Shri Sanjay S.Shah, Ahmedabad V. The Dy.CIT.Circle-1, Ahmedabad

ITA 432/AHD/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6395 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 17-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y C SURTI
• Keywords: Unexplained investment; Rectification of order; Reasonable cause; Competent authority; TDS
• Section: 271(1)(c); 273B; 143(3); 154; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH SMC BEFORE SHRI D. K. TYAGI, JUDICIAL MEMBER I.T.A. NO. 432 / AHD/2011 (ASSESSMENT YEAR 2006-07) SHRI SANJAY S. SHAH, 7, ARUN SOCIETY, 1 ST FLOOR, MAHALAXMI CHAR RASTA, AHMEDABAD VS. DCIT ,CIRCLE 1, AHMEDABAD PAN/GIR NO. : AIGPS0083H (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI ASEEM THAKKAR, AR RESPONDENT BY: SHRI Y C SURTI, DR O R D E R THIS APPEAL BY THE ASSESSEE HAS BEEN PREFERRED AGA INST THE ORDER DATED 11.01.2011 OF CIT(A) VI, AHMEDABAD FOR THE AS SESSMENT YEAR 2006-07. THE ASSESSEE HAS TAKEN FOLLOWING GROUND : THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.64,619/- LEVIED BY THE A.O. U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS MANAGING DIRECTOR OF PISIL GLASS LTD. AND HAS SHOWN SALARY F ROM THE COMPANY AND ALSO INTEREST INCOME AND LONG TERM CAPITAL GAIN IN HIS RETURN OF INCOME FILED FOR THE YEAR UNDER APPEAL. THE TOTA L INCOME DECLARED WAS AT RS.2,50,040/-. THE ASSESSMENT U/S 143(3) WAS CO MPLETED AND THE I.T.A.NO423/AHD/2011. 2 INCOME WAS ASSESSED AT RS.4,63,212/-. THE ADDITION WAS MADE ON ACCOUNT OF INTEREST INCOME. 3. DURING THE ASSESSMENT PROCEEDINGS, IT WAS OBSERV ED BY THE A.O. THROUGH AIR INFORMATION THAT THE ASSESSEE HAD SHOWN INTEREST INCOME OF RS.2,39,114/- RECEIVED FROM UCO BANK, CITY BANK AND ICICI BANK LTD. ON BEING ENQUIRED, THE ASSESSEE COULD NOT EX PLAIN THE ISSUE AND AGREED ON THE PROPOSED ADDITION. THE A.O. FURTHER OBSERVED FORM THE BANK STATEMENT OF CITY BANK THAT THE ASSESSEE HAD A LSO EARNED INTEREST INCOME TO THE EXTENT OF RS.72,058/- BUT THE SAME WA S NOT REFLECTED IN ITS RETURN OF INCOME. THE ASSESSEE ACCEPTED HIS MISTAK E AND AGREED TO THE PROPOSED ADDITION. 4. PENALTY PROCEEDINGS WERE INITIATED AND A SHOW CA USE NOTICE U/.S 271(1)(C) OF THE INCOME TAX ACT, 1961 WAS ISSUED TO THE ASSESSEE. IN REPLY, ASSESSEE STATED AS UNDER: KINDLY REFER TO YOUR ABOVE MENTIONED NOTICE ISSUED TO OUR ABOVE NAMED CLIENTS CALLING UPON THEM TO SHOW CAUSE AS TO WHY PENALTY U/S 271(1)(C) OF THE ACT SHOULD NOT BE LEVIED AS OU R ABOVE NAMED CLIENTS HAVE CONCEALED THE PARTICULARS OF INCOME. IN THIS CONNECTION, WE ARE INSTRUCTED BY OUR CLIENTS TO SUB MIT AS UNDER:- OUR ABOVE NAMED CLIENTS HAD NOT SHOWN THE INTEREST INCOME RECEIVED FROM BANKS IN THE STATEMENT OF TOTAL INCOM E FOR THE ABOVE ASSESSMENT YEAR. THIS WAS SO SINCE THE TDS C ERTIFICATES WERE NOT RECEIVED FORM THE BANK IN TIME AND THEREFO RE, THE INCOME FOR THE SAME AND ALSO THE TDS AMOUNT WAS NOT CONSIDERED. THE SAME WAS TO BE CONSIDERED ONCE THE TDS CERTIFICATES WERE RECEIVED. THUS, THERE IS NO CONCE ALMENT OF INCOME AND ACCORDINGLY, NO PENALTY BE LEVIED. WE HAVE, THEREFORE, TO REQUEST YOU TO KINDLY DROP T HE PROCEEDINGS. 5. AFTER TAKING INTO CONSIDERATION THESE SUBMISSION S OF THE ASSESSEE, THE A.O. IMPOSED THE PENALTY OF RS.64,619/- @ 100% OF TAX SOUGHT TO BE EVADED U/S 271(1)(C) OF THE ACT BY OBSERVING AS UNDER: I.T.A.NO423/AHD/2011. 3 I HAVE CONSIDERED THE ARGUMENTS OF THE ASSESSEE AN D FACTS OF THE CASE AND I FIND NO FORCE IN THE CONTENTIONS OF THE ASSESSEE. FIRSTLY, THE ASSESSEE HAS FAILED TO OFFER INTEREST INCOME. THE ASSESSEE HAS BEEN AVAILING FACILITIES OF SKILLED PR OFESSIONALS; THEREFORE, SUCH INACCURATE PARTICULARS FILED BY THE ASSESSEE CANNOT BE IGNORED. FURTHER, BY CLAIMING INCORRECT INCOME, THE INCOME TO THAT EXTENT WAS SUPPRESSED. IN THIS REGARD, THE CON TENTION OF THE ASSESSEE THAT THERE WAS NO CONCEALMENT/FURNISHING O F INACCURATE PARTICULARS OF INCOME, IS ALSO NOT CORRECT. THE STA TEMENT OF THE ASSESSEE THAT NO TDS CERTIFICATES WERE RECEIVED FRO M BANKS IN TIME IS ALSO NOT FOUND CORRECT AS THE TWO TDS CERTI FICATES SUBMITTED BY THE ASSESSEE VIDE LETTER DTD.18/11/200 8 REVEAL THAT BOTH THE CERTIFICATES ARE DUPLICATE AND THE ORIGINA L CERTIFICATES HAD ALREADY BEEN ISSUED TO THE ASSESSEE. THE DUPLICATE TDS CERTIFICATE ISSUED BY ICICI BANK SHOWS THAT THE ORI GINAL CERTIFICATE NO.0344-05-06-4459067 DTD.30/04/2006 WA S ISSUED EARLIER TO THE ASSESSEE. THE DETAILS OF THESE TWO C ERTIFICATES ARE AS UNDER:- SL. NO. BANK AMOUNT TDS DATE OF ORIGINAL TDS CERTIFICATE 1 ICICI BANK 8137 830 30/04/06 2 UCO BANK 94403 9629 26/04/06 IT IS VERY CLEAR THAT THE ORIGINAL CERTIFICATES HAD ALREADY BEEN ISSUED TO THE ASSESSEE BEFORE FILING RETURN OF INCO ME. THEREFORE, CONTENTION OF THE ASSESSEE IS NOT CORRECT. FURTHER, THE ASSESSEE HAS FAILED TO OFFER ITS EXPLANATION FOR THE BALANCE INT EREST INCOME NOT SHOWN IN THE RETURN OF INCOME. IT IS CRYSTAL CLEAR THAT THE ASSESSEE HAS DELIBERATELY NOT OFFERED INTEREST INCOME FOR TA XATION. IN THE CASE OF CIT VS. VIDYAGAURI NATVERLAL, 238 ITR 91(G UJ), THE HON'BLE HIGH COURT HAS HELD THAT: 'THE WORD 'CONCEALMENT 'INHERENTLY CARRIES WITH IT THE ELEMENT OF MENS REA. THEREFORE, THE MERE FACT THAT SOME FIG URE OF SOME PARTICULARS HAVE BEEN DISCLOSED BY ITSELF, EVEN IF TAKES OUT THE CASE FROM THE PURVIEW OF NONDISCLOSURES, IT CANNOT BY ITSELF TAKE OUT THE CASE FROM THE PURVIEW OF FURNISHING INACCUR ATE PARTICULARS. IN ANY CASE, DISCLOSURE WHICH HAS BEEN MADE IN PART OF THE RETURN WHICH IS INCORRECT OF FALSE TO THE KN OWLEDGE OF THE I.T.A.NO423/AHD/2011. 4 ASSESSEE AND IF THAT FACT IS ESTABLISHED, SUCH DISC LOSURE CANNOT TAKE IT OUT FROM THE PURVIEW OF THE ACT OF CONCEALM ENT OF PARTICULARS FOR THE PURPOSE OF LEVY OF PENALTY.' THIS VIEW FINDS SUPPORT FROM THE FOLLOWING CASE LAW S : 1. KANTILALMANILAM 30ITR411(GUJ) 2. SULEMAN ABDUL 139 ITR 8(GUJ) 3. MANLABHAI BHANABHAI 163 ITR 189(GUJ) 4. SMT.VILASBEN HASMUKHLAL SHAH 192 ITR 214 5. ABDULGAFUR AHMED WAGMAR 199ITR 827(GUJ) RECENTLY, THE SUPREME COURT IN THE CASE OF UNION OF INDIA & ORS. VS. DHARAMENDRA TEXTILE PROCESSORS & ORS., 306 ITR 227 (2008), HAS HELD AS UNDER:- 'PENALTY UNDER S. 1 1AC OF CENTRAL EXCISE ACT MENS REA PROVISIONS OF S. 1 1 AC INSERTED BY FINANCE ACT, 19 96, WITH THE INTENTION OF IMPOSING MANDATORY PENALTY ON PERSONS WHO EVADED PAYMENT OF TAX CANNOT BE READ TO CONTAIN MEN S REA AS AN ESSENTIAL INGREDIENT AND THERE IS NO DISCRETION WIT H THE AUTHORITY COMPETENT TO IMPOSE PENALTY TO LEVY PENALTY BELOW T HE PRESCRIBED MINIMUM IF THE CONTENTION OF COUNSEL F OR THE ASSESSEE IS ACCEPTED THAT THE USE OF THE EXPRESSION 'ASSESSEE SHALL BE LIABLE' PROVES THE EXISTENCE OF DISCRETION , IT WOULD LEAD TO A VERY ABSURD RESULT COURT CANNOT READ ANYTHIN G INTO A STATUTORY PROVISION OR A STIPULATED CONDITION WHICH IS PLAIN AND UNAMBIGUOUS A CONSTRUCTION WHICH REQUIRES FOR ITS SUPPORT, ADDITION OR SUBSTITUTION OF WORDS OR WHICH RESULTS IN REJECTION OF WORDS AS MEANINGLESS HAS TO BE AVOIDED A CASUS OM ISSUS CANNOT BE SUPPLIED BY THE COURT EXCEPT IN THE CASE OF CLEAR NECESSITY AND WHEN REASON FOR IT IS FOUND IN THE FO UR COMERS OF THE STATUTE ITSELF AT THE SAME TIME A CASUS OMISS US SHOULD NOT BE READILY INFERRED AND FOR THAT PURPOSE ALL THE PA RTS OF A STATUTE OR SECTION MUST BE ' CONSTRUED TOGETHER AND EVERY C LAUSE OF A SECTION SHOULD BE CONSTRUED WITH REFERENCE TO THE C ONTEXT AND OTHER CLAUSES THEREOF SO THAT THE CONSTRUCTION TO B E PUT ON A PARTICULAR PROVISION MAKES A CONSISTENT ENACTMENT O F THE WHOLE STATUTEOBJECT BEHIND ENACTMENT OF S.271(L)(C) R/W EXPLANATIONS INDICATE THAT THE SAID SECTION HAS BEE N ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE I.T.A.NO423/AHD/2011. 5 PENALTY UNDER THAT PROVISION IS A, CIVIL LIABILITYWILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTR ACTING CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTION UNDER S.276C THAT THE LEVY OF PENALTY IS MANDATORY AND NO DISCRETION IS LEFT WITH THE COMPETENT AUTHORITY IS MADE CLEAR BY S. 11 AC INTRODUCED BY FINANCE (NO. 2) ACT, 1996 AND PA RA 136 OF UNION BUDGET OF 1996 AND THE NOTES ON CLAUSE S THEREOF IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENTS, MEREL Y THE DISCLOSURE DURING THE COURSE OF HEARING WILL NOT MA KE THE ASSESSEE FREE FROM THE PENAL PROVISIONS. IN VIEW OF THE ABOVE NARRATED FACTS AND IN THE CIRCUMSTANCES, I A SATISF IED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME THE EXTENT OF RS.2,11,172/. I, THEREFORE, LEVY A PENALTY OF R S,64,619/-@ 10Q OF TAX SOUGHT TO BE EVADED U/S 271 (1 )(C) OF T HE ACT. THE ORDER IS PASSED AFTER OBTAINING APPROVAL FROM T HE ADDL. C.I/T., RANGE-1, AHMEDABAD VIDE LETTER NO.ADDL .CIT/R.1/ PEN.APPROVAL/SSS/08-09 DATED.24/03/2009. 6. BEFORE LD CIT(A) ASSESSEE MADE THE FOLLOWING WRI TTEN STATEMENT: 5. THE APPELLANT SUBMITS THAT THE LD. AO WAS IN GR OSS ERROR IN IMPOSING THE IMPUGNED PENALTY. THERE IS NO DISPU TE OVER THE FACT THAT THE APPELLANT IS FOLLOWING THE CASH SYSTE M OF ACCOUNTING' IN RESPECT OF INCOME EARNED BY WAY OF INTEREST I.E. INTEREST INCOME IS RECOGNIZED AS AND WHEN THE SAME IS RECEIV ED. IN THE INSTANT CASE, THOUGH THE BANK MIGHT HAVE CREDITED T HE AMOUNT OF INTEREST THAT WAS ACCRUED TO THE APPELLANT, THE APP ELLANT WAS NOT AWARE OF SUCH CREDIT TO HIS ACCOUNT AT THE MATERIAL POINT OF TIME WHILE FILING THE RETURN OF INCOME. IT IS RELEVANT T O MENTION HERE THAT THE CERTIFICATE IN FORM NO. 16A STATED TO HAVE BEEN ISSUED BY THE UCO BANK ON 26.04.2006 IN RESPECT OF PAYMENT OF INTEREST OF RS.94,403/- WAS NOT RECEIVED BY THE APPELLANT TILL DATE OF FILING THE RETURN OF INCOME. SIMILARLY, THE CERTIFICATE OF TDS IN FORM 16A STATED TO HAVE BEEN ISSUED BY THE ICICI BANK FO R PAYMENT OF RS.91387- ON 30.04.2006 WAS ALSO NOT RECEIVED BY TH E ASSESSEE TILL THE DATE OF FILING THE RETURN OF INCOME. IT WA S FOR THIS REASON THAT THE ASSESSEE COULD NOT INCLUDE THE AMOUNT OF I NTEREST AS THE CERTIFICATE FOR SUCH DEDUCTION WAS NOT FURNISHED TO THE ASSESSEE TILL FILING THE RETURN OF INCOME ON 27.07.2006. IT WAS FOR THIS REASON THAT THE ASSESSEE DID NOT INCLUDE THESE INTE RESTS IN THE I.T.A.NO423/AHD/2011. 6 RETURN OF INCOME AND ALSO DID NOT CLAIM ANY CREDIT FOR THE AMOUNT OF TDS MADE BY THE BANK IN RESPECT OF SUCH INTEREST INCOME. THIS FACT IS CLEARLY PROVED AND ESTABLISHED BY THE VERY FACT THAT THE AO HIMSELF HAD PASSED AN ORDER U/S. 154 ON 6.2.2009 WH EREIN HE HAS CLEARLY MENTIONED THAT THE ASSESSEE HAS NOT CLAIMED CREDIT FOR THE TDS IN RESPECT OF THE AFORESAID AMOUNT FOR THE OBVI OUS REASON THAT THE TDS CERTIFICATES WERE NOT RECEIVED BY HIM AT THE TIME OF FILING THE RETURN OF INCOME. BY THE SAID ORDER U/S. 154 DATED 6.2.2009, THE AO HAS GIVEN FURTHER CREDIT FOR TDS O F RS.830/- AND RS.9629/- IN RESPECT OF THE TAX DEDUCTED BY ICI CI BANK AND UCO BANK FROM THE AMOUNT OF INTEREST CREDITED TO TH E ACCOUNT OF THE ASSESSEE. HAVING ACCEPTED THE FACT THAT THE ASS ESSEE WAS NOT AWARE OF THE FACT OF INTEREST CREDITED TO HIS ACCOU NT AND THAT HE HAS NOT RECEIVED THE TDS CERTIFICATE AS MENTIONED A BOVE THE LD AO IS NOT JUSTIFIED IN IMPOSING THE IMPUGNED PENALT Y WITH RESPECT TO THE ADDITION MADE BY THE AO ON ACCOUNT O F SUCH INTEREST. 6. IT IS RELEVANT TO MENTION HERE THAT THE PENALT Y IS NOT AUTOMATIC. JUST BECAUSE AN ADDITION HAS BEEN MADE T O THE RETURNED INCOME WHICH HAS BEEN ACCEPTED BY THE APPE LLANT DOES NOT IPSO FACTO CONSTITUTE THE DEFAULT OF CONCEALMEN T OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. EXPLAN ATION (1) BELOW SECTION 271(L)(C) IS ALSO NOT APPLICABLE TO T HE CASE OF THE APPELLANT BECAUSE IT IS NOT A CASE WHERE THE APPELL ANT DID NOT FURNISH ANY EXPLANATION WITH RESPECT TO THE ISSUE R AISED BY THE AO. THE APPELLANT HAS FURNISHED EXPLANATION BEFORE THE AO REGARDING THE CIRCUMSTANCES UNDER WHICH A PARTICULA R INCOME REMAINS TO BE SHOWN IN THE RETURN OF INCOME I.E. TH E APPELLANT HAS BEEN FOLLOWING CASH SYSTEM OF ACCOUNTING I.E. INTER EST ACTUALLY RECEIVED IS BEING RECOGNIZED AND THE INTEREST WHICH HAS ACCRUED AND WHICH HAS BEEN CREDITED BY THE BANK IN THE RECO RDS OF THE BANK WAS NOT KNOWN TO THE ASSESSEE AT THE TIME OF F ILING THE RETURN OF INCOME BECAUSE HE DID NOT GET THE CERTIFI CATE IN FORM 16A FROM THE BANK. THE EXPLANATION SO FURNISHED BY THE ASSESSEE HAS NOT BEEN FOUND TO BE FALSE BY THE AO. MOREOVER THE AO HIMSELF HAS RECTIFIED THE ASSESSMENT ORDER U/S. 143 (3) BY PASSING A RECTIFICATION ORDER U/S. 154 AND CREDIT FOR TAX D EDUCTED AT SOURCE WHICH WAS NOT ALLOWED IN THE ORIGINAL ASSESSMENT OR DER FOR WANT OF TDS CERTIFICATE WAS ALLOWED. I.T.A.NO423/AHD/2011. 7 UNDER THE CIRCUMSTANCES, IT IS SUBMITTED THAT THE A CTION OF THE AO IN IMPOSING THE PENALTY IS TOTALLY UNWARRANTED BY F ACTS AND UNJUSTIFIED IN LAW. THE CASE LAWS REFERRED TO BY TH E AO IN THE ASSESSMENT ORDER ARE NOT APPLICABLE TO THE APPELLAN T'S CASE BECAUSE THE FACTS IN THOSE CASES ARE QUITE DISTINCT AND DIFFERENT FROM THAT OF THE APPELLANT. MOREOVER THE RATIO OF THE SUPREME COURT JUDGMENT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS 30 6 ITR 227 REFERRED TO BY THE AO IS ALSO NOT APPLICABLE TO THE FACTS O THE PRESENT CASE BECAUSE THAT DECISION WAS IN RELATION TO A PENALTY IMPOSED U/S. 11 AC OF THE CENTRA! EXCISE ACT AND NO T U/S. 271(L)(C) OF THE IT ACT. THE AO HAS REFERRED TO THE FOLLOWING JUDICIAL PRONOUNCEMENTS WHICH DO NOT APPLY TO THE F ACTS OF THE APPELLANTS CASE. I) KANTILAL MANILAL 130 ITR 411 (GUJ.) IN THIS CASE THERE WAS MANIPULATION OF ACCOUNTS. TH ERE WAS A DIFFERENCE BETWEEN RETURNED INCOME AND ASSESSED INC OME. TWO EXPLANATIONS WERE SUBMITTED IN RESPECT THEREOF BOTH OF WHICH WERE UNTRUE. THE ADDITIONS WERE ALSO CONTESTED AN D WERE SUSTAINED BY HON. TRIBUNAL. THERE WAS NO FRESH EX PLANATION FURNISHED IN PENALTY PROCEEDINGS. AS A RESULT OF T HIS, THE CONCLUSION DRAWN WAS THAT THERE WAS MANIPULATION OF ACCOUNTS HAVING WHICH ALSO MEANT THAT THE POSSIBILITY OF INT ENTION TO DEFRAUD THE REVENUE COULD NOT BE RULED OUT. IN THE CASE OF THE APPELLANT NONE OF THE EXPLANATIONS HAVE BEEN FOUND TO BE FALSE AND NEITHER HAS THE ASSESSMENT BEEN CHALLENGED. II) SULTAN ABDUL 139 ITR 8 (GUJ.) IN THIS CASE THE APPELLANT HAD SHOWN THE PRIZE MONE Y RECEIVED IN THE COMPETITION AS CASUAL INCOME AND STATED THAT TH E SAME WAS NOT TAXABLE. IT WAS PROVED BY OVERWHELMING EVIDENCE S THAT THE STORY REGARDING WINNING ALL THE PRIZE WAS A HOAX AN D A DEVISE TO LEGITIMATIZE THE INTRODUCTION OF UNACCOUNTED MONEY UNDER THE SMOKE SCREEN OF THE STORY OF CROSS WORD PUZZLE COMP ETITION MONEY. IN THE CASE OF THE APPELLANT THERE WAS ONLY A BONAF IDE OMISSION TO INCLUDE INTEREST INCOME. THIS OMISSION WAS ON ACCOU NT OF NON RECEIPT OF TDS CERTIFICATES FROM THE BANKS. THERE W AS NO CLAIM I.T.A.NO423/AHD/2011. 8 OF TDS ALSO MADE. THE SOURCE OF BANK FDR WAS ALSO E XPLAINED AND HAS NOT BEEN TREATED AS UNEXPLAINED INVESTMENTS ETC. THEREFORE, THE RELIANCE PLACED ON THE ABOVE CASE IS NOT JUSTIFIABLE. III) MANLABHNI BHANNABHAI 163 ITR 189 (GUJ.) 'I'HE FACTS STATED IN THIS CASE ARE IDENTICAL TO TH E CASE OF SULEMAN ABDUL WHICH HAS ALREADY BEEN DISTINGUISHED BY THE A PPELLANT. IV) SMT. VILASBEN HASMUKHLAL SHAH 192 ITR 21 4 THE FACTS STATED IN THIS CASE ARE IDENTICAL TO THE CASE OF SULEMAN ABDUL WHICH HAS ALREADY BEEN DISTINGUISHED BY THE A PPELLANT. V) ABDULGAFUR AHMED WAGMER 199 ITR 827 (GUJ. ) THE FACTS STATED IN THIS CASE ARE IDENTICAL TO THE CASE OF SULEMAN ABDUL WHICH HAS ALREADY BEEN DISTINGUISHED BY THE A PPELLANT. 9. FURTHER THE SUPREME COURT ITSELF HAS REVIEWED THE JUDGMENT SUBSEQUENTLY IN THE CASE OF RAJASTHAN COTTON & WEAV ING MILLS LTD WHEREIN THE HON. SUPREME COURT HELD THAT RATIO IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS DOES NOT HAVE BLANKET APPLICATION, THE RATIO HAS TO BE APPLIED ON CASE TO CASE BASIS. 10. WITHOUT PREJUDICE TO THE ABOVE IT IS FURTHER SU BMITTED THAT EVEN ASSUMING FOR A MOMENT WITHOUT ADMITTING THAT H E APPELLANT HAS COMMITTED A DEFAULT U/S. 271(L)(C) THE SAME IS ATTRIBUTABLE TO REASONABLE CAUSE WITHIN THE MEANING OF SECTION 273B . SECTION 273B OF THE IT ACT PROVIDES THAT WHERE THE DEFAULT IS ATTRIBUTABLE TO REASONABLE CAUSE, NO PENALTY IS LEVIABLE. IN THE CASE OF THE APPELLANT, OMISSION TO RETURN THE CORRECT AMOUNT OF INTEREST INCOME WAS ON ACCOUNT OF THE FACT THAT APPELLANT HA S FOLLOWED CASH SYSTEM OF ACCOUNTING I.E. INTEREST ACTUALLY RE CEIVED IS RECOGNIZED THAT THE APPELLANT WAS NOT AWARE OF THE AMOUNT OF INTEREST ACCRUED TO HIM AND CREDITED TO HIS ACCOUNT BY THE RESPECTIVE BANKS BECAUSE HE WAS NOT COMMUNICATED BY THE BANK ABOUT SUCH CREDITS THAT EVEN THE TDS CERTIFICATE IN FORM NO. 16A IN RESPECT OF THOSE PARTICULAR INTEREST WAS NOT REC EIVED BY THE APPELLANT TILL THE DATE OF FURNISHING THE RETURN OF INCOME AND FOR THIS REASON HE COULD NOT CLAIM CREDIT FOR SUCH TDS IN THE RETURN OF INCOME. THE AO HAS ACCEPTED THESE FACTS BY PASSI NG AN ORDER U/S. 154 REFERRED TO ABOVE. THEREFORE THERE WAS JUS TIFIABLE REASON I.T.A.NO423/AHD/2011. 9 FOR THE ASSESSEE FOR NOT CONSIDERING THE INTEREST S O CREDITED IN THE BANK ACCOUNT IN THE RETURN OF INCOME FILED. IN VIEW OF SECTION 273B, NO PENALTY IS IMPOSABLE WHEN THERE IS SUFFICI ENT REASON FOR THE DEFAULT. CIT VS. MILCX CABLE INDUSTRIES (2003) 261ITR 675 (GUJ) _ IT WAS HELD THAT 'ALTHOUGH THE ASSESSES CONCEDED THE TOTALLING MISTAKES WHICH HAD RESULTED IN UNDERASSESSMENT ONLY AFTER HE HAD RECEIVED THE NOTICE OF THE AO POINTING OUT THE MISTAKES. TRIBUNAL HAVING COME TO A CONCLUSION THAT THE ASSES SEE HAD NO INTENTION OF CONCEALING PARTICULARS OF HIS INCOME O R MISGUIDING THE AO, IT WOULD NOT BE PROPER IT COME TO A DIFFERE NT CONCLUSION AND, THEREFORE, PENALTY UNDER S. 27L(L)(C) WAS N OT LEVIABLE.' DAHOD SAHAKARI KHARID VECHAN SANGH LTD. V CIT (2006 ) 282 ITR 321 (GUJ) IT WAS HELD THAT 'ASSESSEE, A CO-OPERATIVE SOCIETY, HAVING DIRECTLY CREDITED THE AMOUNI RECEIVED FROM THE INSURANCE COM PANY, TO GRATUITY FUND ACCOUNT INSTEAD OF P&L A/C AND NOT IN CLUDED THE SAME IN THE TOTAL INCOME IN THE RETURN DUE TO OVERS IGHT WITHOUT ANY MALA FIDE INTENTION OR' MENS REA, PENALTY UNDER S. 271(L)(C) WAS NOT LEVIABLE.' CIT VS. ELI LILLY & COMPANY (INDIA) (P) LTD. & ORS. (2009) 312 ITR 225 (SC) 'ASSESSEES WERE UNDER GENUINE AND BONA FIDE BELIEF THAT THERE WAS NO OBLIGATION TO DEDUCT TAX A T SOURCE FROM THE HOME SALARY PAID BY THE FOREIGN COMPANY/HEAD OF FICE; CONSEQUENTLY, PENALTY UNDER S. 27IDS NOT LEVIABLE I N ANY CASE. ' AT THIS STAGE, KIND ATTENTION IS INVITED TO THE DEC ISION OF THE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD VS . STATE OF ORISSA 83 ITR 26 (SC). IT WAS HELD THUS IN THE SAID CASE; 'AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT AS STATUTORY OBLIGATION IS THE RESULT OF A QUASI CRIMINAL PROCEE DING AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBL IGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR GUILTY ON CONDUCT, CONTUMACIOUS OR DISHONEST OR ACTED IN CONSCIOUS DIS REGARD TO HIS OBLIGATION. PENALTY WILL NOT BE IMPOSED MERELY BECA USE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCR ETION OF THE I.T.A.NO423/AHD/2011. 10 AUTHORITY TO BE EXERCISED JUDICIAL AND ON CONSIDERA TION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY I S PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICA L OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BR EACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LI ABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. THE RATIO OF THE JUDGMENT OF THE SUPREME COURT CITE D SUPRA HAS BEEN FOLLOWED BY THE HIGH COURTS AND TRIBUNALS AND EVEN THE SUPREME COURT IN THEIR RECENT JUDGMENTS IN THE CASE OF DILIP N SHROFF REPORTED IN 291 ITR 591 AND T. ASHOK PAI VS. CIT 292 ITR 11. THE APPELLANT THEREFORE PRAYS THAT IN VIEW OF THE RATIO LAID DOWN BY THE SUPREME COURT, THE IMPUGNED ORDER IMPOSING PENALTY OF RS.64,619/- U/S. 271(L)(C) OF THE I.T. A CT IS UNJUSTIFIED IN LAW AND ON FACTS OF THE CASE. THE PENALTY ORDER MAY PLEASE BE CANCELLED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND TH E VARIOUS JUDICIAL PRONOUNCEMENTS REFERRED TO ABOVE IT IS REQ UESTED THAT THE PENALTY LEVIED BY THE AO BE CANCELLED. 7. AFTER TAKING INTO CONSIDERATION THESE SUBMISSION S OF THE ASSESSEE, LD. CIT(A) CONFIRMED THE PENALTY BY O BSERVING AS UNDER: I HAVE CONSIDERED THE FACTS OF THE CASE, PENALTY O RDER AND APPELLANT'S SUBMISSION. IT IS NOT IN DISPUTE THAT A PPELLANT DID NOT DISCLOSE INTEREST INCOME ON FDRS, WHEN APPELLANT'S INCOME WAS COMPARED WITH AIR INFORMATION RECEIVED BY THE DEPAR TMENT, THE FACT OF NONDISCLOSURE OF INTEREST INCOME CAME TO LI GHT. THE REASON GIVEN FOR NONDISCLOSURE OF INTEREST INCOME BY THE A PPELLANT IS THAT HE DID NOT RECEIVE TDS CERTIFICATE AND ALSO INTERES T. INTEREST WAS CREDITED BUT HE WAS NOT AWARE OF THE SAME IN THE AB SENCE OF TDS CERTIFICATE RECEIVED BY IT. SINCE APPELLANT WAS HAV ING FOR, IT WAS OBVIOUS THAT INTEREST INCOME WILL ACCRUE ON THE SAM E. BY NOT DISCLOSING INTEREST INCOME ACCRUED ON FDRS, APPELLA NT HAS DEFINITELY CONCEALED THE PARTICULARS OF INCOME. SUC H CONCEALMENT I.T.A.NO423/AHD/2011. 11 CAME TO BE NOTICED ONLY AFTER AIR INFORMATION WAS C OMPARED. IF SUCH VERIFICATION WAS NOT DONE, THE INTEREST INCOME WOULD NOT HAVE BEEN TAXED. IN VIEW OF THIS THERE IS NO DOUBT THAT THERE WAS CONCEALMENT OF INCOME TO THE EXTENT OF INTEREST INC OME NOT OFFERED FOR TAX. THE APPELLANT'S CLAIM OF BONA FIDE MISTAKE IS NOT R ELEVANT SINCE THERE IS A CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME IN THE RETURN FILED. DEPARTME NT NEED NOT HAVE TO PROVE MENS REA IN SUCH ACT OF CONCEALMENT. THE DECISION RELIED UPON BY THE APPELLANT ARE NOT ON THE FACT OF THE CASE AND THEREFORE DO NOT HELP THE APPELLANT. IN THIS CASE, CONCEALMENT IS CLEARLY PROVED AND THEREFORE, THERE IS NO NEED TO C ONSIDER EXPLANATION 1 WHEREIN BONA FIDE OF THE EXPLANATION FURNISHED HAS TO BE CONSIDERED. AS PER THE DECISION OF APEX COURT IN THE CASE OF RELIANCE, THE CONCEALMENT IS WITH REFERENCE TO RETU RN OF INCOME AND IN THE CASE OF APPELLANT THERE IS CONCEALMENT A S PER RETURN OF INCOME. IN VIEW OF THESE FACTS, I AGREE WITH THE A. O. PENALTY BY THE A.O. IS THEREFORE, CONFIRMED. 8. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEF ORE ME. 9. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE REITERATED THE SAME SUBMISSIONS AS MADE BEFORE THE LD. CIT(A) WHIC H HAVE BEEN REPRODUCED IN PARA 6 ABOVE OF THIS ORDER. HE ALSO CHALLENGED THE ORDER OF LD. CIT(A) ON THE GROUND THAT CIT(A) HAS SIMPLY MENTIONED THAT CASE LAW RELIED BY THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE CASE AND WITHOUT POINTING OUT AS TO WHY THESE ARE NOT AP PLICABLE. HOWEVER WHEN THESE CASE LAWS WERE DISCUSSED DURING THE HEAR ING BEFORE ME, IT WAS FOUND THAT THEY ARE NOT APPLICABLE TO THE FACTS OF THIS CASE AS THE FACTS OF THOSE CASES ARE QUITE DIFFERENT FROM THE F ACTS OF THE INSTANT CASE. 10. LD. D.R. ON THE OTHER HAND VEHEMENTLY SUPPORTED THE ORDER PASSED BY LD. CIT(A). I.T.A.NO423/AHD/2011. 12 11. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORDS, I FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT THE INTERES T INCOME AMOUNTING TO RS.2,11,172/- WAS NOT SHOWN BY THE ASSESSEE IN HIS RETURN OF INCOME. HAD THE CASE WAS NOT TAKEN INTO SCRUTINY AND THE A. O. WAS NOT HAVING INFORMATION THROUGH AIR, THIS INCOME WOULD HAVE GON E UNTAXED. THEREFORE, THERE IS CLEAR CONCEALMENT OF INCOME TO THE EXTENT OF INTEREST INCOME NOT OFFERED FOR TAX ON THE PART OF THE ASSES SEE AND THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT WHICH READ AS UNDER , ARE ATTRACTED: SEC. 271(1)- IF THE [ASSESSING] OFFICER OR THE [] [COMMISSIONER (APPEALS)] [OR THE COMMISSIONER] IN T HE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THA T ANY PERSON- (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR [] FURNISHED INACCURATE PARTICULARS OF [SUCH INCOME, O R] 12. THE EXPLANATION GIVEN BY THE ASSESSEE THAT HE D ID NOT DISCLOSE THE INTEREST INCOME AS HE DID NOT RECEIVE TDS CERTIFICA TES HAS ALSO BEEN FOUND FALSE AS IS CLEAR FORM THE DUPLICATE TDS CERT IFICATES RECEIVED BY THE ASSESSEE THAT ORIGINALS WERE SENT WELL BEFORE T HE DATE OF FILING OF RETURN. THEREFORE, EXPLANATION (1) TO SECTION 271 (1)(C) WHICH READS AS UNDER, IS APPLICABLE TO THE FACTS OF THIS CASE: EXPLANATION (1): WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION NOR O FFERS AN EXPLANATION WHICH IS FOUND BY THE [ASSESSING] OFFIC ER OR THE [] [COMMISSIONER (APPEALS)] [OR THE COMMISSIONER] TO B E FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE [AND FAILS TO PROVE THAT SUCH EXPLANAT ION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MAT ERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM], I.T.A.NO423/AHD/2011. 13 THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FO R THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REP RESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED. 13. THE CONTENTION OF THE ASSESSEE THAT THE A.O. BY PASSING THE RECTIFICATION ORDER U/S 154 GIVING CREDIT TO THE AS SESSEE ON THE BASIS OF DUPLICATE TDS CERTIFICATE, HAS ACCEPTED THE CONTENT ION OF THE ASSESSEE THAT ORIGINAL CERTIFICATES WERE NOT RECEIVED BY HIM IS ALSO NOT TENABLE. IN MY CONSIDERED OPINION, THE FACT THAT THE ASSESSEE G OT CREDIT OF TDS U/S 154 PROCEEDINGS IN FACT GOES AGAINST THE ASSESSEE. WHEN THE ASSESSEE RECEIVED TDS IN RESPECT OF SOME FDRS, AND NOT IN RE SPECT OF OTHER FDRS AS CLAIMED BY HIM, HE SHOULD HAVE OBTAINED THE DUPLICATE CERTIFICATES AND SHOULD HAVE FILED THEM WITH THE RE TURN OF INCOME SHOWING TOTAL INTEREST RECEIVED BY HIM. INSTEAD, HE CHOSE NOT TO SHOW THE INTEREST INCOME TO THE EXTENT OF RS.2,11,172/-. WHEN THE A.O. ON THE BASIS OF AIR INFORMATION TAXED THIS AMOUNT, TO TAKE THE CREDIT OF TDS HE OBTAINED THE DUPLICATE CERTIFICATE. AS A MA TTER OF FACT THIS EXERCISE SHOULD HAVE BEEN DONE BY HIM BEFORE FILING THE RETURN OF INCOME. THIS CONDUCT OF THE ASSESSEE CREATES DOUBT ABOUT THE BONA FIDES OF THE ASSESSEE AND, THEREFORE, IT CANNOT BE SAID T HAT DEFAULT ON THE PART OF THE ASSESSEE IN NOT SHOWING INTEREST INCOME WAS ATTRIBUTABLE TO REASONABLE CAUSE. SINCE THE CONCEALMENT OF INCOME IS IN REFERENCE TO THE RETURN OF INCOME, THE FOLLOWING OBSERVATION OF THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. L TD. 322 ITR 158 (S.C.) ARE RELEVANT TO THE FACTS OF THIS CASE: A GLANCE AT THE PROVISIONS OF SECTION 271(12)(C) O F THE INCOME TAX ACT, 1961, 1961, SUGGESTS THAT IN ORDER TO BE C OVERED BY IT, I.T.A.NO423/AHD/2011. 14 THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISH ED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXP OSE THE ASSESSEE TO PENALTY, UNLESS HT CASE IS STRICTLY COVERED BY T HE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E AN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULA RS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRA CT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE , NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. 14. IN VIEW OF THE ABOVE PENALTY IMPOSED BY THE A.O. AN D SUSTAINED BY THE LD. CIT(A) IS HEREBY CONFIRMED. 15. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS DISMIS SED. 16. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2011. SD./- (D.K.TYAGI) JUDICIAL MEMBER AHMEDABAD; DATED :17 TH JUNE, 2011 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE I.T.A.NO423/AHD/2011. 15 1. DATE OF DICTATION 3/6/11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 6/6/11..OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 16/6/11 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 17/6/11 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 17/6/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 17/6/11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..