Sh. Harjinder Singh Raina, Jammu V. The Income Tax Officer, Jammu

ITA 73/ASR/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8207 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 08-10-2018
• Assessment Year: 1992-1993
• Appeal Filed On: 28-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence; Initiation of penalty proceedings; Fair market value; Valuation report; Competent authority
• Section: 271(1)(c); 69C; 205; 69; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 73/ASR/2016 AS SESSMENT YEAR: 1992-93 HARJINDER SINGH RAINA PROP. SINGH & SINGH TRADING CO. NEHRU MARKET, JAMMU [PAN: AGKPR 4068H] VS. INCOME TAX OFFICER, WARD-1(1), JAMMU (APPELLANT) (RESPONDENT) APPELLANT BY : SH. TARUN BANSAL (A DV.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 28.10.2018 DATE OF PRONOUNCEMENT: 31.12.2018 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS), JAMMU ('CIT(A )' FOR SHORT) DATED 29.10.2015, CONFIRMING THE LEVY OF PENALTY U/S. 271 (1)(C) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) VIDE ORDER DATED 28.02 .2008 FOR THE ASSESSMENT YEAR (AY) 1992-93. 2. THE ONLY ISSUE ARISING IN THE INSTANT APPEAL IS THE SUSTAINABILITY OF THE IMPUGNED ORDER, I.E., IN LAW AND IN THE FACTS AND C IRCUMSTANCES OF THE CASE. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE WAS, UPON BEING FOUND TO HAVE INVESTED RS.17 LACS IN A BUILDING DURING THE RELEVANT YEAR, QUESTIONED IN ITS RESPECT DURING THE ASSESSMENT PROCEEDINGS. HE EXPLAINED THE SAME T O HAVE BEEN EXPENDED OUT OF ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 2 RS.17.85 LACS RECEIVED BY HIS MOTHER ON THE ACQUISI TION OF HER LAND. HE, HOWEVER, COULD NOT CORRELATE THE SAME WITH THE WITHDRAWALS F ROM HIS BANK ACCOUNT, IN WHICH THE COMPENSATION RECEIVED BY HIS MOTHER WAS STATED TO HAVE BEEN DEPOSITED. EXPENDITURE TO THE EXTENT OF RS.5.75 LACS WAS REGAR DED AS UNEXPLAINED AND, ACCORDINGLY, DEEMED AS THE ASSESSEES INCOME U/S. 6 9C OF THE ACT. THE SAME STOOD CONFIRMED UP TO THE TRIBUNAL, THE OPERATIVE PART OF WHOSE ORDER (IN ITA NO. 96/ASR/2016 DATED 10.08.2017/PB PGS. 24-40), ALSO R EAD OUT DURING HEARING, READS AS UNDER: 10. IN THE WRITTEN SUBMISSIONS, IT HAS BEEN CONTEN DED ON BEHALF OF THE ASSESSEE, THAT HE RAISED LOANS FROM DIFFERENT PARTIES AND ALSO TOOK B UILDING MATERIAL ON CREDIT AND CONSTRUCTED THE HOUSE; THAT HE HAD RECEIVED COMPENSATION FOR LA ND ACQUIRED TO THE TUNE OF RS.17,85,595/70 THROUGH CHEQUE WHICH WAS CREDITED I N HIS ACCOUNT ON 10-4-1991; THAT HE IMMEDIATELY STARTED MAKING PAYMENTS TO PERSONS FROM WHOM HE HAD RAISED LOANS OR HAD TAKEN BUILDING MATERIALS ON CREDIT, BY MAKING WITHD RAWALS FROM HIS SAID BANK ACCOUNT; THAT ALL THE PAYMENTS WERE MADE THROUGH CHEQUES; THAT TH E A.O. HAD DISALLOWED THE PAYMENTS MADE BY THE ASSESSEE INSPITE OF THE FACT THAT FOUR PERSONS, BEING THE MANAGING PARTIES (PARTNERS) OF THE FINANCE COMPANIES, HAD ADMITTED O N OATH BEFORE THE A.O. BUT THEY HAD ADVANCED THE RESPECTIVE LOANS TO THE ASSESSEE FOR T HE CONSTRUCTION OF HOUSE; THAT SUCH EVIDENCE HAD BEEN GIVEN INSPITE OF THE FACT THAT AL MOST 10 YEARS HAD PASSED AND THEIR RESPECTIVE FINANCE FIRMS HAD BEEN CLOSED FOR MORE T HAN FIVE YEARS, BECAUSE (OF) RBI REGULATIONS; THAT THE BANK STATEMENT CLEARLY INDICA TED THE CHEQUES ISSUED BY THE ASSESSEE; THAT SO, THE ASSESSEE HAD DULY DISCHARGED HIS ONUS; THAT THE ASSESSEE HAD PAID RS.20,000/- TO SHRI DEWAN CHAND AND RS.1,50,00 0/- TO SHRI MUNI CHAND ON 18- 4-1991; THAT THESE PERSONS WERE AGENTS WHO USED TO SUPPLY THE BUILDING MATERIAL THAT THEY HAD SUPPLIED BRICKS, SAND AND STONES TO THE AS SESSEE FOR THE CONSTRUCTION OF HOUSE AND MADE THE PAYMENT TO THESE PERSONS FOR THE BUILDING MATERIAL SUPPLIED; THAT THESE PAYMENTS WERE ALSO MADE THROUGH CHEQUES; THAT THE PAYMENTS HAD BEEN MADE TO PERSONS FROM WHOM THE ASSESSEE HAD TAKEN LOANS O R BUILDING MATERIAL ON CREDIT; THAT THE ENTIRE AMOUNT HAD BEEN SPENT FOR THE CONST RUCTION OF THE HOUSE; THAT THE PAYMENT OF RS.20,000/- MADE BY SMT. SATYA RANI, WHO WAS WIFE OF A FRIEND OF THE ASSESSEE, HAD ALSO BEEN WRONGLY DISALLOWED; THAT TH IS PAYMENT HAD ALSO BEEN MADE THROUGH THE CHEQUE; THAT THE ASSESSEE HAD SUBMITTED THE NAMES AND ADDRESSES OF ALL THE PERSONS FROM WHOM THE SAID CREDITS HAD BEEN RAI SED AND REFUNDED THE AMOUNTS THROUGH CHEQUES; THAT THEREFORE, THE ASSESSEE HAD D ULY DISCHARGED HIS ONUS AND THERE WAS NO REASON FOR REJECTING THE EXPLANATION; THAT T HE ASSESSEE HAD ALSO SPENT MONEY FROM HIS PAST SAVINGS; AND THAT EVEN IF NO ACCOUNT HAD BEEN KEPT BY THE ASSESSEE, THE AMOUNT SPENT FROM SAVINGS CANNOT BE COMPLETELY IGNO RED. ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 3 11. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND HAV ING APPRECIATED THE MATERIAL ON RECORD, WE ARC OF THE VIEW THAT THE ORDER PASSED BY THE LEARNED CIT(A) CALLS FOR NO INTERFERENCE AT OUR HANDS. THE ASSESSEE HAS NOT BEEN ABLE TO REFUTE THE CLEAR AND CATEGORIC FINDINGS OF FACT BY THE LOWER AUTHORITIES . THE ASSESSEE WAS A PARTNER IN SIX FIRMS CARRYING ON FINANCE BUSINESS , NAMELY, M/S. SINGH TRADING CORPORATION, M/S. KHALSA FINANCE CORPORATION, M/S. NEW PARBHAT FINANC E CORPORATION, M/S. APEX MOTOR FINANCE CORPORATION, M/S. PUNJAB FINANCE CORP ORATION AND M/S. TULSI FINANCE CORPORATION. HE HAD NOT FILED HIS INCOME TAX RETURN S FOR THE EARLIER FOUR TO FIVE YEARS, CONTENDING THAT HIS INCOME WAS NOT TAXABLE. HIS CASE IS THAT HE CONSTRUCTED HIS HOUSE PROPERTY BY INVESTING RS.17 LACS . THIS AMOUNT OF RS.17 LACS IS STATED TO HAVE COME AS COMPENSATION RECEIVED ON ACQUISITION O F LAND. THIS LOAN WAS STATEDLY DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT AND T HE INVESTMENT IN THE HOUSE IS STATED TO HAVE BEEN MADE BY MAKING WITHDRAWALS THEREFROM B ETWEEN 11-4-1991 TO 3-5-1991. SOME OF THE WITHDRAWALS ARE STATED TO HAVE BEEN UTI LISED FOR THE REPAYMENT OF LOANS TAKEN IN EARLIER YEARS FROM FINANCE COMPANIES AND O THER PERSONS. HOWEVER, UNDISPUTEDLY, THE ASSESSEE DID NOT FILE ANY DETAILS OF THE EXPENDITURE INCURRED ON THE CONSTRUCTION OF THE HOUSE, NOR ANY BILLS OR VOUCHER S OF THE EXPENDITURE . 12. THE ALLEGED LOANS TAKEN WERE ALSO NOT SUPPORTED BY ANY EVIDENCE, NOR WAS THE PURPOSE FOR SUCH LOANS DIVULGED . IT IS NOT COMPREHENSIBLE AS TO WHY THE FINANCE COMPANIES, WHICH WERE ADVANCING LOANS FOR FINANCING VEHICLES, WOULD ADVANCE LOANS TO THE ASSESSEE FOR CONSTRUCTION OF THE HOUSE, PART ICULARLY WHEN THE ASSESSEE HIMSELF WAS IN THE BUSINESS OF FINANCE . IT IS PERTINENT TO NOTE THAT DESPITE THE FACT THA T THE ASSESSEE WAS A PARTNER IN SIX FIRMS CARRYING ON FIN ANCE BUSINESS, HE DID NOT MAINTAIN ANY CONSTRUCTION ACCOUNT REGARDING HIS HOUSE AND EV EN DID NOT HAVE ANY DETAILS OF THE ALLEGED LOANS RAISED. SO MUCH SO, THE ASSESSEE EVEN FAILED TO FILE A COPY OF HIS BANK ACCOUNT WHERE THE LOANS ALLEGEDLY RAISED FROM THE F INANCING COMPANIES WERE DEPOSITED. MOREOVER, EVEN THE WITHDRAWALS COULD NOT BE COR RELATED WITH THE CONSTRUCTION OF THE HOUSE . 13. IT WAS IN THESE FACTS THAT THE AUTHORITIES BELO W RIGHTLY DID NOT ACCEPT THE STATEMENTS OF THE PARTNERS OF THE FIRM, SUCH STATEM ENTS BEING ONLY BALD STATEMENTS UNSUPPORTED BY ANY EVIDENCE WHATSOEVER, AS DISCUSSE D HEREINABOVE. 14. APROPOS THE PAYMENTS ALLEGEDLY MADE TO SHRI MUN I LAL AND SHRI DEWAN CHAND, THE ASSESSEE COULD NOT EVEN ESTABLISH THEIR IDENTITY. ALSO, EVEN THE PURPOSE OF SUCH PAYMENT WAS NOT JUSTIFIED. EVIDENTLY, THEREFOR E, SUCH PAYMENTS DID NOT STAND CO-RELATED WITH THE ALLEGED CONSTRUCTION OF HOUSE B Y THE ASSESSEE, AS WAS ALSO THE CASE WITH THE PAYMENT OF RS.11,000/- TO THE PRINCIP AL, GURU HAR KRISHAN SCHOOL AND RS.60,000/- UTILISED FOR PURCHASE OF FDR AND RS.20, 000/-, THE PAYMENT ALLEGEDLY MADE TO SMT. SATYA RANI, WIFE OF A FRIEND OF THE AS SESSEE. 15. THE MERE FACT THAT THE PAYMENTS HAD BEEN MADE T HROUGH CHEQUES IS OF NO AVAIL TO THE ASSESSEE, THE ASSESSEE HAVING MISERABLY FAIL ED TO PRODUCE ANY EVIDENCE WHATSOEVER, AS DISCUSSED ABOVE. FURTHER, BY MERELY SUBMITTING THE NAMES AND ADDRESSES OF ALL THE CREDITORS, THE ASSESSEE DOES N OT GET ABSOLVED. THE CONTENTION THAT ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 4 THE ASSESSEE HAD SPENT MONEY FROM HIS PAST SAVINGS ALSO, IS AN ENTIRELY NEW PLEA, IT WAS NEVER BEFORE EITHER OF THE AUTHORITIES BELOW. M OREOVER, THIS, AGAIN, IS A BLAND AND UNCORROBORATED ASSERTION. 16. THE ASSESSEE HAS ALSO FAILED TO PROVE HIS CONTE NTION THAT THE CONSTRUCTION OF THE HOUSE WAS SPREAD OVER TWO YEARS. ONCE AGAIN, NO EVIDENCE IN THIS REGARD IS FORTH- COMING. RATHER, THE WITHDRAWALS MADE BY THE ASSESSE E PERTAIN TO THE PERIOD 10-4- 1991 TO 3-5-1991, LESS THAN ONE MONTH, COMPRISED IN ONE SINGLE YEAR. 17. SECOND 69C OF THE ACT PROVIDES AS FOLLOWS:- WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURR ED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPE NDITURE OR PART THEREOF, OR THE EXPLANATION, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY, THE AMOUNT COVERED BY SUCH E XPENDITURE OR PART THEREOF, AS THE CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR. 18. IN THE PRESENT CASE, THE EXPLANATION OFFERED BY THE ASSESSEE REGARDING THE SOURCE OF THE EXPENDITURE IN QUESTION WAS NOT, IN THE VIEW OF THE A.O., SATISFACTORY, FOR THE REASONS RELATED (NARRATED) IN THE ASSESSMENT ORDER. THE LEARNED CIT (A), VIDE THE IMPUGNED ORDER, CONFIRMED THE ASSESSMENT ORDER, DISCUSSING THREADBARE THE EXP LANATION OFFERED BY THE ASSESSEE BEFORE THE A.O. AS WELL AS BEFORE HIMSELF [THE LEARNED CIT (A)]. THE ADDITION MADE BY THE A.O. HAS BEEN CONFIRMED BY THE LEARNED CIT(A) BY RECORDING C ATEGORIC FINDINGS OF FACT, WHICH RUN CONCURRENT WITH THOSE CONTAINED IN THE ASSESSMENT O RDER. 19. AS SUCH, FINDING NO ERROR IN THE ORDER OF THE L EARNED CIT(A), THE SAME IS HEREBY UPHELD. THE GRIEVANCE RAISED BY THE ASSESSEE BY WAY OF THE GROUNDS OF APPEAL, IS REJECTED. [ EMPHASIS, SUPPLIED ] IN THE PENALTY PROCEEDINGS, THE ASSESSEE FAILING TO MAKE ANY IMPROVEMENT IN HIS CASE, I.E., VIS--VIS THAT IN THE ASSESSMENT PROCEE DINGS; IN FACT, FAILING TO ADVANCE ANY EXPLANATION, I.E., QUA THE ADDITION OF RS. 5.75 LACS, PENALTY THEREON WA S LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME. IN APPEAL , AS CLAIMED, THE ASSESSEE MADE AN APPLICATION UNDER RULE 46A OF THE INCOME TAX RUL ES, 1962 (THE RULES HEREINAFTER) TOWARD A LOAN OF RS.1 LAC FROM A FINAN CE COMPANY, M/S. SINGH FINANCE PVT. LTD. WHICH, TAKEN DURING FINANCIAL YEAR (F.Y.) 1990-91 (I.E., THE PREVIOUS YEAR RELEVANT TO AY 1991-92), WAS REPAID DURING THE RELE VANT YEAR, I.E., F.Y.1991-92. THE ASSESSEES EXPLANATION OF HAVING REPAID THE LOAN TA KEN FOR INVESTMENT PURPOSES, ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 5 WOULD THUS MERIT BEING ADMITTED, WHICH, HOWEVER, TH E LD. COUNSEL FOR THE ASSESSEE, SH. BANSAL, WOULD ARGUE, WAS UNFORTUNATELY NOT. ON BEING QUESTIONED ABOUT THE ASSESSEES CASE FOR THE BALANCE RS.4.75 LACS, HE WO ULD SUBMIT THAT THE SAME SHALL NOT HOLD AS IT IS ONE SINGLE PENALTY, I.E., FOR A S PECIFIC AMOUNT OF RS.5.75 LACS, AND NOT A CASE OF TWO SEPARATE PENALTIES. ONCE, THEREFO RE, EXPLANATION FOR A PART OF IT IS ACCEPTED, THE BALANCE WOULD NOT OBTAIN IN-AS-MUCH AS IT IS NOT A CASE OF THE PENALTY BEING LEVIED SEPARATELY FOR RS.1 LAC AND SE PARATELY FOR THE BALANCE AMOUNT OF RS. 4.75 LACS. IN FACT, HE WOULD CONTINUE, NO PE NALTY COULD AT ALL BE LEVIED AS THE BASIS OF THE INVESTMENT IN THE BUILDING BY THE ASSE SSEE (AT RS.17 LACS) IS THE VALUATION REPORT, I.E., AN ESTIMATION, WITH IT BEIN G TRITE LAW THAT PENALTY CANNOT BE IMPOSED ON AN ESTIMATE. THE LD. DEPARTMENTAL REPRES ENTATIVE (DR) WOULD VEHEMENTLY OPPOSE. THE INVESTMENT BY THE ASSESSEE A T RS.17 LACS IS AN UNDISPUTED FACT. IT IS NOT A CASE OF THE ASSESSEE HAVING FURNI SHED A COUNTER VALUATION, CONTENDING, ON THAT BASIS, TO HAVE INVESTED A LOWER SUM. 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. 3.1 INDUBITABLY, THE ASSESSEE DID NOT FURNISH ANY E XPLANATION OF SUBSTANCE IN THE PENALTY PROCEEDINGS WHICH, AS RIGHTLY ARGUED BY SH. BANSAL, ARE SEPARATE AND DISTINCT FROM THE ASSESSMENT PROCEEDINGS, SO THAT T HE SAME BY ITSELF CANNOT BE CONCLUSIVE OF THE PENALTY. BUT, THEN, IT IS ONLY TH E ASSESSEE WHO HAS TO THEREFORE MAKE OUT OF A CASE IN THE PENALTY PROCEEDINGS, I.E. , AS TO WHY, DESPITE SUBSTANTIVE FINDINGS OF FACT AGAINST HIM (HIS CASE) ARRIVED AT IN THE ASSESSMENT PROCEEDINGS, WHICH STAND FIRMED UP AND, RATHER, HAVE ATTAINED FI NALITY, OUGHT TO BE DISCARDED OR MODIFIED, AND PENALTY NOT LEVIED, FURNISHING AN EXP LANATION. RATHER, ON THE CONTRARY, THESE FINDINGS, BASED AS THEY ARE ON COGE NT BASIS AND, FURTHER, BY A COMPETENT AUTHORITY, CAN SURELY BE RELIED UPON IN T HE PENALTY PROCEEDINGS, PARTICULARLY WHERE THE ASSESSEE FURNISHES NO SUBSTA NTIVE EXPLANATION IN THE PENALTY ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 6 PROCEEDINGS ( BHARAT RICE MILLS V. CIT [2005] 278 ITR 599 (ALL); CIT V. SOMNATH OIL MILLS [1995] 214 ITR 32 (GUJ); S.S. RATANCHAND BHOLANATH V. CIT [1994] 210 ITR 682 (MP); CIT V. RAM NIWAS AGARWAL [1980] 125 ITR 432 (ALL)). ABSENCE OF SUCH AN EXPLANATION IS A SURE RECIPE FOR LEVY OF PE NALTY; IT BEING THE SUB-STRATUM OR THE EDIFICE ON WHICH THE ASSESSEES CASE IN PENALTY PROCEEDINGS RESTS. THIS REPRESENTS TRITE LAW, OFTEN EXPRESSED BY STATING OF A PLAUSIBLE EXPLANATION SAVING PENALTY, AND FOR WHICH REFERENCE BE MADE TO A HOST OF CASE LAW BY THE APEX COURT SETTLING THE SAME (VIZ. MAK DATA (P.) LTD. VS. CIT [2013] 358 ITR 593 (SC); UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS [2008] 306 ITR 277 (SC); K.P. MADHUSUDHANAN VS. CIT [2001] 251 ITR 99 (SC); B.A. BALASUBRAMANIAM AND BROS V. CIT [1999] 236 ITR 977 (SC); ADDL. CIT VS. JEEVAN LAL SHAH [1994] 205 ITR 244 (SC); CIT VS. K. R. SADAYAPPAN [1990] 185 ITR 49 (SC)), TO CITE SOME, FOLLOWED BY HONBLE HIGH COURTS THROUGHOUT THE COUN TRY, AS BY THE JURISDICTIONAL HIGH COURT IN CIT V. LALCHAND TIRATH RAM [1997] 225 ITR 675 (P&H); PREM PAL GANDHI V. CIT (IN ITA NO. 353 OF 2009, DATED 22/7/2009), AGAIN T O NOTE SOME. WHY, ABSENCE OF AN EXPLANATION IN RESPECT OF FACTS MATERIAL TO THE COMPUTATION OF HIS INCOME, I.E., QUA THE DISALLOWANCE/S OR ADDITIONS SUSTAINED IN ASSES SMENT, ITSELF DEEMS, BY STATUTORY FICTION, THE ASSESSEE TO HAVE C ONCEALED THE PARTICULARS OF HIS INCOME, ATTRACTING PENALTY U/S. 271(1)(C), PER EXPLANATION 1 THEREOF. THIS WOULD ALSO INCLUDE A CASE WHERE THE EXPLANATION FURNISHED IS FOUND FALSE, OR REMAINS UNSUBSTANTIATED. THIS LEGAL POSITION STANDS REITERA TED, ONCE AGAIN, BY THE APEX COURT IN MAK DATA (P.) LTD. (SUPRA). IT, WHILE AFFIRMING THE DECISION BY THE HONBLE DELHI COURT, HELD AS UNDER (AT PAGE 598): EXPLANATION 1 TO SECTION 271(1) (C) OF THE INCOME-TAX ACT, 1961, RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NO TICED BY THE ASSESSING OFFICE, BETWEEN THE REPORTED AND ASSESSED INCOME. T HE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIABLE EVIDENCE. WHEN THE INITIAL ONUS PLACED BY THE EXPLANATION HAS BEEN DIS CHARGED BY HIM, THE ONUS ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 7 SHIFTS TO THE DEPARTMENT TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED INCOME AND NOT OTHERWISE. OF COURSE, WHERE THE ASSESSEE FURNISHES AN EXPLANAT ION IN THE PENALTY PROCEEDINGS, SUBSTANTIATING IT, THE SAME IS TO BE EXAMINED ON IT S MERITS, I.E., ON THE ANVIL OF EXPLANATION 1 TO SECTION 271(1)(C), WHICH DEEMS THE ASSESSEE TO HAVE CONCEALED PARTICULARS OF HIS INCOME WHERE HE FAILS TO FURNISH AN EXPLANATION (OR OFFER S ONE WHICH IS FOUND BY THE REVENUE TO BE FALSE) OR OTHER WISE FAILS TO SUBSTANTIATE IT, DISCLOSING FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS INCOME. IN THE INSTANT CASE, THE ASSESSEE IN THE PENALTY PR OCEEDINGS FAILED TO PROVE THE SOURCE, TO THAT EXTENT, OF THE EXPENDITURE INCURRED BY HIM, I.E., RS. 5.75 LACS. HOW, THEN, ONE WONDERS, COULD THE ASSESSING OFFICER (AO) BE FAULTED FOR LEVYING THE PENALTY U/S. 271(1)(C) ? 3.2 AS REGARDS THE NON-ADMISSION OF THE ADDITIONAL EVIDENCE BY THE LD. CIT(A) UNDER RULE 46A OF THE RULES, THE RECOURSE FOR THE A SSESSEE IN SUCH A CASE IS TO RAISE THIS ISSUE BEFORE THE HIGHER APPELLATE FORUM, THE T RIBUNAL IN THE INSTANT CASE, AND MAKE OUT THE CASE FOR THE ADMISSION OF THE SAID EVI DENCE BY THE FIRST APPELLATE AUTHORITY. THERE IS NO SPECIFIC GROUND RAISED BY TH E ASSESSEE BEFORE THE TRIBUNAL IN THIS RESPECT; THE SEVERAL GROUNDS RAISED (AS AMENDE D) READING AS UNDER: 1. THAT THE PENALTY ORDER OF ID AO U/S 271(L)(C) O F INCOME-TAX ACT 1961, IS ILLEGAL, INVALID & VOID-OBNITIO, IN AS MUCH AS, THE REASONS FOR THE INITIATION OF PENALTY PROCEEDINGS IN THE QUANTUM ORDER ARE DIFFERENT FROM THE A.OS PENALTY ORDER, LEVYING THE PENALTY U/S 271(L)(C) OF THE ACT. 2. THAT THE ADOPTION OF FAIR MARKET VALUE ON REFERE NCE TO VALUATION OFFICER / ADOPTION OF A VALUATION REPORT OF VALUATION OFFICER FOR ADDITIO NS IS AN ESTIMATE, AS PER SEC. 55A & 142A, HENCE LEVY OF PENALTY ON ESTIMATE IS BAD-IN -LAW. 3. THAT IN THE VALUATION REPORT, YEAR OF CONSTRUCTI ON IS 1991, AND YEAR 1991 FALLS INTO TWO FINANCIAL YEARS, HENCE LEVY OF PENALTY ONLY IN THE A.Y. 1992-93 IS BAD-IN-LAW. ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 8 4. THAT THE ID. AO IN PENALTY ORDER WRONGLY IMPOSED THE PENALTY ON THE BASIS OF THE CONFIRMED QUANTUM ORDER OF CIT(A), AS WELL AS, OF I TAT WHEREAS CIT(A) IN QUANTUM ORDER CONFIRMED THE ADDITION ON THE THEORY OF PROBABILITY. 5. THAT THE ID AO AND CIT(A) HAS NEITHER GIVEN ANY INDEPENDENT FINDING IN THE ORDER U/S 271(L)(C), OF HIS CONCLUSION THAT THERE WAS A DELIB ERATE DESIGN ON THE PART OF THE ASSESSEE NOR THE BONAFIDES OF THE ASSESSEES CONDUC T WAS VERIFIED. 6. THAT THE ID CIT(A) IN PENALTY ORDER HAS WRONGLY CONFIRMED THE PENALTY, BEFORE VERIFYING THE FACTS AS PER LETTER DATED 18.07.13 & 19.05.14 MENTIONING THAT THE APPELLANT HAD TAKEN A LOAN OF RS. 1,00,000 FROM SIN GH FINANCE PVT. LTD WHICH WAS WRONGLY MENTIONED AS SINGH FINANCE CORP IN A.OS PE NALTY ORDER AT PAGE - 3 , PARA - 2 AND IS BAD-IN-LAW. 7. THAT ORDER OF LD AO & LD CIT (A) IS BAD IN LAW, AS WELL AS, ON FACTS. THE ASSESSEE, IN MY HUMBLE VIEW, OUGHT TO HAVE RAIS ED THIS ISSUE, I.E., THE NON- ADMISSION OF ADDITIONAL EVIDENCE BY THE LD. CIT(A), PER A SPECIFIC GROUND IN ITS MEMO OF APPEAL. EVEN SO, ON MERITS OF THE SAID NON- ADMISSION, THE STATED REASON FOR THE SAME IN THE IMPUGNED ORDER IS THE GRANT OF SUFFICIENT OPPORTUNITIES TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE SAM E, THOUGH WITHOUT DOUBT RELEVANT, THE SAID EVIDENCE BEING ADMITTEDLY SOUGHT TO BE FURNISHED FOR THE FIRST TIME IN THE APPELLATE PROCEEDINGS, WHAT WOULD BE EQ UALLY RELEVANT IS THE REASON FOR THE NON-FURNISHING OF THE SAME DURING THE PENALTY P ROCEEDINGS, WHICH, THOUGH NOT INDEPENDENT, ARE YET SEPARATE AND DISTINCT PROCEEDI NGS IN WHICH, THEREFORE, THE ASSESSEE COULD FURNISH EVIDENCE. WHY, THE ASSESSEE WOULD, IN ORDER TO SUCCESSFULLY PLEAD ADMISSION, NEED TO SHOW AS TO WHY IT COULD NO T PRODUCE THE SAME EARLIER, WHICH WOULD THEREFORE INCLUDE THE ASSESSMENT PROCEE DINGS AS WELL, THE PENALTY PROCEEDINGS BEING ONLY IN CONTINUATION THERETO. THE PENALTY PROCEEDINGS BEING, HOWEVER, DIFFERENT, WITH SEPARATE CONSEQUENCES, THE ADMISSION OF ADDITIONAL EVIDENCE CANNOT BE EXCLUDED SOLELY ON THE BASIS OF IT BEING NOT FURNISHED IN QUANTUM PROCEEDINGS, I.E., WITHOUT ANY JUSTIFIABLE CAUSE. IN FACT, EXPLANATION 1(B) TO SECTION 271(1)(C) SPECIFICALLY PROVIDES FOR FURN ISHING AN EXPLANATION AND ITS SUBSTANTIATION IN THE PENALTY PROCEEDINGS. HOWEVER, WITHOUT DOUBT, NO SUCH ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 9 EXPLANATION, DULY SUPPORTED BY EVIDENCE, WAS FURNIS HED DURING THE PENALTY PROCEEDINGS, WHEREIN THE ASSESSEE STANDS SHOW CAUSE D VIDE NOTICE DATED 26.10.2007. NOT ONLY, THEREFORE, SUFFICIENT OPPORTU NITIES STAND ALLOWED TO THE ASSESSEE, NO CASE OF BEING PREVENTED BY SUFFICIENT CAUSE IN PRODUCING THE SAID EVIDENCE HAS BEEN SHOWN. NO REASON FOR NON-ADDUCING THE SAID EVIDENCE IN THE PENALTY PROCEEDINGS STANDS ADVANCED DESPITE THE ABS ENCE OF EVIDENCE BEING THE PRIME REASON FOR DISREGARDING THE ASSESSEES STATED EXPLANATION, DISCUSSED, AS WOULD BE APPARENT FROM ITS ORDER, REPRODUCED SUPRA , BY THE TRIBUNAL, THREADBARE. HOW, THEN, ONE WONDERS, COULD THE IMPUGNED NON-ADMI SSION, DENIED U/R. 46A(1), BE VALIDLY ASSAILED ? NO SUPERVENING CIRCUMSTANCES PREVENTING THE PRODU CTION OF THE SAID EVIDENCE, ARE STATED, EVEN AS THE ASSESSEE STANDS ALLOWED SUFFICIENT OPPORTUNITY BOTH FOR PRODUCTION OF THE EVIDENCE SOU GHT TO BE ADMITTED. NO WONDER, THE HONBLE COURTS, CONSIDERING THE SEVERAL STAGES THROUGH WHICH THE EXAMINATION OF THE ASSESSEES CASE STANDS PASSED, HAVE OPINED T HAT AN ASSESSEE COULD NOT FURNISH FRESH EVIDENCE IN THE APPELLATE STAGE OF THE PENALT Y PROCEEDINGS. AS I SEE IT, AND EVEN AS OBSERVED BY THE BENCH DURING HEARING, THE S AID EVIDENCE IS EVEN OTHERWISE LIABLE TO NOT ADMITTED AT THE THRESHOLD, I.E., ON T HE GROUND OF ITS RELEVANCY OR, RATHER, NON-RELEVANCY. THE EXPENDITURE FOR INCURRING WHICH, I.E., WITHOUT ESTABLISHING SOURCE THEREOF, THE ADDITION U/S. 69C HAS BEEN MADE AND CONFIRMED, IS THAT INCURRED BY THE ASSESSEE DURING THE RELEVANT PREVIOUS YEAR, I.E., THE FINANCIAL YEAR 1991-92. THE EVIDENCE, WHICH IS IN RESPECT OF A LOAN (OF RS. ONE LAC) CONTRACTED EARLIER, REPAID BY THE ASSESSEE ON APRIL 24, 1991, WOULD NOT THEREFORE ASSIST THE ASSESSEES CASE QUA THE SAID ADDITION, I.E., EVEN TO THAT EXTENT, IN A NY MANNER. THE REPAYMENT OF A LOAN DURING THE RELEVANT YEAR, RATHER THAN SUG GESTING AVAILABILITY OF RESOURCES FOR MEETING THE IMPUGNED EXPENDITURE OR INVESTMENT ON CONSTRUCTION OF A HOUSE, DEPLETES THE ASSESSEES RESOURCES, AVAILABLE WITH H IM FOR THE RELEVANT YEAR, TO THAT EXTENT. IF ANYTHING, IT FURTHER WEAKENS THE ASSESSE ES CASE ON MERITS. REFERENCE IN ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 10 THIS REGARD MAY ALSO BE MADE TO THE EMPHASIZED PART S OF THE TRIBUNALS ORDER IN THE QUANTUM PROCEEDINGS, WHEREAT IT STATES OF THE ASSES SEE BEING UNABLE TO CORRELATE THE WITHDRAWALS FROM HIS BANK ACCOUNT WITH THE CONSTRUC TION OF THE HOUSE, AND WHICH POSITION CONTINUES TO OBTAIN. 3.3 NEXT, LET US VISIT THE ASSESSEES ARGUMENT OF T HE IMPUGNED PENALTY BEING NOT MAINTAINABLE IN-AS-MUCH AS THE BASIS OF THE INVESTM ENT OF RS.17 LACS (ON THE CONSTRUCTION OF THE HOUSE) IS THE VALUATION REPORT, WHICH IS ONLY AN ESTIMATE. THE ARGUMENT, WHICH STATES TOO BROAD A PROPOSITION, ADM ITTING OF SEVERAL CAVEATS, IS NOT TENABLE ON THE FACTS OF THE CASE. FIRSTLY, ON A MOR E GENERAL PLANE, A QUESTION WOULD ARISE ONLY THERE IS MORE THAN ONE ESTIMATE OR BASIS , IN WHICH CASE, AGAIN, THE LOWER OF THE TWO SHALL OBTAIN. FOR EXAMPLE, IF THE ASSESS EES CLAIM OF THE INVESTMENT, ALSO SUPPORTED BY A VALUATION REPORT, IS AT RS.15 LACS ( SAY), IT MAY BE POSSIBLE TO CONTEND THAT PENALTY COULD NOT BE LEVIED ON THE DIF FERENCE OF RS.2 LACS, REPRESENTING A BONA FIDE DIFFERENCE BETWEEN TWO REASONABLE VALUES. THIS, AG AIN, PRESUMES ABSENCE OF ANY MARKED INCONSISTENCIES BETWEEN THE T WO STATEMENTS, AS WHERE ONE OF THEM MAY BEAR SOME OMISSIONS, ETC. MORE SPECIFIC ALLY, IN THE FACTS OF THE CASE, THERE IS, TO BEGIN WITH, NO REFERENCE TO THE VALUAT ION REPORT EITHER IN THE ASSESSMENT OR IN THE PENALTY ORDER OR IN FACT IN ANY EXPLANATI ON FURNISHED BY THE ASSESSEE IN PENALTY PROCEEDINGS. IN FACT, THE ASSESSEE VIDE HIS LETTER DATED 28.11.2016 (THROUGH HIS COUNSEL, SH. BANSAL) TO THE REGISTRY OF THE TRI BUNAL (COPY ON RECORD), CLEARLY STATES THAT IT NEEDS TO BE VERIFIED WHETHER THE REO PENING OF THE ASSESSMENT IN THE INSTANT CASE IS BASED ON A VALUATION REPORT OR NOT. RATHER, NO DISPUTE AS REGARDS THE QUANTUM OF INVESTMENT BY THE ASSESSEE, ADOPTED THRO UGH-OUT AT RS. 17 LACS, EVEN AS AFORENOTED, IS OBSERVED. WHY, THE ASSESSEES CASE, AS NOTED BY THE TRIBUNAL AT PARA 11 OF ITS ORDER, IS STATED AS OF HIM HAVING CONSTR UCTED A HOUSE PROPERTY INVESTING RS. 17 LACS. WHY, IN FACT, ONE WONDERS, WOULD THE ASSESSEE EXPLA IN THE SOURCE OF ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 11 INVESTMENT OF RS.17 LACS IF HE HAD NOT MADE THE SAM E OR DISAGREED WITH THE QUANTUM STATED ? RATHER, THE ASSESSEES FIRST EXPLANATION IS OF THE SOURCE OF INVESTMENT BEING THE COMPENSATION OF RS.17.85 LACS RECEIVED BY HIS MOTHER, AND WHICH STANDS CREDITED IN (HIS) SAVING BANK ACCOUNT IN APRIL, 1991. THOUGH THE ACCOUNT NO.1968 WITH J&K BANK IS NOT SPECIFICALLY S TATED TO BE THE ASSESSEES BANK ACCOUNT, THIS IS PRESUMED AND, IN ANY CASE, EVEN IF IT IS HIS MOTHERS ACCOUNT, WITHDRAWALS FROM THE SAME FOR CONSTRUCTION WOULD VA LIDLY PROVE THE SOURCE. IN OTHER WORDS, THE INVESTMENT OF RS.17 LACS BY THE AS SESSEE IS BOTH UNDISPUTED AND ADMITTED. IT WOULD, IT MAY BE THOUGH ADDED, BE A DI FFERENT MATTER ALL TOGETHER IF THE ASSESSEE WAS TO PROVE THAT THE INVESTMENT ON CONSTR UCTION WAS MADE DURING AN EARLIER PERIOD, SO THAT THE INVOCATION OF SEC.69C O R SEC.69, FOR THAT MATTER, IN WHICH CASE DESPITE THE ADDITION BEING SUSTAINED, NO PENAL TY COULD BE LEVIED. REFERENCE IN THIS REGARD MAY BE MADE TO THE RECENT DECISION BY T HE TRIBUNAL IN KAMAL GANDHI VS. ASST. CIT (IN ITA NO.458/ASR/2017 DATED 28.08.2018). THE ASS ESSEES CASE THROUGHOUT, ON THE OTHER HAND, AS THE READING OF TH E TRIBUNALS ORDER IN QUANTUM WOULD SHOW, HAS BEEN THAT THE CONSTRUCTION WAS MADE BY PURCHASING CONSTRUCTION MATERIAL ON CREDIT OR BY ASSUMING LOANS FROM FINANC E COMPANIES, WHICH OBLIGATIONS WERE DISCHARGED FROM WITHDRAWALS FROM HIS BANK ACCO UNT IN APRIL, 1991. THE CONSTRUCTION ACTIVITY IS COMPLETELY UNEVIDENCED AS TO ITS PERIOD. FURTHER, AGAIN AS APPARENT FROM THE TRIBUNALS ORDER IN QUANTUM, THE ASSESSE HAS COMPLETELY FAILED TO CORRELATE THE WITHDRAWALS FROM THE SAID BANK ACCOUN T WITH THE CONSTRUCTION ACTIVITY STATED TO BE SPREAD OVER TWO YEARS, WITH THE PAYM ENTS TO CREDITORS OR OF LOANS, WHICH IS STATED TO BE DURING 1991. WHY, THE SOURCE OF CREDIT OF RS.17.85 LACS, GOING BY THE ASSESSEES CASE, BEING PROVED, ALL HE HAD TO DO SO OF THE SAME HAVING BEEN UTILIZED FOR THE CONSTRUCTION OF THE HOUSE, PAYMENT S FOR WHICH, TO THE EXTENT ALLOWED, WERE FOUND TO HAVE BEEN MADE DURING F.Y. 1 991-92, THE RELEVANT PREVIOUS YEAR. THE ALLOWANCE OF CREDIT FOR TWO YEARS IS BIZA RRE, AND OUT OF BOUNDS OF ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 12 IMAGINATION, I.E., EVEN FOR BUILDING MATERIALS, NOT TO SPEAK OF LABOUR. THE ASSESSEE IN FACT HAS ALREADY BEEN ALLOWED CREDIT FOR THE WIT HDRAWALS MADE FROM 10.04.1991 TO 3.5.1991 TO THE EXTENT THESE ARE TO SELF OR TO PERSONS ENGAG ED IN THE CONSTRUCTION OF THE HOUSE (I.E., AT RS.11.25 LACS), ALSO DETAILED BY THE LD. COUNSEL AND REFERRED TO DURING HEARING (COPY ON RECORD). THE ASSESSEES PLE A IS, THUS, WITHOUT MERIT. 3.4 NEXT, I MAY ADDRESS THE ASSESSEES PLEA WITH RE GARD TO THE NON- MAINTAINABILITY OF THE PENALTY ON THE BALANCE AMOUN T OF RS.4.75 LACS OR, FOR THAT MATTER, THE ENTIRE RS. 5.75 LACS. THE SAID PLEA, WI TH RESPECT, ONLY NEEDS TO BE STATED TO BE REJECTED. TO BEGIN WITH, THE SAME PRESUMES A CCEPTANCE OF THE ASSESSES EXPLANATION FOR RS.1 LAC, REPRESENTING A LOAN FROM A FINANCE COMPANY, REPAID DURING THE RELEVANT PREVIOUS YEAR. THE SAME, HOWEVE R, HAS NOT BEEN ACCEPTED, EITHER IN PRINCIPLE OR EVEN AS REGARDS ITS ADMISSIO N. THAT BEING THE CASE, THE QUESTION OF THE ACCEPTANCE OF RS.4.75 LACS, ACCEPT ANCE OF WHICH IS STATED FOLLOW IN CONSEQUENCE (TO THE ACCEPTANCE OF RS.1 LAC), WOU LD NOT. THERE IS, IN FACT, NO CORRELATION BETWEEN THE TWO; THE ASSESEE BEING CALL ED UPON TO ESTABLISH THE SOURCE OF RS.17 LACS INVESTED ON THE CONSTRUCTION OF HIS H OUSE, WAS, ON THE BASIS OF THE EXAMINATION OF THE EXPLANATION FURNISHED, FOUND TO HAVE SATISFACTORILY EXPLAINED IT TO THE EXTENT OF RS.11.25 LACS, SO THAT THE BALANCE AMOUNT WAS ADDED U/S. 69C, EVEN AS IT COULD EQUALLY VALIDLY BE U/S. 69. THE APPROP RIATENESS OF THE SECTION, I.E., S. 69 OR S. 69C, FAIRLY NOT DISPUTED BEFORE US, WOULD, WE MAY THOUGH CLARIFY, OF LITTLE CONSEQUENCE IN VIEW OF THE SETTLED LAW IN THE MATTE R, AND TOWARD WHICH I MAY ADVERT TO DECISIONS IN L. HAZARI MAL KATHULIA V. ITO [1961] 41 ITR 12 (SC); ISHA BEEVI V. TRO [1975] 101 ITR 449 (SC); CIT V. HARGOPAL BHALLA & SONS [1971] 82 ITR 243 (P&H); NAMDEV ARORA V. CIT [2016] 389 ITR 434 (P&H)]. THERE HAS BEEN, FURTHER, NO IMPROVEMENT IN HIS CASE BY THE AS SESSEE IN THE PENALTY PROCEEDINGS, I.E., UP TO THE STAGE OF THE TRIBUNAL; THE EXPLANATION BEING WHOLLY ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 13 UNSUBSTANTIATED. THE ASSESSEE IN THE PENALTY PROCEE DINGS IN FACT ONLY REITERATED HIS CASE AS IN THE QUANTUM PROCEEDINGS, WHICH HAD BEEN FOUND BY ALL THE AUTHORITIES UP TO THE TRIBUNAL AS WITHOUT ANY EVIDENCE, AND IT WOU LD THEREFORE NOT BE INCORRECT TO SAY OF THE ASSESSEES CASE BEING WITHOUT ANY EVIDEN CE. CLEARLY, IF THEREFORE THE ASSESSEE WAS ABLE TO MAKE OUT A CASE FOR A PART SUM , AS HE SOUGHT TO, IT IS ONLY THE PENALTY FOR THAT SUM THAT WOULD, ACCORDINGLY, I.E., ASSUMING THE ACCEPTANCE OF THIS PLEA, DELETED. NO CASE, IT MAY BE ADDED, STANDS MAD E OUT FOR ANY PART OF THE IMPUGNED SUM. NONE OF THE SEVERAL OBSERVATIONS OR F INDINGS BY THE TRIBUNAL, ISSUED ON EXAMINING THE ASSESSEES EXPLANATION, WHICH REMA INS THE SAME IN THE PENALTY PROCEEDINGS HAVE BEEN MET IN THE PENALTY PROCEEDING S. IN FACT, EVEN THE EVIDENCE SOUGHT TO BE ADMITTED IN PART EXPLANATION OF THE IM PUGNED SUM IN APPELLATE PROCEEDINGS, APART FROM NOT SATISFYING THE MANDATE OF R. 46A, FOUND AS NOT RELEVANT (ALSO REFER PARAS 2, 3.3). 3.5 FINALLY, THE ASSESSEE HAS PLACED HIS RELIANCE ON THE ORDERS OF THE TRIBUNAL IN THE CASE OF DY. CIT VS. YASH PAL NARENDER KUMAR (IN ITA NO.5340-42/DEL/2012, DATED 07.02.2013) AND ANITA SURENDERA AGGARWAL VS. ITO (IN ITA NO.3102/MUM 2014, DATED 08.06.2018). THE FIRST ORDER IS QUA A QUANTUM ASSESSMENT. IT IS NOT UNDERSTOOD AS TO HOW IS THE SAME RELEVANT, BEING AL SO NOT REFERRED TO DURING HEARING. AS REGARDS THE LATTER, WHICH WAS ALSO READ OUT DURING HEARING, THE SOLE ASPECT SOUGHT TO BE EMPHASIZED BY SH. BANSAL WAS TH AT THE ASSESSMENT AND PENALTY PROCEEDINGS BEING SEPARATE, FINDINGS IN ASSESSMENT PROCEEDINGS COULD NOT BE IPSO FACTO CONCLUSIVE OF THE LEVY OF PENALTY. THERE IS QUARRE L WITH THIS PROPOSITION. HOWEVER, AS AFORE-NOTED, WITH REFERENCE TO CASE LAW (REFER PARA 3.1), FIRSTLY, THE FINDINGS IN THE ASSESSMENT PROCEEDINGS ARE EXTREMEL Y RELEVANT, SO THAT THEY WOULD REQUIRE TO BE DISLODGED, AND WHICH HAS NOT BEEN IN THE PRESENT CASE. TWO, EXPLANTION-1 TO SECTION 271(1)(C), AS IS WELL SETTLED, RAISES A STATUTORY PRESUMPTION ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 14 AGAINST THE ASSESSEE, WHICH IS TO BE MET, AND WHICH HAS NOT BEEN IN THE INSTANT CASE. AS EXPLAINED IN LALCHAND TIRATH RAM (SUPRA), THAT MERE FURNISHING OF AN EXPLANATION IN NOT SUFFICIENT, AND IS TO BE SUBSTAN TIATED BY COGENT AND RELIABLE EVIDENCE. THE REQUIREMENT OF SUBSTANTIATION, IT MAY BE NOTED, STANDS PROVIDED BY LAW FOR AN ASSESSEE TO ESTABLISH THE TRUTH OF HIS E XPLANATION. THE DECISION IN ANANTHANRAM VEERASINGHAIAH & CO. VS. CIT [1980] 123 ITR 457(SC), RELIED UPON BY THE TRIBUNAL IN ANITA SURENDERA AGGARWAL (SUPRA), FOLLOWS THE DECISION IN CIT VS. ANWAR ALI [1970] 76 ITR 696 (SC). THE SAME, IN VIEW OF THE A MENDMENT IN LAW AS WELL AS THE DECISIONS AFORE-REFERRED, NO LONGER REPRESENTS THE LAW. THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE CIVIL IN NATURE AND NO MENS REA IS REQUIRED TO BE PROVED BY THE REVENUE. FURTHER, REFERENCE IN THIS CONTEXT MAY BE USEFUL MADE TO THE DECISION IN CHUHARMAL VS. CIT [1988] 172 ITR 250 (SC), WHEREIN THE PENALTY CONFIRMED WAS IN RESPECT OF INCOME U/S. 69 OF THE ACT. 3.6 BEFORE PARTING WITH THIS ORDER, IT MAY BE ADDED THAT THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS, ONLY THAT DISCUSSED ABOVE W ERE PRESSED OR OTHERWISE ARGUED BY THE ASSESSEES COUNSEL DURING THE HEARING. I DEC IDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN CO URT ON DECEMBER 31, 2018 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 31.12.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: HARJINDER SINGH RAINA, PROP. SINGH & SINGH TRADING CO., NEHRU MARKET, JAMMU (2) THE RESPONDENT: INCOME TAX OFFICER, WARD-1( 1), JAMMU (3) THE CIT(APPEALS), JAMMU ITA NO. 73/ASR/2016 (AY 1992-93) HARJINDER SINGH RAINA V. ITO 15 (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER