M/s New Tex Hosiery Factory, Ludhiana V. ITO, Ludhiana

ITA 426/CHANDI/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5346 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 30-05-2011
• Assessment Year: 1989-1990
• Appeal Filed On: 25-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: S K MUKHI
• Keywords: Business income; Retrospective amendment
• Section: 133(6); 145; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH SMC, CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.426 /CHD/2011 (ASSESSMENT YEAR : 1989-90) NEW TEX HOSIERY FACTORY, VS. THE INCOME-TAX OFFIC ER, BRHAMPURI WARD-1(5) LUDHIANA. LUDHIANA. PAN: ABWPP-1290N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K.MUKHI RESPONDENT BY : SHRI N.K.SAINI, DR O R D E R THE APPEAL OF THE ASSESSEE IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A), DATED 8.10.2010 RELATING TO ASSE SSMENT YEAR 1989-90 AGAINST THE ORDER PASSED U/S 271(1)(C) OF THE INCOM E-TAX ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL :- 1. THAT THE ORDER PASSED BY THE INCOME TAX OFFICER WARD- 1(5), LUDHIANA IMPOSING THE PENALTY OF RS.46537/- U /S 271(1)(C) OF THE INCOME TAX ACT 1961 AND THE SAME UPHOLD BY LEARNED COMMISSIONER OF INCOME TAX APPEALS-I, LUDHIANA WAS BARRED BY THE TIME AND HAS BEEN IMPOSED WITHOUT GIVING THE PROPER OPPORTUNITY TO APPELLANT. THEREFORE PENALTY OF RS.46537/- IS UNCA LLED FOR UNWARRANTED AND MAY BE DELETED. 2. THAT THE ORDER PASSED BY THE INCOME TAX OFFICER WARD- 1(5), LUDHIANA IMPOSING THE PENALTY OF RS.46537/- U /S 271(1)(C) OF THE INCOME TAX ACT 1961 AND THE SAME UPHOLD BY LEARNED COMMISSIONER OF INCOME TAX APPEALS-I, LUDHIANA WITHOUT ANY BASES AND MATERIAL IN THE FILE AND AGAINST THE FACT OF THE CASE. THEREFO RE PENALTY OF RS.46537/- IS UNCALLED FOR UNWARRANTED A ND MAY BE DELETED. 2 3. THE GRIEVANCE OF THE ASSESSEE VIDE GROUND NO.1 I S AGAINST THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE INCOME-T AX ACT AND THE ORDER PASSED BY THE CIT(A) HAVING BEEN PASSED WITHOUT GIV ING PROPER OPPORTUNITY TO THE ASSESSEE. 4. DURING THE COURSE OF HEARING THE LEARNED A.R. F OR THE ASSESSEE WAS CONFRONTED WITH THE NON-APPEARANCE BEFORE THE CIT(A ) ON VARIOUS DATES OF HEARING. THE LEARNED A.R. FOR THE ASSESSEE POI NTED OUT THAT AS THE FACTORY UNIT HAD CLOSED, THE NOTICES OF HEARING WER E NOT BEING SERVED UPON THE ASSESSEE. WHEN FURTHER ASKED ABOUT THE CU RRENT WHEREABOUTS OF THE PARTNER OF THE ASSESSEE COMPANY AND THE ADDRESS TO WHICH THE NOTICES MAY BE SENT, THE CONTENTION OF THE LEARNED A.R. WAS THAT THE NOTICES BE SENT TO THE OLD ADDRESS WHERE THE BROTHER OF THE PA RTNER WAS RUNNING HIS BUSINESS. 5. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE CIT(A) AND POINTED OUT THAT DESPITE SEVERAL OPP ORTUNITIES BEING ALLOWED TO THE ASSESSEE, THERE WAS DEFAULT ON THE P ART OF THE ASSESSEE IN ENTERING APPEARANCE BEFORE THE C IT(A) AND HENCE HIS ORDER IN THIS BEHALF SHOULD BE CONFIRMED. 6. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE RECORD. IN THE MEMO OF APPEAL FILED I.E FORM NO.36, THE ADDRESS OF THE ASSESSEE HAS BEEN SHOWN AS BRHAMPURI, LUDHIANA. IN COLUMN NO.10 SAME ADDRESS HAS BEEN SHOWN BY THE ASSESSEE. BEFORE THE CIT(A) ALS O THE ASSESSEE HAS DECLARED ITS ADDRESS AS BRAHMPURI, LUDHIANA. PERUS AL OF THE ORDER OF THE CIT(A) REVEALS THAT THE APPEAL WAS FIRST FIXED FOR HEARING ON 12.1.2006 WHEN NONE APPEARED ON BEHALF OF THE ASSESSEE NOR AN Y WRITTEN SUBMISSIONS WERE FILED. HOWEVER, ON 23.1.2006, COU NSEL FOR THE ASSESSEE ATTENDED AND THE APPEAL WAS PARTLY HEARD AND ADJOUR NED TO 13.2.2006 AND 3 THEN FINALLY TO 27.2.2006, WHEN THE PROCEEDINGS WE RE ATTENDED BY THE COUNSEL, APPEAL WAS HEARD. THE CIT(A) NOTES THAT NO APPELLATE ORDER WAS PASSED IN THE CASE. NO WRITTEN SUBMISSIONS HAD BEEN FILED IN THE CASE. THEREFORE, FRESH NOTICES WERE ISSUED FIXING THE APPEAL FOR 1.11.2006, 1.12.2006, 14.9.2009 AND 26.7.2010 THROU GH SPEED POST WHICH WERE RETURNED WITH THE POSTAL REMARKS FIRM CLOSED . ANOTHER NOTICE FOR FIXING THE HEARING FOR 20.8.2010 WAS SERVED THROUGH THE ASSESSING OFFICER ON SHRI MAHESH PURI S/O ONE OF THE PARTNERS IN THE FIRM. AS PER THE REPORT OF THE ASSESSING OFFICER, THE SON OF THE PARTNER REPORTED ON THE NOTICE THAT WHEREABOUTS OF THE FIRM WERE NOT KN OWN AND THAT HE WOULD ATTEND THE HEARING ON THE SAID DATE, ALONGWIT H HIS COUNSEL SHRI MAHESH PURI, SON OF THE PARTNER VIDE LETTER DATED 2 3.8.2010 ATTENDED AND SUBMITTED AS UNDER : THAT THE ABOVE SAID NOTICE FOR HEARING SERVED UPON TO APPEAR BEFORE YOUR HONOR ON 20.8.2010. THAT THE AB OVE SAID FIRM WAS FUNCTIONING IN THE SAME BUILDING IN W HICH I AM DOING BUSINESS AND THIS FIRM HAS BEEN CLOSED FIF TEEN YEAR BACK. FURTHER SUBMITTED THAT I AM HAVING NO I NTEREST IN THIS FIRM WHEREAS THE NOTICE WAS SERVED UPON MEF ORCE. SO I SUBMITTING HEREWITH ABOVE SAID NOTICE WITH THE APPLICATION. 7. THAT CIT(A) THEREAFTER ISSUED ANOTHER NOTICE FOR 20.9.2010 WHICH WAS SERVED THROUGH AFFIXTURE BY THE ASSESSING OFFIC ER, LUDHIANA. IN RESPONSE TO WHICH THE COUNSEL FOR THE ASSESSEE ATTE NDED AND REQUESTED FOR ADJOURNMENT. THE MATTER WAS ADJOURNED FOR 4.10 .2010 AND NONE APPEARED ON THE SAID DATE OF HEARING. THE CIT(A) T HEREAFTER DISMISSED THE APPEAL. 8. IN THE FACTS OF THE PRESENT CASE, AS POINTED OU T IN PARA HEREINABOVE, THE CIT(A) HAD REPEATEDLY ISSUED NOTIC E/S OF HEARING STARTING FROM JANUARY, 2006 TO SEPTEMBER, 2010. DE SPITE SEVERAL NOTICES 4 BEING ISSUED TO THE ASSESSEE, THERE WAS NO COMPLIAN CE ON MOST OF THE DATES OF HEARING. EVEN WHEN THE COUNSEL FOR THE A SSESSEE ATTENDED HE SOUGHT ADJOURNMENT AND DID NOT PRESENT THE CASE. O NE OF THE NOTICE/S WAS SERVED ON THE SON OF THE PARTNER AND IN REPLY H E SUBMITTED THAT THE FIRM WAS CLOSED FIFTEEN YEARS BACK AND CLAIMED THAT HE HAD NOTHING TO DO WITH THE FIRM. DURING THE COURSE OF HEARING OF TH E CAPTIONED APPEAL, THE LEARNED A.R. WAS CONFRONTED WITH THE ABOVE SAID FAC TS AND WAS ASKED TO FILE THE CURRENT ADDRESS OF THE EX-PARTNERS OF THE FIRM BY WAY OF AFFIDAVIT. IN REPLY THE LEARNED A.R. SUBMITTED AS UNDER : 1. THAT IT IS HUMBLY SUBMITTED THAT THERE WERE TWO PARTNERS OF THE APPELLANT FIRM I.E. (A) SH.SHIV KUMAR PURI, (SON) (B) SMT.MALIKA PURI (MOTHER) 2. THAT THE FIRM STANDS CLOSED SINCE 2000 AND THE PARTNERS HAVE LEFT FOR USA WHO SOMETIMES VISIT INDIA. 3. THAT EVEN THE PENALTY ORDER BY THE LD. CIT(A) WA S SERVED BY AFFIXTURE ON THE OLD ADDRESS OF THE FIRM WHEREIN NOW THE BROTHER IS RUNNING HIS BUSINESS AS M/S SATYAM TRADERS, BRHAMPURI, LUDHIANA. 4. THAT SINCE AT PRESENT NONE OF THE PARTNER IS IN INDIA IT IS NOT POSSIBLE TO FILE ANY AFFIDAVIT AS DIRECTE D BY THIS HON'BLE BENCH. 5. THAT NON-APPEARANCE BEFORE LD. CIT(A) ON CERTAIN FIXATIONS WAS BECAUSE OF THE FACT THAT FIRM STOOD CLOSED AND THE PARTNERS HAVE SHIFTED TO USA. 6. THAT AS REGARDS QUERY OF THIS HON'BLE BENCH REGARDING REASON FOR GIVING WRONG ADDRESS TO CIT(A) TO WHICH NOTICES COULD NOT BE SERVED AND SUPPLYING OF NEW AND PROPER ADDRESS WHERE FRESH NOTICE COULD BE SERVED, IT IS HUMBLY SUBMITTED THAT NEVER WRONG ADDRESS WAS GIVEN TO LD. CIT(A) BUT FOR THE FACT THAT FIRM WAS CLOSED AND THE OLD ADDRE SS CONTINUED WHERE THE BROTHER IS RUNNING HIS BUSINESS AS M/S SATYAM TRADERS, BRHAMPURI, LUDHIANA. 5 9. IN THE ABOVESAID FACTS AND CIRCUMSTANCES, IT IS ESTABLISHED THAT THE ASSESSEE HAD FAILED TO COOPERATE WITH THE AUTHORITI ES BELOW IN GIVING PROPER ADDRESS FOR COMMUNICATION AS THE EARLIER UNI T HAD CLOSED AND THE NOTICES SENT TO THE SAID ADDRESS WERE NOT BEING COM MUNICATED TO THE ASSESSEE. FURTHER THERE IS NO MERIT IN THE CLAIM O F THE ASSESSEE THAT THE NOTICES WERE BEING RECEIVED BY THE BROTHER OF THE E X-PARTNERS OF THE ASSESSEE FIRM. AS IS EVIDENT FROM THE ORDER OF THE CIT(A), MOST OF THE NOTICES REMAINED UN-COMPLIED WITH AND EVEN WHEN THE COUNSEL FOR THE ASSESSEE ATTENDED ON SOME DATES OF HEARING, ONLY AD JOURNMENT WAS SOUGHT. 10. PERUSAL OF THE ORDER LEVYING PENALTY U/S 271(1) (C) OF THE ACT REVEALS THAT EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE SOUGHT VARIOUS ADJOURNMENTS FOR PRODUCTION OF BOOKS OF ACCOUNT. HOWEVER, NO BOOKS OF ACCOUNT WERE PRODUCE D BEFORE THE ASSESSING OFFICER ON THE PLEA THAT THE BOOKS OF ACC OUNT HAD BEEN LOST WHILE GOING FROM COURT TO RESIDENCE. THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME OF THE AS SESSEE, WHICH WAS UPHELD BY THE CIT(A) AND TRIBUNAL. EVEN DURING THE PENALTY PROCEEDINGS, THE COUNSEL FOR THE ASSESSEE APPEARED ON ONE DATE AND SOUGHT ADJOURNMENT AND NO REPLY WAS FILED. HOWEVER , NONE APPEARED ON THE ADJOURNED DATE OF HEARING NOR ON THE LAST DATE OF HEARING. SAME WAS THE CONDUCT OF THE ASSESSEE IN APPELLATE PROCEEDING S BEFORE CIT(A), AGAINST WHICH THE PRESENT APPEAL IS FILED. IN THE ABOVE SAID FACTS AND CIRCUMSTANCES WHERE VARIOUS OPPORTUNITIES HAD BEEN GRANTED TO THE ASSESSEE BY WAY OF SERVICE OF NOTICE/S ON THE GIVEN ADDRESS OF THE ASSESSEE BY THE AUTHORITIES BELOW, I HOLD THAT REAS ONABLE AND PROPER OPPORTUNITY HAD BEEN ALLOWED BY THE AUTHORITIES BEL OW AND THERE IS NO MERIT IN THE GROUND OF APPEAL NO.1 RAISED BY THE AS SESSEE. 6 11. NOW COMING TO THE MERITS OF LEVY OF PENALTY U/ S 271(1) (C ) OF THE ACT, THE ASSESSING OFFICER HAS HELD THE ASSESSEE L IABLE FOR THE AFORESAID LEVY OF PENALTY U/S 271(1)( C) OF THE ACT. FROM T HE PERUSAL OF THE PENALTY ORDER IT IS NOTICED THAT DURING THE COURSE OF ASSES SMENT PROCEEDINGS VARIOUS ADJOURNMENTS WERE SOUGHT TO PRESENT THE BOOKS OF AC COUNT. ON 6.12.1989, FATHER OF THE PARTNER APPEARED ALONG WITH THE COUNS EL MR. DALJIT PURI AND STATED THAT THE BOOKS OF ACCOUNT HAD BEEN LOST ON 15.11.19 89. THE AO NOTED THAT ON PREVIOUS DATES OF HEARING I.E. 23.11.1989, THIS F ACT WAS NOT MADE KNOWN TO HIM. THE AO FURTHER NOTED AS UNDER:- 2. IN THE TRADING ACCOUNT, A GP OF RS. 56,565/- W AS SHOWN ON TOTAL SALES OF RS. 28,05,060/- AS AGAINST THE GP OF RS. 1,91,785/- ON SALES OF RS. 14,56,735/- GIVING GP R ATE OF 2%. THIS WAS AS AGAINST 13.16%. THE ASSESSEE WAS ASKED TO EXPLAIN REASONS FOR THIS STEEP FALL IN GP BUT HE WA S NOT ABLE TO EXPLAIN THE SAME INSPITE OF OPPORTUNITY GRANTED AS MENTIONED IN THE ASSESSMENT ORDER. 3. ACCORDINGLY SALES TAX RETURNS FOR THE RELEVANT A Y WERE OBTAINED FROM THE SALES TAX DEPARTMENT, ACCORDING T O WHICH SALES SHOWN WERE AT RS. 38,52,411/- (AS MENTIONED I N DETAIL IN THE BODY OF ASSESSMENT ORDER). AS AGAINST THIS TO TAL SALES OF RS. 28,05,060/- HAVE BEEN SHOWN IN THE TRADING ACCO UNT FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME FIL ED ON 28.8.89. THE ASSESSEE WAS ASKED TO EXPLAIN REASONS FOR DIFFERENCE IN THE SALES AS SHOWN IN THE TRADING ACC OUNT AND AS SHOWN IN THE SALES TAX DEPARTMENT. IT WAS ALSO POIN TED OUT TO THE ASSESSEE THAT KEEPING IN VIEW THE GP SHOWN ON V ARIOUS TYPES OF GOODS, ADDITION OF RS. 2,95,186/- IS PROPO SED TO BE MADE. IN THIS NOTICE IT WAS ALSO ASKED TO EXPLAIN A S TO FROM WHERE NAMES AND AMOUNTS OUTSTANDING IN THE ACCOUNTS OF DEBTORS; NAMELY FEE INDIA STORE AT RS. 4743.70 AND RS. 5000/- OF BHAGWAN DASS DEPARTMENTAL STORE WERE TAKEN WHEN BOOKS OF ACCOUNTS WERE LOST AS ALLEGED BY IT. ON 30.3.90 THE ACCOUNTANT WAS PRODUCED BUT HE ALSO FAILED TO EXPLA IN THE SAME. THE ASSESSEE ALSO FILED REPLY ON 30.3.90 STAT ING THEREIN THAT THE BOOKS OF ACCOUNT HAVE BEEN LOST AND MOREOV ER THE DIFFERENCE MAY BE DUE TO GOODS RETURN OR DUE TO CAN CELLATION OF THE SALES BILLS ALSO. AS REGARDS FALL IN GP IT WAS MENTIONED BY THE ASSESSEE THAT RATE OF 15% ON SALES OF HOSIER Y GOODS IS VERY EXCESSIVE AS ALSO RATE OF 12% ON YARN AND CLOT H. THE EXPLANATION OF THE ASSESSEE REGARDING DIFFERENCE DU E TO GOODS RETURN AND DUE TO CANCELLATION OF SALES BILLS WAS N OT ACCEPTED AS GOODS RETURN AT RS. 6800/- HAD DULY BEEN DEDUCTE D FROM THE TOTAL SALES SHOWN IN THE TRADING ACCOUNT FILED ALON G WITH THE RETURN. 7 4. ALSO AS PER COPY OF ACCOUNT OF M/S FREE INDIA S TORES, TINSUKHJA FOR THE AY 1990-91, THE ASSESSEE HAS SHOW N OPENING BALANCE OF RS. 4743.70 AS ON 1.4.89, WHEREAS COPY O F ACCOUNT OBTAINED FROM THE PARTY DIRECTLY U/S 133(6) OF THE INCOME-TAX ACT, 1961 SHOWS THAT THERE WAS NO SUCH BALANCE. 12. THE AO IN VIEW OF THE ABOVE SAID FACTS, WHERE T HERE WAS DIFFERENCE IN THE SALES SHOWN IN TRADING ACCOUNT FILED ALONGWITH RETURN OF INCOME AND THOSE SHOWN IN SALES TAX RETURN HELD THAT IN THE ABSENCE OF BOOKS OF ACCOUNT, SALES DECLARED IN TRADING ACCOUNT COULD NOT BE RELIED UPO N. FURTHER, THERE WAS FALL IN GP RATE AS COMPARED TO THE PRECEDING YEAR. THE AO HELD THAT IT WAS DIFFICULT TO ASCERTAIN THE TRUE PROFITS EARNED BY ASSESSEE AN D APPLYING THE PROVISIONS OF SECTION 145 OF THE ACT, ADDITION OF RS. 2,89,186/- WAS MADE AS DETAILED AT PAGE 2 OF THE PENALTY ORDER. THE SAID ADDITION WAS CONF IRMED BY CIT(A) VIDE ORDER DATED 14.8.1992 AND THE TRIBUNAL CONFIRMED THE ADDI TION IN ITA NO. 241/CHANDI/1993 VIDE ORDER DATED 7.11.2000. PENALT Y U/S 271(1)(C) OF THE ACT HAS BEEN LEVIED BY THE ASSESSING OFFICER ON THE BAL ANCE TAXABLE INCOME OF RS. 1,30,142/- (AFTER ADJUSTMENT OF RETURNED LOSS) AND NOT ON THE ADDITION OF RS. 2,89,186/-. 13. THE ASSESSEE HAS FAILED TO FILE THE ASSESSMENT ORDER FOR THE RELEVANT YEAR DESPITE DEFECT MEMO ISSUED BY THE REGISTRY OF THIS TRIBUNAL. THE APPEAL OF THE ASSESSEE IS NOT MAINTAINABLE ON THIS ACCOUNT ITSELF . THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SOUGHT ADJOURNMENT ON THIS ACCOUNT STATING THAT THE ASSESSMENT FILE HAD BEEN MISPLACED. AN OPPORTU NITY WAS ALLOWED TO THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE FOR FURN ISHING THE SAME, WHICH HE FAILED TO DO AND THE PRESENT APPEAL IS DEFECTIVE AN D HENCE DESERVES TO BE DISMISSED ON THIS GROUND ALONE AND HENCE IS DISMISS ED. 14. WITHOUT PREJUDICE TO THE AFORESAID, THE ASSESSE E HAS NO CASE ON MERITS ALSO. ACCORDING TO THE EXPLANATION 1 TO SECTION 27 1 (1)(C) OF THE ACT, THE AMOUNT ADDED / DISALLOWED IN COMPUTING THE TOTAL IN COME OF AN ASSESSEE IS 8 DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. AN ASSESSEE CAN STILL AVOID LEVY OF PEN ALTY PROVIDED HIS CONDUCT HAS BEEN BONAFIDE AND THAT HE HAD DISCLOSED ALL THE FACTS MATERIAL TO THE COMPUTATION OF TOTAL INCOME, BEFORE THE ASSESSING O FFICER. IN THE MATTER BEFORE ME, THE CONDUCT OF THE ASSESSEE HAS BEEN HIG HLY CONTUMACIOUS RIGHT FROM THE BEGINNING TO THE END. HE HAS NOT ONLY FAI LED TO PRODUCE THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER BUT ALSO FAILE D TO RESPOND TO THE NOTICES ISSUED BY THE ASSESSING OFFICER AND CIT(A). HE DID NOT EVEN CARE TO FURNISH THE CORRECT ADDRESS TO FACILITATE PROPER FOLLOW UP ACTION. HE HAS NOT DISCLOSED ANY OF THE FACTS MATERIAL TO THE COMPUTATION OF HIS INCOME. HE HAS NOT RECONCILED THE DIFFERENCE BETWEEN THE SALES DECALED BY THE ASSESSEE TO THE INCOME TAX DEPARTMENT VIS-A-VIS THE SALES DECLARED IN SALES TAX RETURNS IN SPITE OF THE FACT THAT IT IS THE AFORESAID DIFFEREN CE, WHICH HAS LED TO THE ADDITION TO THE RETURNED INCOME, AS ALSO TO THE LEVY OF PENA LTY. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY EXPLANATION I TO SE CTION 271 (1)(C) OF THE ACT. THE ASSESSING OFFICER HAS RIGHTLY IMPOSED THE IMPUG NED PENALTY. 15. THE SUBMISSIONS OF THE ASSESSEE THAT THE IMPUGN ED PENALTY IS NOT LEVIABLE AS IT HAS BEEN LEVIED ON THE BASIS OF ESTI MATION OF INCOME HAS NO SUBSTANCE. IT CAN NOT BE LAID DOWN AS A MATTER OF U NIVERSAL LAW THAT PENALTY CAN NEVER BE LEVIED IN CASES INVOLVING THE ESTIMATION O F INCOME. SECONDLY, THE IMPUGNED PENALTY IS LIABLE TO BE CONFIRMED IN TERMS OF EXPLANATION I TO SECTION 271 (1)(C) OF THE ACT AND THEREFORE, THE ISSUE OF ESTIMATION OF INCOME IS IRRELEVANT IN THE CONTEXT OF EXPLANATION I TO SECTI ON 271 (1)(C) OF THE ACT. 16. THE SUBMISSION OF THE ASSESSEE THAT THE IMPUGNE D LEVY OF PENALTY IS BARRED BY LIMITATION DOES NOT CARRY ANY FORCE FOR T HE REASON THAT THE AR FOR THE ASSESSEE HAS NOT ADDRESSED ON THE AFORESAID ISSUE A T THE TIME OF HEARING. HE HAS FAILED TO SUBSTANTIATE THE AFORESAID GROUND TAK EN BY HIM. 9 17. PERUSAL OF THE ORDER PASSED BY THE ASSESSING O FFICER LEVYING IMPUGNED PENALTY SHOWS THAT HE HAS LEVIED PENALTY AFTER ADJU STMENT OF LOSS AND NOT ON THE BASIS OF AMOUNT OF TAX SOUGHT TO BE EVADED. SECTIO N 271 (1)(C) OF THE ACT REQUIRES THE ASSESSING OFFICER TO LEVY PENALTY WHIC H SHALL NOT BE LESS THAN BUT SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUG HT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR FUR NISHING OF INACCURATE PARTICULARS OF INCOME. EXPLANATION 4 TO SECTION 2 71(1)(C) OF THE ACT DEFINES THE EXPRESSION, THE AMOUNT OF TAX SOUGHT TO THE EV ADED. SUBSTANTIAL AMENDMENTS HAVE BEEN CARRIED OUT IN EXPLANATION 4 T O SECTION 271 (1)(C) OF THE ACT WITH RETROSPECTIVE EFFECT FROM 1.4.2003 BY THE FINANCE ACT, 2007. SINCE THE AFORESAID CHANGES ARE APPLICABLE WITH RETROSPEC TIVE EFFECT I.E. W.E.F. 1.4.2004, THE ASSESSING OFFICER IS DIRECTED TO RECO MPUTE THE PENALTY IN CONFORMITY WITH LAW. THE VIEW THAT I HAVE TAKEN IN THE MATTER IS SUPPORTED NOT ONLY BY RETROSPECTIVE AMENDMENT TO EXPLANATION 4 TO SECTION 271 (1)(C) OF THE ACT BUT ALSO BY THE JUDGMENT OF THE HON'BLE SUPREME COURT IN CIT VS. ASSAM TRAVELS SHIPPING SERVICE [199 ITR 1 (SC)]. 18. THE APPEAL FILED BY THE ASSESSEE IS DISMISSED S UBJECT TO THE OBSERVATION THAT ASSESSING OFFICER SHALL RECOMPUTE THE PENALTY IN TERMS OF THE AFORESAID DIRECTIONS. THE APPEAL OF THE ASSESSEE IS DISMISSE D. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF JUNE, 2011. SD/- (SUSHMA CHOWLA) JUDICIAL MEMBER DATED : 30 TH JUNE, 2011 RATI COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 10