Shri Chandra Prakash Bubna, Kolkata V. ITO, Ward - 27(3), Kolkata, Kolkata

ITA 289/KOL/2012

• Counselvise Citation: 28923514 RSA 2012
• Duration Of Justice: 3 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-08-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 22-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY
• Assessee Lawyers: V N PUROHIT
• Section: 143(3)

Judgement Text

I.T.A. NO . 289 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T.A. NO. 289 / KOL / 20 1 2 ASSESSMENT YEAR : 200 5 - 20 0 6 SRI CHANDRA PRAKASH BUBNA,...... ..... .... ........ ........ ....... ... .. .APP ELL ANT 2, DIGAMBER JAIN TEMPLE ROAD, KOLKATA - 700 007 [PAN : A EEPB 1958 G ] - VS. - INCOME TAX OFFICER,....................... . ... ....... ... . ............... RESPONDENT WARD - 27 ( 3 ), KOLKATA, BAMBOO VILLA, 169, A.J.C. BOSE RO AD, KOLKATA - 700 014 APPEARANCES BY: SHRI V.N. PUROHIT, FCA, FOR THE ASSESSEE SHRI SANJAY , ADDL. CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MAY 20 , 2 01 5 DATE OF PRONOUNCING THE ORDER : MAY 21 , 201 5 O R D E R PER P.K. BANSAL : THIS A PPEAL HA S BEEN FILED BY THE ASSESSE E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - XIV, KOLKATA D ATED 24 . 0 1 .20 1 2 FOR THE ASSESSMENT YEAR 200 5 - 0 6, BY WHICH THE LD. CIT(APPEALS) HAS CONFIRMED THE PENALTY LEVIED ON THE ASSESSEE BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) VIDE ORDER DATED 27.06.2008. 2. BRIEF FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE FILED HIS INCOME - TAX RETURN FOR THE IMPUGNED ASSESSMENT YEAR ON 26. 07.2005 ON THE INCOME OF RS.1,02,000/ - . SUBSEQUENTLY ASSES SMENT UNDER SECTION 143(3) WAS COMPLETED AT A TOTAL INCOME OF RS.16,51,637/ - BY MAKING AN I.T.A. NO . 289 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 2 OF 6 ADDITION OF RS.15,49,637/ - AS UNDISCLOSED INCOME. THE SAID AMOUNT WAS DEPOSITED BY THE ASSESSEE OUT OF WHICH PROFESSIONAL INCOME, WHICH REMAINED UNDISCLOSED IN THE CO RPORATION BANK, GURGAON BRANCH BETWEEN 21.04.2004 TO 27.12.2004. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) AND ULTIMATELY IMPOSED PENALTY ON THE ASSESSEE VIDE ORDER DATED 27.06.2008 BY OBSERVING AS UNDER: - 10. THEREFORE, CONSIDERING ALL ASPECTS OF THE CASE AS DISCUSSED EARLIER, I AM SATISFIED THAT THIS IS A FIT CASE WHERE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 ARE CLEARLY ATTRACTED. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALSO CONSIDERING FACTS OF TH E CASE, PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED IS IMPOSED AS UNDER: - TOTAL INCOME AS PER ORDER U/S 143(3) DT. 31.12.2007......RS.16,51,640/ - TAX ON THE ASSESSED INCOME .............................RS.5,26,770/ - LESS: TAX ON THE INCOME EXCL UDING CONCEALED INCOME (AFTER GIVING REBATE U/S.88)RS. 1,925/ - _____________________ TAX SOUGHT TO BE EVADED........................ RS.5,24,845/ - _____________________ THEREFORE, PENALTY OF RS.5,24,845/ - BEING 100% OF THE TAX SOU GHT TO BE EVADED IS IMPOSED U/S. 271(1)(C) OF THE I.T. ACT, 1961 3. THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(APPEALS), WHO SUSTAINED THE PENALTY. 4. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH PARTIES AND CAREFULLY CONSIDERED THE SAME ALONG WITH TH E ORDER OF THE AUTHORITIES BELOW. SECTION 271 (1)(C) READS AS UNDER: - 271 (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) .. (B) .. (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, OR (D) .. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, - EXPLANATION 1 - WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, - I.T.A. NO . 289 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 3 OF 6 (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE AO OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FALSE OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND [FAILS TO PROVE SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM], THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TO TAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE OF THIS SUB - SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 5. FROM THE PERUSAL OF THE AFORESAID SECTION, IT IS APPARENT THAT PENALTY U/S 271 (1)(C) IS LEVIABLE IF THE A SSESSING O FFICER IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF THE INCOME. THIS IS THE SETTLED LAW THAT THE PENALTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE DIFFERENT. THE PENALTY PROCEEDINGS CAN BE INITIATED ON 2 CHARGES I.E. I) CONCEALMENT OF PARTICULARS OF INCOME AND II) FURNISHING OF INACCURATE PARTICULARS OF INCOME. BOTH THE CHARGES ARE ENTIRELY DIFFERENT. IF THE PROCEEDINGS ARE INITIATED ON CHARGE OF CONCEALMENT, THEN PENALTY CANNOT BE LEVIED ON THE CHARGE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND VICE VERSA. THUS, THERE MUST BE A CLEAR FINDING ABOUT THE CHARGE FOR WHICH PENALTY IS I MPOSED OR INITIATED. IT IS INCUMBENT UPON THE A SSESSING O FFICER TO STATE WHETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THE ABSENCE OF SUCH FINDINGS, THE ORDER WOULD BE BAD IN LAW. THE C ASE OF NEW SORATHIA ENGINEERING CO. LTD., 282 ITR 642, HON BLE GUJARAT HIGH COURT HAS HELD AS UNDER: - IT IS INCUMBENT UPON THE ASSESSING OFFICER TO STATE WHETHER THE PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHE THER ANY INACCURATE PARTICULARS OF INCOME HAD BEEN FURNISHED BY THE ASSESSEE. HELD, THAT THE PENALTY ORDER AND THE ORDER OF THE COMMISSIONER (APPEALS) SHOWED THAT NO CLEAR CUT FINDING HAD BEEN REACHED. THE TRIBUNAL HAD FAILED TO APPRECIATE THIS LEGAL ISSU E. THE RATION IN CIT V. MANU ENGINEERING WORKS 132 ITR 306 (GUJ) WAS APPLICABLE AND THE ORDER OF PENALTY COULD NOT BE UPHELD BY THE TRIBUNAL. THE ORDER WAS INVALID. 6. IN THE CASE OF COMMISSIONER OF INCOME TAX V. RAJAN AND CO. 291 ITR 340 (DEL), IT IS HE LD THAT THE PROVISION OF SECTION 271 (1) (C) OF THE INCOME TAX 1961 WOULD REQUIRE PROPER APPLICATION OF MIND AND RECORDING OF AT LEAST A BARE MINIMUM OPINION ON THE PART OF A SSESSING O FFICER THAT A CASE FOR INITIATION OF PENALTY PROCEEDING WAS MADE AS I.T.A. NO . 289 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 4 OF 6 THER E WAS CONCEALMENT OF INCOME OR THAT INCORRECT PARTICULARS HAD BEEN FURNISHED BY THE ASSESSEE WITH THE INTENTION TO AVOID PAYMENT OF TAXES. A SSESSING O FFICER HAS NOT MADE OUT ANY CHARGE EITHER OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCU RATE PARTICULARS OF INCOME. 7. THE PENALTY U/S 271(1) (C) CAN BE LEVIED FOR EITHER OF THE CHARGE. THE PENALTY ORDER SIMPLY STATES I AM SATISFIED THAT THIS IS A FIT CASE WHERE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT ARE CLEARLY ATTRACT. IT D OES NOT STATE FOR WHAT DEFAULT PENALTY IS LEVIED S. 271(1) (C) (III) IS EXPRESSLY CLEAR THAT THE PENALTY CAN BE LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS THE PARTICULARS OF INCOME WHICH IS THE COMMON SUBJECT MATTER OF BOTH THE CHARGES. THE WORD CONCEAL AS PER WEBSTER S DICTIONARY MEANS TO HIDE, WITHDRAW, OR REMOVE FROM OBSERVATION; COVER OR KEEP FROM SIGHT; TO KEEP SECRET; TO AVOID DISCLOSING OR DIVULGING. THAT MEANS NON DISCLOSURE OF PARTICU LARS OF INCOME. ON THE OTHER HAND, WHERE PARTICULARS ARE DISCLOSED BUT SUCH DISCLOSURE IS NOT CORRECT, TRUE OR ACCURATE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. FOR EXAMPLE, IN CASE OF BUSINESSMAN, IF A PARTICULAR TRANSACTION OF SALE IS NOT SHOWN IN THE BOOKS, IT WOULD AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME WHILE SALE IS SHOWN BUT AT A LESSER VALUE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. 8. IN OUR OPINION, EXPLANATION 1 TO SECTION 271(1) (C) CA NNOT BE APPLIED WHERE CHARGE AGAINST THE ASSESSEE IS FURNISHING OF INACCURATE PARTICULARS OF INCOME SINCE IT PROVIDES A DEEMING FICTION QUA CONCEALMENT OF PARTICULARS OF INCOME ONLY AND CONSEQUENTLY CANNOT BE EXTENDED TO A CASE WHERE CHARGE AGAINST THE ASSESSEE IS FURNISHING OF INACCURATE PARTICULARS OF INCOME. ON THE OTHER HAND, WHERE CHARGE AGAINST THE ASSESSEE IS CONCEALMENT OF PARTICULARS OF INCOME, THE A SSESSING O FFICER HAS TO ESTABLISH EITHER THAT ASSESSEE HAS NOT DISCLOSED THE PARTICULARS OF INCOME UNDER THE MAIN PROVISIONS OR THE CASE OF ASSESSEE FALLS WITHIN THE SCOPE OF THE DEEMING FICTIONS CREATED UNDER THE EXPLANATIONS. FOR EXAMPLE, THE ASSESSEE MIGHT NOT DISCLOSE PARTICULAR SALES OR DIVIDEND INCOME OR INCOME FROM ANY SOURCE. SUCH IN STANCES WOULD FALL UNDER THE MAIN PROVISIONS ITSELF. IN SUCH CASES, THE BURDEN IS ON THE A SSESSING O FFICER TO ESTABLISH THE EXISTENCE OF THE CHARGE ON THE BASIS OF MATERIAL ON RECORD. I.T.A. NO . 289 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 5 OF 6 9. EXPLANATION 1 TO SECTION 271(1) (C) STATES THAT THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE SHALL BE DEEMED TO BE THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. THIS DEEMING PROVISION IS NOT ABSOLUTE ONE BUT IS REBUTTABLE ONE. IT ONLY SHIFTS THE ONUS ON THE ASSESSEE. EXPLAN ATION 1 REFERS TO THE TWO SITUATIONS IN WHICH PRESUMPTION OF THE CONCEALMENT OF THE PARTICULARS OF INCOME IS DEEMED. IT IS NOT APPLICABLE WHERE THE CHARGE AGAINST THE ASSESSEE IS FURNISHING INACCURATE PARTICULARS OF THE INCOME. THE FIRST SITUATION IS WHERE THE ASSESSEE IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION, WHICH IS FOUND BY THE A SSESSING O FFICER OR THE COMMISSIONER TO BE FALSE. THE SECOND SITUATION IS WHERE THE ASSESSEE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME OFFERS AN EXPLANATION, WHICH, THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE AND ALSO FAILS TO PROVE THAT SUCH EXPLANATION WAS BONA FIDE ONE AND THAT ALL THE FACTS RELATING TO THE COMPUTATI ON OF TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. THE PRESUMPTION AVAILABLE UNDER EXPLANATION TO SECTION 271(1) (C), CANNOT BE DRAWN UNLESS THE CASE OF THE ASSESSEE FALLS UNDER EITHER OF THE CLAUSES (A) OR (B). 10. IN THIS CASE, THE A SSESSING OFFICER HAS NOT BROUGHT OUT ANY SPECIFIC CHARGE FOR WHICH THE PENALTY HAS BEEN IMPOSED ON THE ASSESSEE U/S 271(1) (C) OF THE ACT. HE HAS NOT BROUGHT OUT WHETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICUL ARS OF INCOME. 11. THE A SSESSING OFFICER IN THIS CASE LEVIED THE PENALTY FOR BOTH THE CHARGES WITHOUT MENTIONING ANY SPECIFIC CHARGE. IN CIT V. ATUL MOHAN BINDAL (2009) 9 SCC 589, WHERE HON BLE SUPREME COURT WAS CONSIDERING THE SAME PROVISION, IT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THUS THE SATISFACTION OF THE A SSESSING O FFICER ABOUT THE CONCEALMENT OF PARTICULARS OF INCOME OR F URNISHING OF INACCURATE PARTICULARS OF SUCH INCOME IS ESSENTIAL BEFORE LEVYING ANY PENALTY U/S 271(1) (C). THE A SSESSING O FFICER AS IS APPARENT FROM THE PENALTY ORDER HAS NOT SATISFIED ABOUT I.T.A. NO . 289 / KOL ./20 1 2 ASSESSMENT YEAR: 200 5 - 20 0 6 PAGE 6 OF 6 THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCUR ATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE. ON THIS BASIS ITSELF THE PENALTY DELETED. 12 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE S TANDS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MAY , 201 5 . SD/ - SD/ - MAHAVIR SINGH P.K. BANSAL ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 21 ST D AY OF MAY , 201 5 COPIES TO : (1) SRI CHANDRA PRAKASH BUBNA, C/O. V.N. PUROHIT & CO., CHARTERED ACCOUNTANTS, DIAMOND CHAMBER, SUIT NO. 4G, 4 TH FLOO R, 4, CHOWRINGHEE LANE, KOLKATA - 700 016 (2) INCOME TAX OFFICER, WARD - 27(3), KOLKATA, BAMBOO VILLA, 169, A.J.C. BOSE ROAD, KOLKATA - 700 014 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESE NTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .