Sandeep Kumar Palta, Manimajra V. ITO, Chandigarh

ITA 245/CHANDI/2009

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95461 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 14-07-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 23-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D S SIDHU
• Assessee Lawyers: RAKESH JAIN
• Keywords: Gift; Income from undisclosed sources; Question of law; Initiation of penalty proceedings; Wrong claim; Revised return
• Section: 143(3); 133A; 147; 68; 148; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 243/CHD/2009 (ASSESSMENT YEAR: 2000-01) KRISHAN KUMAR PALTA, VS. THE INCOME TAX OFFICER, SCF-494, MOTOR MARKET, WARD 1(1), MANIMAJRA, CHANDIGARH. CHANDIGARH. PAN NO. ADJPP7189H AND ITA NO. 245/CHD/2009 (ASSESSMENT YEAR: 2000-01) SANDEEP KUMAR PALTA, VS. THE INCOME TAX OFFICER, SCF-494, MOTOR MARKET, WARD 1(1), MANIMAJRA, CHANDIGARH. CHANDIGARH. PAN NO. ADVPP2326G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH JAIN RESPONDENT BY : SHRI D.S.SIDHU, DR DATE OF HEARING : 03.08.2015 DATE OF PRONOUNCEMENT : 06.08.2015 O R D E R PER H.L.KARWA, VP : THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECTED 2 AGAINST THE COMMON ORDER OF THE LEARNED CIT (APPEAL S), CHANDIGARH DATED 23.1.2009 RELATING TO ASSESSMENT Y EAR 2000-01. 2. THE ISSUE INVOLVED IN THESE APPEALS IS COMMON A ND THE APPEALS WERE HEARD TOGETHER AND ARE BEING DIS POSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. FIRSTLY, I WILL TAKE UP ITA NO.243/CHD/2009. T HE ASSESSEE HAS CHALLENGED THE ACTION OF THE LEARNED C IT (APPEALS) IN CONFIRMING THE PENALTY OF RS.3,30,000/ - LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF TH E INCOME TAX ACT, 1961 (IN SHORT THE ACT) FOR THE ASSESSM ENT YEAR 2000-01. 4. THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RET URN OF INCOME ON 31.10.2000 DECLARING AN INCOME OF RS.1,98 ,166/-. THE SAID RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 14.5.2001. SUBSEQUENTLY, INQUIRIES WERE CO NDUCTED BY THE ADIT (INV.)-II, CHANDIGARH REGARDING GIFTS MADE BY SHRI AVINASHI LAL BAJAJ AND HIS FAMILY OUT OF THEIR NRI ACCOUNTS. THE ASSESSEE HAD ALSO SHOWN A GIFT OF RS.10 LACS FR OM SHRI AVINASHI LAL BAJAJ DURING THE ASSESSMENT YEAR UNDER CONSIDERATION. DURING THE COURSE OF INQUIRIES, AD IT (INV.) HAD RECORDED THE STATEMENT OF SHRI AVINASHI LAL BAJ AJ, WHO DENIED HAVING MADE ANY GIFT BUT STATED THAT ONLY PA Y ORDER WAS ISSUED IN LIEU OF CASH RECEIVED FROM SHRI KRISH AN KUMAR PALTA I.E. THE ASSESSEE. CONSEQUENTLY, NOTICE UND ER SECTION 148 OF THE ACT WAS ISSUED ON 4.3.2005 AFTER RECORDI NG REASONS. IN RESPONSE TO THE SAID NOTICE, THE ASSE SSEE FILED 3 WRITTEN REPLY STATING THAT THE ORIGINAL RETURN FIL ED BY HIM MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U NDER SECTION 148 OF THE ACT. THEREAFTER, STATUTORY NOTICES WER E ISSUED TO THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PROV E THE GENUINENESS OF THE GIFT. IN RESPONSE TO THE SAID QUERY, THE ASSESSEE SUBMITTED PHOTOCOPY OF GIFT DEED AND PHO TOCOPY OF AFFIDAVIT OF SHRI AVINASHI LAL BAJAJ DATED 22.11.19 99. THE ASSESSING OFFICER VIDE HIS LETTER DATED 9.1.2006 BR OUGHT TO THE NOTICE OF THE ASSESSEE THE FACT THAT SHRI AVINASHI LAL BAJAJ IN HIS STATEMENT BEFORE THE ADIT (INV.)-II HAS CATEGOR ICALLY STATED THAT HE HAS NOT MADE ANY GIFT BUT ONLY PAY ORDER WA S GIVEN AFTER RECEIVING CASH FROM THE ASSESSEE. IN OTHER WORDS, THE ASSESSEE WAS SPECIFICALLY CONFRONTED WITH THE ABOVE FACTS. THE ASSESSING OFFICER ALSO ISSUED SUMMONS TO SHRI A VINASHI LAL BAJAJ ON THE ADDRESS GIVEN IN THE AFFIDAVIT, HO WEVER, THE SAME COULD NOT BE SERVED AS SHRI AVINASHI LAL BAJAJ WAS STATED TO BE OUT OF COUNTRY. WHEN CONFRONTED WITH THESE FACTS, THE ASSESSEE VIDE HIS LETTER DATED 20.2.2006 SURRENDERED AN AMOUNT OF RS.10 LACS AS HIS ADDITION AL INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, SUBJEC T TO NO PENAL ACTION. THE ASSESSING OFFICER DID NOT ACCEP T THE CONDITIONAL SURRENDER OF THE ASSESSEE AND ASSESSMEN T WAS FRAMED AFTER MAKING AN ADDITION OF RS.10 LACS AS AS SESSEES INCOME FROM UNDISCLOSED SOURCES AND PENALTY PROCEED INGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED O N 28.2.2006. IN RESPONSE TO SHOW CAUSE NOTICE ISSUED UNDER SECTI ON 4 271(1)(C) OF THE ACT, THE ASSESSEE SUBMITTED WRITTE N REPLY ON 7.8.2006, WHICH READS AS UNDER : A) THAT THE ASSESSEE RECEIVED A GIFT FOR RS. 1000000/- FROM MR. AVINASHI LAL BAJAJ THROUGH PAYEES ACCOUNT CHEQUE DUR ING PERIOD 1.4.1999 TO 31.3.2000 AND CREDITED IN HIS BA NK ACCOUNT NO. 1127 MAINTAINED WITH PUNJAB NATIONAL BANK, MANI MAJRA. THE SAID GIFT HAS DULY BEEN REFLECTED IN PERSONAL B ALANCE SHEET FOR THE PERIOD UNDER CONSIDERATION. THE ASSESSEE N EVER DENIED THE FACT OF RECEIVING THE SAID GIFT AND ALSO FILED AN AFFIDAVIT TO THIS EFFECT. ON THE OTHER HAND NEITHER THE ADI AT PANCHKULA NOR THE AO EVER OFFERED ANY OPPORTUNITY TO THE ASSESSEE TO EXAMINE OR CROSS-EXAMINE THE DONOR THROUGHOUT TH E PROCEEDINGS TO VERIFY THE CONTENTION OF THE DONOR. HE HAS DENIED THE FACT TO SAVE HIS OWN SKIN OTHERWISE AN AF FIDAVIT FROM HIM CONFIRMING GIFT HAS ALREADY BEEN ON THE REC ORD. THEREFORE THE ASSESSEE HAS NOT BEEN PROVIDED WITH AN Y PROPER & EFFECTIVE OPPORTUNITY TO EXAMINE/CROSS EXA MINE THE DONOR. THAT IN HIS SURRENDER LETTER OF DATED 20.02.2006 BEFORE THE A.O., THE ASSESSEE HAS CLEARLY MENTIONED THE FACT O F RECEIVING GIFT FROM MR. AVINASHI LAI BAJAJ. IT HAS ALSO BEEN MADE CLEAR IN PARA 2 OF THE SAID SURRENDER LETTER THAT SINCE NO W THE DONOR IS CO-OPERATING IN THE INCOME TAX PROCEEDINGS, THERE FORE TO AVOID LITIGATION AND PURCHASE PEACE RS. 10 LAC IS B EING SURRENDERED SUBJECT TO PENAL ACTION UNDER THE PROVIS IONS OF THE INCOME TAX ACT. SURRENDER BY THE ASSESSEE IS VER Y CLEAR AND CONCLUSIVE. ACCORDINGLY, THE A.O. HAS FRAMED THE ASSESSMENT AND TAXED THE GIFTED AMOUNT. NOW OUR SUB MISSION IS THAT SURRENDER OFFER OF THE ASSESSEE IS IN GOOD FAITH AND DOES NOT AUTOMATICALLY MEANS THAT GIFT RECEIVED AGRE ED TO BE ADDED WAS CONCEALED INCOME. RELIANCE ON SIR SHADI LA I SUGAR & GENERAL MILLS LTD. VS CIT (1987) 168 ITR 705,713 (SC). AGAIN IN GOOD FAITH THE ASSESSEE DID NOT PREFER AN APPEAL BEFORE CIT(A) AGAINST THE ORDERS OF THE A.O. 5 B) THAT ONLY PART OF THE SURRENDER OFFER LETTER HA S BEEN ACCEPTED. ITS FIRST PART OFFERING SURRENDER OF RS.1 0 LACS HAS BEEN ACCEPTED AND HAS TAXED ACCORDINGLY NOW ITS SECOND PART MAKING THE SAID SURRENDER OFFER SUBJECT TO NO PENAL ACTION UNDER THE PROVISIONS OF INCOME TAX ACT BE CONSIDERED WITH SAME SPIRIT. ANY OFFER MUST BE ACCEPTED/REJECTED IN FULL AND NOT PARTLY. C) THAT NO SATISFACTORY REASONS HAVE BEEN RECORDED DURING THE COURSE OF ASSESSMENT EITHER IN RESPECT OF CONCEALMEN T OF ANY INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SU CH INCOME WHICH IS MANDATORY UNDER THE LAW FOR INITIATING THE PENALTY PROCEEDINGS. RELIANCE ON CIT VS MUNISH IRON STOR E, 263 ITR 484 PUNJAB & HARYANA H. C. IN VIEW OF THE FACTS AND SUBMISSION ABOVE, YOUR GOOD SELF WOULD FIND THAT THE ASSESSEE HAS ALREADY SHOWN THE GIFTED AMOUNT I HIS PERSONAL BALANCE SHEET & FILED IT ALONG WITH RETURN, HE VOLUNTARILY CAME FORWARD TO SURRENDER THE GIFTED AMOUNT AND DID NOT PREFER AN APPEAL AGAINST THE ORDE RS AND NO SATISFACTORY REASONS HAVE BEEN RECORDED DURING T HE COURSE OF ASSESSMENT EITHER IN RESPECT OF CONCEALME NT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME, IT IS THEREFORE PRAYED THAT PENALTY PROCEEDIN GS INITIATED UNDER THE PROVISIONS OF SECTION 271(L)(C) OF T HE INCOME BE DROPPED. 5. THE ASSESSING OFFICER DID NOT ACCEPT THE ABOVE REPLY OF THE ASSESSEE FOR THE FOLLOWING REASONS : A) THE CONTENTION OF ASSESSEE THAT HE WAS NOT PROV IDED SUFFICIENT OPPORTUNITY TO EXAMINE OR CROSS EXAMINE THE DONOR IS NOT TENABLE, BECAUSE IT WAS ASSESSEE'S CLAI M THAT THE AMOUNT OF RS.10,00,000/- CREDITED IN ASSESSEE'S ACCOUNT WAS A GIFT RECEIVED FROM MR. AVINASHI LAI BAJA J, THEREFORE, ONUS WAS UPON THE ASSESSEE TO PROVE ITS GENUINENESS. THE ASSESSEE FAILED TO PROVE ITS GENUINE NESS, 6 INSPITE OF THE AMPLE OPPORTUNITIES PROVIDED TO HIM. TH EREFORE THE QUESTION OF NOT GIVING PROPER OPPORTUNITY TO TH E ASSESSEE DO NOT ARISE AT ALL. B) THE CONTENTION OF THE ASSESSEE THAT THE SURRENDER WAS MADE IN GOOD FAITH AND TO AVOID LITIGATION AND WAS S UBJECT TO NO PENAL ACTION IS NOT CORRECT. THE ASSESSEE CHO OSE TO SURRENDER ONLY WHEN AFTER INTENSIVE INQUIRIES IT WAS ESTABLISHED BY THE DEPARTMENT THAT THERE WAS NOT A GENUINE GIFT, THE ENTRY OF RS.10,00,000/-WASOBTAINE D AFTER PAYING AMOUNT IN CASH TO THE SAID DONOR. THE DEPART MENT HAD ALREADY REOPENED THE CASE U/S 147 OF THE INCOME TAX ACT, 1961 AND THE ASSESSEE WAS SPECIFICALLY CONFRONT ED WITH THE FACTS AND WAS ASKED TO PROVE THE GENUINENESS OF THE ALLEGED GIFT. THE ASSESSEE SURRENDERED ONLY WHEN HE WAS CORNERED FROM ALL SIDES AND WAS LEFT WITH NO WAY OUT E XCEPT TO SURRENDER THE ENTRY OF RS.10,00,000/-. THE CONDITIONAL SURRENDER OF THE ASSESSEE WAS NEVER ACCEPTED BY THE AO . THE FACTS OF THE CASE LAW CITED BY THE ASSESEE ARE DIFFERENT FROM THIS CASE. IN THE CASE OF SIR SHADI LAL SUGAR & GENERAL MILLS LTD. VS CIT REPORTED IN 168 ITR 705 THE MAIN ISSUE BEFORE THE HON'BLE SUPREME COURT WAS THAT 'WHE THER HIGH COURT IN A REFERENCE COULD INTERFERE WITH THE FI NDING OF A FACT AND TRANSFORM THE SAME INTO A QUESTION OF LAW O N THE GROUND THAT THERE HAS BEEN NON-CONSIDERATION OF ALL RE LEVANT FACTS' THE HON'BLE SUPREME COURT HELD THAT IN PREFERRING ON E VIEW TO ANOTHER VIEW OF FACTUAL APPRECIATION, THE HIGH COU RT TRANSGRESSED THE LIMITS OF ITS JURISDICTION UNDER THE INCOME TAX REFERENCE IN ANSWERING THE QUESTION OF LAW. FU RTHER ON FACTS THE MAIN ADDITIONS MADE IN THE CITED CASE WERE O N ACCOUNT OF VARIOUS DISALLOWANCES. C) THE ASSESSEES CONTENTION THAT ANY OFFER SHOULD BE ACCEPTED IN FULL NOT IN PART IS NOT RELEVANT AS THE OFFER OF THE ASSESSEE WAS NEVER ACCEPTED BY THE AO. 7 D) THE LAST AVERMENT OF THE ASSESSEE THAT NO SATISF ACTION WAS RECORDED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAS CONCEALED THE PART ICULARS OF INCOME IS NOT CORRECT AS THE AO WHILE FRAMING AS SESSMENT HAS DULY MENTIONED THAT PENALTY PROCEEDINGS FOR CONC EALMENT OF PARTICULARS OF INCOME ARE BEING INITIATED SEPARAT ELY. THE AO IN HIS ENTIRE ORDER U/S 143(3) HAS DISCUSSED THIS V ERY CONCEALMENT OF INCOME AND HAS GIVEN CLEAR FINDING A ND SATISFACTION WITH RESPECT TO THE CONCEALMENT OF P ARTICULARS OF INCOME WHICH HAS BEEN RECORDED IN THE ASSESS MENT ORDER. 6. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER HEL D THAT THE ASSESSEE HAS WILLFULLY CONCEALED THE PARTICULAR S OF INCOME AND HAS FURNISHED INACCURATE PARTICULARS IN THE REL EVANT RETURN. THE ASSESSING OFFICER FURTHER OBSERVED TH AT THE ASSESSEE HAD MAINTAINED STATUS QUO EVEN IN THE RETU RN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. ACCORDING THE ASSESSING OFFICER, THE CONDUCT OF THE ASSESSEE SHOWED THAT THERE WAS NEVER ANY INTENTION TO MEET LAWFUL TAX LI ABILITY AND THE ASSESSEE RESORTED TO UNFAIR AND ILLEGAL MEANS A ND TRIED TO CREATE FALSE DOCUMENTATION TO ARTIFICIALLY SUPPRESS HIS EARNINGS IN ORDER TO EVADE TAX LIABILITY. CONSEQU ENTLY, THE ASSESSING OFFICER HELD THAT HE WAS SATISFIED THAT T HE ASSESSEE HAD WILLFULLY CONCEALED THE PARTICULARS OF HIS INCO ME OF RS.10 LACS AND COMMITTED THE DEFAULT UNDER SECTION 271(1) (C) OF THE ACT. HE, THEREFORE, LEVIED A PENALTY OF RS.3,30,0 00/- UNDER SECTION 271(1)(C) OF THE ACT. 8 7. ON APPEAL, THE LEARNED CIT (APPEALS) CONFIRMED THE IMPUGNED PENALTY, AND HENCE THE ASSESSEE IS IN APPE AL BEFORE THE TRIBUNAL. 8. I HAVE HEARD SHRI RAKESH JAIN, LEARNED COUNSEL FOR THE ASSESSEE AND SHRI D.S.SIDHU, LEARNED D.R. AT LE NGTH AND HAVE ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD . THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE LOWER AUTHORITIES. HE FURTHER SUB MITTED THAT THE ASSESSEE HAS DISCLOSED ALL THE DETAILED PARTICU LARS ABOUT HIS INCOME, WHICH HE HAS RECEIVED ALBEIT CLAIMING THE SAME TO BE GIFT. THE AMOUNT CAME THROUGH BANKING CHANNELS AND THE IDENTITY OF DONOR HAS NOT BEEN DOUBTED. THEREFORE , PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS NOT IMPOSABL E EVEN THOUGH THE AMOUNT WAS NOT CONSIDERED AS GIFT. HE RELIED UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE CIT VS. BALBIR SINGH (2008) 304 ITR 125 (P&H). THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT AFFORDED ANY OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE DONOR SHRI AVINASHI L AL BAJAJ ON WHOSE STATEMENT RELIANCE WAS PLACED BY THE ASSES SING OFFICER. HOWEVER, THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED THAT IN THIS CASE THE ASSESSEE HAS PRODUC ED A GIFT DEED AND THE AMOUNT IN QUESTION COME THROUGH BANKIN G CHANNELS AND, THEREFORE, IDENTITY OF THE DONOR AND GENUINENESS OF TRANSACTION HAVE BEEN DULY ESTABLISH ED. HE FURTHER POINTED OUT THAT IN THE SURRENDER LETTER DA TED 20.2.2006, IT WAS SPECIFICALLY STATED THAT THE DONO R HAS NOT 9 COOPERATING IN THE INCOME TAX PROCEEDINGS AND, THER EFORE, TO AVOID LITIGATION AND TO BUY PEACE, RS.10 LACS WERE SURRENDERED. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FIRST PART OF THE SURRENDER HAS BEEN ACCEP TED. HOWEVER, THE LATER PART THAT IT IS SUBJECT TO NO PE NAL ACTION, WAS NOT ACCEPTED. THE LEARNED COUNSEL FOR THE ASS ESSEE ALSO RELIED UPON THE DECISION OF THE I.T.A.T. DELHI BENC H B, NEW DELHI IN THE CASE OF DEEPAK KUMAR JAIN VS. ITO IN ITA NO.2189/DEL/2012 RELATING TO ASSESSMENT YEAR 2002-0 3. THE I.T.A.T., DELHI BENCH VIDE ITS ORDER DATED 20.7.201 2 DELETED THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE A CT HOLDING THAT IT IS NOT THE CASE OF THE REVENUE THAT THE DOC UMENTS SUBMITTED BY THE ASSESSEE WERE FALSE. IN THE SAI D CASE, GIFTS WERE RECEIVED BY THE ASSESSEE FROM THREE PERSONS AM OUNTING TO RS.15 LACS (RS.5 LACS EACH). IN ORDER TO ESTABL ISH THE IDENTITY, GENUINENESS, THE ASSESSEE SUBMITTED DOCUM ENTS FROM THE DONORS LIKE MEMORANDUM OF GIFTS, AFFIDAVITS, PA N CARD, RATION CARD, COPY OF ITR AND WEALTH TAX RETURN , CO PY OF INCOME TAX AND WEALTH TAX ASSESSMENT ORDER AND COPY OF BANK ACCOUNTS. THESE GIFTS WERE DECLARED IN THE STATE MENT OF AFFAIRS FILED ALONGWITH RETURN OF INCOME. THE ASS ESSING OFFICER DID NOT ACCEPT THE EXPLANATION ON THE GROUN D THAT THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE WITH REGARD TO HIS RELATIONSHIP WITH THE PERSONS FROM WH OM GIFTS HAVE BEEN RECEIVED, NOR COULD EXPLAIN THE PURPOSE O F SUCH GIFTS. HOWEVER, THE TRIBUNAL HAS CANCELLED THE PEN ALTY STATING THAT WHEN THE REVENUE HAS NOT BEEN ABLE TO FIND ANY FAULT IN THE DOCUMENTS SUBMITTED BY THE ASSESSEE, AND, THERE FORE, NO 10 PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIA BLE. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON T HE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF C IT VS. RELIANCE PETROPRODUCTS PVT. LTD., CIVIL APPEAL NO.2 463 OF 2010 DATED 17.3.2010 AND SUBMITTED THAT THE SURRENDER O F AMOUNT OF GIFT IS IN GOOD FAITH AND DOES NOT AUTOMATICALLY MEANS THAT THE GIFT RECEIVED, WHICH WAS AGREED TO BE ADDED AS CONCEALED INCOME. 9. THE LEARNED D.R., ON THE OTHER HAND, SUBMITTED THAT THE ONUS WAS ON THE ASSESSEE TO PROVE THE GENUINENE SS OF THE GIFT AND CREDITWORTHINESS OF THE DONOR. ACCORDING TO THE LEARNED D.R., THE ASSESSEE FAILED ON BOTH THE COUNT S IN SPITE OF AMPLE OPPORTUNITIES PROVIDED TO HIM. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT MADE SURRENDER IN GOOD FA ITH. INSTEAD, THE ASSESSEE CHOOSE TO SURRENDER ONLY WHEN AFTER INTENSIVE ENQUIRIES, IT WAS ESTABLISHED BY THE DEPA RTMENT THAT THERE WAS NOT A GENUINE GIFT, THE ENTRY OF RS.10 LA CS WAS OBTAINED AFTER PAYING THE AMOUNT IN CASH TO THE SAI D DONOR. THE ASSESSEE WAS CONFRONTED WITH THE FACTS AND WAS ASKED TO PROVE THE GENUINENESS OF THE ALLEGED GIFT. THE ASSE SSEE SURRENDERED ONLY WHEN HE WAS CORNERED FROM ALL SIDE S AND WAS LEFT WITH NO WAY OUT EXCEPT TO SURRENDER THE ENTRY OF RS.10 LACS. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS D ISCLOSED THE FACTUM OF RECEIPT OF GIFT IN THE RETURN OF INCO ME. BUT ON INVESTIGATION AND ALSO DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE SAID CLAIM WAS FOUND TO BE FALSE. THE 11 LEARNED D.R FOR THE REVENUE RELIED UPON THE FOLLOWI NG DECISIONS : I) CIT VS. DEEP CHAND (2011) 336 ITR 292 (P&H) II) MAK DATA P.LTD. VS. CIT (2013) 358 ITR 593 (SC) 10. IN THIS CASE, THE ASSESSEE CLAIMED THAT HE HAD RECEIVED GIFT OF RS.10 LACS FROM SHRI AVINASHI LAL BAJAJ S/O SHRI B.D.BAJAJ, RESIDENT OF HOUSE NO.3046, SECTOR 2 0D, CHANDIGARH. DURING THE COURSE OF ENQUIRIES MADE B Y THE INVESTIGATION WING, SHRI AVINASHI LAL BAJAJ IN HIS STATEMENT STATED THAT HE RETIRED ON 1.7.1996 FROM PUBLIC HEAL TH DEPARTMENT, U.T., CHANDIGARH AND DRAWING PENSION OF RS.4000/- PER MONTH. AFTER HIS RETIREMENT, SHRI A VINASHI LAL BAJAJ WENT TO USA AND JOINED THE BUSINESS OF HIS SO N SHRI SURESH BAJAJ, WHO WAS ALREADY IN USA FOR THE LAST 1 0 YEARS. AS REGARDS THE ENTRIES IN HIS NRE ACCOUNT NO.1062 W ITH VIJAY BANK, SECTOR 34, CHANDIGARH, HE HAS STATED THAT THE SE ARE ON ACCOUNT OF PAY ORDERS OBTAINED BY HIM IN DIFFERENT NAMES AND THESE PAY ORDERS WERE PAID TO SOME PERSONS THROUGH SHRI RAMESH KUMAR. HE FURTHER STATED THAT THESE PAY OR DERS WERE PAID IN LIEU OF CASH RECEIVED FROM ALLEGED DONEE AN D HE HAS NOT GIVEN ANY LOAN OR GIFT TO ANY PERSON IN INDIA O UT OF NRE ACCOUNT NO.1062 WITH VIJYA BANK, CHANDIGARH. HE F URTHER STATED THAT SHRI RAMESH KUMAR (MIDDLE MAN) PROMISED TO HELF IN EXPORT BUSINESS TO USA AND OBTAINED DRAFT/PAY OR DERS IN DIFFERENT NAMES AND PAID IN CASH IMMEDIATELY IN LIE U OF THE SAME. THE INVESTIGATION WING OF THE REVENUE HAS A LSO RECORDED THE STATEMENT OF THE ASSESSEE ON 30.12.200 3 ON OATH. 12 IN HIS STATEMENT, THE ASSESSEE STATED THAT SHRI AVI NASHI LAL BAJAJ IS A GOOD FRIEND FOR THE LAST 25 YEARS. HE HAS RECEIVED ALLEGED GIFT FROM THE SAID PERSON OUT OF LOVE AND A FFECTION AND THERE WAS NO SPECIAL OCCASION WHILE RECEIVING THE G IFT. IT IS APPARENT FROM THE RECORD THAT SHRI AVINASHI LAL BAJ AJ WAS WORKING AS A STOREKEEPER WITH PUBLIC HEALTH DEPARTM ENT OF UT ADMINISTRATION, CHANDIGARH AND RETIRED ON 1..7.1996 . IT IS ALSO ADMITTED FACT THAT SHRI AVINASHI LAL BAJAJ HAS CATEGORICALLY STATED THAT HE HAS NOT MADE ANY GIFT TO ANY PERSON; ONLY PAY ORDER HAS BEEN GIVEN IN LIEU OF CA SH. THE ASSESSING OFFICER VIDE LETTER DATED 9.1.2006 ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF THE GIFT IN QU ESTION. IN RESPONSE TO THE ABOVE QUERY, THE ASSESSEE VIDE HIS LETTER DATED 20.2.2006 SUBMITTED AS UNDER : 1. THAT DURING THE PERIOD RELEVANT OF THE ACT THE ASST. YEAR 2000-01, I RECEIVED A GIFT FOR RS.10 LACS FROM SH.ABHINASHI LAL BAJAJ S/O SH.B.D.BAJAJ RESIDENT OF HOUSE NO.3046, SECTOR 20D, CHANDIGARH, THROUGH PAY ORDER WHICH WAS CREDITED TO MY SAVING ACCOUNT NO.1127 WITH P.N.B. MANIMAJRA. COPY OF THE SAID BANK STATEMENT, GIFT DEED DULY SIGNED BY THE DONOR AND A COPY OF THE AFFIDAVIT EXECUTED BY THE SAID DONOR TO THIS EFFECT HAS ALREADY BEEN SUBMITTED. 2. THAT UNFORTUNATELY NOW THE DONOR IS NOT CO- OPERATING WITH US IN THE INCOME TAX PROCEEDINGS. THEREFORE, TO AVOID LITIGATION AND PURCHASE PEACE I HEREBY SURRENDER RS.10 LACS AS MY INCOME FOR THE ASST. YEAR 2000-01. SUBJECT TO 13 NO PENAL ACTION UNDER THE PROVISIONS OF I-TAX ACT. 11. FROM THE ABOVE LETTER OF THE ASSESSEE, IT IS C LEAR THAT THE ASSESSEE SURRENDERED RS.10 LACS AS HIS INCOME F OR THE ASSESSMENT YEAR 2000-01 AS HE FAILED TO PROVE THE GENUINENESS OF GIFT AND THE AMOUNT OF RS.10 LACS WA S TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE ASSES SMENT YEAR UNDER CONSIDERATION. IN THE INSTANT CASE, THE ASS ESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE DONOR DURING THE COURSE OF ASSESSMENT PROCEEDINGS ANDALSO DURING THE COURSE OF PENALTY PROCEEDINGS. 12. THE ADDITION MADE BY THE ASSESSING OFFICER HAS BEEN CONFIRMED BY THE LEARNED CIT (APPEALS) IN THE QUANT UM APPEAL. THE TRIBUNAL VIDE ITS COMMON ORDER DATED 2 1.4.2014 IN ITA NO.242/CHD/2009 (KRISHAN KUMAR PALTA) AND IN ITA NO.244/CHD/2009 (SANDEEP KUMAR PALTA) HAS DISMISSED THE APPEAL OF THE ASSESSEE, OBSERVING AS UNDER : 8 AS FAR AS ISSUE REGARDING MERIT IS CONCERNED IT IS NOT CORRECT THAT THE STATEMENT OF THE DONOR WAS RECORDED BEHIND THE BACK OF THE ASSESSEE. IN FACT THE STATEMENT OF THE DONOR, SHRI ABINASHI LAL BAJAJ WAS RECORDED BY INVESTIGATION WING AND SAME WAS CONFRONTED TO THE ASSESSEE WHICH FACT BECOMES CLEAR FROM THE LATTER WRITTEN BY THE ASSESSING OFFICER ON 9.1.2006 WHICH IS AS UNDER: YOU HAVE RECEIVED A GIFT AMOUNTING TO RS. 10 LAKHS FROM ABINASHI LAL BAJAJ. THE STATEMENT OF 14 BAJAJ WAS RECORDED BY THE ADIT (INV) II, CHANDIGARH. IN HIS STATEMENT SHRI BAJAJ HAS STATED THAT HE HAS NOT MADE ANY GIFT TO ANY PERSONS; ONLY PAY ORDER HAS BEEN GIVEN IN LIEU OF CASH. IT IS QUITE CLEAR FROM THE ABOVE FACTS THE GIFT IS NOT GENUINE. YOU ARE REQUESTED TO FURNISH THE COMPLETE POSTAL ADDRESS OF THE PERSON FROM WHOM GIFT HAS BEEN RECEIVED OR PRODUCE THE DONOR TO VERIFY THE GENUINENESS OF THE GIFT ON THE DATE OF HEARING I.E. 18.1.2006. THEREFORE IT IS CLEAR THAT THE ASSESSEE WAS CONFRON TED WITH THE STATEMENT GIVEN BY SHRI ABINASHI LAL BAJAJ BEFORE THE INVESTIGATION WING. THERE AFTER THE ASSESSEE VIDE LETTER DATED 20.2.2006 STATED AS UNDER: 1 THAT DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR 2000-01, I RECEIVED A GIFT FOR RS. 10 LAKHS FROM ABNASHI LAL BAJAJ S/O SHRI B.D. BAJAJ R/O H NO. 3046, SECTOR 20D, CHANDIGARH THROUGH PAY ORDER WHICH WAS CREDITED TO MAY SAVING ACCOUNT NO. 1127 WITH PNB MANIMAJRA. COPY OF THE SAID BANK STATEMENT GIFT DEED DULY SIGNED BY THE DONOR AND A COPY OF THE AFFIDAVIT EXECUTED BY THE SAID DONOR TO THIS EFFECT HAS ALREADY BEEN SUBMITTED. 2 THAT UNFORTUNATELY NOW THE DONOR IS NOT COOPERATING WITH US IN THE INCOME TAX PROCEEDINGS. THEREFORE TO AVOID LITIGATION AND PURCHASE PEACE I HEREBY SURRENDER RS. 10 LAKHS AS MY INCOME FOR THE ASSESSMENT YEAR 2000-01. SUBJECT TO NO PENAL ACTION UNDER THE PROVISIONS OF THE INCOME TAX ACT IN VIEW OF THE ABOVE DISCUSSION AND ALSO FACTS OF T HE CASE, THE AMOUNT OF RS. 10 LAKHS SHOWN AS GIFTS IS 15 TREATED AS UNDISCLOSED INCOME, WHICH THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIFTS AND ADDED TOWARDS THE TAXABLE INCOME. FROM THE ABOVE IT BECOMES CLEAR THAT THE ASSESSEE HAS SURRENDERED THE AMOUNT AFTER BEING FULLY CORNERED AND THEREFORE ONCE THE ADDITION HAS BEEN MADE ON THE BASIS OF ADMISSION NO APPEAL IS MAINTAINABLE. IN ANY CASE THE ASSESSEE HAS NOT BEE N ABLE TO SHOW ANY RELATIONSHIP WITH THE DONOR AND THEREFORE THERE CAN NOT BE ANY LOVE AND AFFECTION W ITH THE NON RELATIVE AND THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SHOW CLOSE RELATIONSHIP BETWEEN THE ASSESSEE AND ABINASHI LAL BAJAJ. THEREFORE THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT V. P. MOHANKALA (SUPRA) AND HON'BLE PUNJAB AND HARYANA HIGH COURT IN CASE OF SMT. USHA RANI VS. CIT (SUPRA) ARE CLEARLY APPLICABLE TO THE FACTS OF THE CASE. IN VIEW OF THIS WE FIND NOTHING WRONG WITH T HE ORDER OF THE LD. CIT(A) AND CONFIRM THE SAME. 13. WHILE DECIDING THE QUANTUM APPEAL, THE DIVISIO N BENCH OF THIS TRIBUNAL HAS CATEGORICALLY HELD THAT THE ASSESSEE HAS SURRENDERED THE AMOUNT AFTER FULLY COR NERED AND THE ADDITION HAS BEEN MADE ON THE BASIS OF THE PAYM ENT MADE BY THE ASSESSEE. THE TRIBUNAL HAS ALSO OBSERVED T HAT THE ASSESSEE FAILED TO SHOW ANY RELATIONSHIP WITH THE D ONOR AND, THEREFORE, THERE CANNOT BE ANY LOVE AND AFFECTION W ITH THE NON-RELATIVE AND FURTHER THE ASSESSEE COULD NOT PRO DUCE ANY EVIDENCE TO SHOW CLOSE RELATIONSHIP BETWEEN HIM AND SHRI AVINASHI LAL BAJAJ. 16 14. AFTER PERUSING THE RECORDS, IT IS OBSERVED THA T THE REVENUE HAS UNEARTHED THE SCAM IN RESPECT OF BOGUS GIFTS. THE ADIT (INV.)-II, CHANDIGARH VIDE LETTER DATED 27 .4.2004 FORWARDED A DETAILED REPORT WHICH IS ANNEXED AS A-2 TO THE IMPUGNED ORDER, WAS SENT TO THE ASSESSING OFFICER. THE AUTHORITIES BELOW HAVE CATEGORICALLY STATED THAT BA JAJ FAMILY WAS INVOLVED IN GIVING BOGUS GIFTS. THE STATEMENTS OF MEMBERS OF BAJAJ FAMILY (ANNEXURE-3) TO THE ORDER O F THE LEARNED CIT (APPEALS) WERE RECORDED AND THEY HAVE A CCEPTED THAT PAY ORDERS WERE GIVEN IN LIEU OF CASH. IT IS CLEAR CASE WHERE THE ASSESSEE HAS MISERABLY FAILED TO SATISFY THE INGREDIENTS OF SECTION 68 OF THE ACT. THE ONUS WA S ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIO N AND CREDITWORTHINESS OF THE DONOR. IN THE CASE OF JA SPAL SINGH VS. CIT (2007) 290 ITR 306 (P&H), THE FACTS OF THE CASE WERE THAT THE ASSESSEE HAD CONSTRUCTED A HOUSE PROPERTY. HE HAD CLAIMED TO HAVE RECEIVED VARIOUS GIFTS AGGREGATING TO RS.15,69,000/- IN THE ASSESSMENT YEARS 1997-98 TO 2 001-02 FROM NRIS. IN ASSESSMENT YEAR 1998-99, THE ASSESSE E HAD CLAIMED TO HAVE RECEIVED A SUM OF RS.4,70,000/- FRO M NRIS AND RS.1,20,000/- FROM FOUR PERSONS AT RS.30,000/- EACH. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE T HE IDENTITY OF THE DONORS, THEIR CREDITWORTHINESS AND GENUINENE SS OF THE GIFTS. THE ASSESSEE COULD NOT DISCHARGE THE ONUS WHICH WAS LAID UPON HIM. THE ASSESSING OFFICER MADE THE ADD ITION STATING THAT THE GENUINENESS OF THE GIFTS WAS NOT E STABLISHED AND THAT THE DONOR WAS NOT RELATED TO THE ASSESSEE AND THERE WAS NO OCCASION FOR MAKING THE GIFT. THE ADDITION WAS 17 CONFIRMED BY THE LEARNED CIT (APPEALS). IN SECOND APPEAL, THE TRIBUNAL ALSO DISMISSED THE APPEAL OF THE ASSESSEE. THE ASSESSEE PREFERRED AN APPEAL AGAINST THE ORDER OF T HE TRIBUNAL BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT AND TH E HON'BLE JURISDICTIONAL HIGH COURT HELD AS UNDER : IT IS WELL-SETTLED THAT MERE IDENTIFICATION OF DO NOR AND SHOWING THE MOVEMENT OF GIFT AMOUNT THROUGH BANKING CHANNEL IS NOT ENOUGH TO PROVE GENUINENESS OF THE GIFT. THE ASSESSEE WAS REQUIRED TO ESTABLIS H THAT THE DONOR HAD THE MEANS AND THE GIFT WAS GENUINE, FOR NATURAL LOVE AND AFFECTION. REFERENCE IN THIS REGARD MAY BE MADE TO THE JUDGMENT OF THIS COU RT IN LALL CHAND KALRA V. CIT (1981) 22 CTR 135, THE JUDGMENT OF THE DELHI HIGH COURT IN SAJAN DASS AND SONS V. CIT (2003) 264 ITR 435, CIT V. DURGA PRASAD MORE (1971) 82 ITR 540 (SC) AND SUMIT DAYAL V. CIT (1995) 214 ITR 801 (SC). THE JUDGMENT RELIED UPON BY LEARNED COUNSEL FOR THE ASSESSEE ARE DISTINGUISHABLE. IN THE SAID JUDGMENTS, THE TRIBUNAL RECORDED A FINDING THAT THE GIFTS WERE GENUINE WHICH WAS HELD TO BE A PURE FINDING OF FACT. WE HAVE DEALT WITH THIS ASPECT OF THE MATTER AT LENGTH IN OUR JUDGMENT DATED JULY 31, 2006, IN SUBHASH CHANDER SEKHRI V. DEPUTY CIT (2007) 290 ITR 300 (P&H) (ITA NO.265 OF 2006) WE ARE OF THE VIEW THAT THE CONCURRENT FINDINGS OF FACT RECORDED BY THE AUTHORITIES THAT THE GIFTS IN QUESTION WERE NOT GENUINE, ARE PURE FINDINGS OF FAC T AND NO SUBSTANTIAL QUESTION OF LAW ARISES. 18 15. WHEN THE GIFT RECEIVED BY THE ASSESSEE IS HELD TO BE BOGUS, THE ONLY CONCLUSION WOULD BE THAT THE ASSESS EE HAD FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND, THEREFORE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT HAD TO B E LEVIED. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. DEEP CHAND (2011) 336 ITR 292 (P&H) OBSERVED AS UND ER : THE FACTS, IN BRIEF, NECESSARY FOR ADJUDICATION AS NARRATED IN THE APPEAL, ARE THAT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RECEIVED A GIFT AMOUNTING TO RS. 1,75,000 ON PAYMENT OF AN EQUAL AMOUNT IN CASH, ALONG WITH PREMIUM FOR ARRANGING THAT GIFT. DURING PROCEEDINGS UNDER SECTION 148 OF THE ACT INITIATED AGAINST THE ASSESSEE, THE AMOUNT EQUAL TO THE AMOUNT OF THE GIFT, I.E., RS. 1,75,000 AND RS. 17,500 ON ACCOUNT OF PREMIUM AT THE RATE OF 10 PER CENT. WERE ADDED TO THE INCOME OF THE ASSESSEE. THE COMMISSIONER OF INCOME-TAX (APPEALS) (IN SHORT 'THE CIT(A)'), CONFIRMED THE ORDER OF THE ASSESSING OFFICER WHEREAS THE TRIBUNAL ACCEPTED THE APPEAL OF THE ASSESSEE AND DELETED THE PENALTY, VIDE ORDER DATED SEPTEMBER 22, 2005. MEANWHILE PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE ALSO INITIATED AGAINST THE ASSESSEE WHEREBY A PENALTY OF RS. 82,000 WAS IMPOSED ON THE ASSESSEE. THE ASSESSEE PREFERRED APPEAL AGAINST IMPOSITION OF PENALTY. THE COMMISSIONER OF INCOME-TAX (APPEALS) CANCELLED THE PENALTY IMPOSED, VIDE ORDER DATED OCTOBER 26, 2005. THE APPEAL CARRIED BY THE REVENUE WAS DISMISSED BY THE TRIBUNAL VIDE ORDER UNDER APPEAL AND IT WAS OBSERVED THAT SINCE THE ASSESSING OFFICER HAD NOT RECORDED HIS SATISFACTION BEFORE INITIATING THE PENALTY PROCEEDINGS, THE ORDER OF PENALTY COULD NOT BE SUSTAINED. 19 THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD AS U NDER:- THE POINT FOR CONSIDERATION IN THIS CASE IS, WHETH ER THE TRIBUNAL WAS JUSTIFIED IN DELETING THE PENALTY LEVIED AGAINST THE ASSESSEE UNDER SECTION 271(1)(C) OF THE ACT. 7. THE GIFT AMOUNTING TO RS. 1,75,000 SAID TO HAVE BEEN RECEIVED BY THE ASSESSEE WAS HELD TO BE BOGUS. ONCE THAT IS SO, THE ONLY CONCLUSION IS THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND THE ORDER OF THE TRIBUNAL DELETIN G THE PENALTY IS UNSUSTAINABLE IN LAW. ACCORDINGLY, I T IS HELD THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME AND, THUS, PENALTY WAS LIABLE TO BE LEVIED AGAINST HIM UNDER SECTION 271(1)(C) OF THE ACT. FURTHER, THE ISSUE REGARDING RECORDING OF SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IN THE COURSE OF ASSESSMENT PROCEEDINGS STANDS CONCLUDED AGAINST THE ASSESSEE IN THE JUDGMENT OF THIS COURT REPORTED IN CIT V. PEAREY LAL AND SONS (EP) LTD. [2009] 308 ITR 438 (P&H). 8. IN VIEW OF THE ABOVE, THE SUBSTANTIAL QUESTION O F LAW IS ANSWERED IN FAVOUR OF THE REVENUE AND THE APPEAL IS ALLOWED ACCORDINGLY. 16. IN VIEW OF THE LATEST DECISION OF THE JURISDIC TIONAL HIGH COURT ON THE ISSUE AT HAND, I AM OF THE OPINIO N THAT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIA BLE WHEN THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE GIF T AND CREDITWORTHINESS OF THE DONOR. IN OTHER WORDS, THE CLAIM MADE BY THE ASSESSEE REGARDING THE GIFT IN QUESTION WAS BOGUS AND NOT GENUINE. THE ASSESSING OFFICER HAS GIVEN CLEA R FINDINGS THAT THE DETAILS/PARTICULARS SUPPLIED BY THE ASSESS EE IN HIS RETURN OF INCOME WERE FOUND TO BE INCORRECT AND FAL SE. NOW, 20 THE ASSESSEE CAN NOT TAKE THE PLEA THAT ALL THE PAR TICULARS WERE DISCLOSED IN THE RETURN OF INCOME. THE ASSESS EE HAS DISCLOSED THE FACTUM OF RECEIPT OF GIFT OF RS.10 LA CS IN THE RETURN OF INCOME. THE SAID CLAIM OF THE ASSESSEE WAS FOUND TO BE INCORRECT AND FALSE AND WHEN THE CONCEALMENT OF INCOME WAS DETECTED BY THE REVENUE, THE ASSESSEE MADE FALS E CLAIM AND ULTIMATELY SURRENDERED THE AMOUNT FOR TAXATION. THE ASSESSEE HAS KNOWINGLY MADE A FALSE CLAIM IN THE RE TURN OF INCOME TO THE EXTENT OF RS.10 LACS, WHICH IS NOT A SMALL AMOUNT BY ANY MEANS. THE ALLEGED DONOR WAS WORKIN G AS A STOREKEEPER, WHO RETIRED ON 1.7.1996 FROM PUBLIC HE ALTH DEPARTMENT, U.T., CHANDIGARH. HE WAS DRAWING PENS ION OF RS.4000/- PER MONTH. THERE IS NO EVIDENCE ON RECO RD TO SHOW THAT THE ALLEGED DONOR HAD ANY OTHER SOURCE OF INCO ME. IT IS THUS, NOT BELIEVABLE THAT SUCH A PERSON CAN EVER DR EAM OF MAKING A GIFT OF RS.10 LACS. NOW, THE QUESTION IS AS TO WHY THE ALLEGED DONOR WILL GIVE A GIFT OF HUGE AMOUNT T O THE ASSESSEE, PARTICULARLY IN ABSENCE OF ANY RELATIONSH IP BETWEEN MR.BAJAJ (ALLEGED DONOR) AND THE ASSESSEE AND THERE WAS NO OCCASION FOR GIFT. IN MY CONSIDERED OPINION, THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. R ELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) REL IED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE IS NOT APPL ICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. SIMILARLY, OTHER DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE TO THIS CASE SINCE THE FACTS ARE DIFFERENT AND DISTINGUISHABLE. 21 17. THE ASSESSEE VIDE HIS LETTER DATED 20.2.2006 M ADE A SURRENDER OF RS.10 LACS SUBJECT TO NO PENAL ACTION. THE ASSESSEE HAS MADE THE SURRENDER AFTER DETECTION OF CONCEALMENT BY THE DEPARTMENT. IT IS ADMITTED FAC T THAT THE DETAILED INVESTIGATIONS WERE CARRIED OUT BY THE REV ENUE IN REGARD TO THE GIFTS GIVEN BY THE ALLEGED DONOR. TH E ASSESSEE MADE SURRENDER ONLY AFTER DETECTION OF CONCEALMENT OF INCOME BY THE DEPARTMENT. IN MY OPINION, THE SURRENDER M ADE BY THE ASSESSEE CANNOT BE CONSIDERED A VOLUNTARY SURRE NDER. THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT OF ALLEG ED GIFT WAS VOLUNTARILY SURRENDERED TO AVOID LITIGATION AND BUY PEACE WITH THE DEPARTMENT, CANNOT BE ACCEPTED IN VIEW OF THE D ECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F RAJESH CHAWLA VS. CIT , 203 CTR 209 (P&H) AND THE HON'BLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD. VS. CIT (201 3) 358 ITR 593 (SC). IN THE INSTANT CASE, THE ORIGINAL RETUR N OF INCOME WAS FILED BY THE ASSESSEE ON 31.10.2000. THE RETU RN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 14.5.2 001. THE BALANCE SHEET AS ON 31.3.2000 ACCOMPANIED WITH THE RETURNS SHOWED GIFT OF RS.10 LACS RECEIVED BY THE ASSESSEE DURING THE PERIOD 1999-2000. ON MAKING INVESTIGATION BY THE ADIT-II,, CHANDIGARH, IT HAD COME TO THE NOTICE OF THE DEPART MENT THAT THE GIFTS SHOWN BY THE ASSESSEE IN HIS RETURN OF IN COME FOR THE ASSESSMENT YEAR 2000-01 WERE FAKE. THE AMOUNT OF RS.10 LACS WAS SHOWN IN THE BOOKS OF ACCOUNT OF ASSESSEE S PROPRIETARY CONCERN. SUBSEQUENTLY, PROCEEDINGS UND ER SECTION 147 OF THE ACT WERE INITIATED AND NOTICE UNDER SECT ION 148 OF THE ACT WAS ISSUED ON 4.3.2005. THE ASSESSEE CLAIM ED THAT HE 22 HAD RECEIVED A GIFT OF RS.10 LACS ON 22.11.1999 FRO M SHRI AVINASHI LAL BAJAJ. IT IS ALSO OBSERVED THAT IN R ESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE S UBMITTED HIS LETTER DATED 27.4.2005, WHEREIN IT WAS STATED T HAT THE ORIGINAL RETURN FILED BY HIM ON 31.10.2000 MAY BE TREATED AS RETURN FILED IN RESPONSE TO THE SAID NOTICE. IT IS OBSERVED THAT VIDE LETTER DATED 20.2.2006, THE ASSESSEE SURR ENDERED RS.10 LACS AS HIS INCOME FOR ASSESSMENT YEAR 2000-0 1. THUS, IT IS CLEAR THAT THE ASSESSEE SURRENDERED THE AMOUN T AFTER MORE THAN FIVE YEARS FROM THE DATE OF FILING OF ORI GINAL RETURN OF INCOME. EVEN IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE MADE FAL SE CLAIM. IN SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT THE A SSESSEE HAD MADE VOLUNTARY SURRENDER OF THE AMOUNT OF GIFT. IN MY OPINION, THERE WAS A DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE TO EVADE TAX ON THE AMOUNT OF RS.10 LACS. THE EXPLANATION GIVEN BY THE ASSESSEE REGARDING THE ALL EGED GIFT WAS FOUND TO BE FALSE BY THE ASSESSING OFFICER. T HE ASSESSING OFFICER HAS BROUGHT AMPLE EVIDENCE ON RECORD TO DIS CHARGE ITS BURDEN OF PROVING CONCEALMENT. IN THE ASSESSMENT O RDER ITSELF, THE ASSESSING OFFICER HAS STATED THAT PENAL TY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALING/FURNISHING INACCURATE PARTICULARS OF INC OME HAVE BEEN INITIATED SEPARATELY. AS REGARDS THE CONTENT ION OF THE ASSESSEE, THE ASSESSING OFFICER HAS STATED THAT IT IS NOT A RIGHT OF THE ASSESSEE TO OFFER THE INCOME AS PER HI S REQUIREMENTS THAT THE ASSESSING OFFICER SHOULD HAVE ALSO ACCEPTED THE SURRENDER MADE BY THE ASSESSEE. IN TH E INSTANT 23 CASE, THE ASSESSING OFFICER HAS NOT ACCEPTED THE SU RRENDER MADE BY THE ASSESSEE. IT IS TRUE THAT THE SURRENDE R HAS NOT BEEN MADE BY ANY MISTAKE OF LAW OR FACT AS THE ASSE SSEE CAME TO KNOW THAT THE REVENUE HAS MADE DETAILED INVESTIG ATION. ON INVESTIGATION, THE CLAIM MADE BY THE ASSESSEE WA S FOUND TO BE FALSE. THEREFORE, THE ASSESSEE IS PRECLUDED FRO M TAKING THE PLEA THAT THE FACTS WERE DISCLOSED IN THE RETURN OF INCOME. AFTER PERUSING THE ORDER OF THE ASSESSING OFFICER, IT IS CLEAR THAT THE ASSESSING OFFICER WAS SATISFIED THAT THE A SSESSEE HAS CONCEALED THE INCOME OR FURNISHED INACCURATE PARTIC ULARS OF INCOME IN THE INSTANT CASE, THE DETAILED INVESTIGA TION WAS MADE BY THE REVENUE AND IT WAS FOUND THAT CERTAIN P ERSONS WERE INDULGING IN GIVING BOGUS GIFTS. THE ONUS WAS CLEARLY ON THE ASSESSEE TO PROVE THAT A PARTICULAR GIFT WAS GE NUINE. UNDER THE LAW, IT IS THE DUTY AND RESPONSIBILITY OF THE ASSESSEE TO DISCHARGE HIS ONUS. THE ASSESSEE FAIL ED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE ALLEGED DONOR. IT IS TRUE THAT THE PENALTY PROCEEDINGS ARE APART AND SEPARATE FROM THE ASSESSMENT PROCEEDINGS. THE FINDINGS GIVEN IN AS SESSMENT PROCEEDINGS ARE CERTAINLY RELEVANT AND HAVE PROBATI VE VALUE, BUT SUCH FINDINGS ARE MATERIAL ALONE AND MAY NOT JU STIFY THE IMPOSITION OF PENALTY IN A GIVEN CASE, BECAUSE THE CONSIDERATION THAT ARISES IN PENALTY PROCEEDINGS AR E DIFFERENT FROM THOSE ARISING IN ASSESSMENT PROCEEDINGS. HOW EVER, IN THE INSTANT CASE, IN THE PENALTY PROCEEDINGS, THE A SSESSEE HAS NOT TAKEN ANY NEW PLEA. THE ONLY CONTENTION OF THE ASSESSEE IS THAT THE SURRENDER MADE BY THE ASSESSEE WAS VOLU NTARY, AND 24 HENCE NO PENALTY SHOULD BE IMPOSED ON THE CONTRAR Y, THE CASE OF THE REVENUE IS THAT THE ASSESSEE HAS WILLFU LLY CONCEALED PARTICULARS OF INCOME AND HAS FURNISHED I NACCURATE PARTICULARS IN THE RELEVANT RETURN . IT IS ALSO T HE CASE OF THE REVENUE THAT THE ASSESSEE HAD MAINTAINED STATUS QUO IN THE RETURN FILED IN RESPONSE TO NOTICE 148 OF THE ACT. THE CONDUCT OF THE ASSESSEE SHOWED THAT THERE WAS NEVER ANY INTENTION TO MEET LAWFUL TAX LIABILITY AND THE ASSE SSEE RESORTED TO UNFAIR AND ILLEGAL MEANS AND TRIED TO CREATE FAL SE DOCUMENTATION TO ARTIFICIALLY SUPPRESS HIS EARNINGS IN ORDER TO EVADE TAX LIABILITY. THIS CLEARLY SHOWED THE CONS CIOUS AND WILLFUL ACTION ON THE PART OF THE ASSESSEE AND, HEN CE PENALTY UNDER SECTION 271(1)(C) OF THE ACT SHOULD BE LEVIED . IT IS RELEVANT TO OBSERVE HERE THAT IN VIEW OF THE JUDGME NT OF THE HON'BLE SUPREME COURT IN THE CASE OF DHARMENDRA TE XTILE PROCESSORS (2008) 306 ITR 277 (SC), THE CONCEPT OF PENALTY HAS NOT UNDERGONE A CHANGE. IN THE SAID JUDGMENT, IT HAS BEEN CATEGORICALLY OBSERVED THAT THE PENALTY IS IMP OSED ONLY WHEN THERE IS SOME ELEMENT OF DELIBERATE DEFAULT AN D NOT MERE MISTAKE. IN MY OPINION, THE CONTENTIONS RAISED ON BEHALF OF THE ASSESSEE IN ALL RESPECT DESERVE TO BE REJECTED. 18. THE FACTS IN THE CASE OF RAJESH CHAWLA VS. CI T, 203 CTR 209 DATED 22.5.2006 (P&H) ARE THAT THE ASSESSES WERE MEMBERS OF GROUP KNOWN AS M/S BALDEV ELECTRICALS, L UDHIANA. INFORMATION WAS RECEIVED BY THE INTELLIGENCE WING T HAT THE MEMBERS OF THE GROUP ARE INDULGING IN TAX EVASION B Y SHOWING INCOME FROM OTHER SOURCES AS AGRICULTURAL INCOME. DURING THE 25 INVESTIGATION, THE ASSESSEE RAJESH CHAWLA WAS ASKED TO PRODUCE THE EVIDENCE ABOUT AGRICULTURAL INCOME. IN RESPONSE TO THE SAID QUERY, RAJESH CHAWLA FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM. HOW EVER, THE ASSESSEES COUNSEL OFFERED TO DISCLOSE INCOME SUBJE CT TO NO PENALTY BUT HE WAS TOLD THAT DISCLOSURE COULD NOT B E CONDITIONAL. THE ASSESSEE WAS AGAIN ASKED TO PRODU CE THE GENUINENESS OF HIS CLAIM. ON 20.6.1996, THE LEARN ED COUNSEL FOR THE ASSESSEE STATED THAT CERTAIN AGRICULTURAL R ECEIPTS WERE IN CASH FOR WHICH NO RECORD WAS AVAILABLE AND ORIGI NAL AGREEMENTS OF THE FAMILY MEMBERS WAS NOT TRACEABLE. ON 18.6.1996, REVISED RETURN SURRENDERING AGRICULTURA L INCOME WAS FILED. THE ASSESSING OFFICER COMPLETED THE AS SESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT. IN TH E SAID ASSESSMENT ORDER, THE REVISED RETURN WAS ACCEPTED. HOWEVER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE STAND OF THE AS SESSEE WAS THAT SINCE AGRICULTURAL INCOME WAS VOLUNTARILY SURR ENDERED BEFORE BEING DETECTED BY THE AUTHORITIES, NO PENALT Y WAS LEVIABLE. THE ASSESSING OFFICER DID NOT ACCEPT A SSESSEES CONTENTION AND HELD THAT THE ASSESSEE FURNISHED INA CCURATE PARTICULARS OF INCOME AND LEVIED PENALTY UNDER SECT ION 271(1)(C) OF THE ACT. ON APPEAL, THE LEARNED CIT (APPEALS) UPHELD THE ORDER OF THE ASSESSING OFFICER. IN SEC OND APPEAL, THE TRIBUNAL UPHELD THE ORDER OF THE LEARNED CIT (A PPEALS). THE ASSESSEE PREFERRED AN APPEAL BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT AND THE HON'BLE JURISDICT IONAL HIGH COURT AFFIRMED THE ORDER OF THE TRIBUNAL, OBSERVING AS UNDER : 26 4. THE ABOVE DISCUSSION BY THE TRIBUNAL CLEARLY SH OWS THAT IT WAS NOT A CASE OF BONA FIDE VOLUNTARY DISCLOSURE BU T ONLY TO AVOID CONSEQUENCES OF LAW. IT IS NOT POSSIBLE TO HOLD THAT IN EVERY CASE, MERE SURRENDER OF INCOME WILL FORECLO SE ANY ACTION FOR CONCEALMENT OF INCOME. JUDGMENTS OF THE H ON'BLE SUPREME COURT IN SIR SHADI LAI AND CIT VS. SURESH CHANDR A MITTAL (2001) 170 CTR (SC) 182 : (2001) 251 ITR 9 (SC) HAVE RIGHTLY BEEN DISTINGUISHED BY THE TRIBUNAL. FINDING S RECORDED BY THE TRIBUNAL CANNOT BE HELD TO BE PERVERSE IN AN Y MANNER, THE SAME BEING BASED ON RELEVANT MATERIAL. THE ASSESSEES HAVE BEEN HELD TO BE MEMBERS OF THE SAME FAMILY AND IT HAS ALSO BEEN FOUND THAT REVISED RETURNS WER E FILED ON COMING TO KNOW ABOUT DETECTION OF CONCEALMENT. A DI VISION BENCH OF THIS COURT IN PADAM KUMAR GARG VS. ITO &. ANR. (2005) 26 IT REP 26 (P&H), HELD THAT ASSESSEE COULD NOT ESCAPE PENALTY MERELY ON THE GROUND THAT HE HAD SURRENDERE D THE AMOUNT. SIMILAR VIEW HAS BEEN TAKEN IN P.C. JOSEPH & BROS. VS. CIT (2000) 158 CTR (KER) 104 : (2000) 240 ITR 818 (KE R) AND CIT VS. SUDHARSHAN SILKS & SAREES (2001) 171 CTR (KAR) 2 56 : (2002) 253 ITR 145 (KAR). ACCORDINGLY, NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEALS ARE DISMISSED. 18.1 IN THE ABOVE CASE, THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT IT WAS NOT A CASE OF BONAFIDE VOLUN TARY DISCLOSURE BUT ONLY TO AVOID CONSEQUENCES OF LAW. THE HON'BLE JURISDICTIONAL HIGH COURT FURTHER HELD THAT THE REVISED RETURNS WERE FILED ON COMING TO KNOW ABOUT DETECTION OF CONCEALMENT. IN THE INSTANT CASE ALSO, THE SURR ENDER OF AMOUNT OF GIFT WAS NOT VOLUNTARY AND THE SAME WAS SURRENDERED AFTER DETECTION OF CONCEALMENT BY THE R EVENUE. IN VIEW OF THE ABOVE JUDGMENT, THE ASSESSEE COULD N OT ESCAPE PENALTY MERELY ON THE GROUND THAT HE HAD VOLUNTARIL Y 27 SURRENDERED THE AMOUNT OF GIFT TO AVOID LITIGATION AND BUY PEACE WITH THE DEPARTMENT. 19. RECENTLY, THE HON'BLE SUPREME COURT IN THE CAS E OF MAK DATA P. LTD. VS. CIT (2013) 358 ITR 593 (SC) HE LD THAT VOLUNTARY SURRENDER DOES NOT RELEASE THE ASSESSEE F ROM THE MISCHIEF OF PENAL PROCEEDINGS. THE HON'BLE SUPREM E COURT HELD THAT LAW DOES NOT PROVIDE THAT WHEN AN ASSESSE E MAKES A VOLUNTARY SURRENDER OF HIS CONCEALED INCOME, HE HAS TO BE ABSOLVED FROM PENALTY. THE RELEVANT OBSERVATIONS OF THE HON'BLE SUPREME COURT (PAGES 597 TO 599) ARE AS UND ER : WE HAVE HEARD COUNSEL ON EITHER SIDE. WE FULLY CONC UR WITH THE VIEW OF THE HIGH COURT THAT THE TRIBUNAL H AS NOT PROPERLY UNDERSTOOD OR APPRECIATED THE SCOPE OF EXP LANATION 1 TO SECTION 271(L)(C) OF THE ACT, WHICH READS AS F OLLOWS:- 'EXPLANATION L:-WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) O R THE COMMISSIONER TO BE FALSE, OR B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO P ROVE THAT SUCH EXPLANATION IS BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATIO N OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESU LT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF TH IS 28 SUB SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED.' THE ASSESSING OFFICER, IN OUR VIEW, SHALL NOT BE CA RRIED AWAY BY THE PLEA OF THE ASSESSEE LIKE 'VOLUNTARY DI SCLOSURE', 'BUY PEACE', 'AVOID LITIGATION', 'AMICABLE SETTLEME NT', ETC. TO EXPLAIN AWAY ITS CONDUCT. THE QUESTION IS WHETHER T HE ASSESSEE HAS OFFERED ANY EXPLANATION FOR CONCEALMEN T OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. EXPLANATION TO SECTION 271(1) RAISES A PRES UMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE A SSESSING OFFICER, BETWEEN REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, B Y COGENT AND RELIABLE EVIDENCE. WHEN THE INITIAL ONU S PLACED BY THE EXPLANATION, HAS BEEN DISCHARGED BY HIM, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AM OUNT IN QUESTION CONSTITUTED THE INCOME AND NOT OTHERWISE. ASSESSEE HAS ONLY STATED THAT HE HAD SURRENDERED TH E ADDITIONAL SUM OF RS.40,74,000/- WITH A VIEW TO AVO ID LITIGATION, BUY PEACE AND TO CHANNELIZE THE ENERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND TO MAKE A MICABLE SETTLEMENT WITH THE INCOME TAX DEPARTMENT. STATUT E DOES NOT RECOGNIZE THOSE TYPES OF DEFENCE SUNDER THE EXPLAN ATION 1 TO SECTION 271(L)(C) OF THE ACT. IT IS TRITE LAW THAT THE VOLUNTARY DISCLOSURE DOES NOT RELEASE THE APPELLANT-ASSESSEE F ROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NOT PROVID E THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HI S CONCEALED INCOME, HE HAD TO BE ABSOLVED FROM PENALT Y. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CAS E IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SURREN DER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH COND UCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION , IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTAR Y. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NO TICED THAT CERTAIN DOCUMENTS COMPRISING OF SHARE APPLICATION F ORMS, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION O F COMPANIES, 29 AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSE SSMENT ORDERS AND BLANK SHARE TRANSFER DEEDS DULY SIGNED, HAVE BE EN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2003,INTHECASE OF A SISTER C ONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DIS CLOSURE OF ITS INCOME, IT WOULD HAVE FILED THE RETURN DECLARING AN INC OME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING TH E COURSE OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEA R THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME . IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TR ANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYME NTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCO ME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE 'HAD CONCEALE D TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEE DINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. THE AO HAS TO SATISFY WHETHER THE PENALTY PROCEED INGS BE INITIATED OR NOT DURING THE COURSE OF THE ASSESS MENT PROCEEDINGS AND THE AO IS NOT REQUIRED TO RECORD HIS SATISFACTI ON IN A PARTICULAR MANNER OR REDUCE IT INTO WRITING THE SCOPE OF SECTION 27L (L)(C) HAS ALSO BEEN ELABORATELY DISCUSSED BY THIS COURT IN UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (2008) 13 SCC 369 AND CIT VS. ATUL MOHAN BINDAL( 2009) 9 SCC 589. THE PRINCIPLE LAID DOWN BY THIS COURT, IN OUR VIEW, HAS BEEN CORRECTLY FOLLOWED BY THE REVENUE AND WE FIND NO ILLEGALITY IN THE DEPARTMENT INITIATING PENALTY PROCEEDINGS IN THE INSTANT CASE. WE, THEREFORE, FULLY AGREE WITH THE VIEW OF TH E HIGH COURT. HENCE, THE APPEAL LACKS MERIT AND IS DISMISSED. THE RE SHALL BE NO ORDER AS TO COSTS. 30 20. IN VIEW OF THE ABOVE DISCUSSION, I DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. ACCORDINGLY, I DISMISS THE SAME. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I TA NO.243/CHD/2009 IS DISMISSED. ITA NO.245/CHD/2009 : 22. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED TH E ACTION OF THE LEARNED CIT (APPEALS) IN CONFIRMING T HE PENALTY OF RS.1,92,362/- LEVIED BY THE ASSESSING OFFICER UN DER SECTION 271(1)(C) OF THE ACT. 23. THE FACTS IN THE CASE OF SHRI SANDEEP KUMAR P ALTA (ITA NO.245/CHD/2009) ARE SIMILAR AS IN THE CASE OF SHRI KRISHAN KUMAR PALTA (ITA NO.243/CHD/2009). THE RI VAL CONTENTIONS ARE ALSO SIMILAR AS MADE IN ITA NO.243/ CHD/2009 (SUPRA). THE LEARNED COUNSEL FOR THE ASSESSEE ADM ITTED THAT THERE WAS NO RELATIONSHIP OF THE ALLEGED DONOR SMT. BHUPINDER KAUR WITH THE ASSESSEE. THE ASSESSEE CLAIMED TO H AVE RECEIVED A GIFT OF RS.3,10,000/- FROM SM.BHUPINDER KAUR AND GIFT OF RS.3 LACS FROM SHRI RAKESH BAJAJ SON OF SHR I AVINASHI LAL BAJAJ (ALLEGED DONOR IN THE CASE OF SHRI KRISH AN KUMAR PALTA IN ITA NO.243/CHD/2009). THE DECISION GIVEN IN THE CASE OF ASSESSEES BROTHER SHRI KRISHAN KUMAR PALTA IN ITA NO.243/CHD/2009 SHALL APPLY WITH EQUAL FORCE TO THI S APPEAL 31 ALSO. ACCORDINGLY, I DISMISS THE APPEAL OF THE AS SESSEE IN ITA NO.245/CHD/2009.. 24. IN THE RESULT, THE APPEALS OF BOTH THE ASSESSE ES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF AUGUST, 2015. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 6 TH AUGUST, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 32