A.Raj Mohan, CHENNAI V. The Addl.CIT, CHENNAI

ITA 721/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64241 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-09-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 04-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: G BASKAR
• Keywords: Unexplained cash credit
• Section: 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.721 /MDS/2012 ASSESSMENT YEAR : 2003-04 SHRI A. RAJ MOHAN, A-4, LOTUS COLONY, NANDANAM, CHENNAI 600 035. [PAN:ADQPR7150P] VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE X, CHENNAI. (APPELLANT) (RESPONDENT) A PPELLANT BY : SHRI G. BASKAR, ADVOCATE RESPONDENT BY : DR. S. MOHARANA, CIT DR DATE OF HEARING : 10.09.2012 DATE OF PRONOUNCEMENT : 14.09.2012 ORDER PER BENCH THIS ASSESSEES APPEAL CHALLENGING CONFIRMATION OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 [ IN S HORT ACT] HAS BEEN PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) VI CHENNAI DATED 30.06.2009 IN ITA NO. 172/08-09 FOR T HE ASSESSMENT YEAR 2003-04. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A ROAD CONTRACTOR, WHO FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04 ADMITTING TOTAL INCOME OF ` .2,48,722/- AS WELL AS AGRICULTURAL INCOME OF ` .2,65,400/-. IN I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.7 77 721 2121 21/M/ /M/ /M/ /M/12 1212 12 2 SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEES BANK STATEMENT OF M/S. VYSYA BANK LTD. WAS SHOWING CREDI T OF ` .8.00 LAKHS ON 01.11.2002. ON BEING ASKED, THE ASSESSEE VOLUNTARIL Y OFFERED THE SAID CREDIT AS HIS INCOME. ACCORDINGLY, THE ASSESSING OFFICER IN THE ASSESSMENT ORDER DATED 27.03.2006 PASSED UNDER SECTION 143(3) OF THE ACT, ADDED THE SAID AMOUNT OF ` .8.00 LAKHS IN ASSESSEES TAXABLE INCOME AND ALSO I NITIATED PENALTY PROCEEDING UNDER SECTION 271(1)(C) OF THE ACT. 3. IN PENALTY PROCEEDINGS, THE ASSESSEE CONTENDED THAT SINCE HE HAS ALREADY OFFERED THE CREDIT OF ` .8.00 LAKHS AS HIS INCOME ON GOOD FAITH AND ALSO COOPERATED IN THE ASSESSMENT PROCEEDINGS, THER EFORE HIS PRAYER WAS TO DROP THE PENALTY PROCEEDINGS. HOWEVER, THE ASSESSIN G OFFICER NEGATIVED THE ASSESSEES PLEA BY HOLDING THAT THE ASSESSEES ACT IN NOT OFFERING THE CREDIT AMOUNT OF ` .8.00 LAKHS AMOUNTED TO CONCEALMENT ON HIS PART. AC CORDINGLY, VIDE ORDER DATED 26.09.2006, THE PENALTY OF ` .2,52,000/- WAS ORDERED TO BE IMPOSED. IN APPEAL, THE CIT(A) HAS ALSO CONFIRMED T HE PENALTY. HENCE, THE ASSESSEE IS AGGRIEVED. 4. REITERATING THE GROUNDS RAISED IN THE APPEAL, T HE AUTHORIZED REPRESENTATIVE BEFORE US HAS VEHEMENTLY ARGUED THAT SINCE THE ASSESSEE HAD VOLUNTARILY SURRENDERED THE CREDIT OF ` .8.00 LAKHS IN ORDER TO BUY PEACE, THEREFORE, THE SAME, IN NO CASE CAN BE CALLED AS AN ACT OF CONCEALMENT OF I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.7 77 721 2121 21/M/ /M/ /M/ /M/12 1212 12 3 INCOME. IN SUPPORT THEREOF, HE HAS ALSO CITED CASE LAW OF HONBLE JURISDICTIONAL HIGH COURT [2000] 241 ITR 825 IN THE CASE OF CIT V. S. SHANKARAN AND [2003] 263 ITR 509 IN THE CASE OF CIT V. P. GOVINDASWAMY AND PRAYED FOR ACCEPTANCE OF THE APPEAL. 5. REPLYING THE ASSESSEES ARGUMENT, THE DEPARTMEN TAL REPRESENTATIVE HAS SUBMITTED THAT THE ASSESSEE HAD ONLY OFFERED TH E UNEXPLAINED CREDIT AS TAXABLE INCOME WHEN HE HAD NO CHANCE TO JUSTIFY THE SAME. THEREFORE, PER DR, IT IS A CASE OF CONCEALMENT OF INCOME. BY RELYI NG ON THE CASE LAW OF HONBLE SUPREME COURT IN THE CASE OF K.S. MADHUSUDA NAN V. CIT [251 ITR 99], HE HAS PRAYED FOR REJECTION OF THE APPEAL. 6. WE HAVE HEARD BOTH PARTIES AT LENGTH AND ALSO G ONE THROUGH RELEVANT FINDINGS AS WELL AS THE CASE LAW CITED. UNDISPUTEDL Y, INITIALLY THE ASSESSEE HAD DISCLOSED THE INCOME OF ` . 2,48,722/- FOR TAXATION COUPLED WITH AGRICULTURAL INCOME OF ` .2,65,400/-. WE FIND THAT THE CREDIT WHICH WAS NOT INITIALLY DISCLOSED BY THE ASSESSEE IS ` .8.00 LAKHS I.E. ALMOST 4 TIMES MORE THAN THE INCOME DECLARED (SUPRA). EVEN THOUGH, IT T RANSPIRES THAT THE ASSESSEE HAD NOT OFFERED THE SAID AMOUNT OF ` .8.00 LAKHS FOR TAXATION AT THE FIRST INSTANCE, A PERUSAL OF THE CIT(A)S ORDER REV EALS THAT ON 01.11.2002, AN ENQUIRY WAS INITIATED QUA THE ASSESSEES CREDIT AMO UNT OF ` .8.00 LAKHS. THEREAFTER, THE ASSESSEE SOUGHT ADJOURNMENTS UPTO 2 006. AS PER THE CIT(A)S ORDER, THE ASSESSEE AVAILED LOT OF OPPORTU NITIES TO EXPLAIN THE CREDIT. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.7 77 721 2121 21/M/ /M/ /M/ /M/12 1212 12 4 WHEN HE FOUND THAT HE HAD NO EXPLANATION TO OFFER, THEN ONLY HE OFFERED THE INCOME FOR TAXATION. THIS, IN OUR OPINION, IS NOT V OLUNTARY OFFER OF TAXATION ON ASSESSEES PART. RATHER, IT IS A CASE WHEN THE ASSE SSEE HAD NO EXPLANATION TO OFFER DESPITE HIS BEST EFFORTS THAT HE CHOSE TO PAY THE TAX. IN THIS BACKGROUND, WE EXPRESS OUR UNABILITY TO CONCUR WITH THE ASSESSEES SUBMISSIONS. ALTHOUGH IT IS A SETTLED LAW THAT EVER Y ADDITION OR DISALLOWANCE IN ASSESSMENT PROCEEDING DOES NOT IPSO FACTO LEAD T O IMPOSITION OF PENALTY; THE TWO BEING ALTOGETHER DIFFERENT PROCEEDINGS, BUT , AT THE SAME TIME, THE NECESSARY MITIGATING CIRCUMSTANCES QUA ASSESSEES B ONAFIDES RELEVANT TO DISALLOWANCE ARE RELEVANT IN PENALTY PROCEEDINGS. A FTER EXAMINING THE ASSESSEES CONDUCT ABOVE CITED, IT EMERGES THAT THE ASSESSEES VOLUNTARY OFFER OF TAXATION OF THE CREDIT WAS NOT BONAFIDE ON E AS HE HAD TAKEN A TIME PERIOD OF ALMOST FOUR YEARS IN OFFERING THE CREDIT FOR TAXATION. 7. COMING TO THE CASE LAW CITED BY THE ASSESSEE (S UPRA), WE NOTICE THAT THE SAME IS NOT APPLICABLE QUA THE PECULIAR FACTS A ND CIRCUMSTANCES OF THE CASE. IN THE CASE OF CIT V. S. SHANKARAN (SUPRA), T HE HONBLE HIGH COURT HAD BEEN PLEASED TO HOLD THAT EVERY ADDITION DOES N OT LEAD TO PENALTY. WHEREAS, IN THE CASE OF CIT V. P. GOVINDASWAMY (SUP RA), THE HONBLE HIGH COURT OBSERVED THAT THERE WAS NO FINDING BY EITHER THE ASSESSING OFFICER OR THE CIT(A) THAT THE ASSESSEES EXPLANATION WAS FALS E OR NOT SUBSTANTIATED OR LACKED BONAFIDE. SINCE IN THE INSTANT CASE, THE ASS ESSEE HAS NO SUCH I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.7 77 721 2121 21/M/ /M/ /M/ /M/12 1212 12 5 EXPLANATION TO OFFER AT ALL, WE CONCLUDE THAT THE C IRCUMSTANCES OF THE INSTANT CASE ARE NOT ON THE SAME FOOTING. 8. CONSEQUENTLY, WE UPHOLD THE ORDER OF THE CIT(A) CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND DI SMISS THE INSTANT APPEAL OF THE ASSESSEE. 9. DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 14 TH OF SEPTEMBER, 2012 AT CHENNAI. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER CHENNAI, DATED, THE 14.09.2012 VM/- TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.