Srikant Shah, New Delhi V. ITO, Ward-19(3), New Delhi

ITA 6585/DEL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9241 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 15-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER ITA NO.6585/DEL/2018 ASSESSMENT YEAR: 2011-12 SRIKANT SHAH E-2/2, 2 ND FLOOR, SHASTRI NAGAR, NEW DELHI -110052 PAN NO. APFPS7384M VS INCOME TAX OFFICER WARD 19 (3) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SHRI S. L. ANURAGI, SR. DR DATE OF HEARING: 01/07/2019 DATE OF PRONOUNCEMENT: 08/07/2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 21.03.2016 OF THE CIT(A)-34, NEW DELHI RELATING TO A. Y. 2011-12. 2. LEVY OF PENALTY OF RS.3,88.549/- BY THE ASSESSIN G OFFICER U/S. 271 (1) (C) WHICH HAS BEEN UPHELD BY THE CIT(A ) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPE AL. 3. NONE APPEARED ON BEHALF OF THE ASSESSE AT THE T IME OF HEARING. IT WAS FURTHER SEEN THAT THE NOTICE ISSUE D BY THE REGISTRY THROUGH RPAD WAS RETURNED BY THE POSTAL AU THORITIES PAGE | 2 WITH THE REMARKS NO SUCH PERSON. THE ASSESSEE HA S ALSO NOT TAKEN ANY STEPS TO INTIMATE THE CHANGED ADDRESS, IF ANY. THEREFORE, THIS APPEAL IS BEING DISPOSED OFF ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 18.08. 2011 DECLARING TAXABLE INCOME OF RS.3,34,10/-. THE ASSE SSMENT U/S. 143 (3) WAS COMPLETED ON 10.02.2014 DETERMINING THE TOTAL INCOME AT RS.18,05,090/- WHEREIN THE ASSESSING OFFI CER MADE ADDITION OF RS.14,54,230/- ON ACCOUNT OF PROFIT @ 8 % ON THE ENTIRE AMOUNT OF RS.2,23,53,003/- DEPOSITED IN THE BANK ACCOUNTS. THERE WERE CERTAIN OTHER ADDITIONS ALSO. THE ASSESSING OFFICER THEREAFTER INITIATED PENALTY PROC EEDINGS U/S. 271 (1) (C). SINCE, THERE WAS NO PROPER EXPLANATIO N FROM THE SIDE OF THE ASSESSEE, THE ASSESSING OFFICER LEVIED PENALTY OF RS.3,88.549/- BEING 100% OF THE TAX SOUGHT TO BE EV ADED. 5. IN APPEAL THE LD. CIT(A) SUSTAINED THE PENALTY S O LEVIED BY THE ASSESSING OFFICER BY OBSERVING AS UNDER :- 5. I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMIS SIONS OF APPELLANT. FROM THE FACTS, IT IS CLEAR THAT THE APPELLANT HAS BEEN NON- COOPERATIVE THROUGHOUT THE PENALTY PROCEEDINGS. NEITHER HE ATTENDED THE PROCEEDINGS NO R ANY EXPLANATION OR SUBMISSIONS WERE FILED BY HIM. THIS ACT OF APPELLANT CLEARLY SH OWS THAT HE HAS DELIBERATELY AND WILLFULLY CONCEALED HIS INCOME AND FURNISHED INACCU RATE PARTICULARS WITH THE INDENTION TO HIDE THE INCOME SO AS TO AVOID THE IMPOSITION OF TA X THEREON. THE PROVISIONS OF EXPLANATION-1 OF SECTION 271(L)(C) OF THE ACT ARE C LEARLY APPLICABLE IN THE CASE OF PAGE | 3 APPELLANT WHICH CREATE A LEGAL FICTION AND RAISE A PRESUMPTION AGAINST THE ASSESSEE. IT PROVIDES THAT IF IN RESPECT OF ANY FACT WHICH IS MA TERIAL TO THE COMPUTATION OF TOTAL INCOME, ASSESSEE DOES NOT OFFER AN EXPLANATION OR O FFERS AN EXPLANATION WHICH IS FOUND TO BE FALSE, THE AMOUNT ADDED OR DISALLOWED SHALL BE D EEMED TO BE INCOME IN RESPECT OF WHICH PARTICULARS ARE CONCEALED. IN THE CASE OF APP ELLANT, HE HAS FAILED TO OFFER ANY EXPLANATION IN RESPECT OF UNDISCLOSED INCOME DURING ASSESSMENT PROCEEDINGS AS WELL AS PENALTY PROCEEDINGS. IN THE CASE OF MAK DATA P. LTD . VS. CIT-II, HON'BLE SUPREME COURT, WHILE EXPLAINING THE PENAL PROVISIONS U/S.27 1(L)(C) OF THE ACT, HAS OPINED THAT 'THE EXPLANATION- 1 TO SECTION 271(L)(C) RAISES A PRESUM PTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY AO, BETWEEN REPORTED AND A SSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RE LIABLE EVIDENCE. WHEN THE INITIAL ONUS PLACED BY THE EXPLANATION, HAS BEEN DISCHARGED BY HIM, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION CONSTIT UTED THE INCOME AND NOT THE OTHERWISE. HERE IN THE CASE OF APPELLANT, HE HAS FA ILED TO DISCHARGE HIS ONUS BY NOT COMPLYING THE NOTICES DURING PENALTY PROCEEDINGS OR BY NOT MAKING ANY SUBMISSIONS OR OFFERING ANY EXPLANATION IN REGARDS TO CONCEALMENT OF PARTICULARS OF HIS INCOME. THE OTHER HON'BLE COURTS ALSO HAVE THE SAME OPINION FOR LEVY OF PENALTY WHEN NO EXPLANATION IS OFFERED BY ASSESSEE DURING PENALTY PROCEEDINGS. HON'BLE ALLAHABAD HIGH COURT, IN THE CASES BALWANT RAI & CO. VS. CIT 274 ITR 269, SOM EN GINEERING CORPORATION VS. CIT 277 ITR 92 AND CHATER SAIN VS. CIT 277 ITR 68 HAS U PHELD THE ORDER OF LEVY OF PENALTY BY AO BECAUSE NO EXPLANATION, WHATSOEVER, WAS OFFER ED BY ASSESSEE IN RESPECT OF ADDITIONS MADE BY AO. SIMILAR VIEW HAS BEEN TAKEN B Y HON'BLE KARNATAKA HIGH COURT IN THE CASE CIT VS. ALTRON ELECTRONICS (INDIA) LTD. 30 1 ITR 66 WHEREIN IT IS HELD BY HON'BLE COURT THAT WHERE NO EXPLANATION IS GIVEN IN SPITE O F SUFFICIENT OPPORTUNITY, PENALTY CANNOT BE AVOIDED. THE RATIOS OF AFORESAID DECISION S ARE SQUARELY APPLICABLE IN THE CASE OF APPELLANT. HE HAS NOT OFFERED ANY EXPLANATION EI THER DURING ASSESSMENT PROCEEDINGS OR PENALTY PROCEEDINGS IN RESPECT OF ADDITIONS MADE BY AO. THUS, IN ABSENCE OF ANY EXPLANATION ON THE PART OF APPELLANT, AO WAS JUSTIF IED IN CONCLUDING THAT THE APPELLANT HAS CONCEALED THE INCOME OR FURNISHED INACCURATE PA RTICULARS. 5.1 FURTHER, THE CONDUCT OF APPELLANT ALSO PROVES THAT HE HAS CONSCIOUSLY MADE THE CONCEALMENT OR FURNISHED INACCURATE PARTICULARS OF INCOME ADDITION CONFIRMED BY LD. CIT(A) ESTABLISHED THIS ASPECT. HON'BLE ORISA HIGH COURT IN THE CASE CIT VS. INDIAN PAGE | 4 METALS & FERRO ALLOYS LTD. 117 CTR 378 HAS HELD THA T 'THE OFFENCE OF CONCEALMENT IS A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOME OR A PORTI ON THEREOF FROM THE KNOWLEDGE OF THE INCOME TAX AUTHORITIES. IN FURNISHING ITS RETURN OF INCOME, AN ASSESSEE IS REQUIRED TO FURNISH PARTICULARS AND ACCOUNTS ON WHICH SUCH RETU RNED INCOME HAS BEEN ARRIVED AT. THESE MAY BE PARTICULARS AS PER ITS BOOKS OF ACCOUN T IF IT HAS MAINTAINED THEM, OR ANY OTHER BASIS ON WHICH IT HAS ARRIVED AT THE RETURNED FIGURE OF INCOME. ANY INACCURACY MADE IN SUCH BOOKS OF ACCOUNT OR OTHERWISE WHICH RE SULTS IN KEEPING OFF OR HIDING A PORTION OF ITS INCOME IS PUNISHABLE AS FURNISHING I NACCURATE PARTICULARS OF INCOME'. IN THE CASE OF APPELLANT, HE HAS DELIBERATELY HIDDEN T HE PART OF HIS INCOME WHICH IS PUNISHABLE AS FURNISHING INACCURATE PARTICULARS OF HIS INCOME. THE BASIS TAKEN BY APPELLANT DURING APPELLATE PROCEEDINGS THAT SINCE T HE ADDITIONS WERE MADE ON ESTIMATE BASIS, PENALTY IS NOT LEVIABLE, IS MISPLACED. THE B ASIS TAKEN BY APPELLANT IS RELEVANT ONLY IN THOSE CASES WHERE BOOKS OF ACCOUNT AND OTHER MAT ERIAL FACTS ARE DISCLOSED BY ASSESSEE BEFORE AO BUT DUE TO SOME DEFECTS IN THOSE BOOKS OF ACCOUNT, PROFIT IS ESTIMATED. BUT IN THE CASE OF APPELLANT, HE HAS NOT EVEN DISCLOSED TH E BANK ACCOUNTS AND ITS TRANSACTIONS TO THE DEPARTMENT LEAVE ASIDE THE PROFIT ON SUCH TRANS ACTIONS. ONCE THE ENTIRE TRANSACTIONS ARE UNDISCLOSED, ANY PROFIT/INCOME ARRIVED AT ON TH OSE TRANSACTIONS ALSO REMAIN UNDISCLOSED AS WELL AS CONCEALED. 5.2 ONE MORE PLEA HAS BEEN TAKEN BY APPELLANT THAT HE S URRENDERED THE INCOME DURING ASSESSMENT PROCEEDINGS, THEREFORE, PENALTY S HOULD NOT BE LEVIED ON HIM. THE PLEA TAKEN BY APPELLANTS MISPLACED. FROM THE FACTS, IT I S CLEAR THAT ONCE HE WAS CORNERED BY AO HE REVISED THE COMPUTATION OF INCOME DISCLOSING THE INCOME @ 8% OF TOTAL CASH DEPOSITS. IN THE CASE CIT VS. USHA INTERNATIONAL LT D., HON'BLE DELHI HIGH COURT VIDE THEIR ORDER DATED 19.11.2012 HAS HELD THAT THE REVI SED RETURN FILED BY ASSESSEE ONLY WHEN IT WAS CORNERED AND INCOME TAX AUTHORITIES HAD COLL ECTED MATERIAL ON THE BASIS OF WHICH IT COULD BE SAID THAT A CLAIM FOR DEDUCTION WAS FALSE OR BOGUS, PENALTY U/S. 271(L)( C) IS LEVIABLE IN SUCH CASES. FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT IN THE INSTANT CASE, REVISION OF COMPUTATION OF INCOME BY APPELLANT WAS NOT BONAFIDE AND VOLUNTARILY. WHEN HE WAS CORNERED BY AO WITH THE FACTS AND MATERIAL C OLLECTED BY HIM, HE REVISED THE COMPUTATION OF INCOME. IN SUCH SITUATION, LEVY OF P ENALTY BY AO HAS TO BE HELD JUSTIFIABLE. 5.3 IN VIEW OF THESE FACTS, IT IS ESTABLISHED THAT THE APPELLANT HAS WILLFULLY AND DELIBERATELY CONCEALED HIS INCOME WHICH ATTRACTS TH E PENAL PROVISIONS U/S. 27L(L)(C) OF THE ACT. IN SUCH SITUATION, THE LEVY OF PENALTY OF RS. 3,88,549/- BY AO IS JUSTIFIED. I, THEREFORE, CONFIRM THE PENALTY LEVIED BY AO AND DISMISS THE GR OUNDS TAKEN BY APPELLANT. PAGE | 5 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. I HAVE PERUSED THE ORDERS OF THE AUTHORITIES BEL OW AND HEARD THE LD. DR. I FIND THE LD. CIT(A) HAS GIVEN VALID REASONS FOR SUSTAINING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271 (1) (C) OF THE IT ACT. ASSESSEE HAD NOT GIVEN A NY PROPER EXPLANATION EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) FOR SUCH HUGE CASH DEPOSITS IN THE BANK ACCO UNTS. THERE IS NOTHING ON RECORD TO CONTROVERT THE PENALTY SUST AINED BY THE CIT(A). UNDER THESE CIRCUMSTANCES I AM OF THE OPIN ION THAT THE ORDER OF THE CIT(A) IS IN ACCORDANCE WITH LAW, I, T HEREFORE, UPHOLD THE SAME AND GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.07.2019. SD/- (R.K PANDA) ACCOUNTANT MEMBER *NEHA* DATE:- 08 .07.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI PAGE | 6 DATE OF DICTATION 01.07.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02.07.2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 08.07.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER