Agesh Hariram Dhupar, Ahmednagar V. Income-tax Officer,

ITA 207/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1744 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 01-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POOJA RASTOGI
• Keywords: Business income; Bonafide belief; Reasonable cause; Revised return
• Section: 273B; 27; 2; 11

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.207/PN/2014 ASSESSMENT YEAR : 2008-09 AGESH HARIRAM DHUPAR, M/S SHANTILAL GANDHI, TAX CONSULTANT, 1 ST FLOOR, 146 AMBER PLAZA STATION ROAD, AHMEDNAGAR 414 001. PAN : AHRPD1958Q . APPELLANT VS. THE INCOME TAX OFFICER, WARD 1, AHMEDNAGAR. . RESPONDENT / APPELLANT BY : MR. C. H. NANIWADEKAR / RESPONDENT BY : MS. POOJA RASTOGI / DATE OF HEARING : 11.05.2016 / DATE OF PRONOUNCEMENT: 31.05.2016 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE ASSESSEE IS AGAIN ST THE PENALTY ORDER OF CIT(A)-IT/TP, PUNE DATED 01.01.2014 RELATING TO ASS ESSMENT YEAR 2008-09 PASSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX AC T, 1961 (IN SHORT THE ACT). 2. BY WAY OF THE PRESENT APPEAL, THE ASSESSEE HAS C HALLENGED THE ACTION OF THE CIT(A) IN CONFIRMING THE IMPUGNED PENALTY LEVIE D UNDER SECTION 271(1)(C) OF THE ACT AT RS.8,82,000/- BY THE ASSESSING OFFICE R. 3. BRIEFLY STATED, THE RELEVANT FACTS CONCERNING TH E ISSUE RAISED BY THE ASSESSEE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME BELATEDLY UNDER SECTION 2 ITA NO.207/PN/2014 139(4) OF THE ACT ON 25.03.2009 DECLARING A TOTAL I NCOME OF RS.1,50,000/-. THE CASE WAS SELECTED FOR SCRUTINY BY THE ASSESSING OFFICER. THE ASSESSING OFFICER WAS IN POSSESSION OF CERTAIN INFORMATION AS PER ANNUAL INFORMATION REPORT (AIR) THAT THE ASSESSEE HAS SOLD LAND AT SUR VEY NO.229/1B+2B TO LARSEN & TURBO (L&T) LTD. ALONG WITH FOUR OTHER CO- OWNERS WITH ONE FIFTH SHARE BELONGING TO THE ASSESSEE. AS PER SALE DEED, THE ASSESSEE HAS GOT HIS SHARE OF SALE CONSIDERATION AT RS.47,68,365/-. THE ASSESS ING OFFICER FOUND ON VERIFICATION OF THE RETURN OF INCOME THAT THE ASSES SEE HAS NOT DECLARED THIS TRANSACTION OF SALE OF LAND IN HIS RETURN OF INCOME . IN RESPONSE TO NOTICE BY ASSESSING OFFICER, THE ASSESSEE FILED HIS REVISED R ETURN ON 26.08.2010 IN WHICH HE HAS SHOWN TOTAL INCOME OF RS.42,42,030/- INCLUDI NG LONG TERM CAPITAL GAIN (LTCG) ARISING FROM SALE OF LAND AT RS.41,24,3 84/-. THEREAFTER, THE ASSESSEE FILED ANOTHER REVISED RETURN ON 11.10.2010 IN WHICH THE ASSESSEE CLAIMED SHORT TERM LOSS OF RS.2,57,718/-. THE ASSE SSING OFFICER OBSERVED THAT REVISED RETURNS SO FILED WERE OUT OF TIME AND THE I MPUGNED INCOME WAS DECLARED AFTER DETECTION OF CONCEALMENT BY THE DEPA RTMENT. THE ASSESSING OFFICER, THEREFORE, REFUSED TO TAKE COGNIZANCE OF T HE REVISED RETURNS SO FILED. IN VIEW OF THE SPECIFIC INFORMATION, THE ASSESSING OFF ICER ASSESSED LTCG AT RS.41,24,384/- IN THE HANDS OF THE ASSESSEE. THE A SSESSING OFFICER ALSO ALLEGED THAT ASSESSEE HAS CONCEALED INCOME FROM THE LTCG BY NOT DISCLOSING HIS SHARE ON SALE OF LAND IN THE RETURN OF INCOME. IN THE PENALTY ORDER, THE ASSESSING OFFICER OBSERVED THAT ASSESSEE DID NOT OF FER ANY PLAUSIBLE EXPLANATION FOR CONCEALMENT OF INCOME. THE ASSESSI NG OFFICER NOTICED THAT THE EXPLANATION OFFERED BY THE ASSESSEE IN THE COURSE O F THE PENALTY PROCEEDINGS WHEREBY THE ASSESSEE SUBMITTED THAT SINCE 2005 THE ASSESSEE WAS ENGAGED AS AN ESTATE BROKER. IN 2005 TO 2007, HE ALONG WITH HIS FRIENDS ENTERED INTO AN AGREEMENT FOR PURCHASE OF LANDS IN QUESTION WITH DI FFERENT LAND OWNERS WITH THE INTENTION OF DEVELOPING THE SAME. DURING THE YE AR UNDER CONSIDERATION, IMPUGNED LAND WAS SOLD TO ONE M/S L&T LTD.. IT WAS THE CASE OF THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT THERE WAS AN UNDE RSTANDING BETWEEN THE CO- PURCHASERS THAT THE TRANSACTIONS BETWEEN THEM SHALL BE JOINT VENTURE, WHICH SHALL BEAR THE INCOME-TAX AND OTHER TAXES LIABILITY . AS THE DEAL WAS ABOUT TO BE 3 ITA NO.207/PN/2014 FINALIZED, THE ELDER BROTHER OF THE ASSESSEE SUFFER ED FROM HEALTH PROBLEMS OF SERIOUS NATURE, ON WHICH HE HAD TO BE HOSPITALIZED. HE WAS THEREFORE UNFORTUNATELY ENGROSSED IN HIS BROTHERS TREATMENT AND THEREFORE HANDED OVER BANK ACCOUNTS AND OTHER DETAILS TO HIS CA FOR PREPA RING TAX RETURN, WHICH WAS FILED IN MARCH, 2009. AS ALL THESE TRANSACTIONS WE RE REFLECTED IN THE BANK ACCOUNTS, HE WAS UNDER THE BONAFIDE BELIEF THAT HIS CA MUST HAVE DISCLOSED INCOME IN THE RETURN OF INCOME. IT IS ONLY ON RECE IPT OF NOTICE FROM THE DEPARTMENT, HE FOUND THAT ALL THE CO-OWNERS OF THE LAND HAD OFFERED CAPITAL GAINS IN THEIR INDIVIDUAL CAPACITY AND NOT AS PER T HE UNDERSTANDING REACHED AMONGST THEM. HE IMMEDIATELY FILED THE REVISED RET URN PREPARED BY OTHER CONSULTANT AND PAID TAX. THUS, HE INADVERTENTLY RE LIED ON THE UNDERSTANDING ARRIVED AT THE TIME OF ACQUISITION OF LAND. FURTHE R, THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT DUE TO SUFFERINGS OF HIS BROTHER, HE COULD NOT CONTACT OTHER CO-OWNERS AND ALSO TO HIS CA. HE STR ESSED THAT THERE WAS NO MALAFIDE INTENTION WHATSOEVER, ON HIS PART TO EVADE TAX LIABILITY. HE PAID THE TAXES IN THE COURSE OF ASSESSMENT PROCEEDINGS AND H AS ALSO NOT CONTRADICTED THE ASSESSMENT BY WAY OF APPEAL. THE ASSESSING OFFICER , HOWEVER, PERCEIVED THE FACTS AGAINST THE ASSESSEE AND ALLEGED THAT THE ASS ESSEE HAS OMITTED TO OFFER THE INCOME ALTOGETHER IN THE RETURN OF INCOME AND THERE FORE THE ASSESSEE IS LIABLE TO PENALTY FOR CONCEALMENT OF INCOME. 4. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE CIT(A). 5. BEFORE THE CIT(A), THE ASSESSEE ONCE AGAIN SUBMI TTED THAT HE HAS PURCHASED AGRICULTURAL LAND ALONG WITH HIS FRIENDS WITH INTENTION TO SALE THE AFORESAID LAND AFTER DEVELOPING IT. ACCORDINGLY, T HEY DEVELOPED THE LAND AND SOLD IT TO LARSEN & TURBO LTD.. THE SALE DEED WAS EXECUTED BY THE ASSESSEE ALONG WITH CO-OWNERS AND OTHER LAND OWNERS FOR ACQU ISITION OF LAND. IT WAS STATED BY THE ASSESSEE BEFORE THE CIT(A) THAT HE AL ONG WITH HIS FRIENDS LATER FORMED AOP FOR THIS VENTURE. THE CIT(A) WAS NOT CO NVINCED WITH THE EXPLANATION OFFERED BY THE ASSESSEE TO BE BONAFIDE ONE. HE OBSERVED THAT LAND 4 ITA NO.207/PN/2014 WERE PURCHASED BY THE ASSESSEE AND OTHERS IN THE CA PACITY OF CO-OWNERS. THE AOP WAS FORMED LATER. THE CIT(A) THUS OBSERVED THA T LAND SO PURCHASED DID NOT BELONG TO AOP AND THEREFORE AOP COULD NOT HAVE PAID TAXES ON THE LAND WHICH DID NOT BELONG TO IT. THE CIT(A) ALSO NOTED THAT THERE IS NO REFERENCE FOUND ANYWHERE THAT MEMBERS INTRODUCED THIS LAND TO AOP. HE ACCORDINGLY OBSERVED THAT THE ASSESSEE BELIEVED THAT THE AOP CO ULD HAVE PAID TAXES HAS NO BASIS. THE CIT(A) ALSO NOTED THAT IN ANY BUSINESS VENTURE, RIGHTS AND OBLIGATIONS OF EACH PARTY ARE VERY CLEAR. THAT IS THE REASON WHY OTHER MEMBERS PAID TAXES ON THEIR SHARE OF CAPITAL GAIN. THEREFO RE, THE PLEA OF THE ASSESSEE THAT HE WAS NOT AWARE AS TO WHETHER THE AOP WAS GOI NG TO PAY TAX ON CAPITAL GAINS OR NOT IS NOT ACCEPTABLE. THE CIT(A) FURTHER OBSERVED THAT ASSESSEE ACTED ONLY AFTER THE DEPARTMENT STARTED ENQUIRIES AND IN THE ABSENCE OF INFORMATION IN THE POSSESSION OF THE DEPARTMENT, THE TAXES DUE TO THE DEPARTMENT COULD NOT BE COLLECTED. THE CIT(A) ALSO OBSERVED THAT THE AS SESSEE HAD DULY VERIFIED HIS RETURN OF INCOME AS TRUE AND CORRECT. IT IS REQUIR ED FROM THE TAXPAYERS THAT THEY EXERCISE DUE DILIGENCE AND DECLARE CORRECT INCOME W HILE FILING THE RETURN OF INCOME. THE CIT(A) ACCORDINGLY CONFIRMED THE ACTIO N OF THE ASSESSING OFFICER IN IMPOSING THE PENALTY AT A MINIMUM RATE O F 100% UNDER SECTION 271(1)(C) OF THE ACT. 6. AGGRIEVED BY THE SAID ACTION OF THE CIT(A), THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 7. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE SHRI C.H. NANIWADEKAR, AT THE OUTSET, SUBMITTED THAT THE ASSE SSEE IMMEDIATELY FILED THE REVISED RETURN AND RECTIFIED THE MISTAKE IN NOT DEC LARING THE INCOME AND DULY PAID THE TAXES DUE TO THE ASSESSEE ALONG WITH INTER EST AND HENCE COMPLIED WITH THE LAW. HE REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER THAT DUE TO SERIOUS HEALTH PROBLEMS FACED BY THE BROTHER THE ASSESSEE COULD NOT PAY ATTENTION TO THE MATTERS AND RELIED UPON THE CHARTE RED ACCOUNTANT RESULTING IN ERROR. THUS, THERE IS A REASONABLE CAUSE AS CONTEM PLATED UNDER SECTION 273B OF THE ACT. HE THEREAFTER SUBMITTED THAT THE ASSESSIN G OFFICER AS WELL AS CIT(A) 5 ITA NO.207/PN/2014 FAILED TO APPRECIATE THE POSITION ON FACTS IN PROPE R PERSPECTIVE. THE AGRICULTURAL LAND IN QUESTION WAS PURCHASED ALONG W ITH OTHER FOUR CO-OWNERS WITH AN INTENTION TO SALE THE LAND AFTER DEVELOPING IT WHICH ACTIVITY IS A BUSINESS VENTURE. THE LAND WAS CONVERTED INTO NON- AGRICULTURAL LAND AND THEREAFTER SOLD TO L&T LTD.. HE, THEREFORE, STRESS ED THAT THE INCOME GENERATED FROM THE SALE OF LAND IS SUSCEPTIBLE TO ASSESSMENT IN THE HANDS OF THE AOP AND NOT IN THE HANDS OF THE INDIVIDUAL CO-OWNERS. HE A LSO SIMULTANEOUSLY ASSERTED THAT INCOME SHOULD BE RIGHTLY ASSESSED UNDER THE HE AD BUSINESS INCOME AS AGAINST THE CAPITAL GAINS IN THE HANDS OF THE OTH ER CO-OWNERS AS WELL AS THE ASSESSEE. HE HAS OFFERED THE INCOME AND PAID THE T AXES ONLY TO AVOID ANY UNWARRANTED LITIGATION. THE PENALTY IS THUS NOT JU STIFIED. HE, THEREAFTER, ADVERTED OUR ATTENTION TO THE ENGLISH TRANSLATION O F THE DEVELOPMENT AGREEMENT AT PAGE NO.20 OF THE PAPER BOOK. HE OBSERVED WITH REFERENCE TO THE AFORESAID DEVELOPMENT AGREEMENT THAT THE AGREEMENT WAS ENTERE D INTO ON 11.03.2005 BETWEEN FIVE PARTIES INCLUDING THE ASSESSEE WITH VE NDORS NAMELY SMT. KIRAN PRADIPKUMAR AGRAWAL. THUS, AT THE ACQUISITION STAG E ITSELF, THE INTENTION OF THE ASSESSEE WAS MANIFEST TO ACT AS A DEVELOPER OF THE SAID PROPERTY AS PER THE DEVELOPMENT AGREEMENT. THE LAND WAS TO BE SUB-DIVI DED INTO PLOTS AND THE PLOTS WERE TO BE SOLD ON DEVELOPMENT BASIS. THE AS SESSEE TOGETHER WITH OTHER JOINT PURCHASERS WERE ALSO ENTITLED TO CONSTRUCT OW NERSHIP SCHEMES IN RELATION TO THE IMPUGNED LAND. HE SUBMITTED THAT FROM THE T EXT AND TENOR OF THE DEVELOPMENT AGREEMENT ENTERED INTO AT THE TIME OF A CQUISITION OF LAND, IT IS EVIDENT THAT THE INTENTION WAS TO EXPLOIT THE LAND SO ACQUIRED COMMERCIALLY AS A JOINT VENTURE AND CONSEQUENTLY THE INCOME THEREFROM IS REQUIRED TO BE TAXED IN THE HANDS OF THE AOP AND NOT IN THE HANDS OF THE RE SPECTIVE INDIVIDUAL OWNERS. IT IS A DIFFERENT MATTER THAT THE OTHER JOINT OWNER S AS WELL AS THE ASSESSEE HAS OFFERED THE INCOME IN THEIR RESPECTIVE HANDS WHICH WILL NOT CHANGE THE POSITION OF LAW. FOR THE PROPOSITION THAT INCOME TO BE ASSE SSED IN THE HANDS OF THE AOP, HE REFERRED TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. INDIRA BALKRISHNA, 39 ITR 546 (SC) AND SUBMITTE D THAT THE HONBLE SUPREME COURT HAS EXPLAINED THE CONCEPT OF AOP IN T HE AFORESAID DECISION AS UNDER :- 6 ITA NO.207/PN/2014 IT IS ENOUGH FOR OUR PURPOSE TO REFER TO THREE DEC ISIONS : IN RE B. N. ELIAS ; COMMISSIONER OF INCOME-TAX V. LAXMIDAS DEVIDAS ; AN D IN RE DWARAKANATH HARISCHANDRA PITALE. IN IN RE B. N. ELIAS DERBYSHIR E, C. J., RIGHTLY POINTED OUT THAT THE WORD 'ASSOCIATE' MEANS, ACCORDING TO THE OXFORD DICTIONARY, 'TO JOIN IN COMMON PURPOSE, OR TO JOIN IN AN ACTION.' THEREFORE, AN AS SOCIATION OF PERSONS MUST BE ONE IN WHICH TWO OR MORE PERSONS JOIN IN A COMMON PURPO SE OR COMMON ACTION, AND AS THE WORDS OCCUR IN A SECTION WHICH IMPOSES A TAX ON INCOME, THE ASSOCIATION MUST BE ONE THE OBJECT OF WHICH IS TO PRODUCE INCOME, PROFI TS OR GAINS. THIS WAS THE VIEW EXPRESSED BY BEAUMONT, C. J., IN COMMISSIONER OF IN COME-TAX V. LAKSHMIDAS DEVIDAS AT PAGE 589 AND ALSO IN IN RE DWARAKANATH H ARISCHANDRA PITALE. IN IN RE B. N. ELIAS, COSTELLO, J., PUT THE TEST IN MORE FORCEF UL LANGUAGE. HE SAID : 'IT MAY WELL BE THAT THE INTENTION OF THE LEGISLATURE WAS TO HIT COMBINATIONS OF INDIVIDUALS WHO WERE ENGAGED TOGETHER IN SOME JOINT ENTERPRISE BUT DID NOT IN LAW CONSTITUTE PARTNERSHIPS....... WHEN WE FIND, ....... THAT THER E IS A COMBINATION OF PERSONS FORMED FOR THE PROMOTION OF A JOINT ENTERPRISE ...... THEN I THINK NO DIFFICULTY ARISES WHATEVER IN THE WAY OF SAYING THAT THESE PERSONS DID CONSTIT UTE AN ASSOCIATION ........' WE THINK THAT THE AFORESAID DECISIONS CORRECTLY LAY DOWN THE CRUCIAL TEST FOR DETERMINING WHAT IS AN ASSOCIATION OF PERSONS WITHI N THE MEANING OF SECTION 3 OF THE INCOME-TAX ACT, AND THEY HAVE BEEN ACCEPTED AND FOL LOWED IN A NUMBER OF LATER DECISIONS OF DIFFERENT HIGH COURTS TO ALL OF WHICH IT IS UNNECESSARY TO CALL ATTENTION. IT IS, HOWEVER, NECESSARY TO ADD SOME WORDS OF CAUT ION HERE. THERE IS NO FORMULA OF UNIVERSAL APPLICATION AS TO WHAT FACTS, HOW MANY OF THEM AND OF WHAT NATURE, ARE NECESSARY TO COME TO A CONCLUSION THAT THERE IS AN ASSOCIATION OF PERSONS WITHIN THE MEANING OF SECTION 3 ; IT MUST DEPEND ON THE PARTIC ULAR FACTS AND CIRCUMSTANCES OF EACH CASE AS TO WHETHER THE CONCLUSION CAN BE DRAWN OR NOT. 8. THE LD. AR ALSO MADE REFERENCE TO THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. BULDANA DISTRICT MAIN CLOTH IMPORTERS GROUP, 42 ITR 172 (SC) AND N.V. SHANMUGHAM AND CO. VS. CIT, 8 1 ITR 310 (SC) TO LAY STRESS TO HIS PLEA THAT THE PRESENT AGREEMENT B ETWEEN THE ASSESSEE AND OTHER CO-OWNERS WAS IN THE NATURE OF AOP AND THE INCOME G ENERATED FROM THE SALE OF LAND SHOULD BE CORRECTLY TAXED IN THE CAPACITY OF T HE AOP. SHRI NANIWADEKAR THUS ASSERTED THAT THE INCOME ITSELF HAS BEEN WRONG LY ASSESSED IN THE HANDS OF ASSESSEE. THERE IS, THUS, NO JUSTIFICATION TO IMPO SE PENALTY BASED ON SUCH A WRONG ASSESSMENT. HE FURTHER EXHORTED THAT PENALTY PROCEEDINGS ARE INDEPENDENT OF THE ASSESSMENT PROCEEDINGS AND OBSER VATIONS MADE IN THE ASSESSMENT PROCEEDINGS ARE NOT CONCLUSIVE FOR THE D ETERMINATION OF CONTROVERSY IN THE PENALTY PROCEEDINGS. THEREFORE, MERELY BECAUSE THE INCOME HAS BEEN OFFERED BY THE ASSESSEE IN ITS HAND IN HIS INDIVIDUAL CAPACITY, THIS WILL NOT LEAD TO THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE LD. AR WENT ON TO SUBMIT THAT IN THE LIGHT OF THE D ECISION OF THE HONBLE SUPREME COURT ON THE CONCEPT OF AOP AS NOTED ABOVE, NO SEPARATE FORMAL DOCUMENT FOR FORMATION OF AOP IS REQUIRED. THE EXI STENCE OF AOP IS REQUIRED 7 ITA NO.207/PN/2014 TO BE INFERRED FROM THE ACTION OF THE VARIOUS CO-OW NERS WHERE THE PARTIES JOINED HAND FOR MUTUALITY OF INTEREST TO SHARE INCOME AND LIABILITY. HE ALSO INSISTED THAT OFFERING OF INCOME BY OTHER CO-OWNERS IN THEIR INDIVIDUAL CAPACITY AS CAPITAL GAINS IS IRRELEVANT CONSIDERATION FOR DETER MINATION OF THE TAXABILITY IN THE HANDS OF THE ASSESSEE. SHRI NANIWADEKAR THUS S UBMITTED THAT IN VIEW OF THE INCOME ASSESSABLE IN THE HANDS OF AOP AS DEMONSTR ATED ABOVE, THE ACTION OF THE ASSESSEE IN NOT OFFERING THE INCOME IN THE INDI VIDUAL HANDS AT THE TIME OF FILING THE ORIGINAL RETURN CANNOT BE TERMED TO BE M ALAFIDE. AS A COROLLARY, THE EXPLANATION OF THE ASSESSEE IS BONAFIDE AND SUBSTAN TIATED BY THE TOTALITY OF CIRCUMSTANCES AND THUS PENALTY IMPOSED DESERVES TO BE STRUCK DOWN. 9. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE ASSESSING OFFICE R AND THE CIT(A). HE SUBMITTED THAT THE UNDISCLOSED INCOME WAS UNEARTHED ONLY BECAUSE OF THE AIR INFORMATION IN POSSESSION OF THE REVENUE WHICH WOUL D HAVE OTHERWISE ESCAPED ASSESSMENT CAUSING LOSS TO THE REVENUE. THE PENALT Y WAS IMPOSED AT MINIMUM RATE AND IS MERELY A REMEDY FOR THE POSSIBL E LOSS OF REVENUE. THE LD. DR SUBMITTED THAT THE LAND PURCHASED BY THE CO- OWNERS WERE SOLD AND THE SUBSTANTIAL PROFITS WERE GENERATED. THE SUBSTANTIA L AMOUNT WAS RECEIVED THROUGH BANKING CHANNEL WHICH IS REFLECTED FROM THE BANK STATEMENT. THEREFORE, THE SUBMISSIONS OF THE ASSESSEE THAT THE INCOME REMAINED TO BE ACCOUNTED AT THE TIME OF FILING OF THE RETURN OF IN COME DUE TO MISTAKE OF CA IS NOT CONCEIVABLE ON FACTS. AS REGARDS, THE PLEA OF THE ASSESSEE THAT THE INCOME SHOULD BE TAXED AS AOP, THE LD. DR SUBMITTED THAT T HE INCOME HAS BEEN RIGHTLY ASSESSED IN THE HANDS OF THE INDIVIDUAL CO- OWNERS AS OFFERED BY THE RESPECTIVE CO-OWNERS. THE ASSESSEE HIMSELF ALSO HA S OFFERED THE INCOME AS CO- OWNER. THE LD. DR ALSO SUBMITTED THAT THE INCOME H AS NOT BEEN OFFERED TO TAX AS AOP AND THEREFORE THE THEORY PROPOUNDED BY THE A SSESSEE THAT THE INCOME IS TAXABLE IN THE HANDS OF THE AOP IS ALSO DEVOID OF A NY MERIT. HE, THEREFORE, SUBMITTED THAT NO INTERFERENCE IS CALLED FOR WITH T HE ACTION OF THE REVENUE IN IMPOSING THE MINIMUM PENALTY ON THESE SPEAKING FACT S. 8 ITA NO.207/PN/2014 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE ASSESSEE HAS ASSAILED THE IMPOSITION OF PENALTY UNDER SECTION 27 1(1)(C) AND CONTENDS THAT THAT NO PENALTY IS WARRANTED IN THE FACTS AND CIRCU MSTANCES OF THE CASE IN VIEW OF THE SPECIFIC CASE MADE OUT THAT INCOME IS NOT AS SESSABLE IN THE HANDS OF ASSESSEE IN HIS INDIVIDUAL CAPACITY AT THE FIRST PL ACE AND IS RIGHTLY ASSESSABLE IN THE HANDS OF DIFFERENT PERSON I.E. AOP. WITHOUT PRE JUDICE TO THIS PLANK, THE SECOND PLANK OF THE ARGUMENT IS THAT HAVING REGARD TO THE REASONABLE CAUSE FOR FAILING TO DISCHARGE ITS TAX OBLIGATION, IMPOSITIO N OF PENALTY UNDER S. 271(1)(C) IS NOT JUSTIFIED. 11. WE TAKE NOTICE FROM THE FACTS NARRATED ABOVE TH AT THE ASSESSEE ADMITTEDLY DID NOT FILE RETURN OF INCOME WITHIN THE DUE DATE SPECIFIED UNDER SECTION 139(1) OF THE ACT. THE IMPUGNED CAPITAL GA IN OF RS. 41,24,384/-- AND ANOTHER INCOME TOWARDS BANK INTEREST RS. 21,941/- W AS NOT OFFERED FOR TAXATION IN THE BELATED RETURN OF INCOME FILED UNDER S. 139( 4) OF THE ACT. THE INCOME WAS HOWEVER OFFERED BY A SUBSEQUENT RETURN IN THE C OURSE OF SCRUTINY PROCEEDINGS. THE ASSESSING OFFICER INITIATED PENALT Y PROCEEDINGS IN THE COURSE OF ASSESSMENT PROCEEDINGS AND IMPOSED PENALTY UNDER S. 271(1)(C) AT THE MINIMUM RATE OF 100% OF THE TAX SOUGHT TO BE EVADED WHICH WAS WORKED OUT TO RS. 8,82,000/-. AS NOTED, THE ORIGINAL RETURN F ILED WAS BELATEDLY UNDER S. 139(4) OF THE ACT. IT IS NOT PERMISSIBLE TO REVISE THE BELATED RETURNS AT A SUBSEQUENT STAGE UNDER THE SCHEME OF THE ACT. THUS, THE REVISED RETURN OF INCOME WHEREIN THE IMPUGNED INCOME WHICH IS SUBJECT MATTER OF PENALTY WAS DECLARED IS NON EST AND A NULLITY IN THE EYES OF LAW. THEREFORE, AS PE R THE VALID RETURN ON RECORD, THE INCOME REMAINS UNDECLARED AND KEPT AWAY FROM THE REVENUE AUTHORITIES. SECONDLY, THE INCOME WAS STATE D TO HAVE BEEN DECLARED IN SUBSEQUENT RETURN AS DISCUSSED ABOVE, ONLY AFTER TH E INCOME WAS FOUND BY THE ASSESSEE TO BE DETECTED BY REVENUE AS PER SPECIFIC AIR INFORMATION. THUS, THE ONUS SQUARELY LIES ON THE ASSESSEE TO JUSTIFY THE A BSENCE OF ANY CULPABILITY. THE PLEA OF THE ASSESSEE THAT THE BANK STATEMENT WERE G IVEN TO THE CHARTERED ACCOUNTANT AND HE FAILED TO OFFER THE IMPUGNED INCO ME IS TOO VAGUE AND BALD TO BE ASSIGNED ANY ACCEPTANCE. THE BOUNDEN DUTY OF ASS ESSEE TO FURNISH TRUE AND 9 ITA NO.207/PN/2014 CORRECT PARTICULARS OF INCOME IN THE RETURN OF INCO ME CANNOT BE OVEREMPHASIZED. THIS INCOME NOT OFFERED AT THE FIRS T INSTANCE IS OF SIZEABLE AMOUNT IN THE CONTEXT OF THE CASE OF ASSESSEE AND C OULD NOT ORDINARILY BE LOST SIGHT OF. IT IS NOT PALATABLE TO ACCEPT THAT A TRAN SACTION OF THIS MAGNITUDE ROUTED THROUGH BANKING CHANNEL HAS BEEN OVERLOOKED WHILE D ETERMINING TAXABLE INCOME. BE THAT AS IT MAY, APART FROM DECLARING THE INCOME AS AFORESAID; THE ASSESSEE IS EXPECTED TO MEET ADVANCE TAX AND SELF A SSESSMENT TAX OBLIGATIONS AS PER THE FRAMEWORK OF LAW. THE ASSESSEE HAS NOT SHOW N TO HAVE PAID ANY TAX TOWARDS IMPUGNED GAIN. THUS, THIS PLEA OF OVERSIGHT ON BEHALF OF THE ASSESSEE IS LISTLESS. HENCE, NO CASE OF REASONABLE CAUSE FOR OMITTING TO INCLUDE THE INCOME IN THE FIRST RETURN IS SUCCESSFULLY MADE OUT . THE PREPONDERANCE OF PROBABILITIES IS WEIGHED AGAINST THE ASSESSEE. WE A LSO WISH TO NOTE HERE THAT PENALTY PROCEEDINGS IN QUESTION ARE GOVERNED BY S. 271(1)(C) READ WITH EXPLANATIONS APPENDED THERETO. THE ASSESSEE IS EXPE CTED TO JUSTIFY HIS BONAFIDES IN THE LIGHT OF EXPLANATION 1 OF S. 271(1 )(C) OF THE ACT. THE CONDONATION OF PENALTY FOR COMPLIANCE FAILURE ON TH E GROUNDS OF REASONABLE CAUSE AS PROVIDED UNDER S. 273B IS FOREIGN TO THE SCOPE OF S. 271(1)(C) OF THE ACT. 12. WE SHALL NOW EXAMINE ANOTHER PLEA OF THE ASSESS EE THAT THE IMPUGNED INCOME FROM SALE OF PROPERTY IS IN THE NATURE OF BU SINESS INCOME AND TAXABLE IN THE HANDS OF THE AOP AND THUS NOT RIGHTLY SUSCEPTIB LE TO TAX IN THE HANDS OF THE ASSESSEE AT THE FIRST PLACE. WE NOTE THAT THE SEVER AL CITATIONS WERE REFERRED TO LEND SUPPORT TO THIS PLEA. HOWEVER, WE FIND SUCH AV ERMENT TO BE AN ARGUMENT OF DESPAIR. IN THE INSTANT CASE, THE INVESTMENTS WE RE MADE FROM RESPECTIVE INDIVIDUAL SOURCES AND THE SHARES WERE DEFINITE AND ASCERTAINABLE. AS BORNE OUT FROM THE CONDUCT OF THE OTHER CO-PURCHASERS OF THE PROPERTY, THE SO CALLED ARRANGEMENTS BETWEEN THE CO-PURCHASERS WERE CAPABLE OF BEING SPLIT. COMMON DESIGN IS ALSO ABSENT AS CAN BE SEEN FROM THE CONDU CT OF THE OTHER CO-OWNERS. ALL THE OTHER CO-OWNERS EXCEPT THE ASSESSEE HAVE DI SCHARGED THEIR TAX OBLIGATIONS IN THEIR INDIVIDUAL CAPACITY. THIS SERV ES AS A CLEAR INDICATOR THAT WHILE THE PARTIES MAY HAVE AGREED TO COME TOGETHER FOR BETTER CO-OPERATION, THE 10 ITA NO.207/PN/2014 PARTIES WERE TO BEAR THEIR OWN LOSSES OR RETAIN THE IR OWN PROFITS CONTRARY TO THE CASE MADE OUT BY THE ASSESSEE. IF THE VERSION OF TH E ASSESSEE IS TO BE GIVEN ANY CREDENCE, ONE HAS TO SEE THE CONDUCT OF THE ASSESSE E. THE OBLIGATIONS OF THE ASSESSEE AS ONE OF THE MEMBERS WHO ALLEGEDLY COMBIN ED TO FORM ALLEGED AOP IS PLACED AT PAR WITH OTHER MEMBERS TO COMPLY WITH TAX LAWS. NO PAN NUMBER IN THE CAPACITY OF AOP WAS REPORTEDLY OBTAINED. THE ALLEGED AOP IS ALSO NOT SHOWN TO HAVE PAID ANY ADVANCE TAX OR SELF ASSESSME NT TAX WHICH COULD HAVE PROBABLY SERVED AS A GUIDING FACTOR FOR APPRECIATIN G BONAFIDES. THE RETURN OF INCOME IN THE CAPACITY OF AOP FOR THE COMBINED INCO ME IS NOT ADMITTEDLY FILED. COMMON BANK ACCOUNT FOR ALLEGED CONSORTIUM I S ALSO NOT REFERRED TO. THUS, THE ONUS OF THE EXISTENCE OF CONTRACT ( ORAL OR WRITTEN) FOR SALE OF PROPERTY GIVING RISE TO IMPUGNED INCOME IN THE CAPACITY OF A OP IS NOT DISCHARGED AT ALL. COUPLED WITH THIS, THE OTHER ALLEGED MEMBERS HAVE A CTED IN THEIR RESPECTIVE PERSONAL CAPACITY WHICH BELIES PRESENCE OF ANY ALLE GED UNDERSTANDING IN THE NATURE OF PURPORTED AOP. THE ABOVE IS ENUMERATION T O SHOW THAT NO ASSERTIVE JUSTIFICATION HAS BEEN ADVANCED BY THE ASSESSEE TO PROVE BONAFIDES OF PLEA OF EXISTENCE OF AOP. MERE ABSTRACT RELIANCE ON CASE L AWS WITHOUT ANY CONNECTION WITH THE UNDERLYING FACTS DESERVES TO BE DISCREDITE D. 13. IN THE LIGHT OF ABOVE DISCUSSION, THE EXPLANATI ON OFFERED FOR THE DEFAULT IN DECLARING THE INCOME IS PALPABLY IMPROBABLE. OMI SSION TO DECLARE CHARGEABLE INCOME CANNOT BE HELD TO BE A BONAFIDE E RROR IN THE GIVEN CIRCUMSTANCES. HENCE, WE FIND NO ERROR IN THE ORDER S OF THE AUTHORITIES BELOW IN IMPOSING PENALTY UNDER S. 271(1)(C) OF THE ACT. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED ON THIS 31 ST DAY OF MAY, 2016. SD/- SD/- ( VIKAS AWASTHY ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 31 ST MAY, 2016. 11 ITA NO.207/PN/2014 & ' () *+( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-IT/TP, PUNE; 4) THE CIT-IT/TP, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. &, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE