Sh. Ronak Arora, Agra V. I.T.O.-4(3), Agra

ITA 232/AGR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72800 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-02-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 21-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANURADHA
• Assessee Lawyers: ROOP KISHORE AGARWAL
• Keywords: Income from undisclosed sources; Search and seizure; Peak credit; Period of limitation; Question of law; Initiation of penalty proceedings; Reasonable cause; Valuation report; Revised return
• Section: 148; 133A; 260A; 133(6)

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. 232/AGRA/2012 ASST. YEAR : 2007-08 SHRI RONAK ARORA, VS. INCOME-TAX OFFICER, A-29,RADHA VIHAR, 4(3), AGRA. KAMALA NAGAR, AGRA. (PAN: AIMPA 8128M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROOPKISHORE AGARWAL, ADVOCATE RESPONDENT BY` : SMT. ANURADHA, JR. DR DATE OF HEARING : 26.02.2014 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 15.02.2012 FOR THE ASSESSMENT YEAR 2007- 08, CHALLENGING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT. 2. EARLIER THIS APPEAL WAS DISMISSED IN DEFAULT VID E ORDER DATED 26.09.2012. THE ASSESSEE MOVED M.A. FOR RECALLING OF EXPARTE OR DER. THE TRIBUNAL ON BEING SATISFIED WITH THE CAUSE OF NON-APPEARANCE RECALLED THE EXPARTE ORDER DATED 26.09.2012. THE APPEAL WAS, THEREFORE, REFIXED FOR HEARING ON MERITS. ITA NO. 232/AGRA/2012 2 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FURNISHED THE RETURN OF INCOME ON 11.09.2007 DECLARING TOTAL INCOME OF RS.1 ,08,400/-. THE ASSESSEE DERIVED INCOME FROM COMMISSION RECEIVED FROM VARIOU S SHOE TRADERS AND INTEREST ON LOANS ADVANCED BY HIM. CASE WAS SELECTED FOR SCR UTINY ON THE BASIS OF AIR INFORMATION. STATUTORY NOTICES WERE ISSUED AGAINST THE ASSESSEE FOR COMPLETION OF THE ASSESSMENT AND ASSESSEE WAS DIRECTED TO PRODUCE BOOKS OF ACCOUNT AND OTHER DETAILS, BUT THE SAME WERE NOT COMPLIED WITH. LATER ON, THE ASSESSEES COUNSEL APPEARED AND ON HIS REQUEST SEVERAL ADJOURNMENTS WE RE SOUGHT, BUT NO PROPER COMPLIANCE WAS MADE. LATER ON, THE ASSESSEES COUNS EL FILED REPLY AND ALSO FILED PHOTOCOPY OF BANK STATEMENT OF BANK ACCOUNT MAINTAI NED WITH ING VAISHYA BANK LTD. THE ASSESSEE WAS REQUIRED TO EXPLAIN CASH DEPO SIT IN THE SAID BANK ACCOUNT, BUT NO COMPLIANCE WAS MADE AND EVEN ON ADJOURNED DA TES, NOBODY APPEARED FROM THE SIDE OF ASSESSEE. THEREAFTER, THE COPIES OF ASS ESSEES BANK ACCOUNT NO. 599010004596 AND 599010024451 WITH ING VAISHYA BANK LTD. WERE OBTAINED BY THE AO U/S. 133(6) OF THE IT ACT. THE SAME IS PLACE D ON RECORD. THE AO FOUND THAT HUGE CASH DEPOSITS WERE MADE AS ARE REFLECTED IN TH E AIR INFORMATION. THE DETAILS OF THE SAME ARE NOTED IN THE ASSESSMENT ORDER. THE ASSESSEES COUNSEL LATELY APPEARED ON 17.09.2009, FEW DAYS PRIOR TO THE COMPL ETION OF ASSESSMENT AND SUBMITTED THAT EARLIER NO COMPLIANCE COULD BE MADE ON ACCOUNT OF SLACKNESS OF THE ITA NO. 232/AGRA/2012 3 COUNSEL FOR THE ASSESSEE TO WHOM NOTICES WERE GIVEN AND HE COULD NOT COLLECT THE BANK STATEMENTS FROM THE BANK AUTHORITIES. IN THE S AME REPLY, THE ASSESSEE SURRENDERED THE INCOME OF RS.2,05,070/- FROM OTHER SOURCES AND TAKING INTO CONSIDERATION THE PEAK CREDITS IN BOTH THESE BANK S TATEMENTS. THE ASSESSEE ALSO FILED REVISED INCOME COMPUTATION CHART WITH THE REQ UEST THAT RETURN FILED BE TREATED AS REVISED ACCORDINGLY. THE TAXES WERE PAID. THE AO ACCORDINGLY COMPUTED THE INCOME OF THE ASSESSEE AT RS.3,13,470/- BY MAKING A DDITION OF RS.2,05,070/-. THE AO INITIATED THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE IT ACT FOR CONCEALMENT OF INCOME TO THAT EXTENT. 4. THE AO IN THE PENALTY ORDER ALSO MENTIONED THE S AME FACTS AND ISSUED SHOW CAUSE NOTICE BEFORE LEVY OF PENALTY AS TO WHY PENAL TY SHOULD NOT BE IMPOSED FOR CONCEALMENT OF INCOME AS DISCUSSED IN THE ASSESSMEN T ORDER DATED 29.09.2009. THE ASSESSEE DID NOT FILE ANY REPLY TO THE SHOW CAUSE N OTICE. THEREFORE, AGAIN ONE MORE OPPORTUNITY WAS GIVEN BUT AGAIN ON THE DATE FIXED N OBODY APPEARED BEFORE THE AO AND EVEN NO WRITTEN SUBMISSIONS WAS FILED. THE AO, THEREFORE, HELD THAT THE ASSESSEE WILLFULLY ATTEMPTED TO EVADE TAX AND COMMI TTED DEFAULT U/S. 271(1)(C) OF THE ACT AND HAD THIS CASE NOT BEEN TAKEN FOR SCRUTI NY ASSESSMENT, THIS INCOME WOULD HAVE BEEN LEFT FROM ASSESSMENT. MINIMUM PENAL TY OF RS.44,050/- WAS ACCORDINGLY IMPOSED. ITA NO. 232/AGRA/2012 4 5. THE ASSESSEE CHALLENGED THE LEVY OF PENALTY BEFO RE THE LD. CIT(A) AND IT WAS SUBMITTED THAT THE ASSESSEE SUO MOTO WORKED OUT PEA K BALANCE IN THE BANK ACCOUNT AT RS.2,05,070/-. THEREFORE, NO PENALTY SHOULD HAVE BEEN IMPOSED BECAUSE THE ASSESSEE VOLUNTARILY SURRENDERED THE ADDITIONAL INC OME AS ABOVE AND PAID THE TAXES. THE LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE BECAUSE THE INCOME WAS REVISED ONLY AFTER SELECTION OF CASE FOR SCRUTI NY AND DEPARTMENT WAS IN THE KNOWLEDGE OF TRANSACTION IN THE BANK ACCOUNT. THERE FORE, ACT OF REVISING THE RETURN COULD NOT BE SAID TO BE VOLUNTARY AND ACCORDINGLY, THE APPEAL OF THE ASSESSEE WAS DISMISSED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE V OLUNTARILY SURRENDERED THE ADDITIONAL INCOME OF RS.2,05,070/-. THEREFORE, NO P ENALTY BE LEVIED. HE HAS SUBMITTED THAT THE AO HAS NOT GIVEN ANY SPECIFIC FI NDING WHETHER THE PENALTY WAS LEVIED FOR CONCEALMENT OF INCOME OR FOR FILING INAC CURATE PARTICULARS. HE HAS SUBMITTED THAT THE AO HAS ISSUED ONLY GENERAL NOTIC E. IN THE WRITTEN SUBMISSIONS, HE HAS ATTACHED CERTAIN COPIES OF THE DECISIONS. ON THE OTHER HAND THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMIT TED THAT WHEN THE ASSESSEE WAS ITA NO. 232/AGRA/2012 5 CONFRONTED WITH THE UNACCOUNTED BANK ACCOUNTS AND W AS CORNERED BY THE AO, IT IS NOT A VOLUNTARY DISCLOSURE BY THE ASSESSEE. THEREFO RE, PENALTY WAS CORRECTLY LEVIED IN THE MATTER. 7. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. RECENTLY, WE HAVE CONSIDERE D SIMILAR ISSUE IN THE CASE OF VIJAY KUMAR GUPTA VS. ITO IN ITA NO. 194/AGRA/2013 AND VIDE ORDER OF THE EVEN DATE, LEVY OF PENALTY WAS CONFIRMED. FINDINGS IN TH IS CASE ARE REPRODUCED AS UNDER : 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH T HE 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 ASSES SEE FROM THE REVENUE DEPARTMENT. IT IS THE ASSESSING OFFICER, WHO HAS OB TAINED DETAILS FROM THIS BANK OTHERWISE, THE DETAILS WOULD NOT HAVE COME ON RECOR D OF THE REVENUE. THE ASSESSEE IN HIS INITIAL REPLY TO THE NOTICE ISSUED BY THE AO DELIBERATELY DID NOT DISCLOSE THE BANK ACCOUNT MAINTAINED WITH ICICI BANK LTD. AND RE PLIED BEFORE THE AO THAT HE HAS MAINTAINED ONLY ONE BANK ACCOUNT IN BANK OF BIK ANER & JAIPUR. THE AO AGAIN CONFRONTED THE DETAILS COLLECTED FROM ICICI BANK LT D. TO THE ASSESSEE THROUGH SHOW CAUSE NOTICE AND CORNERED THE ASSESSEE THAT THE ASS ESSEE HAS MAINTAINED UNACCOUNTED BANK ACCOUNT WITH ICICI BANK LTD. THE ASSESSEE ON CONFRONTING THE DETAILS AND CORNERED BY THE AO HAD NO OPTION BUT TO ADMIT THE UNACCOUNTED BANK ACCOUNT WITH ICICI BANK LTD. NO SOURCE OF THE DEPOS ITS OR WHY THIS BANK ACCOUNT WAS CONCEALED FROM THE DEPARTMENT WAS NOT AT ALL EX PLAINED AT ANY STAGE. THERE IS, THEREFORE, NO QUESTION TO DISCLOSE UNACCOUNTED BANK ACCOUNT VOLUNTARILY TO PURCHASE PEACE OF MIND. THERE IS NO ACCEPTANCE BY T HE DEPARTMENT THAT NO PENALTY WOULD BE LEVIED. THERE CANNOT BE ESTOPPEL AGAINST L AW BECAUSE THE AO CANNOT GIVE ANY ASSURANCE NOT TO LEVY PENALTY IN SUCH CIRCUMSTA NCES. IT MAY BE THE SUBMISSION OF THE ASSESSEE ONLY, THEREFORE, NO LEGAL IMPORTANC E CAN BE ATTACHED TO THE SUBMISSIONS OF THE ASSESSEE. HONBLE SUPREME COURT IN THE CASE OF MAK DATA P. ITA NO. 232/AGRA/2012 6 LTD. VS. CIT, 358 ITR 593 HELD THAT THERE IS NO AUT OMATIC IMMUNITY FROM PENALTY ON VOLUNTARY SURRENDER OF INCOME. THE SURRENDER SUBJEC T TO NON-INITIATION OF PENALTY PROCEEDINGS AND PROSECUTION DOES NOT ABSOLVE ASSESS EE FROM LIABILITY TO PENALTY. IT WAS FURTHER HELD THAT SATISFACTION OF THE AO ABOUT CONCEALMENT OF INCOME 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 ASSESSMEN T 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 WHE THER THERE 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 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 ITA NO. 232/AGRA/2012 7 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 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. ITA NO. 232/AGRA/2012 8 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 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 ASS ESSEE HAS CONCEALED THE BANK ACCOUNT MAINTAINED WITH ICICI BANK LTD. FROM THE RE VENUE DEPARTMENT. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, SUBMITTED ALTERN ATIVELY 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 ITA NO. 232/AGRA/2012 9 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. 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 FAC TS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEE ADMITTEDLY ACCEPTED THE ORDER OF THE AO IN MAINTAINING THE ADDITION OF RS.5,36,987/- BECAUSE NO APPEAL WAS PRE FERRED BEFORE ANY AUTHORITY AGAINST THE SAID ADDITION. THE ASSESSEE, THEREFORE, ADMITTED THAT HE HAS EARNED UNACCOUNTED INCOME FROM UNDISCLOSED BUSINESS. THERE FORE, IN THE PENALTY PROCEEDINGS, FINDING OF FACT RECORDED BY THE AO WHI CH HAVE REACHED FINALITY CANNOT BE DISTURBED. THE LD. COUNSEL FOR THE ASSESSEE FURT HER SUBMITTED THAT WHEN PEAK ADDITION OF THE SAME BANK ACCOUNT IS MAINTAINED, TH E GROSS PROFIT ADDITION SHOULD ALSO NOT BE ADDED. BUT THE ASSESSEE DID NOT CHALLEN GE ANY ADDITION MADE BY THE AO IN FURTHER APPEAL BEFORE ANY AUTHORITY AND FURTHER IN THE PENALTY PROCEEDINGS, NO SUCH POINTS HAVE BEEN ADMITTEDLY RAISED. FINDINGS G IVEN IN THE ASSESSMENT ORDER HAVE PROBATIVE VALUE AND SHALL HAVE TO BE CONSIDERE D 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. 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 CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. 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 SORATH IA ENGINEERING CO. VS. CIT, 282 ITR 642, IN WHICH IT WAS HELD THAT ORDER OF PEN ALTY MUST CLEARLY STATE WHETHER IT IS FOR CONCEALMENT OR FOR FURNISHING INACCURATE PARTICULARS. THE AO IN THE QUANTUM ORDER HAS SPECIFICALLY MENTIONED THAT HE WA S SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME. IN PAR A 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 ALS O HELD THAT EXPLANATION 1(A) OF SECTION 271(1)(C) IS ALSO SQUARELY APPLICABLE IN TH E CASE OF 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 REVEAL 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 P ARTICULARS OF INCOME. THE LD. ITA NO. 232/AGRA/2012 10 CIT(A) ALSO IN PARA 3.4 OF THE IMPUGNED ORDER FOUND THAT THE ASSESSEE HAS NOT FILED ANY SATISFACTORY EXPLANATION BEFORE HIM. THEREFORE, HE WAS OF THE OPINION THAT THE AO IS CORRECT IN HOLDING THAT THE ASSESSEE HAS WILL FULLY CONCEALED THE PARTICULARS OF HIS INCOME BY NOT DISCLOSING THE FACT OF MAINTAININ G BANK 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 APPEAL, 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 PROCEEDINGS U/S. 271(1)(C) OF THE IT ACT. THE CONCEPT OF REASONABLE CAUSE OR EXCEPT ION 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. 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 I N THE NEXT YEAR, A LENIENT VIEW MAY BE TAKEN AGAINST THE ASSESSEE. ON THE OTHER HAN D, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. ON CONSIDERATION O F THE SUBMISSIONS AND ORDERS OF THE AUTHORITIES BELOW, WE ARE OF THE VIEW THAT THE ASSESSEE WOULD BE ENTITLED FOR SOME RELIEF ON THIS ISSUE. THE AO HAS CALCULATED MA XIMUM 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 ASSE SSEE WITHOUT GIVING ANY REASONS. IT IS A CASE WHERE THE ASSESSEE ADMITTED U NACCOUNTED BANK ACCOUNT AND UNACCOUNTED INCOME HAS BEEN ASSESSED AGAINST THE AS SESSEE, WHICH HAVE NOT BEEN CHALLENGED BEFORE ANY APPELLATE AUTHORITIES AND THA T WHEN THE SAME BANK ACCOUNT HAS COME ON RECORD, WE ARE OF THE VIEW THAT IT MAY NOT BE A CASE OF LEVY OF MAXIMUM PENALTY OR AT LEAST 200% PENALTY. THE INTER EST OF JUSTICE REQUIRES THAT MINIMUM PENALTY AT THE RATE OF 100% MAY BE LEVIED I N THIS CASE. WE ACCORDINGLY MODIFY THE ORDERS OF THE AUTHORITIES BELOW TO THE E XTENT ONLY THAT AO WILL LEVY 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. 232/AGRA/2012 11 7. CONSIDERING THE ABOVE DISCUSSION, THE APPEAL OF THE ASSESSEE IS DISMISSED ON MERITS. HOWEVER, PENALTY IS REDUCED TO MINIMUM PENALTY AT THE RATE OF 100% AS HELD ABOVE. 7.1 THE FACTS OF THIS CASE ARE VERY SPECIFIC THAT T HE ASSESSEE FILED RETURN OF INCOME AT RS.1,08,400/- AND SUCH RETURN OF INCOME W AS FILED ON 11.09.2007. THE CASE WAS SELECTED FOR SCRUTINY ON THE BASIS OF AIR INFORMATION. THE AO ISSUED SEVERAL STATUTORY NOTICES CALLING FOR THE EXPLANATI ON OF THE ASSESSEE, BUT NO REPLY WAS FILED. THE AO OBTAINED COPIES OF BOTH THE BANK ACCOUNTS OF ASSESSEE MAINTAINED WITH ING VAISHYA BANK U/S. 133(6) OF THE IT ACT AND FOUND HUGE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE DURING THE ASSESSMENT YEAR UNDER APPEAL AS WERE REFLECTED IN THE AIR INFORMATION. TH E FINDINGS OF FACT RECORDED BY THE AO IN THE ASSESSMENT ORDER HAVE NOT BEEN ASSAIL ED TO BY THE ASSESSEE THROUGH ANY MATERIAL. IT IS, THEREFORE, CLEAR THAT THE AO W AS ALREADY HAVING INFORMATION WITH HIM THROUGH AIR INFORMATION AND THE DETAILS CA LLED FOR U/S. 133(6) OF THE IT ACT THAT THE ASSESSEE HAS MAINTAINED TWO UNACCOUNTE D BANK ACCOUNTS WITH ING VAISHYA BANK LTD. THE ASSESSEE DID NOT EXPLAIN SOUR CE OF ENTRIES IN THE SAME BANK ACCOUNTS AND STATUTORY NOTICES REMAINED UN-COMPLIED AND IT IS ONLY ON 17.09.2009 JUST PRIOR TO COMPLETION OF ASSESSMENT, THE ASSESSE ES COUNSEL REPLIED THAT EARLIER NO COMPLIANCE COULD BE MADE ON ACCOUNT OF SLACKNESS OF THE COUNSEL TO WHOM NOTICE WAS HANDED OVER AND THE DETAILS OF BANK ACCOUNT COU LD NOT BE OBTAINED. THE ITA NO. 232/AGRA/2012 12 ASSESSEE IN THE SAME REPLY SURRENDERED RS.2,05,070/ - AS ADDITIONAL INCOME ON ACCOUNT OF PEAK CREDIT IN THESE BANK ACCOUNTS. THE ASSESSEE ALSO FILED REVISED INCOME COMPUTATION CHART AND REQUESTED THE AO THAT THE RETURN FILED ORIGINALLY MAY BE TREATED AS REVISED ACCORDINGLY. THE COURSE O F ACTION ADOPTED BY THE ASSESSEE IS NOT PERMISSIBLE UNDER LAW. THERE IS NO PROVISION UNDER LAW TO FILE REVISED INCOME COMPUTATION CHART WITHOUT ACTUAL FIL ING OF REVISED RETURN OF INCOME WITHIN THE PERIOD OF LIMITATION IN ACCORDANCE WITH LAW. THEREFORE, THE REQUEST OF THE ASSESSEE WAS NOT CORRECTLY ENTERTAINED. FURTHER, WH EN THE AO WAS ALREADY HAVING INFORMATION WITH HIM THAT THE ASSESSEE MAINTAINED U NACCOUNTED BANK ACCOUNTS WITH ING VAISHYA BANK LTD. AGRA AND THE ASSESSEE DID NOT REPLY TO THE QUERIES RAISED BY THE AO, WOULD CLEARLY REVEAL THAT WHEN THE ASSES SEE WAS CONFRONTED AND CORNERED BY THE AO THAT THERE IS UNACCOUNTED BANK A CCOUNTS IN THE NAME OF ASSESSEE, THERE IS NO QUESTION OF VOLUNTARY SURREND ERING ANY AMOUNT FOR TAXATION. THIS ISSUE IS DEALT IN DETAIL IN THE CASE OF VIJAY KUMAR GUPTA (SUPRA). THEREFORE, FOLLOWING THE FINDINGS IN THAT CASE, WE FIND THAT T HE AO HAS CORRECTLY LEVIED PENALTY AGAINST THE ASSESSEE. IT MAY ALSO BE ADDED HERE THA T THE AO DID NOT ACCEPT ANY SURRENDER OF INCOME AS PER REVISED COMPUTATION OF I NCOME BECAUSE THE AO COMPUTED THE INCOME AS PER RETURN OF INCOME FILED O N 11.09.2007, IN WHICH SUCH ENTRIES IN THE BANK ACCOUNTS WERE CONCEALED AND THE AO AFTER MAKING ADDITION OF RS.2,05,070/- COMPUTED THE TOTAL INCOME AT RS.3,13, 470/-. WE MAY ALSO ADD HERE ITA NO. 232/AGRA/2012 13 THAT THE AO IN THE ASSESSMENT ORDER HAS SPECIFICALL Y MENTIONED THAT HE WAS SATISFIED THAT THE ASSESSEE HAS CONCEALED INCOME TO THE TUNE OF RS.2,05,070/-. THE AO ALSO IN THE PENALTY ORDER HAS SPECIFICALLY MENTI ONED THAT SHOW CAUSE NOTICE WAS ISSUED PRIOR TO LEVY OF PENALTY FOR CONCEALMENT OF INCOME TO THE TUNE OF RS.2,05,070/- AND THE ASSESSEE WAS SHOW CAUSED AS T O WHY PENALTY BE NOT IMPOSED FOR CONCEALMENT OF INCOME. THEREFORE, CLEAR CUT FIN DING HAS BEEN GIVEN IN THE ASSESSMENT ORDER AS WELL AS IN THE PENALTY ORDER TH AT PENALTY IS IMPOSED FOR CONCEALMENT OF INCOME. FURTHER, AT THE PENALTY STAG E, THE ASSESSEE ADMITTEDLY DID NOT FILE ANY EXPLANATION TO THE SHOW CAUSE NOTICE I SSUED BY THE AO. HONBLE M.P. HIGH COURT IN THE CASE OF RUKMINI BAI 276 ITR 650 H AS HELD AS UNDER: HELD, REJECTING THE APPLICATION, THAT THE ASSESSEE DID NOT FILE ANY EXPLANATION WHEN THE PENALTY PROCEEDINGS WERE I NITIATED. THE EXPLANATION COULD BE THE SAME AS THAT GIVEN BEFORE THE ASSESSING OFFICER AND IF THAT HAD BEEN SO, IT WOULD HAVE HAD TO BE LOOKED INTO IN THE PENALTY PROCEEDINGS, BUT WHEN NO EXPLANATION WA S FILED, IT COULD NOT BE TAKEN INTO CONSIDERATION. THE ASSESSEE COULD NOT CONTEND FOR THE FIRST TIME BEFORE THE COURT THAT INTERFERENCE W AS WARRANTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. CALLING FOR TH E STATEMENT OF CASE WAS NOT WARRANTED IN THIS CASE BECAUSE THE TRIBUNAL HAD RIGHTLY RECORDED THAT THE IMPOSITION OF PENALTY UNDER SECTI ON 271(1) (C) IN THE CASE WAS JUST AND PROPER. 7.2 THE HONBLE ALLAHABAD HIGH COURT IN THE CASE O F SOM ENGINEERING CORPORATION VS. CIT 277 ITR 92 (ALL) HAS HELD AS UN DER : HELD, THAT THE EXPLANATION TO SECTION 271(1)(C) OF THE INCOME- TAX ACT, 1961, WAS CLEARLY ATTRACTED IN THE PRESENT CASE INASMUCH AS ITA NO. 232/AGRA/2012 14 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. 7.3 HONBLE DELHI HIGH COURT IN THE CASE OF KAMAL CHAND 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 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. ITA NO. 232/AGRA/2012 15 SINCE NO EXPLANATION, WHATSOEVER, WAS FILED AT THE ASSESSMENT STAGE AS WELL AS AT THE PENALTY STAGE, THEREFORE, LEVY OF PENALTY U/S. 271(1)(C) IS WHOLLY JUSTIFIED. THE CASES CITED BY THE LD. COUNSEL FOR THE ASSESSEE THR OUGH PAPER BOOK ARE NOT RELEVANT IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE. THE APPEAL OF THE ASSESSEE HAS NO MERIT AND IS ACCORDINGLY DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. 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