Himanshu Ishwarbhai Patel, Ahmedabad V. Dy. Commissioner of Income Tax, Ahmedabad

ITA 762/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8378 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAURABH SINGH
• Assessee Lawyers: K C THAKER
• Keywords: Salary income
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER HIMANSHU ISHWARBHAI PATEL, A - 35, SURBHI PARK, ISANPUR - VATVA ROAD, AHMEDABAD - 380043 PAN: ADSPP7607H (APPELLANT) VS THE DCIT, CIRCLE - 14, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI SAURABH SINGH , SR. D . R. ASSESSEE BY: S H RI K.C. THAKER , A.R. DATE OF HEARING : 26 - 03 - 2 018 DATE OF PRONOUNCEMENT : 17 - 04 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - T HIS ASSESSEE S APPEAL FOR A.Y. 2010 - 11 , ARIS ES FROM ORDER OF THE CIT(A) - 5 , AHM EDABAD DATED 13 - 01 - 2015 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - THE LEARNED C.I.T.(A) HAS ERRED IN LAW AND ON FACTS IN PARTIALLY CONFIRMING THE PENALTY RELATABLE TO THE SALARY RECEIVED FROM THE PREVIOUS EMPLOYER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED C.I.T.( A) OUGHT TO HAVE CANCELLED THE ORDER U/S. 271(1)(C) IN RESPECT OF PARTIALLY CONFIRMING THE PENALTY. 3. IT IS THEREFORE PRAYED THAT THE ORDERS OF THE LOWER AUTHORITIES M AY BE CANCEL LED. I T A NO . 762 / A HD/2 0 15 A SSESSMENT YEAR 2010 - 11 I.T.A NO. 762 /AHD/20 15 A.Y. 2010 - 11 PAGE NO HIMANSHU ISHW A RBHAI PATEL VS. DCIT 2 3. IN THIS CASE, RETURN OF INCOME DECLARING T OTAL INCOME OF RS. 36 , 98 , 260/ - WAS FILED ON 31 ST JULY, 2010 . SUBSEQUENTLY, A NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 4 TH SEP, 2012 ON THE REASON ING THAT ASSESSEE HAS NOT SHOWN SALARY OF RS. 7 , 18 , 884/ - RECEIVED FROM ALKA TEL LUCENT INDIA LTD. ON 30 TH A PRIL, 2009 IN THE RETURN OF INCOME. THE ASSESSING OFFICER HAS ADDED THIS AMOUNT OF UNDISCLOSED SALARY TO THE TOTAL INCOME OF THE ASSESSEE WHILE FINALIZATION OF ASSESSMENT MADE U/S. 143(3) R.W.S. 147 OF THE ACT . THE ASSESSING OFFICER HAS ALSO INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT. DURING THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSEE EXPLAINED THAT IMPUGNED SALARY INCOME REMAINED UNREPORTED AS THE ASSESSEE HAD RESIGNING FROM THE JOB. THE ASSESSING OFFICER WAS NOT CONVINCED WITH TH E EXPLANATION OF T HE ASSES SEE THEREFORE,HE HAS LEVIED PENALTY OF RS. 2,1 8 , 410/ - FOR FURNISH ING INACCURATE PARTICULARS OF INCOME AND CONCEALED THE INCOME. 4. AGGRIEVE D ASSESSEE FILED APPEAL BEFORE T H E LD. CIT(A). THE LD. CIT(A) HAS GIVEN CREDIT OF RS. 1 , 20 , 576/ - AND TDS MADE BY THE EMPLOYER WHICH WAS NOT CLAIMED BY THE ASSESSEE, THEREFORE, THE LD. CIT(A) HAS PARTLY ALLOWED APPEAL OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IT IS UNDISPUTED FA CT THAT ASSESSEE HAS NOT DISCLOSED SALARY INCOME OF RS. 7 , 18 , 684/ - RECEIVED FROM HIS EARLIER EMPLOYER ALKA T EL LUCENT INDIA PVT. LTD. IN HIS ORIGINAL RETURN OF INCOME. THE ASSESSEE HAS RECEIVED TH E UNDISCLOSED SALARY DURING THE YEAR UNDER CONSIDERATION ON 30 TH APRIL, 2009 . WE OBSERVE THAT THE ASSSESSEE H A S NOT SUBMITTED ANY SATISFACTORY EXPLANATION FOR NOT DISCLOSING THE SAID SALARY IN THE RETURN OF INCOME AS THE SAME HAS BEEN RECEIVED IN THE INITIAL MONTH OF THE FINANCIAL YEAR 2009 - 10 FOR THE ASSESSM ENT YEAR UNDER CONSIDERATION WHEREAS THE ASSESSEE HAS FILED RETURN OF INCOME AT MUCH LATER DATE ON 31 ST JULY, 2010 . THE RELEVANT PROVISIONS OF SECTION 271(1)(C) ALONG WITH EXPLANATION 1 WHICH READ AS UNDER: I.T.A NO. 762 /AHD/20 15 A.Y. 2010 - 11 PAGE NO HIMANSHU ISHW A RBHAI PATEL VS. DCIT 3 '271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC. (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE CIT IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON ( A ) AND ( B )** ** ** ( C ) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY. ( I ) AND (INCOME - TAX OFFICER,)** ** ** ( III ) IN THE CASES REFERRED TO IN CLAUSE (C) OR CLAUSE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR FRINGE BENEFIT THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME OR FRINGE BENEFITS: EXPLANATION 1 . - WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMM ISSIONER(APPEALS) OR THE CIT 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 BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUBSECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED'. EXPLANATION I TO SECTION 271(1)(C) POSTULATES TWO SITUATIONS; (A) FIRST WHETHER IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE FAILS TO OFFER AN EXPLAN ATION OR THE EXPLANATION OFFERED BY THE ASSESSEE IS FOUND TO BE FALSE BY THE ASSESSING OFFICER OR LEARNED CIT(APPEALS); AND, (B) WHERE IN RESPECT OF ANY FACT, MATERIAL TO THE COMPUTATION OF TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE THE EXPLANATION AND THE ASSESSEE FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT THE ASSESSEE HAD DISCLOSED ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME. UNDER FIRST SITUATION, THE D EEMING FICTION WOULD COME TO PLAY IF THE ASSESSEE FAILED TO GIVE ANY EXPLANATION WITH RESPECT TO ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL I.T.A NO. 762 /AHD/20 15 A.Y. 2010 - 11 PAGE NO HIMANSHU ISHW A RBHAI PATEL VS. DCIT 4 INCOME OR BY ACTION OF THE ASSESSING OFFICER OR THE LEARNED CIT(APPEALS) BY GIVING A CATEGORICAL FINDING TO THE E FFECT THAT EXPLANATION GIVEN BY THE ASSESSEE IS FALSE. IN THE SECOND SITUATION, THE DEEMING FICTION WOULD COME TO PLAY BY THE FAILURE OF THE ASSESSEE TO SUBSTANTIATE HIS EXPLANATION IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME AND IN ADDITION TO THIS THE ASSESSEE IS NOT ABLE TO PROVE THAT SUCH EXPLANATION WAS GIVEN BONA FIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME HAVE BEEN DISCLOSED BY THE ASSESSEE. THESE TWO SITUATIONS PROVIDED IN EX PLANATION 1 APPENDED TO SECTION 271(1)(C) MAKES IT CLEAR THAT THAT WHEN THIS DEEMING FICTION COMES INTO PLAY IN THE ABOVE TWO SITUATIONS THEN THE RELATED ADDITION OR DISALLOWANCE IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, FOR THE PURPOSE OF SECTION 271 (1)(C) WOULD BE DEEMED TO BE REPRESENTING THE INCOME IN RESPECT OF WHICH INACCURATE PARTICULARS HAVE BEEN FURNISHED. WE OBSERVE THAT THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE AND TO PROVE HIS EXPLANATION FOR NOT SHOWING THE SALARY INCOME IN THE RETURN OF INCOME IN VIEW OF THE EXPLANATION 1 OF SECTION 271(1)(C) OF THE ACT. IN VIEW OF THE ABOVE FACTS AND AFTER CONSIDERING THE DETAILED FINDING ALONG WITH THE JUDICIAL PRONOUNCEMENT ELABORATED IN THE ORDER OF CIT(A) , WE DO NOT FIND ANY REASON TO INTERFERE I N THE DECISION OF THE LD. CIT(A). 6. IN T HE RESULT , T H E APPEAL OF T HE ASSESSSE IS DISMISSED . ORDER PR ONOUNCED IN THE OPEN C OURT ON 17 - 04 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 17 /04 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT I.T.A NO. 762 /AHD/20 15 A.Y. 2010 - 11 PAGE NO HIMANSHU ISHW A RBHAI PATEL VS. DCIT 5 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,