SMT. ARPARNA TIWARI, Mandsaur V. THE ITO, Mandsaur

ITA 36/IND/2015

• Counselvise Citation: 3622714 RSA 2015
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: RAVI SARDA
• Keywords: Unexplained investment; Business income; Question of law; Onus to prove; Revised return
• Section: 133A; 153A; 131; 27; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO.36/IND/2015 A.Y. : 2009-10 SMT.APARNA TIWARI, ITO, MANDSAUR VS. MANDSAUR APPELLANT RESPONDENT PAN NO. AHPPT9810K APPELLANT BY : SHRI RAVI SARDA, C.A. RESPONDENT BY : SHRI R.A.VERMA, SR. DR DATE OF HEARING : 0 6 . 0 7 .201 5 DATE OF PRONOUNCEMENT : 10 . 0 8 .201 5 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), UJJAIN, DATED 01.10.2014 FOR THE ASSESS MENT YEAR 2009-10. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER. 3. THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR THE FIRST TIME IN ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS S HOWN THE OPENING CAPITAL AT RS. 13,43,020/-. THE ASSESSEE WA S ASKED TO FURNISH THE RELEVANT DOCUMENTS IN RESPECT OF OPENIN G CAPITAL. INSPITE OF REPEATED OPPORTUNITY GIVEN TO THE ASSESS EE TO PROVE HER OPENING CAPITAL, SHE FAILED TO FURNISH THE DOCU MENTARY EVIDENCE IN RESPECT OF THIS. IN ABSENCE OF DOCUMENT ARY EVIDENCE, THE ASSESSEE HAS OFFERED RS. 7,17,000/- A S ADDITIONAL INCOME DURING THE CURRENT YEAR. THE ASSESSEE HAS V OLUNTARILY SURRENDERED THE INCOME OF RS. 7,17,700/- AND PAID T AX BEFORE PASSING THE ORDER. THE ASSESSEE HAS OFFERED THIS I NCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO BUY MENTAL PEACE AND NON-IMPOSITION OF PENALTY. THE ASSESSEE W AS GIVEN -: 3: - 3 SUFFICIENT OPPORTUNITY TO EXPLAIN THE OPENING CAPIT AL. ASSESSEE HAS VOLUNTARILY ADMITTED THE INCOME OF UNDISCLOSED SOURCES. THEREFORE, THE AO HAS IMPOSED THE PENALTY U/S 271(1 )(C) OF THE INCOME-TAX ACT, 1961. 4. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) HA S DISMISSED THE APPEAL. 5. THE LD. AUTHORIZED REPRESENTATIVE HAS FILED THE WRI TTEN SUBMISSIONS, WHICH READS AS UNDER :- BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL AND FILED HER RETURN OF INCOME FOR THE FIRST TIME DECLARING INCOME FROM SAL ARY FOR RS.3,00,000/- AND BUSINESS INCOME AL RS. 1,25,611/-. ASSESSEE HAS SHOWN OPENING CAPITAL FOR -: 4: - 4 RS. 13,43,020/- BRIEFING DETAILS OF RECEIPTS FROM YEARS 1999 TO 2008. OUT OF THE OPENING CAPITAL OF R S. 13,43,020/- ASSESSEE SURRENDERED RS.7,17,000/- AS ADDITIONAL INCOME AND PAID THE TAX THERE ON FOR RS.3,02,580/- WITH INTEREST DURING ASSESSMENT PROCEEDINGS TO BUY MENTAL PEACE AND NON IMPOSITION OF PENALTY. ASSESSEE CONSENTED TO PAY TAX TO AVOID FURTHER LITIGATION AND TO BUY MENTAL PEACE AND INSTEAD OF OFFERING FURTHER EXPLANATION, ASSESSEE VOLUNTARILY SURRENDERED BEFORE AO AND PAID TAX THEREON DURING ASSESSMENT PROCEEDING WITH A LETTER AND COMPUTATION AND CHALLAN RECEIPT OF RS.3,02,580/-. IT IS ALSO PERTINENT TO STATE THAT E VEN ASSSESSEE HAS NOT CHALLENGED THE SAME BEFORE APPELLATE AUTHORITIES AND REACHED TO FINALITY. IN ABSENCE OF FURTHER APPEAL TO CIT (A) OR TO TRIBUNAL , QUANTUM ASSESSMENT ORDER HAD REACHED TO ITS FINALITY. -: 5: - 5 AO IMPOSED THE PENALTY U/S 271(1 )(C) FOR RS.2,24,745/- ON THE SAID SURRENDERED AMOUNT OF RS.7,17,000/-. ASSESSMENT ORDER IS NOT CONCLUSIVE EVIDENCE THAT AMOUNT ASSESSED WAS IN FACT INCOME OF ASSESSEE AND IT COULD NOT BE PRESUMED THAT THERE WAS CONSCIOUS CONCEALMENT OR ACT OF FURNISHING OF INACCURATE PARTICULARS BY ASSESSEE. IN ORDER TO JUS TIFY LEVY OF PENALTY, THERE MUST BE SOME MATERIAL OR CIRCUMSTANCES LEADING TO REASONABLE CONCLUSION THAT AMOUNT DOES NOT REPRESENT ASSESSEES INCOME AND CIRCUMSTANCES MUST SHOW THAT THERE WAS CONSCIOUS CONCEALMENT OR ACT OF FURNISHING OF INACCURATE PARTICULARS, PENALTY WAS NOT IMPOSABLE IN PRESENT CASE. AO IMPOSED PENALTY ON ERRONEOUS ASSUMPTIONS WHICH WAS WRONGLY CONFIRMED BY CIT(A). ASSESSEE VERSION IS SUPPORTED IN NUMBER OF DECISIONS OF COUR TS INCLUDING HONBLE SUPREME COURT AND HON'BLE HIGH COURTS AND HON'BLE TRIBUNALS. NO PENALTY IS LEVIABL E. GIST OF THE CASES ARE AS UNDER:- -: 6: - 6 IN THE CASE OF MAK DATA P. LTD., VS. COMMISSIONER OF INCOME TAX-II CIVIL APPEAL NO.9772, (2013) 263 CTR 0001 (SC) THE HON'BLE SUPREME COURT WHILE CONSIDERING THE EXPLANATION TO SECTION 271(1), HELD THAT THE QUESTION WOULD BE WHETHER THE ASSESSEE HAD OFFERED AN EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME AND THE EXPLANATION TO SECTIO N 271(1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE ASSESSING OFFICER BETWEEN THE REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIABLE EVIDENCE AND WHEN THE INITIA L ONUS PLACED BY THE EXPLANATION, HAS BEEN DISCHARGED BY THE ASSESSEE, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED THEIR INCOME AND NOT OTHERWISE. FACTUALLY, IN APPELLANTS CASE, IT WAS THAT THE ONUS CAST UPON THE ASSESSEE HAD BEEN -: 7: - 7 DISCHARGED BY GIVING A COGENT AND RELIABLE EXPLANATION. THEREFORE, IF THE DEPARTMENT DID NOT AGREE WITH THE EXPLANATION, THEN THE ONUS WAS ON TH E DEPARTMENT TO PROVE THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE INSTANT CASE, SUCH ON US WHICH SHIFTED ON THE DEPARTMENT HAD NOT BEEN DISCHARGED. THEREFORE NO PENALTY IMPOSABLE ON THE ASSESSEE. RELIED ON COMMISSIONER OF INCOME TAX VS. SURESH CHANDRA MITTAL -(2001)251 ITR 0009 SC PENALTY UNDER S. 271(L)(C) CONCEALMENT- REVISED RETURN FILED SHOWING HIGHER INCOMEASSESSEE SURRENDERED THE INCOME AFTER PERSISTENT QUERIES BY AO HOWEVER, REVISED RETURNS HAVE BEEN REGULARISED BY REVENUEEXPLANATION OF THE ASSESSEE THAT HE -: 8: - 8 HAS DECLARED ADDITIONAL INCOME TO BUY PEACE AND TO COME OUT OF VEXED LITIGATION COULD BE TREATED AS BO NA FIDEPENALTY RIGHTLY CANCELLEDNO INTERFERENCE WARRANTED AND PENALTY UNDER S. 271(L)(C) WAS NOT LEVIABLE.CIT VS., SURESH CHANDRA MITTAL (2000) 158 CTR (MP) 26 : (2000) 241 ITR 124 (MP) AFFIRMED COMMISSIONER OF INCOME TAX VS. SURESH CHANDRA MITTAL (2000) 241 ITR 0124 MP PENALTY UNDER S. 271(L)(C) CONCEALMENTREVISED RETURN FILED SHOWING HIGHER INCOMEASSESSEE HAD SURRENDERED THE INCOME AFTER PERSISTENT QUERIES BY A O HOWEVER, REVISED RETURNS HAVE BEEN REGULARISED BY REVENUEEXPLANATION OF THE ASSESSEE THAT HE HAS DECLARED ADDITIONAL INCOME TO BUY PEACE AND TO COME OUT OF VEXED LITIGATION COULD BE TREATED AS BO NA FIDE TRIBUNAL JUSTIFIED IN CANCELLING THE PENALTY AND PENALTY UNDER S. 271(1) (C) WAS NOT LEVIABLE. IT IS WELL SETTLED THAT UNDER S. 271(L)(C), INITIAL BURDEN LIES ON THE REVENUE TO ESTABLISH THAT ASSESSEE HAD -: 9: - 9 CONCEALED THE INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE BURDEN SHIFTS TO TH E ASSESSEE ONLY IF HE FAILS TO OFFER ANY EXPLANATION FOR THE UNDISCLOSED INCOME OR OFFERS EXPLANATION WHICH IS FOUND TO BE FALSE BY THE ASSESSING AUTHORITY. HOWEVER, PROVISO TO EXPLN. 1 PROVIDES FOR SHIFTING OF THIS BURDEN AGAIN WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE BONA FIDE. IN THE PRESE NT CASE, THOUGH IT IS TRUE THAT ASSESSEE HAD NOT SURRENDERED AT ALL AND THAT HE HAD DONE SO ON THE PERSISTENT QUERIES MADE BY AO BUT ONCE THE REVISED ASSESSMENT WAS REGULARISED BY THE REVENUE AND ONCE THE ASSESSING AUTHORITY HAD FAILED TO TAKE ANY OBJECTION IN THE MATTER, THE DECLARATION OF INCOME MADE BY THE ASSESSEE IN HIS REVISED RETURNS AND HIS EXPLANATION THAT HE HAD DONE SO TO BUY PEACE WITH THE DEPARTMENT AND TO COME OUT OF VEXED LITIGATION COULD BE TREATED AS BONA FIDE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE, TRIBUNAL WAS JUSTIFIED IN CANCELLING THE PENALTY LEVIED BY AO AN D -: 10: - 10 AFFIRMED BY CIT(A) IN THE FACTS AND CIRCUMSTANCES O F THE CASE. COMMISSIONER OF INCOME TAX VS. D & H SECHERON ELECTRODES LTD. (2008) 296 ITR 0193 MP PENALTY UNDER S. 271(1)(C)CONCEALMENTABSENCE OF M ENS REATRIBUNAL HAS GIVEN REASONS FOR ACCEPTING THE FA CTUAL VERSION OF THE ASSESSEE AND FOUND THAT THERE WAS NO MENS REA AS CONTEMPLATED UNDER S. 271(1 )(C) FOR IMPOSING TH E PENALTY THERE IS NO GOOD GROUND TO UPSET THE AFORESAID FIND ING OF THE TRIBUNALLEVY OF PENALTY UNDER S. 271 (1 )(C) RIGHT LY CANCELLED ASSESSEE HAVING SURRENDERED INCOME AND THE TRIBUNAL HAVING GIVEN REASONS FOR ACCEPTING THE FACTUAL VERSION OF THE ASSESSEE IT IS NOTICED FROM THE RECORD OF THE CASE THAT IT I S A CASE OF SURRENDER OF INCOME BY THE ASSESSEE AND FULL AMOUNT OF TAX HAS BEEN PAID AND FOUND THAT THERE WAS NO MENS REA AS CONTEMPLATED UNDER S. 271(1 )(C), CANCELLATION OF P ENALTY WAS JUSTIFIED COMMISSIONER OF INCOME TAX VS. PRADEEP KUMAR GANEDI WAL (2002)253 ITR 0361 MP -: 11: - 11 APPEAL (HIGH COURT)SUBSTANTIAL QUESTION OF LAW PENALTY UNDER S. 271(L)(C)TRIBUNAL HAS RECORDED A FINDING THAT THE PROCEEDINGS FOR ASSESSMENT WERE COMPLETED AFTER MAK ING DETAILED ENQUIRY AND SINCE THE ASSESSEE HAD VOLUNTA RILY SURRENDERED SOME INCOME IN THE REVISED RETURN TO BU Y PEACE WITH THE DEPARTMENT, NO PENALTY UNDER S. 271(L)(C) WAS LEVIABLE ACCORDINGLY, TRIBUNAL SET ASIDE THE ORDER OF THE CI T UNDER S. 263NO SUBSTANTIAL QUESTION OF LAW INVOLVE D FINDINGS OF FACT RECORDED BY THE TRIBUNAL NOT OPEN TO CHALLENGEAPPEAL DISMISSED COMMISSIONER OF INCOME TAX VS. RAJIV GARG & ORS. : (2009) 313 ITR 0256 P & H PENALTY UNDER S. 271(1 )(C)CONCEALMENTSURRENDER O F ADDITIONAL INCOME IN RETURN FILED PURSUANT TO NOTIC E UNDER S. 148RETURN WAS ACCOMPANIED BY A NOTE WHEREIN THE AS SESSEE STATED THAT HE HAS SURRENDERED THE ENTIRE AMOUNT OF SALE PROCEEDS OF SHARES TO BUY PEACE OF MIND AND TO AVOI D HAZARDS OF LITIGATION AND ALSO TO SAVE HIMSELF FROM ANY PEN AL ACTION AFORESAID EXPLANATION WAS NEITHER REJECTED NOR IT W AS HELD TO -: 12: - 12 BE MALA FIDETRIBUNAL HAS RECORDED A PURE FINDING O F FACT THAT THE REVENUE HAS NOT PLACED ANY MATERIAL OR EVIDENCE ON RECORD TO DISCHARGE ITS BURDEN OF PROVING CONCEALMENTIT H AS FURTHER HELD THAT THE ADDITIONAL INCOME WAS OFFERED BY THE ASSESSEE IN GOOD FAITH AND TO BUY PEACEPENALTY UNDER S. 271(1 )(C) RIGHTLY DELETED COMMISSIONER OF INCOME TAX VS. SIDH NATH GOEL - (20 13) 359 ITR 0481 (ALL) PENALTYCONCEALMENT OF INCOMEIN PROCEEDINGS U/S 27 1 (1) (C) AO LEVIED PENALTY ON GROUND THAT ASSESSEE HAD FURNI SHED INACCURATE PARTICULARS OF INCOME C1T(A) UPHELD ORDER OF AO IT AT REVERSED ORDER OF CIT(A) HOLDING THAT ASSESSEE A CCEPTED DISCREPANCY AND SURRENDERED AMOUNT IN STATEMENT REC ORDED DURING COURSE OF SEARCHHE WAS READY TO PAY TAXES A LSO ON THOSE AMOUNTS, THUS HE HAD MADE SURRENDER DURING CO URSE OF SEARCH HELD, DETAILS OF EXPENSES OF RENOVATION OF RESIDENC E WERE WRITTEN IN NOTE BOOK FOUND DURING SEARCHASSES SEE STATED THAT HE HAD MADE EXPENDITURE OUT OF BUSINESS INCOME BUT HAD NOT NOTED IN HIS BOOKS OF ACCOUNTAS PER NO TE BOOK, -: 13: - 13 TOTAL INCOME CAME TO RS. X WHICH ASSESSEE ADMITTED TO BE UNDISCLOSED INCOME OF FY 1991-92 AND ON WHICH HE WA S READY TO PAY TAXSTATEMENT WAS ADMITTEDLY MADE DURING SEA RCH THAT ASSESSEE WAS READY TO MAKE PAYMENT OF TAX NO FURT HER DETAIL WAS REQUIRED REGARDING UNDISCLOSED INCOME THEREFO RE, FOLLOWING JUDGMENTS OF MADRAS HIGH COURT. RAJASTHAN HIGH COURT AND GUJARAT HIGH COURT ORDER OF I.T.A.T. IS U PHELD APPEAL IS DISMISSED. C.I.T. VS. CHENNUPATI TYRE & RUBBER PRODUCTS (2014) 90 CCH 0181 APHC PENALTY U/S 271(L)(C)CONCEALMENT OF INCOMEASSESSE E FILED A RETURN, SHOWING LOSS FOR AY 1994-95 INTIMATION WAS GIVEN U/S 143(1)(A) BY AO REDUCING LOSSASSESSEE FILED AN APPLICATION FOR REC TIFICATION THEREOF AND SAID REQUEST WAS ACCEPTED BY AOTHEREAFTER AN EXERC ISE U/S 143(2) WAS UNDERTAKEN AND SCRUTINY OF EACH AND EVERY ITEM WAS MADEIN RESPECT OF TWO ITEMS OF SUNDRY CREDITS, EXPLANATION OFFERED BY ASS ESSEE WAS NOT FOUND SATISFACTORYASSESSEE AGREED FOR TREATING THOSE TWO ITEMS AS INCOME AND IT PAID TAXAO IMPOSED PENALTY U/S 271(L)(C) IN RESPEC T OF TWO SUNDRY CREDITORS, REJECTING ASSESSEES EXPLANATION THAT H E DID NOT HAVE ANY INTENTION TO CONCEAL AMOUNTS, AND TWO AMOUNTS WERE CARRIED FORWARD FROM -: 14: - 14 PREVIOUS ASSESSMENT YEAR CIT(A) DELETED PENALTY IMPOSED BY AO HOLDING THAT THERE WAS NO INTENTION ON PART OF ASSESSEE TO HIDE INCOME TRIBUNAL AFFIRMED ORDER PASSED BY CIT(A) HELD, BEFORE LEVYING PENALTY U/S 271(L)(C) REVENUE HAS TO DISCHARGE ITS BURDEN TO PROVE THAT T HERE WAS SOME INTENTION TO CONCEAL OR FURNISH INACCURATE PARTICULARS ON PAR T OF ASSESSEE CONCEALMENT CAN OCCUR, ONLY WHEN PERSON IS IN FULL KNOWLEDGE OF STATE OF AFFAIRS AND EVEN WHILE BEING UNDER OBLIGATION TO MA KE IT KNOWN TO OTHERS, AND IN PARTICULAR AUTHORITIES UNDER THE ACT FAILS O R REFUSES TO DO SOIT IS THEN, AND ONLY THEN, THAT HE CAN BE SAID TO HAVE CO NCEALED AND ONCE FACTUM OF CONCEALMENT IS PROVED, HIS ATTEMPT TO VOLUNTARIL Y DISCLOSE IT DOES NOT SAVE HIM HOWEVER, AN INADVERTENT MISTAKE, OR A BONA FIDE BEL IEF AS TO CLASSIFICATION, OR CHARACTER OF AN AMOUNT, CANNOT P ER SE PROVIDE A GROUND FOR LEVY OF PENALTYIN INSTANT CASE ASSESSEE AGREED TO TREAT TWO SUNDRY CREDITORS AS INCOME AS A MEASURE OF PURCHASING PEAC ELACK OF ANY MALA FIDE INTENTION ON PART OF ASSESSEE CLEAR FROM THE F ACT THAT THOSE TWO ITEMS WERE CARRIED FORWARD FROM PREVIOUS YEAR AND WERE NO T NEW ADDITIONS AT ALL THERE WAS NO INGREDIENTS OF CONCEALMENTTHUS PENALT Y IMPOSED BY AO U/S 271 (I )(C) WAS RIGHTLY DELETED BY CIT(A)RE VENUES APPEAL DISMISSED. -: 15: - 15 LATE N. R. PALANIVEL VS. COMMISSIONER OF INCOME TAX (2015) 273 CTR 0224 (MAD) PENALTY U/S 271(L)(C)VALIDITY O F ASSESSEE ENGAGED IN BUSINESS OF OPERATING TRANSPORT BUS FILED RETURN OF INCOMEPURSUANT TO SURVEY U/S 133A IN PRE MISES OF ASSESSEE, A STATEMENT WAS RECORDED WITH REGARD TO F IXED DEPOSITS MADE BY ASSESSEE IN A BANK ACCOUNTSUBSEQU ENTLY, ASSESSEE VIDE LETTER TO REVENUE EXPLAINED THAT CONC ERNED AMOUNT WAS RECEIVED BY HIM FROM FAMILY PARTITION IN YEAR 1977 AND THAT SAID DEPOSITS WERE RENEWED ALONG WITH INTE REST ACCUMULATED THEREONAO ISSUED NOTICES TO ASSESSEE U /S 148 AND IN RESPONSE REVISED RETURN OF INCOME WAS FILED BY ASSESSEEASSESSMENT WAS COMPLETED AND REVISED RETUR NS FILED BY ASSESSEE WAS ACCEPTED BY AO WITHOUT ANY ADDITION HOWEVER PENALTY U/S 271(L)(C) WAS INITIATED AGAINST ASSESSEE ON GROUNDS OF CONCEALMENT OF INCOMEMEANWHILE, ASSE SSEE DIED AND LEGAL HEIRS OF DECEASED ASSESSEE REQUESTED AO TO DROP THE PENALTY PROCEEDINGS -DENYING EXPLANATION GIVEN BY LEGAL REPRESENTATIVE, AO LEVIED PENALTY U/S 271(1 )(C) ON GROUNDS THAT ASSESSEE HAD FILED REVISED RETURN ONLY AFTER THE SU RVEY WAS CONDUCTED U/S 133A AND ASSESSEE HAD FAILED TO DISCL OSED -: 16: - 16 UNEXPLAINED INVESTMENTCIT(A) AND ITA T DISMISSED ASSESSEES APPEALHELD, ONCE AN EXPLANATION IS SUBM ITTED, ONUS SHIFTS TO REVENUE TO COME TO A CONCLUSION THAT EXPLANATION WAS NOT ACCEPTABLE AND THEREFORE CASE FALLS U/S 271 (L)(C)IT WAS INCUMBENT ON AUTHORITIES TO CONSIDER DETAILS GI VEN BY LEGAL REPRESENTATIVES OF ASSESSEE ALONG WITH ANNEXURES, B EFORE IT PROCEEDS TO INVOKE SECTION 271(L)(C) AND IF ON PERU SAL OF DETAILS SUPPLIED, AUTHORITIES STILL FOUND THAT EXPLANATION WAS NOT JUSTIFIED OR REASONABLE, THEY COULD TAKE A DIFFEREN T VIEW ON PENALTY PROCEEDINGS ALSO, WHEN ASSESSEE HAD GIVEN SOME REASONABLE EXPLANATION, IT WAS INCUMBENT ON PART OF AUTHORITY TO CONSIDER SAME ON ITS OWN MERITS BEFORE PROCEEDIN G FURTHER IN PRESENT CASE, EXPLANATION MADE ON BASIS OF EXPLANAT ION B TO SECTION 271 (I)(C) WAS SATISFIED BY ASSESSEE AND HI S LEGAL HEIRS TO SOME EXTENT, BUT, SAME WAS NOT CONSIDERED BY REV ENUE AUTHORITIESORDER OF TRIBUNAL CONFIRMING PENALTY PR OCEEDINGS WAS SET ASIDEASSESSEE 'S APPEAL ALLOWED. IN 2013 (11) TMI 1375 (COMMISSIONER OF INCOME TAX V ERSUS M/S.GEM GRANITES), THIS COURT PRESENT DEALING WITH THE ISSUE OF PENALTY IMPOSED UNDER SECTION 271(I)(C) OF THE INCO ME TAX ACT -: 17: - 17 HAD HELD THAT IN A RECENT DECISION OF THE HON'BLE S UPREME COURT IN CIVIL APPEAL NO.9772 OF 2013, DATED 30.10.2013 ( MAK DATA P. LTD., V.V. COMMISSIONER OF INCOME TAX-II), THE HON'BLE SUPREME COURT WHILE CONSIDERING THE EXPLANATION TO SECTION 271(1), HELD THAT THE QUESTION WOULD BE WHETHER THE ASSESSEE HAD OFFERED AN EXPLANATION FOR CONCEALMENT OF PARTI CULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME AND THE EXPLANATION TO SECTION 271(1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE AS SESSING OFFICER BETWEEN THE REPORTED AND ASSESSED INCOME. T HE BURDEN WAS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGE NT AND RELIABLE EVIDENCE AND WHEN THE INITIAL ONUS PLACED BY THE EXPLANATION, HAD BEEN DISCHARGED BY THE ASSESSEE, T HE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QU ESTION CONSTITUTED THEIR INCOME AND NOT OTHERWISE. WHERE EXPLANATION MADE ON BASIS OF EXPLANATION B TO SECTION 271(L)(C) WAS SATISFIED BY ASSESSEE AND HIS LEGAL H EIRS TO SOME EXTENT HOWEVER, SAME WAS NOT CONSIDERED BY REVENUE AUTHORITIES, THEN PENALTY IMPOSED U/S 271(1)(C) WAS NOT JUSTIFIED. -: 18: - 18 COMMISSIONER OF INCOME TAX VS. MATHURA COMMERCIAL C O. (2014) 361 ITR 0380 (ALL) 6 PENALTY U/S. 271(L)(C)FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC.IN RETURN FILE D BY ASSESSEE, ASSESSEE HAD SHOWN VARIOUS OUTSTANDING AM OUNT AGAINST DIFFERENT PARTIES AO ISSUED NOTICES TO ASSE SSEE TO EXPLAIN AND ACCORDINGLY OPPORTUNITY WAS GRANTED BY AO TO ASSESSEE WITH REGARD TO DIFFERENT ENTRIES SHOWING O UTSTANDING AMOUNTAO DOUBTED GENUINENESS OF LIABILITIESNOTICE FOR IMPOSING PENALTY U/S. 271 (L)(C) WAS ISSUED AND ASS ISTANT COMMISSIONER IMPOSED PENALTYAC IT HELD THAT, ASSES SEE DELIBERATELY CONCEALED INCOME AND FURNISHED INCORRE CT PARTICULARSCIT ALLOWED APPEAL AND CANCELLED PENALT Y HELD, PRESENT CASE IS NOT A CASE OF MENTIONING OF INACCUR ATE PARTICULARS OR CONCEALMENT IN VIEW OF ABOVE, WE HAVE CAREFULLY GONE THROUGH TH E ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-!! AS WELL AS THE TRIBUNAL WHERE ABSENCE OF NOTICE HAVE BEEN RECORDED SIMPLY H OLDING THAT AN EXPLANATION GIVEN BY THE ASSESSEE FOR SUBMITTING THE REVISED RETURN WAS ACCEPTABLE. THE PRESENT CASE IS NOT A CA SE OF -: 19: - 19 MENTIONING OF INACCURATE PARTICULARS OR CONCEALMENT . APPEAL DISMISSED. COMMISSIONER OF INCOME TAX VS. GEM GRANITES (2013) 86 CCH 0160 CHEN HC PENALTY U/S 271(L)(C)CONCEALMENT OF INCOMEBONA FI DE CLAIM LEVIABILITYSEARCH WAS CONDUCTED U/S 132, WHICH REVEALED THAT IN REAL ESTATE DEALINGS THERE WERE ON -MONEY TRANSACTIONS ASSESSEE OFFERED TO ADMIT ON-MONEY, BUT ON COMPLETION OF PROJECTS UNDER COMPLETED CONTRACT MET HODAO INCLUDED ON-MONEY COMPONENT AND COMPLETED ASSESSMEN T PENALTY PROCEEDINGS INITIATED U/S 271(L)(C) CIT(A) STATED THAT INEVITABLY AND INFALLIBLY ASSESSEE HAD RECEIVED ON- MONEY, THEREFORE PENALTY WAS SUSTAINEDIT A T CANCELLED PE NALTY HELD, IN CASE OF UNION OF INDIA V.V. RAJASTHAN SPINNING AND WEAVING MILLS (2009) 13 SCC 448, IT WAS HELD THAT M ERE MAKING OF CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, WOULD NO T AMOUNT TO FURNISHING OF INACCURATE PARTICULARS FOR SUSTAINING PENALTY U/S 271(L)(C), PENALTY BEING MULTIPLE LIABILITY, BO NA FIDE CONDUCT OF ASSESSEE (NECESSARILY ASSUMES SIGNIFICANCE, EVEN THOUGH WILLFULNESS OF ASSESSEE MAY NOT BE CRITERIA, CONDUC T IS TO BE -: 20: - 20 CONSIDEREDMERE FACT THAT ADDITION IN PRESENT CASE HAD BEEN SUSTAINED BY COURT WOULD NOT LEAD TO AUTOMATIC APPL ICATION OF SECTION 27L(L)(C ) IN CASE OF MAK DATA P. LTD., VS. CIT-LL CIVIL APPEAL NO. 9772, IT WAS HELD THAT BURDEN IS ON ASSE SSEE TO SHOW, BY COGENT AND RELIABLE EVIDENCE AND WHEN INIT IAL ONUS HAS BEEN DISCHARGED BY ASSESSEE, ONUS SHIFTS ON REV ENUE TO SHOW THAT AMOUNT IN QUESTION CONSTITUTED THEIR INCO ME AND NOT OTHERWISEIN PRESENT CASE, ONUS CAST UPON ASSESSEE WAS DISCHARGED BY GIVING COGENT AND RELIABLE EXPLANATIO NIF DEPARTMENT DID NOT AGREE WITH EXPLANATION, THEN ONU S WAS ON IT TO PROVE CONCEALMENT OR FURNISHING INACCURATE PARTI CULARS OF INCOMESUCH ONUS WAS NOT DISCHARGED BY AOORDER OF TRIBUNAL CONFIRMED IN THE CASE OF MAK DATA P. LTD., V.V. COMMISSIONER OF INCOME TAX-LL CIVIL APPEAL NO.9772, THE SUPREME COURT WHIL E CONSIDERING THE EXPLANATION TO SECTION 271(1), HELD THAT THE QUESTION WOULD BE WHETHER THE ASSESSEE HAD OFFERED AN EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOM E OR FURNISHING INACCURATE PARTICULARS OF INCOME AND THE EXPLANATION -: 21: - 21 TO SECTION 271(1) RAISES A PRESUMPTION OF CONCEALME NT, WHEN A DIFFERENCE IS NOTICED BY THE ASSESSING OFFICER BETW EEN THE REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIABLE EVIDENCE AND WHEN THE INITIAL ONUS PLACED BY THE EXPLANATION , HAS BEEN DISCHARGED BY THE ASSESSEE, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED THEIR INCOME AND NOT OTHERWISE. FACTUALLY, IN PRESENT CASE, IT WAS F OUND THAT THE ONUS CAST UPON THE ASSESSEE HAD BEEN DISCHARGED BY GIVING A COGENT AND RELIABLE EXPLANATION. THEREFORE, IF THE DEPARTMENT DID NOT AGREE WITH THE EXPLANATION, THEN THE ONUS WAS O N THE DEPARTMENT TO PROVE THAT THERE WAS CONCEALMENT OF P ARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF I NCOME. IN THE INSTANT CASE, SUCH ONUS WHICH SHIFTED ON THE DEPART MENT HAD NOT BEEN DISCHARGED. THE ORDER OF TRIBUNAL WAS CONF IRMED. MAK DATA P. LTD., V.V. COMMISSIONER OF INCOME TAX-II CIVIL APPEAL NO.9772 RELIED (PARA 11) HINDUSTAN COCA-COLA MARKETING COMPANY (P) LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX (2013) 38 CCH 0093 DEL TRIBE(2014) 160 TTJ 0382 (DEL) -: 22: - 22 ASSESSEE HAS SHOWN ITS BONA FIDE ON TWO COUNTS, FIR STLY WHEN CALCULATION MISTAKE WAS POINTED OUT BY AO. ASSESSEE CAME FORWARD TO VOLUNTARILY SURRENDER FOR TAXATION AND S ECONDLY, ASSESSEE DID NOT CARRY OUT ISSUE IN FURTHER LITIGAT ION? SC IN MAK DATA (P) LTD. VS C.I.T. S CASE HAS HELD THAT VOLUN TARY SURRENDER IS NOT A COVER TO PROVIDE IMMUNITY FROM PENALTY BUT IF EXPLANATION OF ASSESSEE IS FOUND TO BE CONSIDERABLE AND BONA FIDE, THEN PENALTY WILL NOT BE IMPOSABLE AS PER EXP LANATION 1 TO SECTION 271(L)?THERE WAS NO FINDING FROM AUTHORITIE S BELOW THAT IT WAS NOT A MISTAKE OF OMISSION, THEREFORE, AUTHOR ITIES BELOW WERE WRONG IN HOLDING THAT ASSESSEE MADE A WRONG CL AIM WHICH WAS DETECTED AND DISALLOWED BY AO ?SINCE EXPLANATIO N OFFERED BY ASSESSEE DURING PENALTY PROCEEDINGS THAT MISTAKE COMMITTED BY ASSESSEE WAS JUST AN ERROR OF OMISSION WHICH WAS IDENTIFIED BY ASSESSEE DURING PREPARATION OF DETAILS FOR ASSES SMENT AND TAX IMPACT OF ADDITION ON ACCOUNT OF CONVEYANCE EXP ENSES WAS QUITE INSIGNIFICANT IN VIEW OF SIZE OF ASSESSEE COM PANY AND THE AMOUNT OF FBT PAID BY THE ASSESSEE WAS ACCEPTABLE W HICH WAS WRONGLY REJECTED BY AUTHORITIES BELOW, PENALTY WAS NOT IMPOSABLE ON ASSESSEE? APPEAL FILED BY ASSESSEE ALL OWED -: 23: - 23 SAKET AGARWAL VS. INCOME TAX OFFICER (2014 ) 147 ITD 0686 (DELHI) ASSESSEE CONSENTED TO PAY TAX TO AVOID FURTHER LITI GATION AND TO BUY MENTAL PEACE AND INSTEAD OF OFFERING FURTHER EX PLANATION, ASSESSEE VOLUNTARILY SURRENDERED BEFORE TAX AUTHORI TIES AND PAID TAX IMPOSED BY AO IN REGARD TO IMPUGNED ADDITI ON. IN ABSENCE OF FURTHER APPEAL TO C1T (A) OR TO TRIBUNAL , QUANTUM ASSESSMENT ORDER HAD REACHED TO ITS FINALITY. BUT A SSESSMENT ORDER WAS NOT CONCLUSIVE EVIDENCE THAT AMOUNT ASSES SED WAS IN FACT INCOME OF ASSESSEE AND IT COULD NOT BE PRESUME D THAT THERE WAS CONSCIOUS CONCEALMENT OR ACT OF FURNISHING OF I NACCURATE PARTICULARS BY ASSESSEE. ACCORDINGLY, FOLLOWING JUD GEMENT OF HIGH COURT OF GUJARAT IN CASE OF NATIONAL TEXTILE VS. COMMISSIONER OF INCOME TAX WHEREIN IT WAS HELD THAT IN ORDER TO JUSTIFY LEVY OF PENALTY, THERE MUST BE SOME MATE RIAL OR CIRCUMSTANCES LEADING TO REASONABLE CONCLUSION THAT AMOUNT DOES NOT REPRESENT ASSESSEES INCOME AND CIRCUMSTAN CES MUST SHOW THAT THERE WAS CONSCIOUS CONCEALMENT OR ACT OF FURNISHING OF INACCURATE PARTICULARS, PENALTY WAS NOT IMPOSABL E IN PRESENT CASE. AO IMPOSED PENALTY ON ERRONEOUS ASSUMPTIONS W HICH -: 24: - 24 WAS WRONGLY CONFIRMED BY CIT(A). RELIED UPON NATIONAL TEXTILE VS COMMISSIONER OF INCOME TAX (2001) 249 ITR 125 (G UJ). AJIT KUMAR SURANA VS. ASSTT. COMMISSIONER OF INCOME TAX (2014) 39 CCH 0138 KOL TRIB. PENALTY U/S. 271(L)(C)CONCEALMENT OF INCOMEREVENU E DURING COURSE OF INVESTIGATION BASED ON INFORMATION FROM F INANCIAL INTELLIGENCE UNIT CFIU') CAME TO KNOW THAT HUGE SUM S OF MONEY WERE DEPOSITED AND WITHDRAWN FROM BANK ACCOUNTS WIT H M/S. A BANK IN NAME OF FIVE INDIVIDUALS I.E. V, P, B, S & G ON ISSUANCE OF SUMMONS U/S. 131 ONLY B&P APPEARED AND PLEADED IGNORANCE OF BANK ACCOUNTS, EXCEPT FOR THEIR REMEMB RANCE THAT SOME ACCOUNT OPENING FORMS WERE SIGNED BY THEM, AT BEHEST OF ASSESSEEASSESSEE IN LETTER DATED 19.04.2010 ADDRES SED TO DDIT (I) SPECIFICALLY STATED THAT CREDITS IN BANK A CCOUNTS REPRESENTED UNDISCLOSED INCOME DEPLOYED BY HIM AND OFFERED TO TAX ON DEPOSITSASSESSEE VOLUNTARILY OFFERED RS. X CRORES AS HIS UNDISCLOSED INCOME NOT FORMING PART OF REGULAR RETURNS, OUT OF WHICH RS. Y CRORES WAS STATED AS FOR A Y 2009-10 AND BALANCE RS.X CRORES FOR AY 2010-11SUBSEQUENTLY ON 23.02.2010, SEARCH U/S. 132 WAS CARRIED OUT IN ASSE SSEE'S -: 25: - 25 PREMISES IN WHICH CERTAIN PEN DRIVE, DOCUMENTS AND CASH WAS SEIZED NOTICES WERE ISSUED U/S. 153A TO ASSESSEE FROM AYS 2004-05 TO 2009-10IN RETURNS FILED ASSESSEE DISCLO SED DEPOSITS IN BANK ACCOUNTS OF FIVE PERSONS AS HIS IN COME- RETURN WAS SUBSEQUENTLY REVISED BY ASSESSEE FOR RECORDING CORRECT FIGURE OF DEPOSITS IN FIVE BANK ACCOUNTS, REWORKING CORRECT FIGURE OF DEPOSITS IN BANK ACCOUNT, BY INCLUDING BANK ACCO UNT OF R, OWNED UP BY ASSESSEE, AS HIS OWN FOR AYS 2009-10. H ELD, CONCEALMENT OF INCOME IS TO BE DETERMINED WITH REFE RENCE TO RETURN OF INCOME FILED IN RESPECT TO NOTICE U/S. 15 3A AND THERE IS COMPLETE DETACHMENT OF SUCH PROCEEDINGS FROM REGULA R ASSESSMENT PROCEEDINGSINCOME OFFERED BY ASSESSEE T HROUGH HIS DECLARATION DATED 28.01.2010, FILED ON 29.01.20 10. PRIOR TO SEARCH OPERATION CANNOT BE CONSIDERED AS SUM WHICH WAS CONCEALED OR SUM ON WHICH INACCURATE PARTICULARS WE RE FILED, IN RESPECT OF ASSESSMENTS COMPLETED U/S. 153A AND 143( 3), AFTER SEARCH - ONCE A CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS WAS NOT COMING OUT AS SUCH FROM RETURNS FILED VIS-A- VIS FINALLY ASSESSED INCOME, IT BECOMES NECESSARY T O SEE WHETHER ANY OF DEEMING PROVISIONS SET OUT IN EXPLAN ATIONS TO -: 26: - 26 SECTION 271(L)(C) WILL COME INTO PLAYSINCE THERE W AS NO SURVEY OR SEARCH AT ANY PLACE, PRIOR TO DISCLOSURE OF BANK ACCOUNTS IN NAME OF FIVE PERSONS AS HIS OWN BY THE ASSESSEE ON 28.01.2010 AND WELL BEFORE ANY NOTICE WAS ISSUED BY DEPARTMENT , ASSESSEE HAD COME UP WITH HIS DISCLOSURE AND FILED AN AFFIDAVIT BEFORE DDI(I)EXPLANATION (1) TO SECTION 271(L)(C) WAS NOT APPLICABLENO DOUBT ASSESSEE MIGHT HAVE BEEN CONSTR AINED TO OFFER AS HIS OWN, VARIOUS BANK ACCOUNTS HELD IN DIF FERENT NAMES, DUE TO VARIOUS DEVELOPMENTS WITH REGARD TO THE INVE STIGATION INTO SUCH BANK ACCOUNTSSTILL SUCH DECLARATION WAS GIVEN PRIOR TO SEARCHDEPOSITS IN SUCH BANK ACCOUNTS CANNOT BE CONSIDERED AS SOMETHING WHICH CAME OUT OF THE SEARC H EXPLANATION 5A OF SECTION 271(L)(C) WAS NOT APPLICA BLEPENALTY PROCEEDINGS DOES NOT SHOW HOW AO REACHED TO SATISFA CTION THERE WAS AN ABSENCE OF A DISCERNABLE ELEMENT OF CO NCEALMENT IN ADDITIONS MADE PENALTY IMPOSED U/S 271(L)(C) WAS NOT JUSTIFIED AND SET ASIDE ASSESSEE'S APPEAL ALLOWED. -: 27: - 27 6. THE LD. SENIOR D.R. RELIED U0PON THE ORDER OF I.T.A .T. INDORE BENCH IN THE CASE OF CIT VS. ALPA LABORATORI ES PASSED IN I.T.A.NO. L487/IND/2013. 7. SIMILARLY, THE LD. SENIOR D.R. ALSO RELIED UPON THE ORDER OF HON'BLE M.P.HIGH COURT IN THE CASE OF GARD EN SILK WEAVING FACTORY VS. CIT, (1994) 207 ITR 394 (MP). A LSO IN THE CASE OF CIT VS. R. C. GUPTA, 15 CTR 53 ( RAJ ). HE HAS ALSO RELIED UPON THE DECISION IN THE CASE OF K.P. MADHUS UDHANAN VS. CIT, (2001) 169 CTR ( S.C.) 489, IN THE CASE OF MAK DATA VS. CIT, 250 ITR 594 ( S. C.) AND IN THE CASE OF CI T VS. SMT. CHANDRAKANTA AND ANOTHER, (1994) 205 ITR 607 (MP). 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE POSITION OF LAW REGARDING LEVY OF PENALTY U/S 271(1)(C) HAS UNDERGONE A SUBSTANTIAL CHANGE AFTER INSERTION OF EXPLANATION I TO SECTION 271(1)(C) WITH EFFECT FROM 01.04.1976. EXPLANATION 1 TO SECTION 271(1)(C) RAISES A PRESUMP TION THAT AS AND WHEN ANY AMOUNT IS ADDED OR DISALLOWED IN CO MPUTING THE TOTAL INCOME, THE SAME SHALL BE DEEMED OR REPRE SENT THE INCOME IN RESPECT OF WHICH THE PARTICULARS HAVE BEE N -: 28: - 28 CONCEALED. FURTHER WITH EFFECT FROM 10.9.1986 AMEND MENT HAS BEEN MADE TO EXPLANATION 1(B) TO SECTION 271(1)(C), AFTER THIS AMENDMENT FURTHER ONUS HAS BEEN PLACED ON THE ASSES SEE TO PROVE THAT EXPLANATION FURNISHED BY HIM WAS BONA FI DE. THE POSITION NOW IS THAT UNLESS AND UNTIL THE ASSESSEE SUBSTANTIATES THE EXPLANATION AND PROVES THAT THE E XPLANATION WAS BONA FIDE, THE ADDITION MADE TO HIS INCOME SHAL L BE DEEMED TO REPRESENT THE CONCEALED INCOME. ON ANALYS IS OF PROVISIONS OF SECTION 271(1)(C), IT IS OBSERVED THA T EXPLANATION 1 TO SECTION 271(1)(C) PROVIDES THE SITUATION, WHER E NO EXPLANATION FOR THE FAILURE IS OFFERED BY THE ASSES SEE OR WHERE THE EXPLANATION THAT HAS BEEN OFFERED IS FOUND TO B E FALSE OR WHERE THE ASSESSEE IS NOT ABOUT TO SUBSTANTIATE THE EXPLANATION OFFERED BY HIM. IN ALL THE CASES, THE A MOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON SHALL BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH THE PARTICULARS HAVE BEEN CONCEALED. AS PER PROVISO TO THIS EXPLANATION, THE ONUS TO ESTABLISH THAT EXPLANATION OFFERED WAS BONA FIDE AND FACTS RELATING TO SAME AND MATERIAL T O THE -: 29: - 29 COMPUTATION OF HIS INCOME EVEN DISCLOSED BY HIM WIL L BE ON THE PERSONS CHARGED FOR CONCEALMENT. AS PER THE PROVISIONS 2 TO EXPLANATION 1(B) NOW TH E ENTIRE ONUS IS ON THE ASSESSEE TO NOT ONLY OFFER AN EXPLAN ATION BUT ALSO TO SUBSTANTIATE IT AND TO PROVE THAT THE PRESU MPTION WAS BONA FIDE. AT THE SAME TIME THE PRESUMPTION SO RAIS ED BY THE EXPLANATION 1 IS REBUTTABLE. THE EFFECT IS THAT UNL ESS AND UNTIL REBUTS THE PRESUMPTION, HE WOULD BE LIABLE TO PENAL TY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. IT IS NOW ES TABLISHED LAW THAT PRESUMPTION WOULD NOT STAND REBUTTED MERELY BY FURNISHING ANY GENERAL OR FANTASTIC OR FANCIFUL OR UNREASONABLE EXPLANATION BY THE ASSESSEE, THE EXPLANATION SHOULD BE BASED ON COGENT AND RELEVANT MATERIAL AND SHOULD BE ACCEP TED TO THE AUTHORITIES. 10. THE EXPRESSION FURNISHING THE INACCURATE PA RTICULARS OF INCOME HAS BEEN NOT DEFINED IN THE ACT. THE EXP RESSION INACCURATE REFERS TO NOT ONLY IN CONFORMITY WITH THE FACT OR TRUTH AND THAT IS AMENDMENT, WHICH IS RELEVANT IN T HE CONTEXT OF FURNISHING INACCURATE PARTICULARS. THE MEANING B Y -: 30: - 30 FURNISHING INACCURATE PARTICULARS OF INCOME IMPLIES FURNISHING OF DETAILS OR INFORMATION ABOUT THE INCOME WHICH AR E NOT IN CONFORMITY WITH THE FACT OR TRUTH. THE DETAILS OR I NFORMATION ABOUT INCOME DEALS WHICH ARE FACTUAL DETAIL OF INCO ME AND THIS CANNOT BE EXTENDED TO THE AREA, WHICH ARE SUBJECTIV E SUCH AS STATUS OF TAXABILITY OF INCOME, ADMISSIBILITY OF DE DUCTION AND INTERPRETATION OF LAW. FURNISHING OF INACCURATE INF ORMATION, THUS, RELATES TO FURNISHING THE FACTUAL INCORRECT D ETAILS AND INFORMATION ABOUT THE INCOME. THE ADMISSION OR REJE CTION OF A CLAIM SUBJECT TO EXERCISE AND WHETHER THE CLAIM IS ACCEPTED OR REJECTED HAS NOTHING TO DO WITH FURNISHING OF INACC URATE PARTICULARS OF INCOME. RAISING A LEGAL CLAIM, EVEN IF IT IS ULTIMATELY FOUND TO BE LEGALLY UNACCEPTABLE CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE FIND THAT, IN THIS CASE, THE ASSESSEE HAS MADE A BONA FIDE LEGAL CLAIM, WHICH WAS NOT ACCEPTED BY THE TAX AUTHORITY OR JUD ICIAL AUTHORITY. WE FIND THAT THE ASSESSEES CLAIM WAS NO T ACCEPTED BY THE AUTHORITY, IT DOES NOT MEAN THAT THE ASSESSE E HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THE HON 'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. -: 31: - 31 RAJASTHAN SPINNING AND WEAVING MILLS REPORTED IN (2009) 13 SCC 448, CONSIDERED THE EARLIER DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND ORS VS. DHARMENDRA TEXTILES PROCESSORS & ORS., REPORTED IN (2008) 306 ITR 277 (SC) AND HELD THAT IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SECTION 27 1(L)(C) OF THE ACT, CONDITION STATED THEREIN MUST EXIST. THE A BOVE SAID DECISION CAME UP FOR CONSIDERATION IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUC TS PVT., LTD., REPORTED IN (2010) 322 ITR 158 (SC). ON READING OF SECTION 271(1)(C) , THE HON'BLE SUPREME COURT POINTED OUT THAT IN ORDER TO BRING THE CASE UNDER S ECTION 271(1)(C), THERE HAS TO BE CONCEALMENT OF THE PARTI CULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION COU LD NOT BE INVOKED. THUS, THE HON'BLE SUPREME COURT POINTED OU T THAT A MERE MAKING OF CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WOULD NOT AMOUNT TO FURNISHING OF INACCURAT E -: 32: - 32 PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. T HE READING OF THE DECISION OF THE HON'BLE SUPREME COUR T REFERRED TO ABOVE, THUS POINTS OUT THAT FOR SUSTAIN ING PENALTY, THE BONA FIDE EXPLANATION OF THE ASSESSEE MUST BE LOOKED AT, SO THAT THE CONTUMACIOUS CONDUCT OF THE ASSESSEE FOR THE PURPOSE OF SUSTAINING THE PENALTY WOULD BE TAKEN AS CONDITION THAT IS THE MAIN REQUIREMENT UND ER SECTION 271(L)(C) OF THE ACT. REFERRING TO THE DECI SION IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS, (SUPRA), THE HON'BLE SUPREME COURT POINTED OUT THAT IN THE BACKG ROUND OF SECTION 271(L)(C) OF THE ACT, THERE IS NO NECESS ITY OF MENS REA BEING SHOWN BY THE REVENUE, HOWEVER REFERRING TO TH E EXPLANATION TO SECTION 271(L)(C) PENALTY BEING A MULTIPLE LIABILITY, THE BONA FIDE OF THE CONDUCT OF THE ASSE SSEE NECESSARILY ASSUMES SIGNIFICANT EVEN THOUGH WILLFUL NESS OF THE ASSESSEE MAY NOT BE A CRITERIA, THE CONDUCT IS TO BE CONSIDERED. THUS, A MERE FACT THAT THE ADDITION IN THIS CASE HAS BEEN SUSTAINED BY THIS COURT BY ITSELF WOULD NO T LEAD TO THE AUTOMATIC APPLICATION TO SECTION 271(L). -: 33: - 33 9. WE HAVE GONE THROUGH THE ASSESSMENT ORDER AND IN THE ASSESSMENT ORDER, THE AO DURING THE ASSESSMENT PROCEEDINGS TRIED TO VERIFY THE OPENING BALANCE OF THE ASSESSEE, WHICH HE CLAIMED IN HIS RETURN OF INCOME. DURING TH E ASSESSMENT PROCEEDINGS, THE AO HAS RECORDED A STATE MENT U/S131 OF THE INCOME-TAX ACT, 1961, AND STATEMENT W AS RECORDED, WHEREIN THE ASSESSEE HAS CLAIMED THAT SHE IS THE ONLY DAUGHTER OF HIS FATHER AND SHE WAS THE ONLY DA UGHTER IN HIS FAMILY. THEREFORE, SHE WAS GIVEN RS. 2 LAKHS. M OREOVER, HER MOTHER HAS GIVEN RS. 1 LAKH AND AFTER THE DEATH OF FATHER, HIS BROTHER HAD GIVEN RS. 50,000/-, THEREFORE, TOTALING TO RS. 3.50 LAKHS WAS GIVEN AND SHE WAS GIVING THIS AMOUNT TO V ARIOUS PERSONS AND FROM THAT AMOUNT THE CAPITAL WAS INCREA SED UP TO RS. 6,26,020/- AND SHE HAS ADMITTED THAT NO BOOKS O F ACCOUNT WERE ADMITTED AND SHE HAS ADMITTED THAT SHE HAS EAR NED THE INCOME OF RS. 7,17,000/- AND IT WAS DECLARED DURING THE ASSESSMENT PROCEEDINGS. WE FIND FROM THE EXPLANATIO N OF THE ASSESSEE THAT THE ASSESSEE HAS TRIED TO EXPLAIN THE FACTS, BUT THE ASSESSEE COULD NOT PROVE THIS AMOUNT BEFORE THE AO. WE FIND THAT SIMILAR ISSUE HAD COME UP BEFORE THE HON' BLE A.P. -: 34: - 34 HIGH COURT IN THE CASE OF CHENNUPATTI TYRES & RUBBE R PRODUCTS, WHEREIN IT WAS HELD AS UNDER :- HELD, BEFORE LEVYING PENALTY U/S 271(L)(C) REVENUE HAS TO DISCHARGE ITS BURDEN TO PROVE THAT THERE WAS SOME I NTENTION TO CONCEAL OR FURNISH INACCURATE PARTICULARS ON PART O F ASSESSEE CONCEALMENT CAN OCCUR, ONLY WHEN PERSON IS IN FULL KNOWLEDGE OF STATE OF AFFAIRS AND EVEN WHILE BEING UNDER OBLI GATION TO MAKE IT KNOWN TO OTHERS, AND IN PARTICULAR AUTHORIT IES UNDER THE ACT FAILS OR REFUSES TO DO SOIT IS THEN, AND ONLY THEN, THAT HE CAN BE SAID TO HAVE CONCEALED AND ONCE FACTUM OF CO NCEALMENT IS PROVED, HIS ATTEMPT TO VOLUNTARILY DISCLOSE IT D OES NOT SAVE HIM HOWEVER, AN INADVERTENT MISTAKE, OR A BONA FIDE BEL IEF AS TO CLASSIFICATION, OR CHARACTER OF AN AMOUNT, CANNO T PER SE PROVIDE A GROUND FOR LEVY OF PENALTYIN INSTANT CAS E ASSESSEE AGREED TO TREAT TWO SUNDRY CREDITORS AS INCOME AS A MEASURE OF PURCHASING PEACELACK OF ANY MALA FIDE INTENTION ON PART OF ASSESSEE CLEAR FROM THE FACT THAT THOSE TWO ITEMS W ERE CARRIED FORWARD FROM PREVIOUS YEAR AND WERE NOT NEW ADDITIO NS AT ALL THERE WAS NO INGREDIENTS OF CONCEALMENTTHUS PENALT Y -: 35: - 35 IMPOSED BY AO U/S 271 (I )(C) WAS RIGHTLY DELETED B Y CIT(A) REVENUES APPEAL DISMISSED. 10. WE FIND THAT THE HON'BLE ANDHRA PRADESH HIGH COURT HAS DISCUSSED THE DECISION OF MAK DATA MAK DATA PRI VATE LIMITED VS. CIT, 358 ITR 593, AND AFTER CONSIDERING THE DECISION OF MAK DATA, DELETED THE PENALTY. 11. WE ALSO GET SUPPORT FROM THE DECISION OF HON'BLE CHENNAI HIGH COURT IN THE CASE OF CIT VS. GEM GRANI TES, (2013) 86 CCH 0160 (CHENNAI), WHEREIN IT IS HELD AS UNDER :- HELD, THAT MERELY BECAUSE THE ASSESSMENT PROCEEDIN GS WERE CONFIRMED BY COURT HOLDING THE ADDITION VALID CANNOT AUTOMATICALLY LEAD TO CONCLUSION THAT THE PE NALTY PROCEEDINGS WERE JUSTIFIED. IN THE SAID JUDGMENT, T HE HON'BLE HIGH COURT OF MADRAS AFTER REFERRING THE DECISION OF APEX COURT IN THE CASES OF UNION OF IND IA VS DHARMENDRA TEXTILE PROCESSORS (2008) 306 ITR 277 (SC); UNION OF INDIA VS. RAJASTHAN SPINNING AND WEAVING MILLS (2009) 13 SCC 448; CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC); A ND -: 36: - 36 MAK DATA PVT LTD. VS. CIT (2013) 358 ITR 593 (SC) H ELD THAT WHEN THERE IS A DIFFERENCE IN THE REPORTED AND ASSESSED INCOME, THE BURDEN IS ON THE ASSESSEE TO SHOW THE DIFFERENCE AND WHEN THE INITIAL ONUS PLACE D BY THE EXPLANATION HAD BEEN DISCHARGED BY THE ASSESSEE , THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMO UNT IN QUESTION CONSTITUTED THE INCOME OF THE ASSESSEE AND NOT OTHERWISE. THE COURT FURTHER HELD THAT ONCE THE ONUS CAST UPON THE ASSESSEE HAS BEEN DISCHARGED BY GIVIN G A COGENT AND RELIABLE EXPLANATION, THE ONUS SHIFTS ON THE REVENUE AND IF THE DEPARTMENT DOES NOT DISCHARGE IT S ONUS, NO PENALTY CAN BE LEVIED. 12. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, DELETE THE PENALTY. -: 37: - 37 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 10 TH AUGUST, 2015. CPU* 17.10