Smt. Preeti Saluja, Bhopal V. THE ITO 2(1), Bhopal

ITA 304/IND/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5883 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 05-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: GIRISH AGRAWAL
• Keywords: Salary income; Wrong claim; Onus to prove
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE (SINGLE MEMBER CASE) BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER I.T.A.NO.304/IND/2016 A.Y. : 2010-11 SMT.PREETI SALUJA, ITO, BHOPAL VS 2(1), BHOPAL APPELLANT RESPONDENT PAN NO. ANAPS5576L APPELLANT BY : SHRI GIRISH AGRAWAL, C. A. RESPONDENT BY : SHRI MOHD. JAVED, DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-31, NEW DELHI, CAMP AT BHOPAL, DATED 18.01 .2016 AGAINST THE IMPOSITION OF PENALTY OF RS. 3,25,000/- U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. DATE OF HEARING : 29 .062016 DATE OF PRONOUNCEMENT : 29 .0 6 .2016 SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 2 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL WHO DERIVED INCOME FROM SALARY AND FROM O THER SOURCES. THE RETURN OF INCOME FOR THE ABOVE MENTION ED ASSESSMENT YEAR WAS FILED ON 7.1.2011 DECLARING A TO TAL INCOME OF RS. 3,42,600/-. THE ASSESSMENT WAS COMPLET ED U/S 143(3) ON 28.3.20013 AT A TOTAL INCOME OF RS.19,00, 870/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY IN TH E FORM OF PLOT OF LAND. ON VERIFICATION OF THE RETURN OF INCO ME, IT WAS NOTICED THAT THE ASSESSEE HAD NOT GIVEN ANY DETAILS WITH RESPECT TO THE SALE OF THE SAID PLOT OF LAND IN HER RETURN AND HAD ALSO NOT SHOWN THE CAPITAL GAIN ARISING ON SUCH SALE. THEREFORE, THE CAPITAL GAIN WAS CALCULATED TAKING TH E SALE CONSIDERATION OF THE PROPERTY AT RS. 22,01,991/-. A CCORDINGLY, THE LONG TERM CAPITAL GAIN WAS WORKED OUT AT RS. 15,5 8,273/-. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE I NITIATED AS PER THE ASSESSMENT ORDER. SUBSEQUENTLY, A PENALTY OF RS. 3,25,000/-WAS LEVIED VIDE ORDER DATED 25.09.2013. 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CI T(A) HAS CONFIRMED THE PENALTY. SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 3 3 4. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE FILED HER REGULAR RETUR N OF INCOME FROM SALARY AND OTHER SOURCES. THE ASSESSMENT U/S 1 43(3) WAS COMPLETED ON 28.03.2013 BY MAKING AN ADDITION OF RS . 15,58,270/- TOWARDS LONG TERM CAPITAL GAIN (LTCG) ON SALE OF AGRICULTURAL LAND SITUATED AT GRAM KHAJURI KALAN, P ATWARI VIKAS KHAND PHANDA, TEHSIL HUZUR, DISTT. BHOPAL. ADDITION OF THE SAID LTCG ON AGRICULTURE LAND WAS NOT DISPUT ED BY THE ASSESSEE AND THE DEMAND RAISED FOR RS. 4,57,160/- WH ICH INCLUDED RS. 3,19,750/- TOWARDS TAX AND RS. 1,37,41 0/- TOWARDS INTEREST WAS PAID IN FULL BY THE ASSESSEE VID E CHALLAN DATED 15.05.2013. THE PENALTY U/S 271(1)(C) WAS IMPO SED FOR RS. 3,25,000/- VIDE ORDER DATED 25.09.2013 BY STATI NG THAT THE ASSESSEE WILLFULLY FURNISHED INACCURATE PARTICULARS OF INCOME AND HAS CONCEALED HER INCOME WITH AN INTENTION TO DE FRAUD THE REVENUE. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS :- (I) RAMASWAMY SENTHILVEL, (2015) 54 TAXMANN.COM 5 ( CHENNAI )(URO). (II) SKYLINE AUTO PRODUCTS (P) LIMITED, (20050 271 ITR 335 (MP). SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 4 4 (III) RELIANCE PETROPRODUCS (P) LTD.,(2010) 322 ITR 158 ( S.C. ) 5. LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PRAY ED THAT CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES AND THE APPLICABLE LAWS, THE PENALTY OF RS. 3,25,000/- IMPO SED BY LD. AO AND CONFIRMED BY THE LD. CIT(A) MAY PLEASE BE DE LETED. 6. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PART IES. I FIND THAT THE LD. CIT(A) HAS DISCUSSED THE DECISI ON OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF HARISH P.MASHURWALA , RELIED UPON BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, WHEREIN IT WAS HELD THAT THE PENALTY AS IMPOSED NOT B ECAUSE THE AMOUNT OFFERED BY THE ASSESSEE, WHICH HAS BEEN A SSESSED UNDER A HEAD OTHER THAN THE HEADING DECLARED BY THE ASSESSEE, BUT THE PENALTY HAS BEEN LEVIED ON ACCOUNT OF THE F ACT THAT THE DECLARATION MADE BY THE ASSESSEE REGARDING THE SOUR CE FORM WHICH THE INCOME AND RS. 17 LAKHS HAS BEEN EARNED AN D FOUND TO BE CORRECT. THE LD. CIT(A) DISTINGUISHED T HE DECISION RELIED UPON BY THE LD. AUTHORIZED REPRESENTATIVE F OR THE SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 5 5 ASSESSEE ON FACTS. THE LD. CIT(A) FURTHER HELD THAT ONCE THE DECLARATION MADE IN THE RETURN OF INCOME ITSELF IS FOUND TO BE INCORRECT, IT WOULD OBVIOUSLY AMOUNT TO FURNISHING I NACCURATE PARTICULARS OF INCOME AND CONSEQUENTLY THE PROVISIO NS OF SECTION 271(1)(C) OF THE ACT WOULD BE ATTRACTED. THE LD. CIT(A) FURTHER RELIED ON THE JUDGEMENT OF HON'BLE DELHI HI GH COURT IN THE CASE OF M/S. KANCHENJUNGA ADVERTISING P. LTD. ( I.T.A.NO. 944/IND/2011) PASSED ON 13.1.2012. I UPHOLD THE ACT ION OF THE LD. CIT(A) IN HOLDING THAT THE ASSESSEE WAS FOUN D TO BE GUILTY OF CONCEALMENT OF INCOME. I FIND THAT THE LD . CIT(A) HAS DISMISSED THE APPEAL AFTER PASSING AN ELABORATE ORD ER, WHICH READS AS FOLLOWS :- 6. I HAVE CAREFULLY CONSIDERED THE FINDINGS RECORDED BY THE LD. AO AS PER THE ASSESSMENT ORDER, THE FACTS OF THE CASE ON RECORD AND THE SUBMISSIONS MADE BY THE APPELLANT AND THE IMPUGNED PENALTY ORDER. IT IS SEEN THAT THE CAPITAL GAIN OF RS. 15,58,273/- WAS NOT SHOWN IN THE RETURN BY THE APPELLANT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAD SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 6 6 SOLD IMMOVABLE PROPERTY IN FORM OF A PLOT OF LAND. ON VERIFICATION OF THE RETURN OF INCOME, IT WAS NOTICE D THAT THE ASSESSEE HAD NOT GIVEN ANY DETAILS WITH RESPECT TO THE SALE OF THE SAID PLOT OF LAND IN HER RETURN AND HAD ALSO NOT SHOWN THE CAPITAL GAIN ARISING ON SUCH SALE. FROM THE ABOVE, IT IS CLEAR T HAT BUT FOR SELECTION OF THE CASE FOR SCRUTINY, THIS AM OUNT WOULD HAVE REMAINED UNDISCLOSED BY THE APPELLANT. THE APPELLANT IS, THEREFORE, CLEARLY AND BEYOND ANY DOUBT GUILTY OF CONCEALMENT OF INCOME TO THE EXTENT OF RS. 15,58,273/-. UNDER THESE CIRCUMSTANCES, I UPHOLD THE LEVY OF CONCEALMENT PENALTY ON THE AFORESAID SUM. ACCORDINGLY, ALL THE GROUNDS OF APPE AL ARE REJECTED. THE RATIO OF THE JUDGMENT OF HON'BLE DELHI HIGH COU RT IN THE CASE OF MODI STONE LTD. PRONOUNCED ON 06.05.2011 IN ITA NO. 1203/2006. 7. THE RATIO OF THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF MODI STONE LTD. PRONOUNCED ON 06.05.2011 IN ITA NO. 1203/2006 IS DIRECTLY SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 7 7 APPLICABLE TO THE FACTS OF THE CASE UNDER CONSIDERATION. IN THE SAID CASE, IT HAS BEEN OBSERV ED BY THE HON'BLE HIGH COURT THAT THE COMMISSIONER OF INCOME TAX (APPEALS) RIGHTLY NOTED THAT IT WAS FOR THE ASSESSEE WHO HAD MADE CERTAIN CLAIM TO PRODUCE RELEVANT MATERIAL BEFORE THE ASSESSING OFFICER TO SATISFY HIM WITH RESPECT TO SUCH CLAIM IT WAS OBLIGATORY FOR THE ASSESSEE TO PRODUCE RELEVANT EVIDENCE BEFORE THE ASSESSING OFFICER TO PROVE THE CLAIM OF DEDUCTION MADE ONCE IT WAS FOUND R AT THE ONUS OF PROVING THE ALLEGED CLAIM WAS ON THE ASSESSEE AND HE HAD NOT PRODUCED ANY EVIDENCE TO PROVE SUCH CLAIM, THE APPELLATE AUTHORITIES CANNOT ALLOW THE DEDUCTION, WITHOUT HAVING ANY MATERIAL BEFORE THEM TO SUBSTANTIATE SUCH CLAIM. IN THE END IT WAS HELD FOR THE REASONS GIVEN ABOVE, THAT THE ONUS OF PROVING BEING ON THE ASSESSEE AND NO EVIDENCE HAVING BEEN PRODUCED BY THE FORMER TO PROVE SUCH CLAIM, AND HEREBY MISPLACING THE BURDEN OF PROOF ON THE REVENUE WAS NOT CORRECT. SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 8 8 7.1 IN THE CASE OF CIT VS. DHARMENDRA TEXTILES PROCESSOR (2007) 295 ITR 244 (SC), THE SUPREME COURT, IN THE CONTEXT OF SECTION 11AC OF TH E CENTRAL EXCISE ACT HAS HELD THAT THE VIEW IN THE CA SE OF DILIP N. SHROFF IS NOT CORRECT. IT HAS HELD THA T PENALTY U/S 271(1)(C) IS A CIVIL LIABILITY AND THE WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY UNLIKE THE MATTER OF PROSECUTION U/S 276C. WHILE CONSIDERING AN APPEAL AGAINST AN ORDER MADE U/S 271(1)(C), WHAT IS REQUIRED TO BE EXAMINED IS THE RECORD WHICH THE OFFICER IMPOSING PENALTY HAD BEFORE HIM AND IF THAT RECORD CAN SUSTAIN THAT THERE HAS BEEN CONCEALMENT, THAT WOULD BE SUFFICIENT TO SUSTAIN THE PENALTY. 7.1.1 THE EXPLANATION 1 TO SECTION 271(1)(C) SHIFTS THE ONUS OF PROOF FROM THE AO TO THE ASSESSEE INSTEAD O F THE AO BEING UNDER AN OBLIGATION TO ESTABLISH THE M ALA FIDES OF THE ASSESSEE, THE ONUS IS NOW ON THE ASSES SEE TO ESTABLISH HIS INNOCENCE AND RIGHTEOUS CONDUCT. A S A MATTER OF FACT, AS A RESULT OF THE EXPLANATION 1 TO SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 9 9 SECTION 271(1)(C) IN ITS PRESENT FORM, THE BURDEN OF PROOF HAS BEEN ENTIRELY SHIFTED TO THE ASSESSEE AND IT IS THIS PARADIGM SHIFT WHICH IS ONE OF THE MOST IMPORTANT FEATURES OF RULE OF EVIDENCE IN CIVIL PROCEEDINGS AS DISTINCT FROM CRIMINAL PROCEEDINGS. 7.1.2 THEREFORE, THE OBSERVATIONS MADE BY THE SUPREME COURT IN DHARMENDRA TEXTILES (SUPRA) CASE ONLY RE-EMPHASIZES THE PARADIGM SHIFT ON BURDEN OF PROOF BROUGHT ABOUT BY THE EXPLANATION 1 TO SECTION 271(A)(C) THE OBSERVATION MADE IN DILIP N. SHROFF C ASE, ON THE NEED FOR THE TAX AUTHORITIES TO ESTABLISH ME NS REA BEFORE A PENALTY CAN BE IMPOSED, WERE CONTRARY TO THIS SCHOOL OF THOUGHT AND TO THAT EXTENT, THEREFOR E, THE LARGER BENCH OVERRULED THE DILIP N SHROFF CASE. 7.2 IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. HARPARSHAD AND COMPANY LTD (328 ITR 53), IT HAS BEEN HELD BY THE HON'BLE DELHI HIGH COURT THAT THE FINDINGS GIVEN IN ASSESSMENT PROCEEDINGS ARE RELEVA NT AND HAVE PROBATIVE VALUE. WHERE THE ASSESSEE PRODUCES NO FRESH EVIDENCE OR PRESENTS ANY ADDITION AL SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 10 10 OR FRESH CIRCUMSTANCE IN PENALTY PROCEEDINGS, HE WO ULD BE DEEMED TO HAVE FAILED TO DISCHARGE THE ONUS PLAC ED 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 BASIS THEREOF TH E CLAM WHICH IS MADE IS EX FACIE BOGUS, IT MAY STILL ATTRACT PENALTY PROVISION. IT HAS FURTHER BEEN OBSE RVED THAT THE EXPLANATIONS APPENDED TO SECTION 271(1)(C) OF THE ACT ENTIRELY INDICATE THE ELEMENT OR STRICT LIA BILITY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURA TE PARTICULARS WHILE FILING RETURN. THE OBJECT BEHIND ENACTMENT OF SECTION 271 (1 )(C) READ WITH THE 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 LIABILITY. WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MA TTER OF PROSECUTION UNDER SECTION 276C OF THE ACT. 7.3 IT MAY FURTHER BE MENTIONED HERE THAT THE RATI O OF THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 11 11 CASE OF PSG INDUSTRIES INDIA PVT. LTD PRONOUNCED ON JULY 11, IS DISTINCTLY APPLICABLE ON THE CASE UNDER CONSIDERATION. WHILE DISTINGUISHING THE JUDGMENT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PETRO PRODUCTS PVT. LTD [322 ITR 158], WHICH HAS BEEN RELIED UPON BY THE APPELLANT, IT HAS BEEN HELD THAT HAD THE ASSESSEE KEPT IN MIND THE PROVISIONS OF SECTION 23 OF THE ACT, WHICH IT WAS SUPPOSED TO, TH E ASSESSEE WOULD HAVE FOUND THAT THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED FROM YEAR TO YEAR IS ADJUSTMENT THAN THE SUM DISCLOSED IN THE LEASE AGREEMENT IN A CASE LIKE THIS, WE ARE OF THE VIEW THAT EXPLANATION OF THE ASSESSEE WAS NOT BONA FIDE. EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT WOULD BE FULLY APPLICABLE AND THE AO WAS JUSTIFIED IN IMPOSING THE PENALTY WHICH WAS UPHELD UPTO THE TRIBUNAL LEVEL. 7.4 IN THE CASE OF SHRI PRAMOD MITTAL, ( I.T.A.NO. 718/DEL/2010), AS PER ORDER DATED 15 07.2011, SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 12 12 HON'BLE ITAT, DELHI DEALING WITH THE ISSUE OF PENAL TY IMPOSED IN RESPECT OF HIRE CHARGES FOR ROAD ROLLER, OBSERVED THAT THE GENUINENESS OF TRANSACTION WAS NOT , PROVED. THE ASSESSEE ALLEGED TO HAVE MADE PAYMENT ON ACCOUNT OF HIRE CHARGES OF ROAD ROLLER, BUT THE OWNERSHIP OF THE SAME WAS NOT PROVED BY THE ASSESSEE. IT WAS HELD THAT FROM THESE FACTS IT WAS EVIDENT THAT THE ASSESSEE HAD NOT PROVED THE GENUINENESS OF THE TRANSACTION AND, THEREFORE, THE ASSESSEE HAD CLAIMED EXPENDITURE WHICH WAS NOT ALLOWABLE AS DEDUCTION. IT WAS FURTHER OBSERVED THA T THE TRIBUNAL HAD UPHELD THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A). IN VIEW OF THESE FACTS, IT WAS CONCLUDED THAT THE ASSESSEE HAD MADE A FALSE CLAIM WHICH WAS NOT ALLOWABLE AS DEDUCTION. THEREFORE, THE ADDITION MAD E BY ASSESSING OFFICER WAS HELD TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS WERE CONCEALED. RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE DELHI HIGH COURT, IT WAS HELD THAT PENALTY SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 13 13 UNDER SECTION 271(1)(C) IS LEVIABLE IN RESPECT OF S ET OFF OF LOSS AND BOGUS CLAIM FOR PAYMENT OF ROAD ROLLER HIRE CHARGES. WITH THE AFORESAID OBSERVATIONS THE CONCEALMENT PENALTY WAS UPHELD APPLYING THE RATIO OF THE DECISION OF HON'BLE DELHI HIGH COURT IN CIT VS. HAR PRASAD & CO LTD, 328 ITR 53 (DEL) AND HON'BLE SUPREME COURT'S DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD,(322 ITR 158) WAS DISTINGUISHED. 7.5 IN THE CASE OF COMMISSIONER OF INCOME-TAX V . ESCORTS FINANCE LTD 328 ITR 44, HON'BLE DELHI HIGH COURT HAS HELD THAT MERELY BECAUSE INFORMATION WAS AVAILABLE IN THE TAX AUDIT REPORT THAT WOULD NOT AB SOLVE TILE ASSESSEE. EVEN IF THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS, BUT ON THE BASIS THEREOF THE CLAIM WHICH WAS NOT MADE WAS EX FACIE BOGUS, IT COULD ATTRACT PENALTY PROVISION. IT WAS NOT A CASE WHERE TWO OPINION ABOUT THE APPLICABILITY OF A PARTICULAR SECTION OR PROVISION OF LAW WERE POSSIBLE. THEREFORE, IT COULD NOT BE A CASE OF A SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 14 14 BONA FIDE ERROR ON THE PART OF THE ASSESSEE THE HON 'BLE HIGH COURT FURTHER HELD HAT IN SUCH CIRCUMSTANCES, IT WAS THUS, NOT A 'WRONG CLAIM' PREFERRED BY THE ASSESSEE, BUT WAS A CLEAR CASE OF 'FALSE CLAIM' AND THEREFORE, PENAL PROVISIONS WERE CLEARLY ATTRACTED. 7.6 IN THE CASE OF CIT VS. ZOOM COMMUNICATIONS PRIVATE LIMITED (327 ITR 510), HON'BLE DELHI HIGH COURT HELD THAT IF THE ASSESSEE MAKES A CLAIM WHICH IS NOT ONLY INCORRECT IN LAW BUT IS ALSO WHOLLY WITHOU T ANY BASIS AND THE EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAIM IS NOT FOUND TO BE BONA FIDE, I T WOULD BE DIFFICULT TO SAY THAT HE COULD STILL NOT B E LIABLE TO PENALTY UNDER SECTION 271(1)(C) OF THE ACT. WHILE DISTINGUISHING THE JUDGEMENT OF HON'BLE APEX COURT IN THE CASE OF CIT V RELIANCE PETROPRODUCTS P. LTD, [2 010) 322 ITR 1 58 (SC), HON'BLE HIGH COURT MADE THE FOLLOWING OBSERVAT IONS :- IT IS TRUE THAT MERE SUBMITTING A CLAIM WHICH IS INCORRECT IN LAW WOULD NOT AMOUNT TO GIVING SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 15 15 INACCURATE PARTICULARS OF THE INCOME OF THE ASSESSE E, BUT CANNOT BE DISPUTED THAT THE CLAIM MADE BY THE ASSESSEE NEEDS TO BE BONA FIDE. IF THE CLAIM BESIDE S BEING INCORRECT IN LAW IS MALA FIDE, EXPLANATION 1 TO SECTION 271(1) WOULD COME INTO PLAY AND WORK TO THE DISADVANTAGE OF THE ASSESSEE. IF THE ASSESSEE MAKES A CLAIM WHICH IS NOT ONLY INCORRECT IN LAW BUT IS ALSO WHOLLY WITHOUT ANY BAS IS AND THE EXPLANATION FURNISHED BY HIM FOR MAKING SUCH A CLAIM IS NOT FOUND TO BE BONA FIDE, IT WOULD BE DIFFICULT TO SAY THAT HE WOULD STILL NOT BE LIABLE TO PENALTY UNDER SECTION 271(1 )(C) OF THE ACT. WE CANNOT LOSE SIGHT OF THE FACT THAT THE ASSESSEE IS A COMPANY WHICH MUST BE HAVING PROFESSIONAL ASSISTANCE IN COMPUTATION OF ITS INCOME AND ITS ACCOUNTS ARE COMPULSORILY SUBJECTED TO AUDIT IN THE ABSENCE OF ANY DETAILS FROM THE ASSESSEE, WE FAIL T O APPRECIATE HOW SUCH DEDUCTIONS COULD HAVE BEEN LEFT OUT WHILE COMPUTING THE INCOME OF THE ASSESSEE SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 16 16 COMPANY AND HOW IT COULD ALSO HAVE ESCAPED THE ATTENTION OF THE AUDITORS OF THE COMPANY. A GENERAL PROPOSITION AS ENUNCIATED BY THE TRIBUNAL , THAT NO PERSON WOULD EVER CLAIM THE AMOUNT OF INCOME TAX AS DEDUCTION WITH A VIEW TO AVOID PAYMENT OF TAX. ONE CANNOT LAY DOWN A HARD AND FAST RULE IN THIS REGARD AND EVERY CASE MUST BE DECIDED CONSIDERING THE FACTS AND CIRCUMSTANCES IN WHICH SUCH A DEDUCTION IS CLAIMED, COUPLED WITH AS TO WHETHER THE EXPLANATION OFFERED BY THE ASSESSEE FOR MADDING THE CLAIM, IS SHOWN TO BE BONA FIDE OR NOT. AS PER THE SUPREME COURT JUDGMENT IN THE CASE OF CI T V RELIANCE PETRO PRODUCTS PVT LTD (322 ITR 158), IT HAS BEEN HELD THAT SO LONG AS THE ASSESSEE HAS NOT CONCEALED ANY MATERIAL FACT OR THE FACTUAL INFORMAT ION GIVEN BY HIS HAS NOT BEEN FOUND TO BE INCORRECT, HE WILL NOT BE LIABLE TO IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, EVEN IF THE CLAIM MAD E BY SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 17 17 HIM IS UNSUSTAINABLE IN LAW, PROVIDED THAT NO EITHE R SUBSTANTIATES THE EXPLANATION OFFERED BY HIM OR THE EXPLANATION, EVEN IF NOT SUBSTANTIATED, IS FOUND TO BE BONA FIDE. IF THE EXPLANATION IS NEITHER SUBSTANTIA TED NOR SHOWN TO BE BONA FIDE, EXPLANATION 1 TO SECTION 271(1 )(C) WOULD COME INTO PLAY AND THE ASSESSEE WI LL BE LIABLE TO FOR THE PRESCRIBED PENALTY. IN THE CASE OF RELIANCE PETRO PRODUCTS PRIVATE LIMI TED, THE ADDITION MADE BY THE AO THE RESPECT OF OTHER INTEREST CLAIMED AS A DEDUCTION UNDER SECTION 36(1) (III) OF THE ACT WAS DELETED BY THE CIT(A) THOUGH IT WAS LATER RESTORED, BY THE TRIBUNAL, TO THE AO. THE APP EAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL, TO THE AO. THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL TO THE AO. THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF T HE TRIBUNAL WAS ALSO ADMITTED BY THE HIGH COURT. IT WA S, IN THESE CIRCUMSTANCES, THAT THE TRIBUNAL COME TO T HE CONCLUSION THAT THE ASSESSEE HAD NEITHER CONCEALED THE INCOME NOR FILED INACCURATE PARTICULARS THEREOF . IN SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 18 18 RECORDING THIS FINDING, THE TRIBUNAL FELT THAT IF T WO VIEWS OF OTHER CLAIM OF OTHER ASSESSEE WERE POSSIBL E, THE EXPLANATION OFFERED BY IT COULD NOT BE SAID TO BE FALSE. THIS, HOWEVER, IS NOT THE FACTUAL POSITION I N THE PRESENT CASE. THE FACTS OF THE PRESENT CASE ARE CLE ARLY DISTINGUISHABLE. WITH THE AFORESAID OBSERVATION IT WAS HELD THAT THE AO HAD CORRECTLY LEVIED PENALTY UNDER SECTION 271(1 )(C). 7.7 IN TILE CASE OF HARISH P. MASHRUWALA, IT WAS HELD BY HON'BLE BOMBAY HIGH COURT VIDE ORDER DATED 22ND SEPTEMBER,2011 THAT IN THE CASE UNDER CONSIDERATION, THE PENALT Y WAS IMPOSED NOT BECAUSE THE AMOUNT OFFERED BY THE ASSESSEE HAS BEEN ASSESSED UNDER A HEADING OTHER THAN THE HEADING DECLARED BY THE ASSESSEE, BUT THE PENALTY HAS BEEN LEVIED ON ACCOUNT OF THE FACT THAT THE DECLARATION MADE BY THE ASSESSEE REGARDING THE SOURCE FROM WHICH THE INCOME AND RS 17,00,OOO/- HAS BEEN SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 19 19 EARNED HAS BEEN FOUND TO BE INCORRECT. THUS, THE DECISIONS RELIED UPON BY THE COUNSEL OR THE ASSESSE E ARE DISTINGUISHABLE ON FACTS. IN THIS VIEW OF THE MATTER, ONCE THE DECLARATION MADE IN THE RETURN OF INCOME ITSELF IS FOUND TO BE INCORRECT, IT WOULD OBVIOUSLY AMOUNT TO FURNISHING INACCURATE PARTICULA RS OF INCOME AND CONSEQUENTLY THE PROVISIONS OF SECTIO N 271(1 )(C) OF THE ACT WOULD BE ATTRACTED. 7.8 FURTHER RELIANCE IS PLACED ON THE RECENT JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF M/S. KANCHENJUNGA ADVERTISING P LTD, (I.T.A.NO. 944/2011) PASSED ON 13.1.2012. 7.9 THE RATIO OF THE AFORESAID DECISIONS IS CLEARL Y APPLICABLE IN THE INSTANT CASE WHERE THE APPELLANT HAS BEEN FOUND TO BE GUILTY OF CONCEALMENT OF INCOM E. UNDER THESE CIRCUMSTANCES AND PLACING A STRONG RELIANCE ON THE DECISIONS AS CITED ABOVE, I HOLD TH AT THE LD. AO HAS CORRECTLY LEVIED PENALTY UNDER SECTI ON 271(1)(C) OF THE ACT. ACCORDINGLY, THE IMPOSITION O F PENALTY IS CONFIRMED AND ALL THE GROUNDS OF THE SMT. PREETI SALUJA, BHOPAL VS. ITO, 2(1), BHOPAL I.T.A.NO. 304/IND/2016 A.Y. 2010-11. 20 20 APPEAL ARE REJECTED. 8. IN THE RESULT, THE APPEAL IS DISMISSED. 8. IN VIEW OF THE ABOVE, I UPHOLD THE ACTION OF THE LD . CIT(A). MY INTERFERENCE IS NOT CALLED FOR. THE PEN ALTY IS CONFIRMED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. THIS ORDER HAS BEEN PRONOUNCED IN THE OP EN COURT ON 29 TH JUNE, 2016. SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 29 TH JUNE, 2016. CPU*