The ACIT, Khandwa V. Shri Kamal Kumar Lath, Burhanpur

ITA 444/IND/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1485 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 03-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ABAPL6738R I.T.A.NO. 444/IND/2012 A.Y. : 2004 - 05 ACIT, SHRI KAMAL KUMAR LATH, KHANDWA VS PROP. M/S. KAMAL CORPN., BURHANPUR. APPELLANT RESPONDENT APPELLANT BY : SHRI R. A. VERMA, SR. DR RESPONDENT BY : S HRI S. S. DESHPANDE , C. A. DATE OF HEARING : 29 . 01 .201 3 DATE OF PRONOUNCEMENT : 12 . 0 2 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE CIT(A) DATED 23.5.2012 , FOR THE ASSE SSMENT YEAR 2004-05, IN THE MATTER OF LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. -: 2: - 2 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT, THE ADDITION WAS MADE ON ACCOUNT OF EXP ENDITURE ON MARRIAGE OF DAUGHTER. THE ASSESSING OFFICER ESTI MATED EXPENSES LIKELY TO BE INCURRED ON MARRIAGE. AS THE ADDITION SO MADE WAS UPHELD BY THE TRIBUNAL, THE ASSESSING OFFI CER IMPOSED PENALTY U/S 271(1)(C) OF THE ACT, WHICH WAS DELETED BY THE LD.CIT(A) AFTER HAVING FOLLOWING OBSERVATIONS : - 4.9 IN VIEW OF ABOVE DISCUSSION, THOUGH THE FINDINGS ARRIVED IN QUANTUM PROCEEDINGS LEADING TO ESTIMATE OF MARRIAGE EXPENSES CONSIDERING ATTENDANT FACTS AND CIRCUMSTANCES, BEING THE APPELLANT SOCIAL AND FINANCIAL STANDING WERE VERY MUCH JUSTIFIED BUT IN VIEW OF' OTHER FACTS EMERGING FROM DISCUSSION MADE ABOVE, THE APPELLANT CANNOT BE HELD TO BE GUILTY OF SUBMISSION OF INACCURATE PARTICULARS RELATING TO MARRIAGE EXPENSES SO ADDED IN THE HANDS OF APPELLANT ON BROAD ESTIMATE BASIS. THOUGH, IT IS ALSO TRUE THAT -: 3: - 3 THERE IS CONCURRENT FINDINGS OF FACT ON THE ISSUE IN QUANTUM PROCEEDINGS, BUT ON A CAREFUL 'ANALYSIS . OF PRACTICE AND TRADITIONS PREVAILING IN HINDU SOCIETY, IT WOULD NOT BE JUSTIFIED TO LEVY FURTHER PENALTY ON THE APPELLANT FOR SUCH ADDITION MADE ON ESTIMATE BASIS AS HIS UNDISCLOSED INCOME FOR A Y - 2004-05. 4.10 IN THE FACTS OF THE APPELLANTS CASE, IN VIEW OF DISCUSS.ION IN DETAIL ABOVE) PROVISIONS OF EXPLANATION 1 TO SECTION 271(1)(C) IN SO FAR AS THE CLAUSE A IS CONCERNED ARE NOT AT ALL ATTRACTED AS THE EXPLANATION OFFERED BY THE APPELLANT HAS NOT BEEN FOUND TO BE FALSE AT ANY STAGE AND THE AMOUNT HAS BEEN ADDED THAT TOO ON ESTIMATE BASIS AS THE APPELLANT FAILED TO SUBSTANTIATE THE CLAIM OF EXPENSES INCURRED ON MERIT. IN THESE FACTS THE APPELLANT'S CASE IS AMPTY SUPPORTED BY RATIO LAID DOWN BY HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF SHIVLAL TAK VS. CIT 251 ITR 373 -: 4: - 4 (RAJ). WHICH BECOMES CLEAR FROM THE HEAD NOTES OF THE CASE AS EXTRACTED HERE UNDER: 'PENALTY-CONCEALMENT OF INCOME-EXPLANATIN OF ASSESSEE NOT FALSE BUT NOT ACCEPTED BECAUSE ASSESSEE FAILED TO SUBTANTIATE IT- DIFFERENT FROM DELIBERATE FALSE EXPLANATION- CANNOT RAISE A PRESUMPTION ABOUT DELIBERATE CONCEALMENT AND LACK OF BONA FIDES- ADDITION TO RETURNED INCOME BY APPLYING FLAT GROSS PROFIT RATE AGREED TO BY ASSESSEE-ASSEESS NOT IN A POSITION TO VOUCH EACH AND EVERY DETAIL OF EXPENSE ENTERED IN BOOKS OF ACCOUNT-PENALTY NOT TO BE LEVIED IN SUCH CASES-INCOME- TAX ACT, 1961, :S. 271(1)(C), EXPLN.' 5. ACCORDINGLY, IT IS HELD THAT IT IS NOT A FIT CASE FOR IMP OSITION OF PENALTY U/S 271(1)(C). HENCE THE PENALTY LEVIED AT RS.5.49,450/ - IS HEREBY CANCELLED. -: 5: - 5 3. AGAINST THE ABOVE ORDER OF CIT(A), THE REVENUE IS I N FURTHER APPEAL BEFORE US. 4. SHRI R. A. VERMA, SR. DR, APPEARED ON BEHALF OF REVENUE AND CONTENDED THAT THE ASSESSEE HAS INCURRE D HEAVY EXPENDITURE ON MARRIAGE, WHICH HE COULD NOT EXPLAIN , THEREFORE, THE ADDITION WAS MADE BY THE ASSESSING O FFICER AND FINALLY IT WAS CONFIRMED BY THE TRIBUNAL. ONCE THE ADDITION IS CONFIRMED BY THE TRIBUNAL, IMPOSITION OF PENALTY BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX A CT, 1961, WAS JUSTIFIED. 5. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTATIV E RELIED ON THE FINDINGS RECORDED BY THE LD.CIT(A) AN D SUBMITTED THAT THE CIT(A) HAS DEALT IN GREAT DETAIL, THE FACT S AND CIRCUMSTANCES UNDER WHICH PENALTY WAS CANCELLED WIT H REFERENCE TO THE LAND MARK DECISION OF HON'BLE HIG H COURT AND HON'BLE SUPREME COURT. ACCORDINGLY, HE JUSTIFIED TH E ORDER OF CIT(A) IN CANCELLING THE PENALTY. -: 6: - 6 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT PENALTY WAS IMPOSED WITH RESPECT T O THE ESTIMATED ADDITION MADE ON ACCOUNT OF MARRIAGE OF D AUGHTER. EVEN THOUGH THE ADDITION SO MADE WAS CONFIRMED BY T HE TRIBUNAL, BUT DURING THE APPELLATE PROCEEDINGS THE ASSESSEE HAS ALL THE RIGHTS TO SUBSTANTIATE ITS CLAIM REGARD ING HIS BONA FIDE ACTION AND THAT CASE WAS NOT FIT FOR LEVY OF P ENALTY. ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO DISTINCT AND SEPARATE PROCEEDINGS UNDER THE PROVISI ONS OF THE INCOME-TAX ACT, 1961, AND THE FINDINGS ARRIVED AT Q UANTUM THOUGH RELEVANT BUT NOT CONCLUSIVE. THERE IS NO DI SPUTE TO THE FACT THAT THE ASSESSING OFFICER HAS ESTIMATED LIKEL Y EXPENDITURE ON MARRIAGE EVEN THOUGH THE ASSESSEE HAS PUT HIS BO NA FIDE EXPLANATION FOR NOT INCURRING VARIOUS EXPENDITURE P ARTICULARLY DUE TO SERIOUS ILLNESS OF GRAND FATHER RESULTING IN NOT HOLDING FUNCTION AT BURHANPUR. AFTER CONSIDERING THE ATTEND ANT FACTS AND CIRCUMSTANCES VIS--VIS ASSESSEES SOCIAL AND F INANCIAL STANDING, THE LD. CIT(A) RECORDED A FINDING TO THE EFFECT THAT THE ASSESSEE CANNOT BE HELD TO BE GUILTY OF SUBMITTING INACCURATE -: 7: - 7 PARTICULARS RELATING TO MARRIAGE EXPENDITURE SO ADD ED IN THE HANDS OF THE ASSESSEE ON BROAD ESTIMATE BASIS. A FI NDING WAS ALSO RECORDED BY THE LD.CIT(A) TO THE EFFECT THAT E XPLANATION OFFERED BY THE ASSESSEE WAS NOT FOUND TO BE FALSE A T ANY STAGE. THE DETAILED FINDING RECORDED BY THE LD.CIT(A) AT P ARA 4 IS AS PER MATERIAL ON RECORD. ACCORDINGLY, NO INTERFERENC E IS REQUIRED IN THE ORDER OF CIT(A) CANCELLING THE PENALTY. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 12 TH FEBRUARY, 2013. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12 TH FEBRUARY,2013. CPU* 2930