Santosh Manikchand Raisoni, Pune V. Income-tax Officer,

ITA 617/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0374 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 01-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence; Corroborative evidences; Onus to prove; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 250; 201; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 617 /PN/20 1 4 / ASSESSMENT YEAR: 20 0 7 - 0 8 SANTOSH MANIKCHAND RAISONI, SANTOSH MANIKCHAND RAISONI, FLAT NO.2, GREEN LEAF APARTMENT, LULLANAGAR CHOWK, KONDHWA, PUNE 41 10 4 0 . / APPELLANT PAN: A ASPR4767R VS. THE INCOME TAX OFFICER , WARD - 2 ( 1 ), PUNE . / RESPONDENT / APPELLANT BY : NONE / RESPOND ENT BY : SHRI ANIL KUMAR CHAWARE / DATE OF HEARING : 2 7 . 1 0 .201 6 / DATE OF PRONOUNCEMENT: 25 . 1 1 .201 6 / ORDER PER SUSHMA CHOWLA, JM: T HIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT( A ) - II , PUNE , DATED 06 . 1 2 .201 3 RELATING TO ASSESSMENT YEAR 200 7 - 0 8 AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX AC T, 1961 (IN SHORT THE ACT) . ITA NO . 617 / PN /201 4 SHRI SANTOSH M. RAISONI 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY U / S 271(1)(C) OF RS.13,80,438/ - . 2] THE LEARNED CIT(A) ERRED IN LEVYING THE PENALTY IN RESPECT O F THE ADDITION U / S 68 OF RS .40 ,98,148/ - MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS FROM THREE PERSONS ON THE GROUND THAT THE ASSESSEE HAD NOT DISCLOSED ALL THE MATERIAL FACTS RELATING TO THE SAID CASH CREDITS AND THUS, THE ASSESSEE HAD CONCEALED THE PARTI CULARS OF HIS INCOME AND HENCE, THE LEVY OF PENALTY WAS JUSTIFIED. 3] THE LEARNED CIT(A) ERRED IN HOLDING THAT THAT THE EXPLANATION FURNISHED BY THE ASSESSEE WAS FOUND TO BE FALSE AND THEREFORE, THE EXPLANATION 1 TO SECTION 271(1)(C) WAS ATTRACTED IN THE CASE OF THE ASSESSEE AND HENCE, THE LEVY OF PENALTY WAS JUSTIFIED. 4] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE SAID AMOUNT OF RS .40 ,98,148/ - WAS ACTUALLY PAID BY THE THREE CREDITORS ON BEHALF OF THE ASSESSEE TOWARDS PURCHASE OF SCRAP FROM AUCT ION AND SUBSEQUENTLY, THE ASSESSEE HAD ALSO MADE BANK PAYMENTS TO THESE PERSONS AND THEREFORE, THERE WAS NO REASON TO LEVY PENALTY IN RESPECT OF THE ABOVE ADDITION. 5] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSEE HAD FILED SUPPORTING EVIDENCES TO SHOW THAT THE AMOUNTS WERE PAID BY THE ABOVE PERSONS ON BEHALF OF THE ASSESSEE AND THE EXPLANATION OF THE ASSESSEE WAS A PLAUSIBLE ONE WHICH WAS NOT FOUND TO BE FALSE AND HENCE, EXPLANATION 1 TO SECTION 271(1)(C) WAS NOT ATTRACTED IN THE CASE OF THE ASSESSEE AND THUS, THE LEVY OF PENALTY WAS NOT JUSTIFIED. 6] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT PENALTY PROCEEDINGS ARE DIFFERENT FROM ASST. PROCEEDINGS AND HENCE, MERELY BECAUSE THE CLAIM OF DIFFERENT FROM ASST. PROCEEDINGS AND HENCE, MERELY BECAUSE THE CLAIM OF THE ASSESSEE WAS NOT SUPPORTED BY CONCRE TE EVIDENCE, THAT WOULD NOT JUSTIFY THE LEVY OF PENALTY ON THE FACTS OF THE CASE. 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AT RS. 13,80,430/ - . 4. THE APPEAL OF ASSESSEE WAS FIXED ON SEVERAL D ATES AND THE SAME WAS ADJOURNED AT THE REQUEST OF THE ASSESSEE. HOWEVER, ON THE APPOINTED DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION WAS MOVED FOR ADJOURNMENT. HENCE, WE PROCEED TO DECIDE THE PRESENT APPEAL EX PARTE THE ASSESSEE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 2,69,819/ - . THE ASSESSEE HAD SHOWN CREDIT BALANCE IN THE NAMES OF T HREE PERSONS I.E. MR. AMJAD ALI KHAN OF RS. 21,80,000/ - , MR. RANJIT ITA NO . 617 / PN /201 4 SHRI SANTOSH M. RAISONI 3 SINGH RAJPAL OF RS. 12,34,713/ - AND MR. JAVED M. SUBEDAR OF RS. 11,78,148/ - . THE ASSESSEE DID NOT FILE ANY CONFIRMATION FROM THE SAID PARTIES OR PAN NUMBERS OF THE SAID PERSONS DURING THE CO URSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER THUS, MADE AN ADDITION OF INCOME AS ASSESSEE HAD NOT COMPLIED WITH PROVISIONS OF SECTION 68 OF THE ACT , EXCEPT FOR THE FILING OF LEDGER EXTRACT OF MR. RANJIT SINGH RAJPAL ALONG WITH RECEIPTS / VOUCHERS ISSUED BY MSRTC. THE ASSESSING OFFICER GAVE THE BENEFIT OF OPENING BALANCE IN THE ACCOUNT OF MR. RANJIT SINGH RAJPAL OF RS. 12,34,714/ - SINCE THE SAID AMOUNT WAS ALREADY ADDED IN ASSESSMENT YEAR 2006 - 07 AND MADE THE ADDITION OF RS. 7,40,000/ - . THE ASSESSI NG OFFICER MADE THE ADDITION OF RS. 21,80,000/ - AND RS. 12,34,71 3 / - ALONG WITH RS.7,40,000/ - , TOTALING RS. 40,98,148/ - UNDER SECTION 68 OF THE ACT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS MAKING CASH PAYMENTS TO MSRTC IN THE AUCTIONS HELD AT VARIOU S PLACES AND THE AMOUNTS WERE SHOWN IN THE NAMES OF SAID PERSONS. WHERE THE ASSESSEE HAD FAILED TO PROVE THE IDENTITY OF THE CREDITORS, GENUINENESS OF THE TRANSACTION AS WELL AS CREDITWORTHINESS OF SAID CREDITORS TO MAKE SUCH HUGE PAYMENTS ON BEHALF OF TH E ASSESSEE , THE ADDITION WAS MADE IN THE HANDS OF ASSESSEE UNDER SECTION 68 OF THE ACT, WHICH WAS UPHELD BY THE CIT(A). IT MAY BE POINTED OUT HEREIN ITSELF THAT THE ASSESSEE HAD FILED AN APPEAL BEFORE THE TRIBUNAL IN ITA NO.1242/PN/2011 , RELATING TO ASSES SMENT YEAR 2007 - 08 AND VIDE ORDER DATED 20.05.2013, THE TRIBUNAL NOTED THAT THE ASSESSEE HAD FAILED TO FURNISH ANY CONFIRMATION FROM THE CREDITORS TO PROVE ANY IDENTITY. THE ASSESSEE WAS IN THE BUSINESS OF SCRAP AND BIDDING AUCTIONS OF MSRTC. THE PAYMENT S WERE SHOWN IN THE NAMES OF DIFFERENT PERSONS BUT THE AUCTIONS WERE TAKEN BY THE ASSESSEE. THE ASSESSEE CLAIMED THAT THE SAID PAYMENTS WERE MADE BY THOSE IDENTIFIED PERSONS AND THE TRIBUNAL IN THIS REGARD HELD THAT THE BURDEN WAS UPON THE ASSESSEE TO PRO VE WHO WERE THE SAID PERSONS AND ALSO TO ESTABLISH THE GENUINENESS OF SAID TRANSACTIONS. THE ADDITION MADE IN THE HANDS OF ASSESSEE ITA NO . 617 / PN /201 4 SHRI SANTOSH M. RAISONI 4 WAS CONFIRMED UNDER SECTION 68 OF THE ACT. THE NEXT ADDITION MADE IN THE HANDS OF ASSESSEE WAS IN RESPECT OF DISALLOWANCE OF INTEREST RELATABLE TO INTEREST FREE ADVANCES WHICH ISSUE WAS SET ASIDE TO THE FILE OF CIT(A) FOR FRESH ADJUDICATION BY THE TRIBUNAL. 6. THE ASSESSING OFFICER WHILE PASSING THE ORDER LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE. IN REPLY, THE ASSESSEE CLAIMED THAT NO PENALTY IS LEVIABLE AS THE PAYMENTS MADE TO THE GOVERNMENT DEPARTMENT WERE SUPPORTED BY RECEIPTS AND THE PAYMENTS WERE SUBJECT TO TAX DEDUCTION AND VAT COLLECTION . THE ASSESSEE REITERATED TH AT THE PAYMENTS WERE MADE BY THE SAID PERSONS ON BEHALF OF THE ASSESSEE TO MSRTC, WHICH IN TURN, ARE SUPPORTED BY THE RECEIPT VOUCHERS ISSUED BY MSRTC IN THE NAMES OF SAID PERSONS. SINCE THE PERSONS COULD NOT BE LOCATED BUT AS THE NAMES OF PERSONS APPEARE D ON THE DELIVERY VOUCHERS ISSUED BY MSRTC, IT WAS CONCLUSIVE PIECE OF EVIDENCE REGARDING THE IDENTITY AND NO PENALTY SHOULD BE CONCLUSIVE PIECE OF EVIDENCE REGARDING THE IDENTITY AND NO PENALTY SHOULD BE LEVIED AND ALSO THE PLEA WAS RAISED AGAINST THE LEVY OF PENALTY ON THE DISALLOWANCE OF INTEREST ON LOANS. THE ASSESSING OFFICER HELD THAT IN THE ABSENCE OF ASSESSEE HAVING GIVEN ANY SPECIFIC EXPLANATION REGARDING THE GENUINENESS OF TRANSACTIONS AND WHERE THE ASSESSEE HAD FAILED TO PROVE THE IDENTITY AND CREDITWORTHINESS OF PERSONS, WHO HAD ADVANCED SUM OF RS. 40,98,148/ - , THE ASSES SEE WAS HELD TO HAVE CONCEALED THE PARTICULARS OF INCOME AND THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVI ED AT RS. 13,80,438/ - . 7. THE CIT(A) VIDE PARAS 4.2 TO 4.5 HELD AS UNDER: - 4.2 THE SUBMISSION MADE BY THE APPELLANT HAS BEEN DULY CONSIDER ED AND MATERIAL ON RECORD PERUSED. IT IS NOTICED THAT DURING THE ASSESSMENT PROCEEDINGS, THE APPELLANT FAILED TO FILE THE CONFIRMATORY LETTERS ALONG WITH PAN IN RESPECT OF THE AFORESAID CREDITS AND HENCE THE ASSESSING OFFICER TREATED THE ENTIRE CREDITS AS UNEXPLAINED U/S 68 . DURING THE APPELLATE PROCEEDINGS WITH RESPECT TO THE QUANTUM PROCEEDINGS BEFORE THE LD. CIT (APPEALS), THE APPELLANT'S REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE WAS CONSIDERED, HOWEVER, THE DOCUMENTS IN THE FORM OF LEDGER ACCOUNTS F ILED BY THE APPELLANT COULD NOT ESTABLISH THE IDENTITY OF THE PERSONS AND ITA NO . 617 / PN /201 4 SHRI SANTOSH M. RAISONI 5 EVEN THE PAN NU MB ERS PROVIDED WERE FOUND TO BE INVALID AFTER VERIFICATION. EVEN THE ADDRESSES PROVIDED BY THE APPELLANT WER E FOUND TO BE INCOMPLETE WHICH PREVENTED ANY FURTHER SCOPE OF ENQUIRY, THE APPELLANT THUS WAS NOT ABLE TO PROVE THE IDENTITY OF THE EDITORS, GENUINENESS OF THE TRA NSACTIONS AS WELL AS CREDITWORTHINESS OF THE SAID CREDITORS TO JUSTIFY SUCH HUGE PAYMENTS ON BEHALF OF THE APPELLANT. IN THE APPEAL FILED BY THE APPELL ANT BEFORE THE ITAT PUNE, THE TRIBUNAL WHILE CONFIRMING THE ADDITION MADE U/S 68 HELD THAT THE APPELLANT FAILED TO DISCHARGE THE BURDEN CAST ON HIM AND NOTHING HAS BEEN PLACED ON RECORD TO CONTROVERT THE FINDINGS OF THE CIT(A) . THUS THE APPELLANT HAS NOT B EEN ABLE TO PROVE THE GENUINENESS OF THE CREDIT AT ANY STAGE AND SECTION 68 EXPECT THE ASSESSEE TO PROVE NOT ONLY THE IDENTITY OF CREDITORS BUT ALSO TO PROVE THE NATURE AND SOURCE OF THE AMOUNTS. THE AFO RESAID ADDITION HAS BEEN MADE AFTER PROPERLY EXAMININ G THE FACT AND ALSO AFTER DUE VERIFICATION OF THE DETAILS FURNISHED BY THE APPELLANT. THE CONTENTION NOW BEING RAISED BY THE APPELLANT IS WITH RESPECT TO THE MERITS OF THE QUANTUM MATTER AND ISSUE INVOLVED WHICH HAS ALREADY BEEN CONSIDERED EARLIER AT ALL STAGES INCLUDING THE ITAT, WHICH ALSO UPHELD THE AFORESAID ADDITION AND THE ISSUE HAS REACHED A FINALITY AND THE APPELLANT CANNOT RAISE THE SAID ISSUES AGAIN DURING THE PENALTY PROCEEDINGS CONTESTING THE MERITS OF THE ADDITION. THE JURISDICTION UNDER PENAL TY PROCEEDINGS IS LIMITED TO THE ISSUE OF PENALTY AS HELD BY THE HIGH COURT OF ALLAHABAD I N THE CASE OF BHARAT RICE MILL VS CIT (2005) 278 ITR 599 (ALL) . THE FINDINGS OF THE HIGH COURT THAT VALIDITY OF THE ASSESSMENT CANNOT BE CANVASSED HAS TO BE UNDERSTO OD ONLY IN SENSE THAT THE ASSESSEE CANNOT ASK FOR CANCELLATION OF ASSESSMENT WHICH HAS BECOME FINAL IN THE PENALTY APPEAL. IN VIEW OF THE ABOVE FACTS THE CONTENTION RAISED BY THE APPELLANT I N THIS REGARD CANNOT BE CONSIDERED AND IS NOT TENABLE UNDER LAW. 4.2.1 IN THE CASE OF CIT VS GURBACHAN LAL (2001) 250 ITR 157 (DEL) IT WAS POINTED OUT THAT THE OBJECT OF THE PROVISION IS TO PLACE THE BURDEN ON THE ASSESSEE TO PROVE THAT THERE HAS BEEN NO CONCEALMENT. IT WAS RECOGNIZED THAT THIS IS ONLY A RULE OF EVI DENCE BASED UPON THE PRINCIPLE THAT IT IS THE ASSESSEE WHO KNOWS HIS AFFAIRS BEST. IT WILL NOT BE CORRECT TO ASSUME AFTER THE RULE THAT THE WHO KNOWS HIS AFFAIRS BEST. IT WILL NOT BE CORRECT TO ASSUME AFTER THE RULE THAT THE ONUS IS STRICTLY ON THE REVENUE. THE HIGH COURT POINTED OUT THAT EXPLANATION - I ITSELF IS SELF - CONTAINED AND THAT IT COMES INTO OPERATION WHERE THERE IS NO EXPLANATION AT ALL OR WHERE THE EXPLANATION OFFERED IS FOUND TO BE FALSE OR IT IS NOT SUBSTANTIATED AND AT THE SAME TIME NOT SHOWN TO BE BONAFIDE AFTER THE ASSESSEE HAS PLACED A LL THE FACTS RELATING TO THE ADDIT ION. IN OTHER WORDS, AN ASSESSEE WHO OFFERS AN EXPLANATION, WHICH IS NOT FOUND TO BE FALSE, CAN SAVE HIMSELF FROM PENALTY EVEN IF HE WAS NOT ABLE TO SUBSTANTIATE HIS CASE AS LONG AS THE EXPLANATION IS BONA FIDE AND AS LONG AS HE PLACES ALL RELEVANT FACT S AVAILABLE WITH HIM. THEREFORE, THE RULE OF EVIDENCE PLACING THE BURDEN OF PROOF ON THE TAXPAYER IN EXPLANATION - I TO SECTION 271 (1)(C) CANNOT BE LIGHTLY DISREGARDED. THE APPELLANT IN THE PRESENT CASE HAS GIVEN AN EXPLANATION WHICH HAS BEEN FOUND TO BE FALSE AND NOT BONA FIDE, AND THE ASSESSMENT ORDER ITSELF CONTAINS FACTS WHICH JUSTIFY AN REF ERENCE OF CONCEALMENT. WHERE EXPLANATION IN THE CONTEXT OF DISCREPANCIES AS PALPABLY IMPROBABLE PENALTY WAS FOUND ELIGIBLE IN LONDHU LA L RABHUBIR PRASAD VS CIT (2008) 298 ITR 37 (ALL). AN OMISSION TO DECLARE A RECEIPT WAS FOUND TO BE NOT BONA FIDE IN THE CASE OF SANDEEP KUMAR GARG & CO. VS ITO (2008) 298 ITR 106 (P & H), WHICH ALSO HELD THAT MENS REA IS APPARENT. THE RELIANCE PLACED BY THE APPELLANT ON THE JU DICIAL DECISIONS ARE SEEN TO BE ON A DIFFERENT SET OF FACTS WHICH IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AND HENCE THE SAME ARE DISTINGUISHABLE. IN FACT THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATHA COTTON & GINNI NG FACTORY, ITA NO. 2564 OF 2005 ORDER DATED 13.12.2012, THE KARNATAKA HIGH COURT HAS DEALT WITH VARIOUS PRINCIPLES GOVERNING PENALTY. IT HAS BEEN HELD THAT FOR THE APPLICABILITY OF SECTION 271(1)(C), CONDITIONS STIPULATED THEREIN MUST EXIST AND THE FAC TS AS BROUGHT OUT ABOVE CLEARLY SHOW THAT THE CONDITIONS U/S 271 (1 )(C) EXIST AND HENCE THE LEVY OF PENALTY IS JUSTIFIED. ITA NO . 617 / PN /201 4 SHRI SANTOSH M. RAISONI 6 4.2.2 THUS AS PER THE PROVISION OF EXPLANATION - 1, THE ONUS TO ESTABLISH THAT THE EXPLANATION OFFERED WAS BONA FIDE AND ALL FACTS R ELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS INCOME HAVE BEEN DISCLOSED BY HIM WILL BE ON THE PERSON CHARGED WITH CONCEALMENT. THE EXPLANATION OF THE ASSESSEE FOR THE PURPOSE OF AVOIDANCE OF PENALTY MUST BE AN ACCEPTABLE EXPLANATION. THE BURD EN IS ON THE ASSESSEE. IF HE FAILS TO DISCHARGE THAT BURDEN HENCE, THE PRESUMPTION THAT HE HAD CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF IS AVAILABLE TO BE DRAWN. IT WAS SO HELD IN CIT VS PRATHI HARDWARE STORES (1993) 203 ITR 641 (OR I). IN THE PRESENT CASE THE APPELLANT HAS FAILED TO FURNISH AN ACCEPTABLE EXPLANATION HENCE THE PRESUMPTION THAT HE HAS CONCEALED THE PARTICULARS OF INCOME GETS DRAWN. THE EXPLANATION OFFERED IS NOT BONA FIDE AND ALL THE FACTS & MATERIAL RELATING TO' THE C OMPUTATION OF HIS INCOME HAVE NOT BEEN DISCLOSED NOR SUBSTANTIATED. THE REASONING OF THE A.O. AND THE MATERIAL ON RECORD GOES ON TO ESTABLISH THE FACT THAT THE EXPLANATION FURNISHED BY THE APPELLANT HAS NOT BEEN SUBSTANTIATED. THE CLAIM MADE BY THE APPELLA NT WAS NOT BONA FIDE RATHER IT WAS WITH MALAFIDE INTENT AND WAS DELIBERATE & FALSE. IT IS A C ASE OF CONSCIOUS CONCEALMENT OF THE PARTICULARS OF INCOME. IN CIT VS KIS HORE KUMAR SHAMJI (2000) 244 ITR 702 (KER), WHERE NO EXPLANATION WAS OFFERED BY ASSESSEE O R EXPLANATION OFFERED BY THE ASSESSEE WAS FOUND TO BE NOT PLAUSIBLE / OR ACCEPTABLE, PENALTY U/S 271(1)(C) COULD BE LEVIED AND AS SUCH BURDEN OF PROOF WAS NOT DISCHARGED BY ASSESSEE, THEREFORE, DELETION OF PENALTY BY THE TRIBUNAL WAS HELD TO BE NOT PROPER. I N THE CASE OF RAJKUMAR CHAURASIA (2007) 288 ITR 329 (ALL), THE ASSESSEE HAD NOT GIVEN ANY FRESH EXPLANATION EXCEPT WHAT WAS STATED BY HIM IN THE QUANTUM PROCEEDINGS AND THE EXPLANATION HAD BEEN PROVED TO BE FALSE. THE IMPOSITION OF PENALTY WAS HELD TO B E VALID. IN THE CASE OF CIT VS MAK DATA LTD. (2013) 352 ITR 1 (DEL), IT WAS HELD THAT IN THE ABSENCE OF ANY EXPLANATION REGARDING THE RECEIPT OF MONEY WHICH WAS IN THE EXCLUSIVE KNOWLEDGE OF THE ASSESSEE AN ADVERSE INFERENCE IS SOUGHT TO BE DRAWN AGAINST THE ASSESSEE AS AMOUNTING TO CONCEALMENT OF INCOME. 4.2.3 IN ORDER TO LEVY PENALTY U/S 271(1)(C) THE ASSESSING OFFICER HAS TO PROVE THAT THE CASE IS DIRECTLY COVERED BY THE SAID SECTION THEREBY IT MEANS THAT THE THAT THE CASE IS DIRECTLY COVERED BY THE SAID SECTION THEREBY IT MEANS THAT THE ASSESSING OFFICER HAS TO PROVE THAT THERE IS CONCEALMENT OF INCOME OR THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. IF THE CASE IS NOT COVERED DIRECTLY BY THE SECTION THE DEEMING FICTION IN EXPLANATION 1 TO SEC 271 (1)(C) SHALL COME INTO PLAY. THE AFORESAID EXPLANATION 2 IS AP PLICABLE TO THE CONCEALMENT OF INCOME AS WELL AS THE FURNISHING OF INACCURATE PARTICULARS. THE IMPOSITION OF PENALTY IS NOT AUTOMATIC. PENALTY CAN BE LEVIED ONLY IN THE EVENT THE FACTORS ENUMERATED IN CLAUSE (A) AND ( B ) OF EXPLANATION 1 ARE SATISFIED AND A FINDING IN THIS BEHALF IS ARRIVED AT BY THE ASSESSING OFFICER AND THE LEGAL FICTION CREATED THERE UNDER WOULD BE ATTRACTED. THE FACTS OF THE PRESENT CASE AS BROUGHT OUT ON RECORD LEAD TO THE CONCLUSION THAT THE PENALTY U/S 271(1)(C) IS ATTRACTED. IN THE P RESENT CASE, THE APPELLANT HAS NOT DISCLOSED ALL THE MATERIAL FACTS RELEVANT FOR ITS ASSESSMENT. THERE IS MATERIAL TO SUGGEST THAT THE APPELLANT HAS NOT DISCLOSED THE RELEVANT PARTICULARS OR FACTS BEFORE THE AUTHORITIES AND HAS NOT ACTED BONA FIDE. IN THES E FACTS OF THE CASE, PENALTY CAN BE LEVIED UNDER SECTION 271 (1)(C) OF THE I.T. ACT. THEREFORE, THE APPLICATION OF EXPLANATION 1 TO SECTION 271(1)(C) CAN COME INTO OPERATION AS THE TWO CONDITIONS AS REQUIRED TO BE SATISFIED BEFORE APPLYING THE EXPLANATION GETS SATISFIED VIZ. A ) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER TO BE FALSE OR B ) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONAFIDE . IN THE INSTANT CASE, THE APPELLANT HAS OFFERED AN EXPLANATION IN RESPECT OF THE CLAIM AND THE CLAIM MADE IS NOT BONA FIDE. THERE IS MATERIAL ON THE RECORD TO SUGGEST THAT THE EXPLANATION OFFERED BY THE APPELLANT IS FALSE. LIKEWISE, THERE IS INDICATION AS WELL AS MATERIAL ON THE RECORD THAT THE EXPLANATION OFFERED BY THE APPELLANT IS ITA NO . 617 / PN /201 4 SHRI SANTOSH M. RAISONI 7 NOT BONA FIDE. THE CONDITIONS STATED U/S 271 (1)(C) EXIST IN THE CASE ON HAND AND HENCE THE LEVIABILITY OF PENALTY U/S 271(1)(C) IS CLEARLY ATTRACTED. IN THE CASE OF AHLUWALIA CONTRACTS (I) LTD. VS JCIT (2007) 213 CTR 157 (DEL), IT WAS HELD THAT SINCE THE ASSESSEE HAD FAILED TO EXPLAIN CASH RECEIPTS WHICH WERE NOT FOUND RECORDED IN HIS BOOKS OF ACCOUNT, PENALTY U/S 271(1)(C) WAS RIGHTLY LEVIED. 4.2.4 IN THE CASE O F DCIT VS SMT. K R KALARNATHI (2006) 99 IT D 359 (CHENNAI) THE ASSESSEE SURRENDERED THE AMOUNT OF CREDIT FOR ASSESSMENT WHEN QUESTIONED ABOUT ITS SOURCE. THE IMPOSITION OF PENALTY WAS UPHELD. IT WAS HELD IN OM PRAKASH GUPTA VS ITO (2002) 81 IT D 55 (CHD) THA T MATERIAL GATHERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS QUITE RELEVANT FOR DECIDING THE ISSUE OF PENALTY. WHERE ASSESSEE FAILED TO LEAD ANY EVIDENCE ABOUT SOURCE AND GENUINENESS OF CREDITS, IMPOSITION OF PENALTY WAS JUSTIFIED. THE ITAT DELHI IN THE CASE OF D INESH KUMAR VS CIT (2002) 254 ITR 240 (DEL) UPHELD PENALTY LEVIED U/S 271 (1)(C) FOR CERTAIN CASH CREDIT HOLDING THE EXPLANATION OF ASSESSEE ABOUT SOURCE OF CASH CREDIT BEING NOT ACCEPTABLE. IN FACT THE APPELLANT HAS NOT OFFERED ANY ACCEPTABLE EXPLANATION FOR THE AFORESAID AMOUNTS AND THE EXPLANATION OFFERED WAS FOUND TO BE FALSE. WHERE NO EXPLANATION WHATSOEVER IS FURNISHED FOR CASH CREDITS IN THE BOOKS OF THE ASSESSEE, PENALTY WAS HELD TO BE EXIGIBLE SINCE EXPLANATION TO SEC 271 (1 )(C) WOULD SPARE PENALTY ONLY WHERE EXPLANATION IS OFFERED AND SUCH EXPLANATION IS NOT FOUND TO BE FALSE WITH THE ASSESSEE PLACING RELEVANT CONFIRMATIONS BEFORE THE ASSESSING OFFICER AS WAS POINTED OUT IN BALWANT RAI & CO VS CIT (2005) 274 ITR 269 (ALL). WHERE PENALT Y PROCEEDINGS WERE INITIATED FOR ADDITIONS MADE FOR UNPROVED CASH CREDITS MADE AFTER DUE ENQUIRY WITH THE ASSESSEE MERELY REPEATING THE CLAIM THAT THE CREDITS WERE GENUINE, IT HAS TO BE ASSUMED THAT THERE WAS NO EXPLANATION AND PENALTY WAS RIGHTLY LEVIED A S HELD IN CIT VS MANGLA RAM OM PRAKASH (2005) 276 ITR (P&H). 4.2.5 THEREFORE, THE PRESUMPTION OF CONCEALMENT AS CONTAINED IN EXPLANATION 1 TO SECTION 271 (1)(C) OF THE INCOME TAX ACT, 1961 IS CLEA RLY ATTRACTED IN CASE OF THE APPELLANT. ON FACTS OF THE CA SE, IT IS ABSOLUTELY CLEAR THAT THE APPELLANT HAS FAILED TO APPELLANT. ON FACTS OF THE CA SE, IT IS ABSOLUTELY CLEAR THAT THE APPELLANT HAS FAILED TO REBUT THIS PRESUMPTION OF CONCEALMENT CONTAINED IN EXPLANATION 1 TO SECTION 271(1)(C) BY ADDUCINQ RELEVANT, RELIABLE AND COGE NT MATERIAL IN THIS REGARD. IT IS, THEREFORE, CLEAR THAT ALL THE FACTS RELATING TO THE EXPLANATION FOR THE INCOME IN RESPECT OF WHICH PENALTY HAS BEEN IMPOSED HAVE NOT BEEN DISCLOSED BY THE APPELLANT . THE APPELLANT HAS ALSO FAILED TO DISCLOSE A LL THE FACTS MATERIAL TO COMPUTATION OF TOTAL INCOME. IN VIEW OF THE ABOVE, THE EX PLANATION OF THE APPELLANT FOR NOT SHOWING THE INCOME IN THE RETURN, WHICH ARE SUBJECT MATTER OF PENALTY U/S. 271 (1)(C) CANNOT BE SAID TO BE BONAFIDE. IT IS, THEREFORE, HELD THAT THE APPELLANT HAS COMMITTED DEFAULT CONTEMPLATED U / S. 271(1)(C) OF THE INCOM E TAX ACT, 1961 AND THE LEARNED ASSESSING OFFICER WAS JUSTIFIED IN FACTS AND IN LAW TO HOLD THAT APPELLANT'S CASE IS FIT FOR IMPOSITION OF PENALTY U/S. 271 (1)(C) OF THE INCOME TAX ACT, 1961. ACCORDINGLY, IT IS HELD THAT THE ASSESSING OFFICER IS FULLY JUS TIFIED IN IMPOSING PENALTY OF RS.23,77,742/ - AT THE MINIMUM RATE. THE PENALTY LEVIED U/S 271 (1)(C) IS, THEREFORE, LIABLE TO BE SUSTAINED. THE GROUND OF APPEAL NO. 2 RAISED BY THE APPELLANT IS, THEREFORE, DISMISSED. 8. AS NONE APPEARED ON BEHALF OF THE A SSESSEE, THE FINDINGS OF CIT(A) COULD NOT BE CONTROVERTED. THE ASSESSEE HAS FAILED TO EVEN FURNISH THE BASIC DETAILS OF CONFIRMATION AND / OR PAN NUMBERS OF THE SAID PARTIES. THE ASSESSEE CANNOT TAKE THE SHELTER UNDER THE GARB OF FILING THE LEDGER ACCOUN TS / RECEIPTS ISSUED BY MSRTC TO ESTABLISH ITS CASE. THE ASSESSEE HAS SHOWN THE SAID PARTIES AS LOAN CREDITORS ITA NO . 617 / PN /201 4 SHRI SANTOSH M. RAISONI 8 AND THE ONUS WAS UPON THE ASSESSEE TO FULFILL THE CONDITIONS LAID DOWN IN SECTION 68 OF THE ACT. WHERE THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS AND THE ADDITION HAS BEEN CONFIRMED IN THE HANDS OF ASSESSEE, THEN THE ASSESSEE IS HELD TO HAVE CONCEALED THE PARTICULARS OF INCOME AND IS THUS, LIABLE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, DISMISSED. 9 . IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THIS 25 TH DAY OF NOVEMBER , 201 6 . SD/ - SD/ - ( ANIL CHATURVEDI ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; D ATED : 25 TH NOVEMBER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / T HE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE C I T (A) - II , PUNE ; 4. / THE C I T - II , PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE