Pioneer Barrels Mfg.Co.Pvt. Ltd., Baroda V. The Jt.CIT.,(Asst.)S.R.2, Baroda

ITA 302/AHD/2007

• Counselvise Citation: 30220514 RSA 2007
• Duration Of Justice: 5 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 02-02-2012
• Assessment Year: 1995-1996
• Appeal Filed On: 17-01-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VINOD GOSWAMI
• Assessee Lawyers: J P SHAH
• Keywords: Business income; Reasonable cause
• Section: 142(1); 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. MOHAN A LANKAMONY, AM) ITA NO.302/AHD/2007 A. Y.: 1995-96 PIONEER BARRELS MFG. CO. PVT. LTD., 67, RACE COURSE CIRCLE, BARODA PAN/GIR NO. 31-039-CZ-6380 VS THE A. C. I. T., CIRCLE -4(1), AAYAKAR BHAVAN, RACE COURSE CIRCLE BARODA (APPELLANT) (RESPONDENT) APPELLANT BY SHRI J. P. SHAH, AR RESPONDENT BY SHRI VINOD GOSWAMI, SR. DR DATE OF HEARING: 02-02-2012 DATE OF PRONOUNCEMENT: 07-02-2012 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II I, BARODA DATED 14 TH NOVEMBER,2006, FOR ASSESSMENT YEAR 1995-96, CHALLEN GING THE LEVY OF PENALTY U/S 271 (1) ( C ) OF THE IT ACT. 2. BRIEFLY, THE FACTS ARE THAT IN THIS CASE THE ASS ESSMENT WAS COMPLETED EX-PARTE. VARIOUS ADDITIONS/DISALLOWANCES WERE MADE AND INCOME WAS ASSESSED AT RS.8,87,589/-. IN APPEAL, TH E FOLLOWING ADDITIONS WERE CONFIRMED BY THE LEARNED CIT(A): ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 2 (I) ESTIMATED INCOME FROM HOUSE PROPERTY RS.2,26,5 60/- (II) ESTIMATED INCOME ON ACCOUNT OF DIVIDEND RS. 16,901/- (III) UNEXPLAINED AND UNACCOUNTED CASH FOUND DURING SURVEY RS. 34,715/- TOTAL RS.2,78,176/- PENALTY PROCEEDINGS IN RESPECT OF ADDITIONS CONFIRM ED IN APPEAL WERE TAKEN. MEANWHILE, ITAT AHMEDABAD BENCH VIDE ITS ORD ER DATED 21-10-2005 IN ITA NO.197/198/AHD/2001 DISMISSED THE ASSESSEES APPEAL IN LIMINIE. THUS, THE ORDER OF THE PREDECESS OR OF THE LEARNED CIT(A) HAS BECOME FINAL. IN VIEW OF THE FINDING OF THE FIRST AND SECOND APPELLATE AUTHORITIES, THE AO HELD THAT THE ASSESSE E HAD WILLFULLY AND WITHOUT REASONABLE CAUSE CONCEALED AND FURNISHED IN ACCURATE PARTICULARS OF INCOME. ACCORDINGLY PENALTY OF RS.1, 28,000/- WAS LEVIED. IN APPEAL BEFORE THE LEARNED CIT(A) THE FO LLOWING SUBMISSIONS WERE MADE: INCOME FROM HOUSE PROPERTY HAS BEEN ESTIMATED BY T HE LD. A. O. BASED ON INCOME OF PREVIOUS A. Y. 1994-95 AS R.2,26,560/- WITHOUT CONSIDERING THE FACT THAT THE ENTIRE UNIT WAS GIVEN TO RINKI PETRO INDIA LTD. A COPY OF AGREEMENT DATED 11-11-1993 STATING THE ENTIRE UNIT GIVEN ON RENT TO RINKI PETROCHEMICALS & INDUSTRIES LTD. WAS ALSO GIVEN. AS THE ENTIRE UNIT WAS GIVEN TO RINKI PETROCHEMICALS P. LTD. THER E IS NO INCOME EARNED FROM SUCH PROPERTY. THE ADDITION WAS RETAINED BY THE CIT(A) DUE TO NON PRODUCTION OF EVIDENCES. S INCE THE APPELLANT HAS NOT EARNED ANY RENTAL INCOME DURING T HE YEAR UNDER CONSIDERATION HE SHOULD NOT BE MADE LIABLE FO R PENALTY U/S 271 (1) ( C ) PARTICULARLY WHERE NO INCOME IS E ARNED. THE LD. A. O. MADE AN ADDITION OF RS.16,901/- TO TH E INCOME OF THE APPELLANT ON ACCOUNT OF DIVIDEND INCO ME BASED ON THE INCOME EARNED IN PREVIOUS A. Y. 1994-95. DUR ING THE YEAR UNDER CONSIDERATION THE APPELLANT HAS NOT EARN ED ANY DIVIDEND INCOME AND THE LD. A. O. HAD NOT PRODUCED ANY ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 3 EVIDENCE TO PROVE THAT HE HAS EARNED DIVIDEND INCOM E. JUST BECAUSE THE APPELLANT HAD DIVIDEND INCOME IN THE PR EVIOUS YEAR DOES NOT AUTOMATICALLY PROVE THAT INCOME WAS CONCEA LED OR INACCURATE PARTICULARS WERE FURNISHED FOR SUCH INCO ME DURING A. Y. 1995-96. 3. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION O F THE ASSESSEE CONFIRMED THE PENALTY ORDER AND DISMISSED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN THE APPELLATE ORDER I N PARA 3.2 AND 4 ARE REPRODUCED AS UNDER: 3.2. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LD. A. R. AND THE FACTS OF THE CASE. THE ARGUMENT OF THE A PPELLANT IS THAT THE INCOME FROM HOUSE PROPERTY AND DIVIDEND HA S BEEN IMPROPERLY INCLUDED IN THE TAXABLE INCOME. NO SUBMI SSIONS WERE MADE REGARDING THE CASH FOUND DURING THE SEARC H. THE SUBMISSIONS MADE HAVE A BEARING ON THE MERITS OF TH E CASE. WHEN THE LD. CIT(A) HAS GIVEN A FINDING THAT THE AS SESSEE DID EARN INCOME FROM HOUSE PROPERTY AND DIVIDEND, THERE IS NOW NO SCOPE FOR THE APPELLANT TO ARGUE OTHERWISE. WHEN A FINDING OF FACT REGARDING EARNING OF CERTAIN INCOME IS AVAILAB LE FROM THE ORDER OF THE LD. CIT(A), THE ONLY RECOURSE OPEN TO THE ASSESSEE TO SHOW THAT IT HAD NOT CONCEALED OR FURNISHED INAC CURATE PARTICULARS OF ITS INCOME, BUT HAD DISCLOSED ALL FA CTS NECESSARY FOR THE COMPUTATION OF ITS INCOME. HOWEVER, THE CO NDUCT OF THE ASSESSEE BELIES THIS POSITION. THE FACT OF THE MATT ER IS THAT THE ASSESSEE DID NOT FILE ITS RETURN OF INCOME U/S 139( 1) BY THE DUE DATE. EVEN AFTER A NOTICE U/S 142(1) WAS ISSUED, TH ERE WAS NO COMPLIANCE. SUBSEQUENTLY, THE ASSESSEE FILED AN APP LICATION SEEKING MORE TIME TO FURNISH ITS RETURN OF INCOME. DESPITE BEING ALLOWED FURTHER TIME UP TO 14-1-1996, THE APPELLANT DID NOT COMPLY BY FILING ITS RETURN OR BY PARTICIPATING IN THE ASSESSMENT PROCEEDINGS, EVEN THOUGH FURTHER TIME WAS ALLOWED U P TO 28-3-1996. ULTIMATELY, THE A. O. HAD TO PASS THE OR DER U/S 144 WITHOUT A RETURN OF INCOME OR REPRESENTATION BY THE ASSESSEE. THE UNCONTROVERTED FACTS ARE THAT (A) IT HAS BEEN H ELD AS A FINDING OF FACT THAT THE ASSESSEE HAD INCOME ON WHI CH TAX WAS PAYABLE, AND (B) ALTHOUGH LIABLE TO FILE ITS RETURN , THE ASSESSEE ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 4 DID NOT FILE ITS RETURN, EVEN WHEN CALLED UPON TO D O SO BY TH4E A.O. THIS CLEARLY SHOWS THE MALA FIDE INTENTION AND CONTUMACIOUS CONDUCT OF THE ASSESSEE. UNDER THE CIRCUMSTANCES, I AM OF THE OPINION THAT IT IS INDUB ITABLY ESTABLISHED THAT THE ASSESSEE HAD CONCEALED THE PAR TICULARS OF ITS INCOME, INAMUCHAS IT HAD NOT DISCLOSED THE SAME TO THE INCOME-TAX AUTHORITIES THROUGH A RETURN. HENCE, THE LEVY OF PENALTY U/S 271 (1) (C) BY THE A. O. WAS FULLY JUST IFIED. THE PENALTY IS CONFIRMED. 4. IN THE RESULT, THE APPEAL IS DISMISSED. 4. I MAY BE NOTED HERE THAT EARLIER THE APPEAL OF T HE ASSESSEE WAS DISMISSED BY THE TRIBUNAL VIDE ORDER DATED 26-02-20 10. IT WAS NOTED IN THE ORDER THAT THE LEARNED COUNSEL FOR THE ASSES SEE CONCEDED THAT PENALTY IS LEVIABLE IN THIS CASE AS THE ASSESSED DI D NOT FILE ITS RETURN OF INCOME. LATER ON, THE ASSESSEE PREFERRED MISC. APPL ICATION NO.234/2010 CLAIMING THEREIN THAT NO PENALTY WILL B E LEVIABLE BECAUSE EXPLANATION 3 TO SECTION 271 (1) ( C ) OF THE IT AC T DOES NOT APPLY TO OLD ASSESSEE AND AFTER AMENDMENT TO EXPLANATION 3 T O SECTION 271 (1) ( C ) OF THE IT CAME FROM ASSESSMENT YEAR 2003- 04 AND THAT PENALTY IS LEVIABLE ONLY ON DEEMING PROVISIONS OF E XPLANATION 3 WHERE THE ASSESSEE HAS NOT FILED RETURN OF INCOME. THE TR IBUNAL ALLOWED THE MISC. APPLICATION OF THE ASSESSEE VIDE ORDER DATED 25-11-2011 BY RECALLING THE EARLIER ORDER OF THE TRIBUNAL DATED 2 6-02-2010. APPEAL OF THE ASSESSEE WAS ACCORDINGLY RE-FIXED FOR HEARING O N MERIT. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL AND SUBMITTED THAT THE AO HAS NOT GIVE N ANY POSITIVE AND CLEAR CUT FINDINGS AS TO WHETHER THERE WAS CONC EALMENT OF ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 5 INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PA RTICULARS OF SUCH INCOME HAVE BEEN FURNISHED BY THE ASSESSEE. HE HAS RELIED UPON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. VS CIT, 282 ITR 642. H E HAS FURTHER SUBMITTED THAT THE ASSESSEE WAS EARLIER ASSESSEE FO R ASSESSMENT YEAR 1993-94 U/S 143 (3) OF THE IT ACT AND PLACED O N RECORD COPY OF THE ASSESSMENT ORDER DATED 27-03-1996 AND SUBMITTED THAT THE ASSESSEE IS AN OLD ASSESSEE, THEREFORE, NO PENALTY WILL BE LEVIABLE BECAUSE EXPLANATION 3 TO SECTION 271 (1) ( C ) OF T HE IT ACT DOES NOT APPLY TO OLD ASSESSEE AND THAT AMENDMENT TO EXPLANA TION 3 CAME FROM ASSESSMENT YEAR 2003-04. THEREFORE, EXPLANATIO N 3 TO SECTION 271 (1) ( C ) OF THE IT ACT WOULD NOT APPLY IN THE CASE OF THE ASSESSEE BEING OLD ASSESSEE. HE HAS RELIED UPON THE ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF ITO VS BOMBAYWALA RE ADYMADE STORES, 91 ITD 225 (AHD) ( TM ) IN WHICH IT WAS HEL D THAT NO PENALTY UNDER S. 271 (1) ( C ) CAN BE LEVIED UNLESS THE ASS ESSEE SUBMITS A RETURN OF INCOME UNDER S. 139 OR S. 147. WE MAY NOTE HERE THAT THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT ARGUE ON MERIT CHALLENGING LEVY OF PENALTY. THUS, THERE IS NO CHAL LENGE TO THE LEVY OF PENALTY ON MERIT. 6. ON THE OTHER HAND, THE LEARNED DR REPLIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESS EE DID NOT FILE RETURN OF INCOME DESPITE SERVICE OF THE NOTICES AND NO STATUTORY NOTICES WERE COMPLIED WITH. THEREFORE, EX-PARTE ASS ESSMENT ORDER WAS PASSED AGAINST THE ASSESSEE COMPUTING THE TOTAL TAXABLE INCOME OF THE ASSESSEE AT RS.8,87,589/- HE HAS SUBMITTED T HAT THE LEARNED ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 6 CIT(A) CONFIRMED THE ADDITION, THEREFORE, PENALTY P ROCEEDINGS WAS RIGHTLY INITIATED IN THE MATTER. THE ASSESSEE AGAIN DID NOT FILE ANY EXPLANATION BEFORE THE AO AT THE PENALTY STAGE, THE REFORE, THE AO IMPOSED PENALTY AGAINST THE ASSESSEE FOR CONCEALMEN T OF INCOME. THE LEARNED DR FURTHER SUBMITTED THAT THE TWO POINT S NOW RAISED DURING THE COURSE OF ARGUMENT BY THE LEARNED COUNSE L FOR THE ASSESSEE HAVE NOT BEEN RAISED BEFORE THE AUTHORITIE S BELOW AT ANY STAGE. THEREFORE, THE SAME POINTS ARE NOT ARISING O UT OF THE IMPUGNED ORDERS AND AS SUCH ASSESSEE SHOULD NOT BE PERMITTED TO RAISE THESE GROUNDS AT THIS STAGE. HE HAS SUBMITTED THAT ON LAS T DATE OF HEARING, ON THE OBJECTION FROM THE SIDE OF THE DEPARTMENT, T HE LEARNED COUNSEL FOR THE ASSESSEE SOUGHT TIME TO RAISE ADDITIONAL GR OUNDS OF APPEAL BUT DESPITE GIVING OPPORTUNITY TO RAISE ADDITIONAL GROU NDS OF APPEAL ON THE ABOVE POINTS, THE ASSESSEE DID NOT FILE ANY APPLICA TION FOR ADMISSION OF ADDITIONAL GROUNDS OF APPEAL. THEREFORE, THE ASS ESSEE SHOULD NOT BE PERMITTED TO RAISE NEW CONTENTIONS WHICH ARE NOT PART OF THE RECORD. THE LEARNED DR RELIED UPON THE DECISION OF THE HONBLE CHHATTISGARH HIGH COURT IN THE CASE OF CHANDRA PRAS AD LIQUOR VS CIT, 227 CTR 409 IN WHICH IT WAS HELD AS UNDER: HELD THAT, FROM A PERUSAL OF ORDER OF THE ASSESSING OFFICER, WHICH HAD BEEN SUBSEQUENTLY CONFIRMED IN APPEAL BY THE COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL, IT WAS OBSERVED THAT ALL T HE AUTHORITIES BELOW HAD RECORDED A CONCURRENT FINDING THAT THERE WAS NO EXPLANATION ON RECORD BY THE ASSESSEE AS TO HOW THE EXPENDITURE CLAIMED WAS NOT EXCESSIVE OR THE EXPENDITURE CLAIMED WAS IN RELATIO N TO THE BUSINESS OF THE ASSESSEE AND WAS OF ALLOWABL E NATURE WHILE COMPUTING THE BUSINESS INCOME. IN THE ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 7 ABSENCE OF ANY EXPLANATION FROM THE ASSESSEE, THE PROVISION OF EXPLANATION 1 TO SECTION 271 (1) ( C ) WAS APPLICABLE AND PENALTY WAS RIGHTLY IMPOSED ON THE ASSESSEE. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD. AS NOTED ABOVE, THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT ARGUE THE APPEAL ON MERIT AND AS SUCH THERE IS NO D ISPUTE WITH REGARD TO LEVY OF PENALTY ON MERIT BY THE AUTHORITIES BELO W. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS HARPARSHAD AND COM PANY LTD., 328 ITR 53, HELD AS UNDER: HELD, THAT THE REASONS GIVEN BY THE TRIBUNAL FOR QUASHING THE PENALTY PROCEEDINGS WERE IRRELEVANT, N OT GERMANE TO THE ISSUE AND THE TRIBUNAL HAD LOST SIGH T OF ASPECTS WHICH HAD BEEN CONCLUSIVELY ESTABLISHED IN THE QUANTUM PROCEEDINGS. THE TRIBUNAL HAD FAILED TO TAKE NOTE OF THE FACT THAT PART OF THE CLAIM AS COMMISSION WAS ALLOWED TO THE ASSESSEE NOT BECAUSE R HAD RENDERED ANY SERVICES BUT BECAUSE J HAD RENDERED SERVICES FOR WHICH IT WAS PAID 1 PER CENT OF THE COMMISSION BY R OUT OF THE 3 PER CENT RECEIVED BY HER. AS FAR AS COMMISSION TO R WAS CONCERNED, IT WAS ACCEPTED BY THE TRIBUNAL IN THE QUANTUM PROCEEDINGS THAT SHE DID NOT RENDER ANY SERVICES AT ALL. THE ASSESSEE HAD FAILED TO OFFER A NY EXPLANATION IN RESPECT OF THE ADDITION OF RS.1,83,0 78 AND IT COULD BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF, BY VIRTUE OF THIS EXPLANATION. THE TRIBUNAL WAS NOT JUSTIFIED IN DELETING THE PENALTY IMPOSED BY THE INCOME-TAX OFFICER UNDER SECTION 271 (1) (C) OF THE ACT. THE FINDINGS GIVEN IN ASSESSMENT PROCEEDINGS ARE RELEVANT AND HAVE PROBATIVE VALUE. WHERE THE ASSESSEE PRODUCES NO FRESH EVIDENCE OR PRESENTS ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 8 ANY ADDITIONAL OR FRESH CIRCUMSTANCES IN PENALTY PROCEEDINGS, HE WOULD BE DEEMED TO HAVE FAILED TO DISCHARGE THE ONUS PLACED ON HIM AND THE LEVY OF PENALTY COULD BE JUSTIFIED. EVEN IF THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, BUT ON THE BA SIS THEREOF THE CLAIM WHICH IS MADE IS EX FACIE BOGUS, IT MAY STILL ATTRACT PENALTY PROVISION. THE EXPLANATION APPENDED TO SECTION 271 (1) (C) OF THE ACT ENTIRELY INDICATE THE ELEMENT OF STR ICT LIABILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GI VING INACCURATE PARTICULARS WHILE FILING RETURN. THE OBJ ECT BEHIND ENACTMENT OF SECTION 271 (1) (C) READ WITH T HE EXPLANATIONS INDICATE THAT THE SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE . THE PENALTY UNDER THAT PROVISION IS A CIVIL LIABILI TY. WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MA TER OF PROSECUTION UNDER SECTION 276C OF THE ACT. 7.1 THE HONBLE M. P. HIGH COURT IN THE CASE OF RU KMINI BAI VS CIT, 276 ITR 650, HELD AS UNDER: HELD, REJECTING THE APPLICATION, THAT THE ASSESSEE DID NOT FILE ANY EXPLANATION WHEN THE PENALTY PROCEEDINGS WERE INITIATED. THE EXPLANATION COULD BE THE SAME AS THAT GIVEN BEFORE THE ASSESSIN G OFFICER AND IF THAT HAD BEEN SO, IT WOULD HAVE HAD HAD TO LOOK INTO IN THE PENALTY PROCEEDINGS BUT WHEN NO EXPLANATION WAS 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 CAS E. CALLING FOR THE STATEMENT OF CASE WAS NOT WARRANTED IN THIS CASE BECAUSE THE TRIBUNAL HAD RIGHTLY RECORDED THAT THE IMPOSITION OF PENALTY UNDER SECTION 271 (1 ) (C) IN THE CASE WAS JUST AND PROPER. ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 9 7.3 THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ECHO SHELLA VS CIT, 293 ITR 234 HELD AS UNDER: HELD, DISMISSING THE APPEAL, THAT THE ONLY SUBMISSION MADE BY COUNSEL FOR THE ASSESSEE WAS THAT WHILE CONFIRMING THE ADDITION, THE EXPENSES ON ELECTRICITY, LABOUR ETC. HAD NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW. A PERUSAL OF THE ORDERS OF ALL T HE AUTHORITIES BELOW SHOWED THAT NO SUCH CLAIM WAS MADE AT ANY STAGE. ACCORDINGLY, THE SAME COULD NOT BE PERMITTED TO BE RAISED AT THIS STAGE BEFORE THE COURT. IT WAS QUITE EVIDENT THAT THE RATES AT WHICH THE VALUATION WAS MADE, WERE SUPPLIED BY THE PARTNER OF THE ASSESSEE-FIRM ITSELF. ONCE THE ASSESSMENT OF TH E VALUATION HAD BEEN MADE AS PER THE MATERIAL SUPPLIE D BY THE ASSESSEE HIMSELF, THERE WAS NO QUESTION OF CHALLENGING THE SAME EITHER ON THE GROUND THAT THE SAME WAS INCORRECT OR THAT THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY TO EXPLAIN THE SAME. THE ADDITION WAS VALID. 7.4 THE HONBLE KERALA HIGH COURT IN THE CASE OF CI T VS SYNTHITE INDUSTRIAL CHEMICALS LTD., 328 ITR 334 HELD THAT CONTENTION NOT RAISED BEFORE THE COMMISSIONER OR TRIBUNAL CANNOT BE RAISED BEFORE THE HIGH COURT. 7.5 WE MAY MENTION THAT ON THE LAST DATE OF HEARING ON 27-12- 2011, THE LEARNED COUNSEL FOR THE ASSESSEE TRIED TO RAISE BOTH THE POINTS BUT ON BEING OBJECTION FROM THE SIDE OF THE REVENUE ON THE SAME LINE AS HAVE BEEN ARGUED BY THE LEARNED DR NOW , THE LEARNED COUNSEL FOR THE ASSESSEE SOUGHT TIME TO RAISE BOTH THE POINTS BY WAY OF RAISING ADDITIONAL GROUNDS OF APPEAL. ON HIS REQ UEST, THE APPEAL WAS ADJOURNED TO 02-02-2012. HOWEVER, THE LEARNED C OUNSEL FOR THE ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 10 ASSESSEE DID NOT FILE ANY APPLICATION FOR ADMISSION OF ADDITIONAL GROUNDS OF APPEAL. IT IS, THEREFORE, CLEAR THAT DES PITE GIVING OPPORTUNITY TO THE ASSESSEE TO RAISE ABOVE ISSUES A S ADDITIONAL GROUNDS, THE ASSESSEE DID NOT AVAIL OF ANY OPPORTUN ITY. IT IS ALSO UNDISPUTED FACT THAT THE ASSESSEE REMAINED NON-COOP ERATIVE AT THE ASSESSMENT STAGE AS WELL AS AT THE STAGE OF LEVY OF PENALTY. NO STATUTORY NOTICES WERE COMPLIED WITH. THE ASSESSEE DID NOT FILE ANY REPLY TO THE LEVY OF PENALTY. EVEN BEFORE THE LEARN ED CIT(A), WHATEVER CONTENTIONS HAVE BEEN RAISED ON MERIT HAVE BEEN REP RODUCED IN THE IMPUGNED ORDER AS ABOVE IN WHICH ALSO THE ASSESSEE HAS NOT RAISED BOTH THE POINTS NOW RAISED BEFORE THE TRIBUNAL. IT IS, THEREFORE, CLEAR THAT THE TWO POINTS NOW RAISED DURING THE COURSE OF ARGUMENTS BY THE LEARNED COUNSEL FOR THE ASSESSEE HAVE BEEN RAISED F OR THE FIRST TIME AND AS SUCH THE SAME ARE NOT ARISING OUT OF THE IMP UGNED ORDERS. THE ASSESSEE ALSO FAILED TO FILE ANY APPLICATION FO R ADMISSION OF ADDITIONAL GROUNDS IN THIS REGARD. SINCE THESE CONT ENTIONS WERE NOT RAISED EITHER BEFORE THE AO OR BEFORE THE LEARNED C IT(A) AND NO PETITION IS FILED FOR ADMISSION OF THE ADDITIONAL G ROUNDS, THEREFORE, THE LEARNED DR IS JUSTIFIED TO CONTEND THAT THE ASSESSE E SHOULD NOT BE PERMITTED TO RAISE THESE CONTENTIONS AT THIS STAGE WHICH ARE NOT PART OF THE RECORD. THE REQUEST OF THE LEARNED COUNSEL FOR THE ASSESSEE IS THUS LIABLE TO BE REJECTED. 7.6 WE MAY ALSO NOTE HERE THAT THE AO IN THE PENALT Y ORDER SPECIFICALLY NOTED THAT ASSESSEE DID NOT ATTEND THE PROCEEDINGS BEFORE HIM AND NO REPLY HAS BEEN FILED. THE AO CONS IDERING THE MATERIAL ON RECORD WAS SATISFIED THAT THE ASSESSEE COMPANY HAS ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 11 WILLFULLY AND KNOWINGLY AND WITHOUT REASONABLE CAUS E HAS NOT FURNISHED DETAILED PARTICULARS AND THUS TRIED TO CO NCEAL THE INCOME SO AS TO EVADE PAYMENTS OF TAX THEREON. THUS, THE AO H AS GIVEN CLEAR CUT FINDING IN THE PENALTY ORDER THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME AND THAT EXPLANATION 1 TO SEC TION 271 (1) ( C ) OF THE IT ACT IS CLEARLY APPLICABLE IN THE CASE OF THE ASSESSEE. THUS, THE CRUX OF THE FINDING OF THE AO IN THE PENALTY ORDER IS THAT EXPLANATION 1 TO SECTION 271 (1) ( C ) OF THE IT ACT IS APPLICABL E IN THE CASE OF THE ASSESSEE FOR CONCEALMENT OF INCOME, WHICH IS ALSO C LEAR FROM THE FACT THAT THE ASSESSEE DESPITE HAVING TAXABLE INCOME HAS WILLFULLY FAILED TO FILE RETURN OF INCOME FOR ASSESSMENT YEAR UNDER APP EAL AND AS SUCH THE ASSESSEE IS GUILTY OF CONCEALMENT OF PARTICULAR S OF INCOME. THEREFORE, EVEN ON MERIT, THE ASSESSEE HAS NO CASE FOR CANCELLATION OF PENALTY. THE DECISIONS CITED BY THE LEARNED COUN SEL FOR THE ASSESSEE WOULD NOT SUPPORT THE CASE OF THE ASSESSEE . 7.7 THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER CO NTENDED THAT EXPLANATION 3 TO SECTION 271 (1) ( C ) OF THE IT AC T WOULD NOT APPLY TO THE ASSESSEE BEING AN OLD ASSESSEE AND THAT AMENDM ENT TO EXPLANATION 3 TO SECTION 271 (1) ( C ) OF THE IT AC T CAME FROM ASSESSMENT YEAR 2003-04. THEREFORE, DEEMING PROVISI ONS WOULD NOT APPLY TO THE CASE OF THE ASSESSEE. WE DO NOT AGREE WITH THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. EXPLANATION 3 TO SECTION 271 (1) (C) OF THE IT ACT PROVIDES AS UNDER : [EXPLANATION 3. WHERE ANY PERSON 28 [***] FAILS, WITHOUT REASONABLE CAUSE TO FURNISH WITHIN THE PERI OD SPECIFIED IN SUB-SECTION (1) OF SECTION 153 A RETUR N OF ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 12 HIS INCOME WHICH HE IS REQUIRED TO FURNISH UNDER SECTION 139 IN RESPECT OF ANY ASSESSMENT YEAR COMMENCING ON OR AFTER THE1ST DAY OF APRIL, 1989, A ND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BEEN ISSUED TO HIM UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142 OR SECTION 148 AND THE ASSESSING OFFICER OR THE [***] COMMISSIONER (APPEALS) IS SATISFIED THAT IN RESPECT OF SUCH ASSESSMENT YEAR SUCH PERSON HAS TAXABLE INCOME, THEN, SUCH PERSON SHALL, FOR THE PURPOSE OF CLAUSE ( C) OF THIS SUB- SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULAR S OF HIS INCOME IN RESPECT OF SUCH ASSESSMENT YEAR, NOTWITHSTANDING THAT SUCH PERSON FURNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY OF THE PERIOD AFORESAID IN PURSUANCE OF A NOTICE UNDER SECTION 148.] (28. WORDS WHO HAS NOT PREVIOUSLY BEEN ASSESSED UN DER THIS ACT, OMITTED BY THE FINANCE ACT, 2002, W. E. F. 1-4- 2003.) 7.8 WE MAY FURTHER NOTE THAT THERE IS AN AMENDMENT IN EXPLANATION 3 TO SECTION 271 (1) ( C ) OF THE IT ACT AND THE WO RDS WHO HAS NOT PREVIOUSLY8 BEEN ASSESSED UNDER THIS ACT IS OMITTE D BY THE FINANCE ACT, 2002 WITH EFFECT FROM 1-04-2003.THE ABOVE LANG UAGE OMITTED FROM THE EXPLANATION 3 EARLIER WAS MENTIONED IN BET WEEN THE WORDS IN FIRST LINE WHERE ANY PERSON [..] FAILS. THUS, IT IS CLEAR THAT AFTER AMENDMENT IN EXPLANATION 3, THE DEEMING PROVISIONS OF EXPLANATION 3 WOULD APPLY TO ALL TH4E ASSESSES IF NO RETURN IS FILED AND IN THAT EVENT IT WOULD BE DEEMED THAT THE ASSESSEE CONCEALE D PARTICULARS OF INCOME. IN THE CASE OF THE ASSESSEE, PENALTY ORDER IS PASSED BY THE AO ON 28-08-2006. THUS, THE ISSUE IS NOT SIMPLE AS IS ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE. SINCE THERE IS AM ENDMENT IN ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 13 EXPLANATION 3 TO SECTION 271 (1) ( C ) OF THE IT AC T WHICH APPLIES TO THE PENALTY ORDER PASSED IN THE CASE OF THE ASSESSEE BE CAUSE IT WAS IN EXISTENCE IN THE ACT. WHEN THE PENALTY ORDER WAS PA SSED, THE POINTS SHOULD HAVE BEEN RAISED BEFORE THE AUTHORITIES BELO W FOR THE PURPOSE OF APPRECIATION AND CONSIDERATION. HOWEVER, AS NOTE D ABOVE, THE ASSESSEE DID NOT FILE ANY EXPLANATION AND HAS NOT R AISED BOTH THE ABOVE POINTS BEFORE THE AUTHORITIES BELOW. THEREFOR E, NO SIGNIFICANCE COULD BE ATTACHED TO THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. THE LEARNED COUN SEL FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF ITAT AHMEDABAD IN THE CASE OF BOMBAYWALA READYMADE STORES (SUPRA) IN WHICH ASSESSMENT YEAR INVOLVED WAS 1985-86 AND SEARCH WAS CONDUCTED ON 31-08-1994. IN THE BACKGROUND OF THOSE FACTS, TH E TRIBUNAL FORMED THE OPINION THAT EXPLANATION 3 TO SECTION 271 (1) ( C ) OF THE IT ACT IS NOT APPLICABLE. HOWEVER, AS NOTED ABOVE IN THE PRE SENT CASE, THE IMPUGNED PENALTY ORDER WAS PASSED ON 28-08-2006 WHE N AMENDED EXPLANATION 3 TO SECTION 271 (1) ( C ) OF THE IT AC T WAS IN FORCE AND WAS INSERTED IN THE IT ACT. THEREFORE, SUCH DECISIO N WOULD ALSO NOT HELP THE ASSESSEE. WE HAVE NOTED TWO OF THE DECISIO NS OF THE HONBLE PUNJAB & HARYANA HIGH COURT AND THE HONBLE KERALA HIGH COURT ABOVE IN WHICH IT WAS CLEARLY HELD THAT NO SUCH CLA IM IS MADE BEFORE THE AUTHORITIES BELOW AND THE CONTENTION WAS NOT RA ISED BEFORE THE COMMISSIONER OR THE TRIBUNAL, THE ASSESSEE WAS NOT PERMITTED TO RAISE THE SAME CONTENTION BEFORE THE HIGH COURT. CO NSIDERING THE CONDUCT OF THE ASSESSEE IN NOT RAISING ADDITIONAL G ROUNDS OF APPEAL DESPITE SEEKING PERMISSION AND CONSIDERING THE FACT S OF THE CASE ABOVE, WE ARE OF THE VIEW NO INTERFERENCE IS REQUIR ED IN THE MATTER. IN ITA NO.302/AHD/200 PIONEER BARRELS MFG. CO. PVT. LTD. VS ACIT, CIR-1 ( 1), BARODA 14 VIEW OF THE ABOVE DISCUSSIONS, WE DO NOT FIND ANY M ERIT IN THE APPEAL OF THE ASSESSEE. SAME IS ACCORDINGLY DISMISSED. 8. NO OTHER POINT IS ARGUED OR PRESSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT 07/02/2012 SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMI LAKSHMI LAKSHMI LAKSHMIKANT DEKA/ KANT DEKA/ KANT DEKA/ KANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD