Santosh Kumar Basak, Siliguri V. I.T.O Wd - 2(3),Siliguri., Siliguri

ITA 586/KOL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3381 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 19-03-2013
• Court: TRIBUNAL
• Department Lawyers: ALOK NAG
• Assessee Lawyers: VARSHA JALAN
• Keywords: Gift
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KO LKATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.586/KOL/2013 ASSESSMENT YEAR: 2003-04 SANTOSH KUMAR BASAK VS. INCOME-TAX OFFICER, WD-2 (3), SILIGURI (PAN: ADEPB2460L) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 09.12.2015 DATE OF PRONOUNCEMENT: 20.01.2016 FOR THE APPELLANT: SMT. VARSHA JALAN, ADVOCATE FOR THE RESPONDENT: SHRI ALOK NAG, JCIT, SR. DR ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), SILIGURI VIDE APPEAL NO. 19/CIT(A)/SLG/2011-12 DATED 17.01.2013. ASSESS MENT WAS FRAMED BY ITO, WARD- 2(3), SILIGURI U/S. 254/143(3) OF THE INCOME-TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2003-04 VIDE HIS ORDER DA TED 22.12.2010. PENALTY UNDER DISPUTE WAS ALSO IMPOSED BY ITO, WARD-2(3), SILIGU RI U/S. 271(1)(C) OF THE ACT VIDE HIS ORDER DATED 30.06.2011. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE LEVY OF PENALTY BY AO U/S. 271(1)(C) OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT THE ORIGINAL ASSES SMENT WAS FRAMED BY THE AO U/S. 143(3) ON 31.01.2006, WHICH WAS SET ASIDE BY ITAT V IDE ITS ORDER BEING ITA NO. 1861/KOL/2008 DATED 20.03.2009 AND SET ASIDE BOTH T HE ISSUES I.E. ADDITION OF GROSS PROFIT AND OF BOGUS GIFTS. THE AO WHILE GIVING APP EAL EFFECT TO THE ORDER OF THE ITAT PASSED U/S. 254 R.W.S. 143(3) OF THE ACT AND AFTER REJECTING BOOKS OF ACCOUNTS REPEATED THE SAME ADDITION AS ASSESSED IN ORIGINAL ASSESSMEN T ASSESSING THE GROSS PROFIT OVER AND ABOVE WHAT HAS BEEN DECLARED BY THE ASSESSEE AT RS. 2,20,302/-. SIMILARLY, THE AO AFTER EXAMINING ALL THE DONORS NUMBERING INTO SIX VIZ. S MT. BULI BASAK, SHRI SURJA KANTA BASAK, SMT. RINKI BASAK, SRI RATAN SARKAR, SRI NAN I GOPAL MONDAL AND SRI SONA BHADRA HAS NOT BELIEVED THE CREDITWORTHINESS OF THE SE PARTIES AND ADDED THESE GIFTS AMOUNTING TO RS. 4 LACS AS UNDISCLOSED INCOME BEIN G INTRODUCED IN THE GUISE OF GIFTS U/S. 68 OF THE ACT. THIS ASSESSMENT WAS ACCEPTED B Y THE ASSESSEE AND NO FURTHER APPEAL 2 ITA NO.586/K/2013 SANTOSH KUMAR BASAK AY 2003-04 WAS PREFERRED. THE AO IN THE MEANTIME, STARTED PEN ALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AND LEVIED PENALTY BY OBSERVING AS UNDER: ON A PERUSAL OF THE CASE LAWS CITED BY THE ASSESSE E IT APPEARS THAT NONE OF THESE CASE LAWS HAVE ANY DIRECT RELATABLE REFERENCE TO THIS CA SE. HENCE NO COGNIZANCE OF THE SAME COULD BE TAKEN. REGARDING THE ASSESSEE'S CONTENTION 'THERE IS NO CONCEALMENT OF INCOME IN THE HAND OF THE DONEE AND HE HAS ALSO NOT FURNIS HED ANY INACCURATE PARTICULAR OF HIS INCOME, MAKING LIABLE HIMSELF TO BE PENALIZED U/S.2 71(1)(C)', IT IS STATED THAT AS THE ASSESSEE HAS NOT PREFERRED ANY FURTHER APPEAL AGAIN ST THE ORDER U/S.143(3) DT.22.12.2010, IT CAN BE WELL IMPLIED THAT THE ASS ESSEE HAS ACCEPTED THE ADDITIONS MADE IN THE SAID ORDER U/S.143(3) AND THEREBY HAS ALSO A CCEPTED THE PENAL PROCEEDINGS INITIATED U/S. 271(1)(C). THEREFORE HIS ABOVE CLAI M, BEING CONTRADICTORY IN ITSELF, IS REJECTED. COGNIZANCE IS ALSO TAKEN OF THE HON'BLE S UPREME COURT OF INDIA'S DECISION IN KALE KHAN HANIF VS CIT (1963) 50 ITR 1 (SC) AND GOV IDARAJALU MUDALIAR VS CIT (1958) 34 ITR 807 (SC) WHEREIN THE APEX COURT HAS H ELD THAT THE ONUS OF PROVING THE GENUINENESS OF THE GIFT IS ON THE ASSESSEE HIMSELF. HENCE IT IS RULED THAT MERE IDENTIFICATION OF THE DONORS DOES NOT EXONERATE THE ASSESSEE FROM THE FACT THAT THERE IS NO CONCEALMENT IN THE DONEE'S HAND. IN VIEW OF THE ABOVE, I AM OF THE OPINION THAT THIS IS FIT CASE FOR IMPOSITION OF PENALTY U/S. 271(1)(C) ON ACCOUNT OF THE ASSESSEE HAVING FA ILED TO DISCHARGE THE ONUS OF RECONCILING THE UNDISCLOSED GROSS PROFIT OF RS. 2, 20,302/- AND THE BOGUS GIFTS OF RS.4,00,000/-. I THEREFORE IMPOSE A PENALTY OF RS. L,86,090/- U/S. 271(L)(C) OF THE INCOME TAX ACT,1961 WHICH IS 100 % OF THE TAX SOUGHT TO HA VE AVOIDED ON THE AGGREGATE OF THE UNDISCLOSED GROSS PROFIT AND BOGUS GIFTS AMOUNTING TO RS.6,20,302/-. AGGRIEVED AGAINST LEVY OF PENALTY BY THE AO, ASSESS EE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO ON IDENTICAL RE ASONING. AGGRIEVED, NOW ASSESSEE IS IN SECOND APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT IN THE PRESENT CASE BEFORE US TH E AO HAS SIMPLY LEVIED THE PENALTY BECAUSE THE ASSESSEE HAS NOT APPEALED AGAINST THE Q UANTUM. HERE THE AO HAS TAKEN THE FINDINGS OF THE ASSESSMENT ORDER AS CONCLUSIVE FOR LEVY OF PENALTY. IN OUR OPINION, HE CANNOT DO SO BECAUSE HONBLE SUPREME COURT IN THE C ASE OF CIT VS. ANWAR ALI (1970) 76 ITR 696 (SC) HAS CONCLUDED THAT WHILE ASSESSMENT PROCEEDINGS MAY CONSTITUTE GOOD EVIDENCE IN PENALTY PROCEEDINGS BUT THEY ARE NOT CO NCLUSIVE. IT HAS BEEN HELD THAT THE STATUTORY AUTHORITY DEAL WITH THE PENALTY PROCEEDIN GS MUST BE SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME WHICH ATTRA CTS THE PROVISIONS OF SECTION 271(1) OF THE ACT. IT IS SETTLED POSITION OF LAW THAT THE ASSESSMENT AND PENALTY PROCEEDINGS ARE INDEPENDENT OF EACH OTHER AND THE IMPOSITION OF THE PENALTY DOES NOT AUTOMATICALLY FOLLOW AS A MATTER OF COURSE IF AN ADDITION HAS BEE N MADE ON THE QUANTUM SIDE AND WHICH HAS NOT BEEN APPEALED. IN THE PRESENT CASE A LSO THE AOS ENTIRE PREMISE FOR LEVY 3 ITA NO.586/K/2013 SANTOSH KUMAR BASAK AY 2003-04 OF PENALTY IS THAT THE ASSESSEE HAS NOT CHALLENGED THE QUANTUM ADDITION. ACCORDINGLY, WE DELETE THE PENALTY ALLOW THE APPEAL OF ASSESSEE. 5. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.01.2 016. SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20TH JANUARY, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT SHRI SANTOSH KUMAR BASAK, C/O METRO MOTORS, LALA LAJPATH ROY ROAD, ASHRAMPARA, SILIGURI-734001. 2 RESPONDENT ITO, WARD-2(3), SILIGURI. 3. THE CIT(A), SILIGURI 4. 5. CIT , SILIGURI DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .