HARDEEP SINGH RANDHAWA, Jaipur V. DCIT, Jaipur

ITA 621/JPR/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6328 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 19-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA J DHK
• Assessee Lawyers: H M SINGHVI
• Keywords: Unexplained cash credit; Opportunity of being heard; Retrospective amendment
• Section: 143(3); 27

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 621/JP/2015 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2008-09 SHRI HARDEEP SINGH RANDHAWA, PROP.- M/S RAJDHANI GAS SERVICE, 236, MEHTA MARG CORNER, GALTA ROAD, SURAJ POLE BAZAR, JAIPUR. CUKE VS. D.C.I.T., CIRCLE-5, N.C.R. BUILDING, C- SCHEME, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABZPR 2720 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI H.M. SINGHVI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. SEEMA MEENA (JCIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14/06/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 20/07/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THE APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 25/03/2015 FOR THE A.Y. 2008- 09. THE MAIN ISSUE INVOLVED IN THE APPEAL IS CONFIRMING THE PENALTY IM POSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (I N SHORT THE ACT). IN THIS APPEAL, THE ASSESSEE HAS ALSO TAKEN A PLEA THA T THE LD. CIT(A) WAS WRONG IN DISMISSING THE GROUND REGARDING THE PERMISS ION SOUGHT BY THE ASSESSING OFFICER FROM ADDL.CIT. ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 2 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADIN G OF LPG CYLINDER AND ALSO EARNED INTEREST INCOME. RETURN DECLARING T OTAL INCOME OF RS. 8,41,720/- WAS FILED ON 31/3/2009. THE CASE OF THE AS SESSEE WAS SELECTED FOR SCRUTINY UNDER CASS. THE ASSESSING OFFICER FINAL IZED THE ASSESSMENT U/S 143(3) OF THE ACT ON 20/12/2010 AND ASSESSED TO TAL INCOME OF RS. 37,75,147/-. THE ASSESSING OFFICER INITIATED PROCEE DINGS U/S 271(1)(C) OF THE ACT ON UNDISCLOSED INCOME AND LEVIED THE PENALT Y OF RS. 10,17,829/-, WHICH IS 100% OF THE TAX SOUGHT TO BE EVADED. THE LD. CIT(A) HAS CONFIRMED THE LEVY OF PENALTY. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. WHI LE PLEADING ON BEHALF OF THE ASSESSEE, THE LD AR HAS REITERATED TH E ARGUMENTS AS MADE BEFORE THE LD. CIT(A). HE HAS FURTHER SUBMITTED AS U NDER: THE ASSESSEE IS CARRYING ON BUSINESS UNDER THE NAME AND STYLE OF M/S RAJDHANI GAS SERVICE AT JAIPUR SINCE 1981. THE ASSESSEE IS ALSO DIRECTOR OF M/S TIGER CONTINENTAL WILD LIFE RESORTS LTD. THE COMPANY ENTERED INTO AN AGREEMENT FOR THE SALE OF THE RESORTS LAND WITH CONSTRUCTED PORTION WITH SURESH A GARWAL, DINESH AGARWAL, VIJAY BANSAL AJAY BANSAL, FOR A SALE CONSIDERATION OF RS. 8,41,00,000/- ON 29/03/2007. THE COMPANY AS PER BOARD RESOLUTION DATED 26/02/200 7 HAS AUTHORIZED MR. H.S. RANDHAWA THE ASSESSEE TO SIGN THIS AGREEMENT FOR AND ON BEHALF OF THE COMPANY. THE COMPANY FURTHER RESOLVED IN BOARD MEET ING HELD ON 26/02/2007 TO RECEIVE THE CHEQUES FROM THE PURCHASER FOR ADVANCE IN HIS OWN NAME. A COPY OF THE RESOLUTIONS ARE ENCLOSED (SEE P.B. PG. NO. 9). AS PER THE AGREEMENT FOLLOWING BUYERS DELIVERED THE FOLLOWING POST DATED CHEQUES IN THE NAME OF DIRECTOR SHRI H.S. RANDHAWA AS PER T HE BOARD RESOLUTION. ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 3 NAME DATE CHEQUE BANK AMT. DINESH AGARWAL 30-03-2007 718737 INDUSIND BANK LTD. 12,50,000.00 30-03-2007 718738 INDUSIND BANK LTD. 12,50,000.00 30-03-2007 718739 INDUSIND BANK LTD. 12,50,000.00 02-04-2007 718740 INDUSIND BANK LTD. 12,50,000.00 02-04-2007 718741 INDUSIND BANK LTD. 12,50,000.00 03-04-2007 718742 INDUSIND BANK LTD. 12,50,000.00 03-04-2007 718743 INDUSIND BANK LTD. 12,50,000.00 04-04-2007 718744 INDUSIND BANK LTD. 12,50,000.00 04-04-2007 718745 INDUSIND BANK LTD. 12,50,000.00 05-04-2007 718746 INDUSIND BANK LTD. 12,50,000.00 SURESH AGARWAL 22-02-2007 605295 INDUSIND BANK LTD. 6,00,000.00 30-03-2007 108411 INDUSIND BANK LTD. 10,00,000.00 30-03-2007 108412 INDUSIND BANK LTD. 10,00,000.00 30-03-2007 108413 INDUSIND BANK LTD. 10,00,000.00 02-04-2007 108414 INDUSIND BANK LTD. 10,00,000.00 03-04-2007 108415 INDUSIND BANK LTD. 10,00,000.00 03-04-2007 108416 INDUSIND BANK LTD. 10,00,000.00 04-04-2007 108417 INDUSIND BANK LTD. 10,00,000.00 20-10-2007 920398 INDUSIND BANK LTD. 10,00,000.00 24-10-2007 920399 INDUSIND BANK LTD. 10,00,000.00 10-04-2007 CASH CASH 5,00,000.00 AJAY BANSAL 30-03-2007 467416 INDUSIND BANK LTD. 10,00,000.00 02-04-2007 467417 INDUSIND BANK LTD. 10,00,000.00 06-11-2007 687628 INDUSIND BANK LTD. 10,00,000.00 03-04-2007 467419 INDUSIND BANK LTD. 10,00,000.00 06-11-2007 687629 INDUSIND BANK LTD. 10,00,000.00 06-11-2007 687630 INDUSIND BANK LTD. 10,00,000.00 VIJAY BANSAL 06-11-2007 905208 INDUSIND BANK LTD. 9,00,000.00 02-04-2007 624457 INDUSIND BANK LTD. 9,00,000.00 03-04-2007 624458 INDUSIND BANK LTD. 9,00,000.00 03-04-2007 624459 INDUSIND BANK LTD. 9,00,000.00 04-04-2007 624460 INDUSIND BANK LTD. 9,00,000.00 04-04-2007 905201 INDUSIND BANK LTD. 9,00,000.00 05-04-2007 905202 INDUSIND BANK LTD. 11,00,000.00 OUT OF THESE CHEQUES, THE FOLLOWING CHEQUES OF THE FOLLOWING PARTIES WERE DEPOSITED IN THE PERSONAL BANK ACCOUNT OF THE ASSES SEE IN THE BANK OF RAJASTHAN LTD., ADARSH NAGAR BRANCH, JAIPUR. OUT OF THESE CHE QUES SOME WERE HONORED AND SOME WERE DISHONORED . THE DETAILS OF WHICH ARE AS UNDER.:- NAME CHQ. NO. AMT. REMARKS DINESH AGARWAL 718737-46 1,25,00,000.00 HONORED ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 4 SURESH AGARWAL 605295 06,00,000.00 HONORED 108411 10,00,000.00 HONORED 108412 10,00,000.00 HONORED 108413 10,00,000.00 HONORED 108414 10,00,000.00 DISHONORED, CASH REC. 108415 10,00,000.00 HONORED 108416 10,00,000.00 HONORED 108417 10,00,000.00 DISHONORED 920398 10,00,000.00 DISHONORED, CASH REC. 920399 10,00,000.00 DISHONORED AJAY BANSAL 467416 10,00,000.00 HONORED 467417 10,00,000.00 HONORED 677628 10,00,000.00 DISHONORED 467419 10,00,000.00 DISHONORED, CASH REC. 687629 10,00,000.00 DISHONORED 687630 10,00,000.00 DISHONORED VIJAY BANSAL 624456 09,00,000.00 DISHONORED 624457 09,00,000.00 HONORED 624458 09,00,000.00 DISHONORED, CASH REC. 624459 09,00,000.00 HONORED 624460 09,00,000.00 HONORED 905201 09,00,000.00 DISHONORED, CASH REC. 905202 11,00,000.00 HONORED THE DISHONORED CHEQUES WERE RECEIVED BACK FROM THE BANK WITH THE MEMORANDUM EXPLAINING THE REASON (REFERRING TO THE DRAWERS), C OPIES OF THESE BANK INTIMATION FOR DISHONORED CHEQUES ARE ENCLOSED (SEE P.B. PG. N O. 30-31). AFTER GIVING INTIMATION TO THE PARTIES FOR DISHONORING OF THE CH EQUE, THE ASSESSEE RECEIVED CASH IN LIEU OF FOR THE SAME DISHONORED CHEQUE FROM THE FOLLOWING PERSONS.:- NAME OF PARTY DISHONORED CHQ. NO. AMT. SURESH AGARWAL 108414, 108418 20,00,000.00 AJAY BANSAL 467419 10,00,000.00 VIJAY BANSAL 624458,624461 18,00,000.00 AND FOR THE REMAINING DISHONORED CHEQUES FOR WHICH NEITHER CASH NOR NEW CHEQUES WERE RECEIVED THE ASSESSEE LODGED LEGAL CAS E U/S 138 OF NEGOTITATION INSTRUMENT ACT IN THE CIVIL COURT OF JAIPUR, DETAIL S ARE AS FOLLOWS.:- ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 5 NAME OF PARTY DISHONORED CHQ. NO. AMT. SURESH AGARWAL 108417, 108419 20,00,000.00 AJAY BANSAL 687628,687629,687630 30,00,000.00 VIJAY BANSAL 624456 09,00,000.00 BEFORE TO PROCEED FURTHER, WE WOULD LIKE TO MENTION THAT THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS OF HIS INDIVIDUAL TRANSACTIONS. THE ASSESSEE WAS MAINTAINING COMPLETE BOOKS OF ACCOUNTS OF HIS BUSIN ESS BEING IN THE NAME OF M/S RAJDHANI GAS SERVICE AND THESE ACCOUNTS OF BUSINESS WERE AUDITED U/S 44AB UNDER THE INCOME TAX ACT. THESE AUDITED ACCOUNTS WERE FIL ED WITH THE AO DURING SCRUTINY. NO PERSONAL BALANCE SHEET WAS EVER PREPARED IN THE PAST AND IN THIS YEAR. THE BANK STATEMENT WAS FILED BEFORE ASSESSING OFFICER D URING SCRUTINY. FROM THE PERUSAL OF THE BANK STATEMENT THERE WAS A CREDIT BA LANCE OF RS. 64,00,000/- AS ON 01-04-2007 THEREAFTER THE CHEQUES RECEIVED FROM THE PURCHASER WERE CREDITED, WHICH WERE CREDITED AT THE TIME OF DEPOSIT BUT ON R ECEIPT OF INTIMATION FROM THE PURCHASERS BANK, 6 CHEQUES WHICH WERE RETURNED DIS HONORED WERE DEBITED IN ASSESSEES BANK A/C. OUT OF THE HONORED CHEQUES THE ASSESSEE PURCHASED ONE FDR FOR RS. 50,00,000/- ON 12-04-2007. THEREAFTER THE A SSESSEE PURCHASED ANOTHER FDR ON 25-04-2007 FOR 3500000/-.IT WILL FURTHER BE OBSE RVED THE ASSESSEE USE TO WITHDRAW CASH FROM THE BANK AND IF THE SAME WAS NOT UTILIZED WAS DEPOSITED BACK IN THE BANK ACCOUNT . IN THIS RESPECT WE ARE ENCLOSING HERE WITH THE C ASH ACCOUNT (SEE P.B. PG. NO. 10) FOR YOUR KIND PERUSAL .FROM THE STATEMENT YOUR HON OR WILL NOTE THAT UPTO 10-05-2007 THE ASSESSEE HAS WIT HDRAWN RS2030000/- AND OUT OF THAT DEPOSITED BACK RS 1500000/- ON 16-05-2007 & 17-05-2007 AND THEREAFTER A DEPOSIT ON 21-08-2007 & 22-08-2007 WAS OUT OF THE C ASH BALANCE AVAILABLE ON 17- 05-2007 AND FURTHER WITHDRAWAL FROM THE BANK ACCOUN T HOUSEHOLD WITHDRAWAL WERE GENERALLY FROM RAJDHANI GAS SERVICE . THE ASSESSEE FURTHER HAD RECOVERED FROM THE BUYER W HICH WAS ALSO AVAILABLE WITH ASSESSEE. THUS THE DEPOSIT IN THE BANK ACCOUNT WERE FULLY EXPLAINED BUT THE ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 6 ASSESSING OFFICER ADDED A SUM OF RS. 2834000/- FOR WHICH NO DETAIL WERE GIVEN IN THE ASSESSMENT ORDER. THUS THE ASSESSING OFFICER OV ERLOOKED THE BASIC FACTS OF HEAVY WITHDRAWAL AND DEPOSIT BACK IN THE BANK ACCOU NT. THOUGH THE ASSESSEE HAS LOST FIRST QUANTUM APPEAL BEFORE CIT (APPEAL) AND F ILED APPEAL BEFORE ITAT AGAINST CIT (APPEAL) ORDER, THE SAME AS PENDING BEFORE ITAT . THE ASSESSING OFFICER ISSUED PENALTY NOTICE U/S 271 (1) (C).THOUGH NO REPLY WAS GIVEN BEFORE THE ASSESSING OFFICER IN PENALTY PROCE EDING. BUT YOUR HONOR HAS GOT ALL THE POWER TO CONSIDER THE EXPLANATION NOW. WE MAY FURTHER BRING TO YOUR KIND NOTICE THE BUYER HAVE FILED FIR AGAINST THE ASSESSEE IN VAISHALI NAGAR POLICE STATION JAIPUR TH E COPY OF THE SAME IS ENCLOSED (SEE P.B. PG. NO. 32-36). FROM THE PERUSAL OF THIS FIR YOUR HONOR WILL KINDLY NOTE THAT THE BUYER HAVE MENTIONED ABOUT THE PAYMENT OF PART CONSIDERATION T HROUGH CHEQUES & CASH .FURTHER THESE BUYER HAVE ALSO FILED CIVIL CASE FO R THE CANCELLATION OF THE CONTRACT AND TO PAY BACK THE AMOUNT PAID BY THEM IN CASH AND CHEQUE ALONG WITH THE INTEREST .THE COURT DIRECTED TO REFER TO ARBITRATIO N AS PER THE CLAUSE IN THE AGREEMENT .AND BEFORE THE ARBITRATOR HAVE AGAIN CON FIRM THE PAYMENT OF THE PART CONSIDERATION IN CASH AND THROUGH CHEQUES. THE ARBI TRATION PROCEEDING IS STILL PENDING BEFORE THE ARBITRATOR. THESE FACTS MAY KIND LY BE CONSIDERED IN DECIDING THE APPEAL AS PER SECTION 274 (2) IT IS MANDATORY AND PRE REQU ISITE CONDITION TO HAVE PRIOR APPROVAL OF JOINT COMMISSIONER BEFORE PASSING ANY O RDER IMPOSING PENALTY UNDER CHAPTER 11 OF INCOME TAX ACT . SECTION 274 READS AS UNDER 274(1) NO ORDER IMPOSING PENALTY UNDER THIS CHAPTER SHALL BE MADE UNLESS THE ASSESSEE HAS BEEN HEARD , HAS BEEN GIVEN REASONAB LE OPPORTUNITY OF BEING HEARD ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 7 (2) NO ORDER IMPOSING PENALTY UNDER THIS CHAPTER SH ALL BE MADE (A) BY THE INCOME TAX OFFICER , WHERE THE PENALTY E XCEEDS RS 10000; (B) BY THE ASSISTANT COMMISSIONER (OR DEPUTY COMMIS SIONER ), WHERE THE PENALTY EXCEEDS TWENTY THOUSAND RUPEES, EXCEPT WITH THE PRIOR APPROVAL OF JOINT COMMISSIONE R (3) AN INCOME TAX AUTHORITY ON MAKING AN ORDER UNDER T HIS CHAPTER IMPOSING A PENALTY , UNLESS IS HIMSELF THE ASSESSING OFFICER S HALL FORTH WITH SEND THE COPY OF SUCH ORDER TO THE ASSESSING OFFICER FROM THE READING OF THE PENALTY ORDER IT IS NO WHER E MENTIONED THAT THE AO HAS TAKEN PRIOR APPROVAL OF JOINT COMMISSIONER AS MENTI ONED IN SUB-SECTION (2) OF 274. IN CIRCLE-3 , JAIPUR THERE WAS NO JOINT COMMISSION ER AT THE TIME OF PASSING OF THE PENALTY ORDER .THERE WAS ONLY ONE ADDITIONAL COMMIS SIONER OF INCOME TAX . THE CIT(A) CONFIRMED THE ACTION OF THE AO OF IMPOSI NG PENALTY U/S 271(1) (C). THE ASSESSING OFFICER MADE ADDITION OF CASH DEPOSIT IN THE BANK BY THE ASSESSEE. THE ADDITION WAS MADE ONLY ON THE GROUND THAT IT WA S A CASH DEPOSIT. WHEREAS THE PENALTY WAS IMPOSED TAKING A GROUND THAT THE INCOME ESCAPED ASSESSMENT AND THE INCOME WAS CONCEALED. THE FACT THAT CASH DEPOSIT WA S A CASH RECEIPT AGAINST AN AGREEMENT FOR SALE OF THE SHARES OF THE COMPANY OWN ED BY THE ASSESSEE. EVEN IF IT WAS NOT CONSIDERED THAN IT WAS AM RECEIPT AGAINST S ALE OF AN ASSET AND WAS A DECLARED RECEIPT NOTHING WAS UNDISCLOSED. IT WAS NO T AN UNEXPLAINED CASH CREDIT WHICH THE AO DELIBERATELY MISUNDERSTOOD. EVEN IF IT IS ASSUMED THAT THE PENALTY PROCEEDINGS WERE INITIATED AS STATED IN THE PENALTY ORDER DATED.:- 20/12/2010, THE IMPUGNED ORD ER IS ILLEGAL AND BAD IN LAW SINCE SATISFACTION FOR INITIATING PENALTY WAS NOT R ECORDED IN THE ASSESSMENT ORDER EXCEPT IN THE CASE OF DISALLOWANCE OF CASH DEPOSIT. THE CIT(A) MENTIONED IN HIS ORDER THAT THE AGREEMEN T FOR SALE WAS PRODUCED AND THE CASH DEPOSIT WAS FULLY EXPLAINED STILL THE LD. CIT(A) DID NOT ACCEPT IT PROCEEDED IN STEREO TYPE MODE. ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 8 THEREFORE, ON THIS GROUND ALONE THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. PENALTY U/S 271(1) (C) WAS NOT IMPOSED BY THE DEPAR TMENT IN ITS OWN CASE.:- 1. THE APPELLANT SUBMIT THAT THE LD. CIT(A) OUGHT T O HAVE FOLLOWED ITS EARLIER STAND IN THE APPELLANT OWN CASE UNDER IDENTICAL CIRCUMSTA NCES. FAILURE TO DO SO VITIATES THE IMPUGNED ORDER. 2. FURTHER, IT IS SETTLED LAW THAT MERELY BECAUSE A DDITIONS ARE MADE, PENALTY IS NOT AUTOMATIC. 3. THEREFORE, THE IMPUGNED ORDER IS LIABLE TO BE SE T ASIDE. WITHOUT PREJUDICE, THE FINDING OF THE CIT(A) IS FAC TUALLY INCORRECT.:- 1. THE CASH IN QUESTION ALONG WITH CHEQUE WAS RECEI VED AGAINST A SALE AGREEMENT OF THE HOTEL. THE DEAL WAS TO TRANSFER THE COMPANY TO THE BUYERS. ACCORDINGLY THE SHARES WERE TO BE TRANSFERRED TO THE BUYERS ON COMP LETION OF THE TRANSACTION. OBVIOUSLY THEN THE SALE PROCEEDS WILL BE RECEIVED B Y THE SHAREHOLDERS AND FUND CANNOT BE DEPOSITED IN THE COMPANY ACCOUNT AS OBSER VED BY THE LEARNED CIT(A). 2. THE OBSERVATION THAT NOBODY APPEARED OR NO EXPLA NATION WAS GIVEN EVEN AFTER OPPORTUNITY WAS GIVEN IS ABSOLUTELY IN CORRECT. IN FACT NO NOTICE WAS EVER ISSUED AND SERVED UPON THE APPELLANT U/S 271 (1) (C)/274. 3. A COMPLETE EXPLANATION OF THE AMOUNT RECEIVED AN D UTILIZED WAS SUBMITTED IN A WRITTEN SUBMISSION WHICH HAS BEEN QUOTED BY THE LD. CIT(A) IN HIS ORDER EVEN HE CLAIMS THAT THE CASE WAS NOT EXPLAINED. THE LEARNED COMMISSIONER ERRED IN MAKING ADDITIONS DELIBERATELY AND WILLFULLY. 4. I FAIL TO UNDERSTAND WHEN THE LEARNED CIT(A) ADM ITS THAT THE CASH RECEIPT WAS EXPLAINED AND WRITTEN SUBMISSION WAS MADE HOW THE R ECEIPT HAS BEEN TAKEN AS INCOME FROM UNDISCLOSED SOURCE. THERE IS A SET LAW BY THE HONORABLE SUPREME ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 9 COURT IN CIT V. RELIANCE PETRO CHEMICAL CASE THAT THE OFFICER IMPOSING PENALTY MUST PROVE BEYOND DOUBT THAT THERE WAS INTENTIONAL NON DISCLOSURE WHICH IS NOT THE CASE HERE. 5. THE CLAIM OF APPELLANT WAS BONAFIDE. IT IS NOT E ITHER A CASE OF CONCEALMENT OF PARTICULARS OF INCOME. APPELLANT HAS BEEN ABLE TO S UBSTANTIATE AS TO HOW CASH WAS RECEIVED AND DEPOSITED IN THE ACCOUNT. THEREFORE, E XPL. 1 TO SECTION 271(1)(C) IS ALSO NOT ATTRACTED. IN SUCH A SITUATION PENALTY IS NOT LEVIABLE. THEREFORE THE FINDING OF THE LEARNED CIT(A) IS EXFA CIE INCORRECT. HENCE, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. RELIANCE IS PLACED ON CIT V. PAWAN KUMAR GARG 334 I TR 241. IT HAS BEEN HELD BY THE HONBLE HIGH COURT AS UNDER.:- HELD DISMISSING THE APPEAL THAT THE OFFICER WHO I SSUED THE WARRANT OF AUTHORISATION ON 25.05.2000 WAS NOT A JOINT DIRECTOR OF INCOME-TA X, BUT WAS THE ADDITIONAL DIRECTOR OF INCOME-TAX (INVESTIGATION). SECONDLY, THE NOTIFI CATION THAT WAS NECESSARY IN THE PRESENT CASE, WAS A NOTIFICATION BY THE BOARD IN EX ERCISE OF POWERS UNDER SECTION 132(1) OF THE SAID ACT. THERE IS NO SUCH NOTIFICATI ON AUTHORIZING ANY JOINT DIRECTOR OR JOINT COMMISSIONER. THE NOTIFICATION DATED 23.10.19 98 ON WHICH THE REVENUE SEEKS TO PLACE RELIANCE IS ONE WHICH HAS BEEN ISSUED NOT BY THE BOARD, BUT BY THE CENTRAL GOVERNMENT AND THAT TOO IN EXERCISE OF POWERS UNDER SECTION 117 (1) OF THE ACT. THERE IS NO SPECIFIC EMPOWERMENT IN FAVOUR OF ANY JOINT D IRECTOR OR JOINT COMMISSIONER UNDER SECTION 132(1) OF THE SAID ACT. MERE RE-DESIG NATION OF A CLASS OF OFFICERS DOES NOT TRANSLATE TO THE SPECIFIC EMPOWERMENT WHICH IS REQU IRED UNDER SECTION 132(1) OF THE SAID ACT. THE DEFINITION OF ADDITIONAL DIRECTOR HAS BEEN INSERTED WITH RETROSPECTIVE EFFECT FROM 01.06.1994 BY VIRTUE OF THE FINANCE ACT , 2007, THE DEFINITION OF JOINT DIRECTOR WAS INTRODUCED AS SECTION 2 (28D) FOR THE FIRST TIME IN THE SAID ACT BY VIRTUE OF THE FINANCE NO. (2) ACT OF 1998 W.E.F. 01.10.1998. THUS, THERE WAS NO CONCEPT OF A JOINT DIRECTOR PRIOR TO 01.10.1998. THUS, THERE WAS NO CONCEPT OF A JOINT DIRECTOR PRIOR TO 01.10.1998. SINCE THE DEFINITION OF ADDITIONAL D IRECTOR HAS BEEN INSERTED WITH RETROSPECTIVE EFFECT FROM 01.06.1994, THE LEGISLATU RE CLEARLY MADE THE DISTINCTION BETWEEN A JOINT DIRECTOR AND AN ADDITIONAL DIRECTOR . THE MANNER IN WHICH THE EXPRESSION JOINT DIRECTOR HAS BEEN USED IN SECTION 132(1) REQUIRES THE SAME TO BE INTERPRETED IN ITS LIMITED SENSE AS MEANING ONLY TH E JOINT DIRECTOR AND NOT AN ADDITIONAL DIRECTOR OF INCOME-TAX. THIS IS SO BECAU SE HAD THE LEGISLATURE INTENDED TO INCLUDE AN ADDITIONAL DIRECTOR OF INCOME-TAX, IT WO ULD HAVE DONE SO SPECIFICALLY IN SECTION 132(1) ITSELF. AND FURTHER IT IS SUBMITTED THAT ASSESSEE HAS EXPLA INED ABOUT THE FULL FACTS REGARDING THE CASH DEPOSIT IN THE BANK ACCOUNT. IT CANNOT BE CONSIDERED AS CONCEALED INCOME OF ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 10 THE ASSESSEE NOR FILING THE WRONG PARTICULARS OF TH E INCOME IN VIEW OF THE FOLLOWING DECISION. HONBLE SUPREME COURT IN THE CASE OF CIT V. RELIANC E PETRO PRODUCTS PVT. LTD. (SEE. P. B. OF JUDGEMENTS PG. NO. 13-18) WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLI ED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH N OT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER S. 271(1)(C) . A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOU NT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE, SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. THE ITAT AHEMDABAD BENCH IN ITO V. BIPIN CHANDRA VE LJI (41 TTJ 347, 350) HAS HELD THAT.:-(SEE. P. B. OF JUDGEMENTS PG. NO. 19-22) WHILE AN ADDITION CAN BE MADE ON A BALANCE OF PROB ABILITIES, PENALTY CAN BE IMPOSED ONLY IF THE DEFAULT IS PROVED BEYOND REASONABLE DOU BT . SINCE, AS STATED ABOVE, ANOTHER VIEW IS POSSIBLE ON THE FACTS, IT CANNOT BE SAID TH E ASSESSEE'S DEFAULT IS PROVED BEYOND REASONABLE DOUBT. ON THE BASIS OF THE ABOVE POSSIBL E VIEW THE ASSESSEE COULD AT LEAST HAVE ENTERTAINED A BONA FIDE BELIEF THAT HE HAD INC URRED A BUSINESS LOSS. ALSO SINCE A DIFFERENT VIEW AS INDICATED ABOVE IS POSSIBLE, THIS IS NOT A FIT CASE FOR LEVY OF PENALTY. SIMILAR VIEW HAS BEEN EXPRESSED IN THE CASE OF BUDD ISH CHANDRA, CHIMANLAL SHAH V. ITO (43 TTJ 262) ITAT, JAIPUR BENCH IN THE CASE OF ADITYA MILLS LTD. V. IAC (44 TTJ 363, 375) HAS HELD AS UNDER.:- CERTAIN CIRCUMSTANCES OR FACTORS MAY HAVE CREATED SUSPICION BUT DUE TO FACT THAT FULL ENQUIRY OR INVESTIGATION WAS NOT MADE OR NOT POSSIB LE TO BE MADE AND SUSTAINED. BUT THIS CANNOT AND WOULD NOT SUFFICE FOR THE PURPOSE O F IMPOSITION OF PENALTY. IT IS TRITE PROPOSITION THAT IF BOTH THE POSSIBILITIES ARE THER E THEN IN THE SITUATION OF LACK OF EVIDENCE IT COULD NOT BE JUSTIFIED SO CHOOSE THE ON CE WHICH LEADS TO THE INFERENCE OF CONCEALMENT. TAKING INTO ACCOUNT THE ENTIRELY OF TH E FACTS AND CIRCUMSTANCES OF THE CASE, NO CASE OF PENALTY U/S 271 (1) (C) WAS MADE O UT. ITAT, MUMBAI BENCH HAS HELD IN THE CASE OF SHRI ISH AR ALLOY AND STEEL LTD. V. ASST. CIT (1999) 68 ITD 117, 124 (MUM.).:-(SEE. P. B. OF JUDGEMENTS PG. NO. 23-29) THE AO COULD NOT ESTABLISH THAT THE EVIDENCE ADDUC ED BY THE ASSESSEE WAS FALSE OR THE CLAIM OF THE ASSESSEE WAS NOT BONA FIDE. WHILE THIS LACK OF SUFFICIENT EVIDENCE MAY LEAD TO DISALLOWANCE OF ASSESSEES CLAIM, IN THE AB SENCE OF A POSITIVE FINDING REGARDING THE FALSITY OR IMPOSSIBILITY OF ASSESSEES CLAIM HA VING BEEN ESTABLISHED BY THE AO, EVEN ON THE BASIS OF PREPONDERANCE OF PROBABILITY, PENAL TY UNDER S. 271(1)(C) CANNOT BE IMPOSED. ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 11 ITAT, AHEMDABAD BENCH HAS HELD IN THE CASE OF STAND ARD SALT WORKS LTD. V. ITO (2001) 73 TTJ (AHMD) 71, 87:(SEE. P. B. OF JUDGEMEN TS PG. NO. 30-48) PARTICULARLY THE DOCUMENTARY EVIDENCE IN THE SHAPE OF AGREEMENT BETWEEN THE PARTIES, CONFIRMATION OF RECEIPT OF PAYMENT, STATEM ENT ON OATH OF THE PERSONS GIVING FULL DETAILS OF RECEIPT OF COMMISSION AS ALSO OF SE RVICES RENDERED BY THEM, DOCUMENTARY EVIDENCE IN THE SHAPE OF INCOME-TAX RETURNS SUBMITT ED BY THE EMPLOYEES AND THE TAX PAID BY THEM, ADMITTED POSITION THAT SOME WITHDRAWA LS OUT OF CREDITED COMMISSION WAS MADE BY THE EMPLOYEES ETC., IT CANNOT BE HELD T HAT CLAIM OF COMMISSION WAS FICTITIOUS AND THE ASSESSEE MADE A FRAUDULENT DEDUC TION. ALL THE MATERIAL AT LEAST RAISE A DOUBT ON THE FINDING RECORDED IN THE QUANTUM PROC EEDINGS AND BENEFIT OF DOUBT HAS TO BE GIVEN TO THE ASSESSEE. HAVING REGARD TO THE O VERALL PICTURE, THE PRESENT CASE CANNOT BE TAKEN AS A FIT CASE FOR LEVY OF PENALTY U NDER S. 271(1)(C). ITAT, DELHI BENCH HAS HELD IN THE CASE OF SMT. SAND HYAVERMA V. ITO (2008) 114 TTJ (DEL) 933,937,938:(SEE. P. B. OF JUDGEMENTS PG. NO. 49-52) EVEN IF THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE ITS EXPLANATION BUT IF SUCH EXPLANATION WAS BONA FIDE NO PENALTY UNDER S. 271(1 )(C) IS IMPOSABLE. IN THE INSTANT CASE BONA FIDE OF THE ASSESSEE CANNOT BE DOUBTED. T HUS, THE AO WAS NOT JUSTIFIED TO IMPOSE THE PENALTY UNDER S. 271(1)(C) ON THE ASSESS EE. ITAT, JAIPUR BENCH HAS HELD IN THE CASE OF PARASMAL PAREKH V. CIT (1996) 58 ITD 34, 41, 42 (JP): (SEE. P. B. OF JUDGEMENTS PG. NO. 53-65) BY VIRTUE OF EXPLANATION 1 TO SECTION 271(1) (C), THOUGH PRESUMPTION WERE RAISED AGAINST THE ASSESSEE, THOSE WERE REBUTTABLE PRESUMP TIONS. AND IN THE PROCESS OF REBUTTAL, IF THE EXPLANATION OF THE ASSESSEE WAS NO T ACCEPTED OR WAS FOUND TO BE FALSE, THAT ITSELF WOULD NOT CONSTITUTE SUFFICIENT MATERIA L TO ATTRACT PENAL PROVISIONS. THE ENTIRETY OF CIRCUMSTANCES MUST POINT TO THE CONCLUS ION OF CONCEALMENT BEFORE PENALTY COULD BE IMPOSED. THIS PRINCIPLE HAS BEEN ENUNCIATE D BY THEIR LORDSHIPS IN CALCUTTA HIGH COURT IN THE CASE OF CIT V. BHURAMALMANIK CHAN D (1980) 121 ITR 840. IT IS THEREFORE RESPECTFULLY PRAYED THAT THE PENALT Y IMPOSED BY CIT(A) U/S 271(1) (C) IS BAD IN LAW AS PER THE PROVISION CONTAINED IN SE CTION 274. THE HONBLE ITAT JAIPUR BENCH IN THE CASE OF SH. GYAN CHAND JAIN IN ITA 53/ JP/2011 FOR A.Y. 1998-99 FOLLOWING THE SUPREME COURT DECISION AND DELHI HIGH COURT DECISION IN THE CASE OF PAWAN KUMAR GARG. A COPY OF ITAT ORDER IS BEING ENC LOSED FOR YOUR KIND PERUSAL (SEE. P.B. PG. NO. 1-12). EVEN IN THE FACTS THE ASSESSEE HAS GIVEN FULL EXPLA NATION ABOUT THE FACT REGARDING THE DEPOSIT IN THE BANK WHICH IS NOT FOUND TO BE FA LSE AND BECAUSE HUMAN PROBABILITY THERE WILL BE NO PENALTY IMPOSED U/S 27 1(1) (C). ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 12 THEREFORE THE PENALTY IMPOSED BY AO AND CONFIRMED B Y CIT(A) MAY BE DELETED. 4. ON THE OTHER HAND, THE LD. DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND ALSO GONE THROUGH THE VARIOUS CASE LAWS RELIED UPON BY BOTH THE SIDES. WE HAVE ALS O GONE THROUGH THE RELEVANT PROVISIONS OF LAW IN THE INCOME TAX ACT. THE PLEADINGS OF THE LD AR WAS THAT THE PERMISSION SOUGHT BY THE ASSESSING O FFICER WAS FROM ADDL. COMMISSIONER WHICH WAS NOT AS PER LAW AS THE PER MISSION SOUGHT MUST HAVE BEEN FROM THE JOINT COMMISSIONER HENCE TH E ORDER PASSED BY THE LD. CIT(A) IS BAD IN LAW. DURING THE HEARING, TH E LD AR OF THE ASSESSEE WAS MADE AWARE ABOUT THE DEFINITION OF JOINT COMMISSI ONER OF INCOME TAX AS PROVIDED IN SUB-SECTION (28C) OF SECTION 2 OF THE ACT, WHICH IS REPRODUCED AS UNDER: ( 28C ) 'JOINT COMMISSIONER' MEANS A PERSON APPOINTED TO BE A JOINT COMMISSIONER OF INCOME-TAX OR AN ADDITIONAL COMMISSIONER OF INCOME- TAX UNDER SUB-SECTION (1) OF SECTION 117 THUS THE DEFINITION OF JOINT COMMISSIONER CLEARLY PR OVIDES THAT WHEREVER THE WORD JOINT COMMISSIONER USED IN INCOME TAX ACT, I T MEANS A PERSON APPOINTED TO BE A JOINT COMMISSIONER OF INCOME TAX O R ADDITIONAL COMMISSIONER OF INCOME TAX UNDER SUB-SECTION (1) OF SECTION 117 OF THE ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 13 ACT. SECTION 117 OF THE ACT PROVIDES THAT THE CENTR AL GOVERNMENT MAY APPOINT SUCH PERSONS AS IT THINKS FIT TO BE INCOME TAX AUTHORITIES. THUS, IN OUR CONSIDERED VIEW, THE APPROVAL GIVEN BY THE ADDIT IONAL COMMISSIONER IS AS PER THE SCHEME OF LAW AND THERE IS NO ILLEGALITY. ON MERITS ALSO WE FULLY AGREE WITH THE FINDINGS OF THE LD. CIT(A). THE ASSESS EE FAILED TO SUBSTANTIATE HIS EXPLANATION. THE FINDINGS OF THE LD . CIT(A) ON THIS ISSUE READ AS UNDER: 2.5 THIS IS A CASE WHERE CASH OF RS 28,34,000/- HA S BEEN DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT. IT HAS BEEN EXPLAINE D BY THE APPELLANT THAT THE SOURCE OF THIS CASH, IS THE CASH GIVEN BY THE BUYERS OF IMMOVABLE PROPERTY FROM M/S. TIGER CONTINENTAL WILD LIFE RESO RTS LTD. IN WHICH THE APPELLANT IS THE DIRECTOR. TOTAL CASH OF RS. 48 LAC S IS SAID TO HAVE BEEN GIVEN BY THE BUYERS, IN LIEU OF DISHONOURED CHEQUES . THE FOLLOWING POINTS ABOUT THIS EXPLANATION FURNISHED BY THE APPELLANT, MERIT CONSIDERATION- (A) THE APPELLANT HAS NOT GIVEN CONFIRMATION OF THE PERSONS WHO ARE SAID TO HAVE GIVEN THE CASH, IN SPITE OF NUMEROUS OPPORTUNI TIES HAVING BEEN GIVEN. ALSO, THE APPELLANT HAS NOT BEEN ABLE TO PRO DUCE THE PERSONS WHO ARE SAID TO HAVE GIVEN THIS CASH. ALSO, NO EVIDENCE S, IN THE FORM OF CASH BOOK, BANK BOOK, BANK STATEMENT ETC, SHOWING THE SO URCE OF THIS CASH IN HANDS OF THE PERSONS GIVING THE CASH WERE PRODUCED OR SUBMITTED. THE APPELLANT HAS SUBMITTED XEROX COPIES OF CASH RECEIP TS BUT THESE RECEIPTS CONTAINED ONLY THE SIGNATURE OF THE APPELLANT AND N OT OF THE BUYERS / PERSONS SAID TO HAVE GIVEN CASH. FURTHERMORE, THESE RECEIPTS ALSO DO NOT CONTAIN THE DATES ON WHICH THIS CASH WAS RECEIVED. THE APPELLANT HAS FILED A COPY OF THE FIR FILED BY THE BUYERS / PERSO N SAID TO HAVE GIVEN CASH WHICH STATES THAT THE BUYERS HAVE GIVEN A SUM OF RS . 3,51,00,000/- BY CHEQUE AND CASH. IN THIS FIR, THE AMOUNT OF CASH GI VEN OR THE DATE ON WHICH THIS CASH WAS GIVEN, HAS NOT BEEN MENTIONED. IT IS ALSO NOT CLEAR FROM THE FIR WHETHER THE CASH GIVEN IS SUBSTANTIAL OR IS MERELY A TOKEN AMOUNT. THE ABOVE DISCUSSION WOULD SHOW THAT THE AP PELLANT HAS NOT BEEN ABLE TO SUBSTANTIATE HIS EXPLANATION. ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 14 (B) THE APPELLANT HAS STATED THAT THE COMPANY - M/S . TIGER CONTINENTAL WILD LIFE RESORTS LTD. HAS AUTHORIZED THE APPELLANT TO C ARRY OUT THE SALE TRANSACTION ON ITS BEHALF. HOWEVER, THE COMPANY HAS NOT AUTHORIZED THE APPELLANT TO RECEIVE THE SALE CONSIDERATION. FURTHE RMORE, THE APPELLANT HAS STATED THAT IT HAS RECEIVED CASH OF RS. 48 LACS FROM THE BUYERS WHEREAS THE AMOUNT DEPOSITED IN THE BANK ACCOUNT IS ONLY RS. 28,34,000/-. THE APPELLANT HAS NOT STATED THE APPLI CATION OF THE BALANCE AMOUNT WHICH IS SUBSTANTIAL. THE ABOVE DISCUSSION, SHOWS THAT THE EXPLANATION F URNISHED BY THE APPELLANT IS ALSO NOT BONAFIDE AND THAT ALL THE FAC TS RELATING TO THIS ' EXPLANATION (ABOUT CASH DEPOSITS IN THE BANK ACCOUN T OF THE APPELLANT) AND MATERIAL TO THE COMPUTATION OF ITS INCOME, HAVE NOT BEEN DISCLOSED BY IT. I HAVE PERUSED THE CASE LAWS CITED BY THE APPELLAN T. THEY DEAL WITH THE PRINCIPLES RELATING TO LEVY OF PENALTY U/S 271(1)( C). THEY DO NOT ADDRESS THE SPECIFIC ISSUE AT HAND. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE CONF IRM THE FINDINGS OF THE LD. CIT(A) AND THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE STANDS DISMISSED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/07/2018. SD/- SD/- FOT; IKY JKO HKKXPAN (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20 TH JULY, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: ITA 621/JP/2015_ HARDEEP SINGH RANDHWA VS DCIT 15 1. VIHYKFKHZ @ THE APPELLANT- SHRI HARDEEP SINGH RANDHAWA, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE D.C.I.T., CIRCLE-5, JAIPUR. 3. VK;DJ VK;QDR @ THE CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 621/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR