADE U/S. 6 8 OF THE IT ACT AT RS.57,66,421/- ON ACCOUNT OF UNEXPLAINED CASH CREDITS FROM FARMERS . THE FACTS ARE SAME AS NOTED IN ITA NO. 206/AGRA/2010. THE AO, ON CONFIRMING THE ADDITION ON ACCOUNT OF CASH CREDITS, INITIATED PENALTY PROCEEDINGS AND NOTED TH AT THE ADDITION WAS MADE OF THE ABOVE AMOUNT, AS THE AMOUNT WAS SHOWN IN BALANCE SH EET AS FARMERS CREDIT FROM WHOM PURCHASES HAVE BEEN MADE BY THE ASSESSEE AND P AYMENTS WERE DUE TO THEM NOT BEING GENUINE. THE ENQUIRY LETTERS/SUMMONS WERE SENT BY THE AO AT THE GIVEN ADDRESSES, WHICH WERE MOSTLY RETURNED BACK. THE ASS ESSEE WAS ASKED TO PRODUCE SUCH FARMERS FOR EXAMINATION, WHICH WAS EVEN DENIED BY THE ASSESSEE STATING THAT IT IS IMPOSSIBLE TO PRODUCE THEM. HOWEVER, IN RESPONSE TO SUMMONS ISSUED U/S. 131, SHRI ASHA RAM PANDIT APPEARED AND HIS STATEMENT WAS RECORDED IN WHICH HE STATED THAT HE HAS RECEIVED PAYMENT IMMEDIATELY AFTER SALE OF HIS CROPS AND NO AMOUNT WAS OUTSTANDING. SHRI THAKUR SHIV SINGH ALSO DENIED OF HAVING ANY DUES FROM THE ASSESSEE. THE AO, THEREFORE, TREATED THE CASH CREDI T AS BOGUS AND MADE ADDITION HOLDING THE SAME TO BE ASSESSEES OWN INCOME FROM U NDISCLOSED SOURCES. THE LD. CIT(A) DELETED PART OF THE ADDITION VIDE ORDER DATE D 08.02.2007 CONSIDERING RS.52,52,341/- AS OPENING BALANCE ON 31.03.2000 AND BALANCE WAS CONFIRMED, BUT THE TRIBUNAL ALLOWED THE DEPARTMENTAL APPEAL AND RE STORED THE ADDITION AS NOTED ITA NO. 206 & 207/AGRA/2010 8 ABOVE BY REJECTING ALL THE CONTENTIONS OF THE ASSES SEE INCLUDING THE THEORY OF PEAK CREDIT ADDITION AND OPENING BALANCE CARRIED FORWARD FROM EARLIER YEARS. THE AO VIDE SEPARATE ORDER DATED 29.05.2009 LEVIED PENALTY BECAUSE THE ASSESSEE DESPITE ISSUING SHOW CAUSE NOTICE DID NOT ATTEND PENALTY PR OCEEDINGS AND NO EXPLANATION, WHATSOEVER, HAS BEEN FILED. THE AO, THEREFORE, HELD THAT THE ASSESSEE CONCEALED INCOME OF RS.57,66,421/- AND PENALTY WAS ACCORDINGL Y LEVIED. AT THE APPELLATE STAGE, THE ASSESSEE FILED WRITTEN SUBMISSIONS STATI NG THEREIN THAT NO ADEQUATE OPPORTUNITY OF BEING HEARD HAS BEEN GIVEN BEFORE PA SSING THE PENALTY ORDER. THE AMOUNT IN QUESTION REPRESENTS THE PURCHASES MADE FR OM FARMERS AND WAS NOT CASH CREDITS. THE LD. CIT(A) FOUND THAT THE ASSESSEE WAS GIVEN DUE OPPORTUNITY OF BEING HEARD BUT NO REPLY HAS BEEN FILED AT THE PENALTY ST AGE AND RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF MCKENZI ES LTD. & ORIENTAL TIMBER TRADING CORPORATION (P) LTD. VS. CIT, 242 ITR 669, IN WHICH IT WAS HELD THAT WHERE NO REASON IS GIVEN BY THE APPELLANT IN RESPON SE TO A SHOW CAUSE NOTICE, PENALTY U/S. 271 IS EXIGIBLE. THE LD. CIT(A) FOUND THAT SINCE THE ASSESSEE HAS NOT AVAILED THE OPPORTUNITY, THEREFORE, THE APPEAL OF T HE ASSESSEE IS DISMISSED. THE LD. CIT(A) ALSO REJECTED THE EXPLANATION OF THE ASSESSE E THAT NO ADDITION U/S. 68 COULD BE MADE IN THIS CASE BECAUSE THE AMOUNTS REPRESENT THE PURCHASE MADE FROM FARMERS. THE APPEAL OF THE ASSESSEE WAS, ACCORDINGL Y DISMISSED. ITA NO. 206 & 207/AGRA/2010 9 8. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE AMOUNTS REPRESENT PURCHASE AND WERE TRADE CREDITORS. THEREFORE, THERE WAS NO MALA FIDE INTENTION ON THE PART OF THE ASSESSEE AND AS SUCH, NO PENALTY IS LEVIABLE. THE AO HAS NOT GIVEN ANY OPPORTUNITY OF BEING HEARD AT THE PENALTY SAGE AND ALL THE EXPLANATIONS OF THE ASSESSEE HAVE NOT BEEN CONSIDERED BY THE LD. CIT(A). ON THE OTHER HAND, TH E LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. EXPLANATION I TO SECTION 271(1)(C) OF THE ACT READ S AS UNDER : EXPLANATION 1.WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR O FFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMM ISSIONER (APPEALS)OR THE COMMISSIONER TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIA L 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, FOR THE P URPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INC OME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. ITA NO. 206 & 207/AGRA/2010 10 9.1 HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. HARPARSHAD AND COMPANY LTD., 328 ITR 53 HELD 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. 206 & 207/AGRA/2010 11 9.2 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. 9.3 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 ITA NO. 206 & 207/AGRA/2010 12 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 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. 9.4. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF MI RZAPUR CONSTRUCTION CO. 122 ITR 828, HAS 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. 9.5 IN THIS CASE THE FACTS NOTED ABOVE ARE NOT IN D ISPUTE. THE AO CONDUCTED DUE ENQUIRY INTO THE MATTER TO VERIFY THE CASH CREDITS SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND FOUND THAT THEY ARE NOT GENUINE. W HATEVER ENQUIRY LETTERS WERE ISSUED WERE EITHER RETURNED BACK OR WHEREVER THEY W ERE SEVERED, THE PERSONS DID NOT RESPOND. THE AO RECORDED SOME OF THE STATEMENTS OF THE FARMERS BUT THEY CLEARLY STATED THAT AFTER SALE OF THEIR CROPS NO AM OUNT WAS OUTSTANDING. THE ASSESSEE ALSO FAILED TO PRODUCE THE FARMERS BEFORE THE AO FO R EXAMINATION. THE AO, THEREFORE, TREATED THE CREDITS AS BOGUS. THE LD. CI T(A), HOWEVER, VIDE ORDER DATED ITA NO. 206 & 207/AGRA/2010 13 08.02.2007 DELETED SUBSTANTIAL ADDITION OF RS.52,52 ,341/- CONSIDERING THE SAME TO BE THE OPENING BALANCE COME UP AS ON 31.03.2000, I. E., EARLIER PRECEDING YEAR. THE ORDER OF THE LD. CIT(A) HAS BEEN REVERSED BY THE TR IBUNAL VIDE ORDER DATED 29.08.2008 AND THE PLEA OF THE ASSESSEE OF PEAK CRE DIT AND OPENING BALANCE OF EARLIER YEAR HAS BEEN REJECTED AS NO CASE OF PEAK C REDIT WAS MADE OUT AS PER DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CAS E OF BHAIYA LAL SHYAM BEHARI VS. CIT, 276 ITR 38 AND ALSO THE CASH CREDITS WERE CREDITED IN THE BOOKS OF ACCOUNT FOR THE FIRST TIME ONLY DURING THE RELEVANT YEAR. T HEREFORE, ADDITION MADE BY THE AO WAS RESTORED. THUS, THERE WAS A FINDING OF FACT REC ORDED AGAINST THE ASSESSEE THAT THE CASH CREDITS WERE BOGUS AND IT WAS INCOME OF TH E ASSESSEE FROM UNDISCLOSED SOURCES. THE TRIBUNAL ALSO CONFIRMED THE ADDITION. THE ASSESSEE IN RESPONSE TO THE PENALTY NOTICE DID NOT ATTEND THE PENALTY PROCEEDIN GS AND NO EXPLANATION WAS FILED BEFORE THE AO. THUS, THE ASSESSEE FAILED TO OFFER A NY EXPLANATION BEFORE THE AO AND AS SUCH EXPLANATION-1 TO SECTION 271(1)(C) WOUL D CLEARLY ATTRACTED IN THE CASE OF THE ASSESSEE AND THE AMOUNT ADDED IN THE COMPUTA TION OF TOTAL INCOME OF THE ASSESSEE SHALL FOR THE PURPOSE OF LEVY OF PENALTY U /S. 271(1)(C) BE DEEMED TO REPRESENT THE INCOME, IN RESPECT OF WHICH PARTICULA RS HAVE BEEN CONCEALED. THE DECISIONS NOTED ABOVE ARE APPLICABLE AGAINST THE AS SESSEE TO SUPPORT THE ORDERS OF THE AUTHORITIES BELOW. SAME IS THE POSITION BEFORE US BECAUSE THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION OF UNEXPLAINED CREDITS, ON WHICH THE PENALTY WAS IMPOSED. ITA NO. 206 & 207/AGRA/2010 14 IT IS NOT A CASE OF DENIAL OF OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AT ANY STAGE. THEREFORE, THE SUBMISSION OF THE LD. COUNSEL FOR TH E ASSESSEE HAS NO MERIT AND IS REJECTED. CONSIDERING THE ABOVE DISCUSSION, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). WE CONFIRM THE SAME AND DI SMISS THE APPEAL OF THE ASSESSEE. IN THE RESULT, ITA NO. 207/AGRA/2010 IS D ISMISSED. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. 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