DCIT, CC-XIII, Kolkata, Kolkata V. Shri Anand Sharma, Kolkata

ITA 211/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78433 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 02-02-2010
• Court: TRIBUNAL
• Department Lawyers: A K DAS
• Assessee Lawyers: V DUTTA
• Keywords: Onus to prove
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [BEFORE HONBLE SRI P.K.BANSAL, AM & HONBLE SRI MAHAVIR SINGH, JM] ITA NO.211/KOL/2010 ASSESSMENT YEAR : 2006-07 ( APPELLANT ) - (RESPONDENT) D.C.I.T.,CENTRAL CIRCLE-XIII, SHRI ANAND SHARMA KOLKATA -VERSUS- KOLKATA (PAN:ARHPS 8140 B) FOR THE APPELLANT: SHRI A.K.DAS, JCIT, SR.DR FOR THE RESPONDENT: SHRI V.DUTTA, ADVOCATE DATE OF HEARING : 30.07.2014 DATE OF PRONOUNCEMENT : 30.07.2014. / ORDER PER SHRI P.K.BANSAL, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-CENTRAL- II, KOLKATA DATED 31.10.2009 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO THE DELETION OF PENALTY IMPOSED BY THE AO U/S 271(1)(C) OF THE ACT. 3. DURING THE COURSE OF ASSESSMENT COMPLETED U/S 1 43(3) OF THE IT ACT READ WITH SECTION 153B(1)(B) OF THE ACT A SUM OF RS.8,00,000/ - WAS ADDED BY THE AO U/S 69A OF THE ACT. THE AO INITIATED PENALTY PROCEEDINGS U/S 2 71(1)(C) OF THE ACT AND ULTIMATELY VIDE ORDER DATED 27.06.2008 IN THE SENSE OF SATISF ACTORY EXPLANATION IMPOSED PENALTY ON THE ASSESSEE BY HOLDING AS UNDER :- IN VIEW OF THE ABOVE DISCUSSION, IT IS NOW HELD TH AT THE ASSESSEE HAS BOTH CONCEALED PARTICULARS OF INCOME AND FURNISHED INACCURATE PART ICULARS OF INCOME FOR A SUM OF RS.8,02,700/-. THE AMOUNT OF TAX SOUGHT TO BE EVADE D IS OF RS.2,45,814/-. MINIMUM PENALTY IMPOSABLE : RS.2,45,814/-[@100%] MAXIMUM PENALTY IMPOSABLE : RS.7,37,442/-[@ 300%] ONCE IT IS HELD THAT THE ASSESSEE HAS CONCEAL ED PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME AS DISCUSSED, THE PENALTY IS REQUIRED TO IMPOSED FOR A SUM WHICH LIES BETWEEN RS.2,45,814/- AND RS.7,37,44 2/-. IN THE LIGHT OF FACTS OF THE CASE, IT IS CONSIDERED TO BE A FIT CASE FOR IMPOSITION OF PENALTY AT THE RATE OF 150% OF THE TAX IT A NO.211/KOL/2010 SHRI ANAND S HARMA.,KOLKATA A.YR.2006-07 2 SOUGHT TO BE EVADED, WHICH WORKS OUT TO RS.3,68,721 /-. THUS, A SUM OF RS.3,68,721/- IS IMPOSED AS PENALTY U/S 271(1)(C). ORDER PASSED U/S 271(1)(C) AS ABOVE AFTER TAKING PR IOR APPROVAL FROM THE LD. ADDL.COMMISSIONER OF INCOME-TAX, RANGE-III(CENTRAL) , KOLKATA. 4. WHEN THE MATTER WENT BEFORE THE LD. CIT(A) THE LD.CIT(A) REDUCED THE PENALTY TO RS.826/- U/S 271(1)(C) OF THE ACT BY HOLDING AS UNDER :- 4.2. IN RESPECT OF THE PENALTY LEVIED BY ASSESSING OFFICER ON THE CASH OF RS.8 LAKH SEIZED IN THE NAME OF APPELLANT, IT IS CLEARLY MENT IONED IN THE ASSESSMENT ORDER THAT THE CASH OF RS.8 LAKH WAS BROUGHT TO THE PREMISES OF AS SESSING OFFICER BY ONE SHRI SUKUMAR KUNDU WHEN SEARCH WAS GOING ON IN THE PREMI SES OF APPELLANT AND APPELLANT HAD DENIED THE OWNERSHIP OF THIS CASH AT THE TIME O F SEARCH ITSELF. APPELLANT HAD CLARIFIED DURING THE ASSESSMENT PROCEEDINGS THAT THIS CASH OF RS. 8 LAKH WAS SENT BY ONE OF HIS CLIENTS SHRI ROHIT KUMAR TIBREWAL, 34A, RATU SARKAR LANE, KOLKATA-73 AS BALANCE PAYMENT OF CONVERSION OF CASH OF RS.10 LAKH TO CHE QUE ISSUED BY APPELLANT AND SUCH ENTRY IS APPEARING IN PAGE NO.73 OF SEIZED DOCUMENT AK/4. I FIND THE EXPLANATION OF APPELLANT IN LINE WITH THE MODUS OPERANDI OF HIS BU SINESS OF CONVERTING CASH INTO CHEQUE. IT ALSO APPEARS THAT APPELLANT DID NOT APPE AL AGAINST THE ADDITION OF THIS AMOUNT IN THE ASSESSMENT ORDER U/S 69A OF THE I.T.ACT TO A VOID LITIGATION AND OTHER CONSIDERATIONS RELATING TO HIS CLIENTS TO BUY PEACH OF MIND. HOWEVER, ASSESSING OFFICER DID NOT DISCHARGE HIS BURDEN TO PROVE THE EXPLANATI ON OF APPELLANT WRONG BY CONDUCTING FURTHER ENQUIRIES IN SPITE OF THE FACT THAT ALL THE RELEVANT DETAILS IN THIS REGARD WERE SUBMITTED BY THE APPELLANT. I HAVE ALREADY HELD IN THE APPELLATE ORDER AGAINST THE PENALTY ORDERS DATED 30-10-2009 FOR ASSESSMENT YEAR 2002-03 TO 2005-06, THAT THE CASH OF RS.8 LAKH BROUGHT BY SHRI SUKUMAR KUNDU TO THE PREMISES OF APPELLANT DOES NOT REFLECT THE INCOME OF APPELLANT AND ON THAT PREMISE I HAD STATE D THAT EXPLANATION 5 OF SECTION 271(1)(C) IS NOT APPLICABLE IN THE CASE OF APPELLAN T EITHER FOR DEEMING THE PENALTY OR FOR CONSIDERING THE IMMUNITY FROM SUCH DEEMING OF PENAL TY. AS THE CASH OF RS.8 LAKH DOES NOT REFLECT THE INCOME OF APPELLANT AND THE SOURCE AND REASON FOR WHICH IT WAS RECEIVED BY APPELLANT AT THE TIME OF SEARCH IS WELL EXPLAINE D BY THE APPELLANT, I DO NOT FIND THAT APPELLANT HAD CONCEALED ANY INCOME OR FILED ANY INA CCURATE PARTICULARS OF THE INCOME IN RESPECT OF CASH OF RS 8 LAKH FOUND AND SEIZED FROM HIS PREMISES. 4.3. IN VIEW OF THE ABOVE DISCUSSION THE PENAL TY U/S 271(1)(C) IS REQUIRED TO BE LEVIED ONLY ON THE CONCEALED INCOME OF RS.2,700/-. THE TAX SOUGHT TO BE EVADED WILL BE THE DIFFERENCE IN TAX PAYABLE ON RS.8,96,950/- AND TAX PAYABLE ON RS.8,94,250/- I.E. RS.223467/- (-) RS.22641/- = RS.826/-. IN VIEW OF T HE FACT THAT APPELLANT HAS ACCEPTED THE DEMAND DETERMINED IN THE ASSESSMENT AND HAS COO PERATED WITH THE DEPARTMENT, I REDUCE THE PENALTY TO 100% OF THE TAX SOUGHT TO BE EVADED, I.E. RS.826/- FROM RS.3,68,721/- IMPOSED BY THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. IN OUR OPINION, THE PENALTY CAN BE IMPOSED FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE AO HAS TO LEV Y SPECIFIC CHARGES ON THE ASSESSEE IN THE CASE OF CONCEALMENT OF PARTICULARS OF INCOME . IN THIS CASE EXPLANATION (1) OF SECTION 271(1) IS APPLICABLE AND THE ONUS IS SHIFTE D ON THE ASSESSEE TO SUBSTANTIATE THAT THERE IS NO CONCEALMENT OF INCOME. IN THE CASE OF F ILING OF INACCURATE PARTICULARS OF IT A NO.211/KOL/2010 SHRI ANAND S HARMA.,KOLKATA A.YR.2006-07 3 INCOME THE ONUS IS ON THE REVENUE TO PROVE THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME. IN THIS CASE WE NOTED THAT T HE AO HAS NOT WORKED OUT ANY SPECIFIC CHARGES ON THE ASSESSE BUT LEVIED PENALTY IN RESPECT OF BOTH THE CHARGES I.E. CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. OUR AFORESAID VIEW IS DULY COVERED BY THE DECISION OF T HE HONBLE GUJARAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. VS CIT 282 ITR 642 (GUJ) IN WHICH THE HONBLE GUJARAT HIGH COURT HAS HELD AS UNDER :- IT IS INCUMBENT UPON THE ASSESSING OFFICER TO STAT E WHETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASS ESSEE OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAD BEEN FURNISHED BY THE ASS ESSEE. WHERE THE TRIBUNAL FAILS TO TAKE INTO CONSIDERATION AND DEAL WITH THE DECISION OF THE JURISDICTIONAL HIGH COURT IT WOULD CONSTITUTE AN ER ROR IN LAW WHICH GOES TO THE VERY BASIS OF THE CONTROVERSY INVOLVED. AN ADDITION OF RS.61,000 WAS MADE TO THE INCOME OF THE ASSESSEE IN THE ASSESSMENT YEAR 1981-82. PENALTY WAS IMPOSED. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER (APPEALS) WHO UPHELD THE PENALTY BY OB SERVING THEREFORE, RS.61,000 CLEARLY IS INCOME WHICH IS CONCEALED OR I N WHICH INACCURATE PARTICULARS OF INCOME HAVE BEEN FURNISHED. THE ASSESSEE, THEREFO RE, FILED SECOND APPEAL BEFORE THE TRIBUNAL WAS BASED ON A DECISION OF THE COURT IN TH E CASE OF CIT V. MANU ENGINEERING WORKS [1980] 122 ITR 306 SUSTAINED IN THE ABSENCE O F A CLEAR-CUT FINDING BY THE ASSESSING OFFICER. THE TRIBUNAL DID NOT DEAL WITH T HE CONTENTION AND UPHELD THE ORDER OF PENALTY. ON A REFERENCE : HELD, THAT THE PENALTY ORDER AND THE ORDER OF THE C OMMISSIONER (APPEALS) SHOWED THAT NO CLEAR-CUT FINDING HAD BEEN REACHED. THE TRIBUNAL HAD FAILED TO APPRECIATE THIS LEGAL ISSUE. THE RATIO IN CIT V. MANU ENGINEERING WORKS [ 1980] 122 ITR 306 (GUJ) WAS APPLICABLE AND THE ORDER OF PENALTY COULD NOT BE UP HELD BY THE TRIBUNAL. THE ORDER WAS INVALID. 5.1. RESPECTFULLY FOLLOWING THE AFORESAID DECISION WE CONFIRM THE ORDER OF THE LD. CIT(A) BY DELETING THE PENALTY IMPOSED U;/S 271(1)( C) OF THE ACT ON DIFFERENT GROUND. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE ST ANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 30.07.2014. SD/- SD/- [MAHAVIR SINGH ] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 30.07.2014. R.G.(.P.S.) IT A NO.211/KOL/2010 SHRI ANAND S HARMA.,KOLKATA A.YR.2006-07 4 COPY OF THE ORDER FORWARDED TO: 1. SHRI ANAND SHARMA, 7, GRANT LANE, KOLKATA-700012. 2 D.C.I.T., CENTRAL CIRCLE-XIII, KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-CENTRAL-II, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES