Dr. Gurvinder Singh Randhawa, Patiala V. ACIT, Patiala

ITA 790/CHANDI/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4794 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 07-11-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 21-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M P DIWEDI
• Section: 271(1)(c); 143(3); 274

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A, CHANDIGARH . . , ! ' , # '$ BEFORE: SHRI N.K.SAINI, VP & SHRI RAJPAL YADAV, JM ./ ITA NO. 790/CHD/2015 # % &% / ASSESSMENT YEAR : 2006-07 DR.GURVINDER SINGH RANDHAWA NO.46,DHALIWAL COLONY PATIALA. '( VS. ACIT, CIR.PATIALA PATIALA. ( )* / APPELLANT) ( +,)* / RESPONDENT) # %-. / 0 / ASSESSEE BY : SHRI ASHWANI KUMAR, CA !$ / 0 / REVENUE BY : : SHRI M.P. DIWEDI, SR.DR 1 2 / .3 / DATE OF HEARING : 07/11/2019 '45& / .3 / DATE OF PRONOUNCEMENT : 08 /11/2019 / ORDER PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A), PATIALA DATED 10.8.2015 PASSED FOR THE ASSTT.YEAR 2006-07. 2. GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERR ED IN CONFIRMING THE LEVY OF PENALTY AMOUNTING TORS.6,97,413/- WHICH W AS IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 26.9.2006 DECLARING TOTAL INCOME AT RS.58,94,500/- AND ITA NO NO.790/CHD/2015 2 AGRICULTURE INCOME OF RS.2,00,000/-. ASSESSMENT ORDER W AS PASSED UNDER SECTION 143(3) WHEREBY HIS INCOME WAS DETERMINED ATRS.91,29,150/-. THE LD.AO HAS MADE THE FOLLOWING ADDITIONS : A) ADDITION ON ACCOUNT OF UNACCOUNTED : RS.25,13, 016/- SURGERIES B) ADDITION ON ACCOUNT OF CONSUMABLES : RS.5,25,20 0/- C) ADDITION ON A/C OF UNEXPLAINED AGRI.INCOME: RS.1 ,96,420/- 4. HE INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. IN THE PENALTY PROCEEDINGS, THE LD.AO OBSERVED THAT ADDITION QUA 10% OUT OF CONSUMABLE WAS SUSTAINED BY THE ITAT; SIMILARLY, ADD ITION QUA ESTIMATE OF INCOME OUT OF SURGERY HAS BEEN SUSTAINED PARTLY . IN OTHER WORDS, OUT OF TOTAL ADDITION, AN ADDITION OF RS.22,38,600/- STANDS CONFIRMED. THE LD.AO WISHED TO VISIT THE ASSESSEE WITH PENALTY QUA THIS ADDITION. HE ACCORDINGLY PASSED PENALTY ORDER ON 5.3.2012 AND IMPOSED PENALTY OF RS.6,97,413/-.CONCLUSION DRAWN BY HIM IN THE CONCLUDING PARAGRAPH OF THE PENALTY ORDER READS AS UNDER: THUS, RESPECTFULLY FOLLOWING THE JUDGMENT OF APEX COURT AS CITED ABOVE AND OTHER HONBLE HIGH COURTS, I AM OF THE CONSIDER ED VIEW THAT THE ASSESSEE HAS INTENTIONALLY AND DELIBERATELY CONCEAL ED/FURNISHED THE INACCURATE PARTICULARS OF HIS INCOME JUST TO AVOID THE TAX INCIDENCE. I, THEREFORE, IMPOSE PENALTY OF RS.6,97,413/-@ 100%FOR CONCEALMENT OF INCOME AS UNDER: CONCEALED INCOME 22,38,600/- TAX ON CONCEALED INCOME 6,97,413/ - MINIMUM PENALTY @ 100% OF TAX SOUGHT TO BE EVADED 6,97,413/- MAXIMUM PENALTY @ 300% OF 20,92,239/- ITA NO NO.790/CHD/2015 3 TAX SOUGHT TO BE EVADED PENALTY IMPOSED @ 100%OF TAX SOUGHT TO BE EVADED 6,97,413/- 5. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSE SSEE. 6. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE PENALTY ORDE R WOULD INDICATE THAT THE LD.AO HAS IMPOSED PENALTY UNDER SECTION 271(1) (C) OF THE ACT WITHOUT RECORDING ANY CATEGORICAL FINDING, WHETHER IT IS BEING IMPOSED FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTIC ULARS OF INCOME. HONBLE GUJARAT HIGH COURT IN THE CASE OF SNITA TRANSPORT P.LTD. VS. ACIT, (2014) REPORTED 42 TAXMANN.COM 54 (G UJ) HAS PROPOUNDED THAT THE ASSESSING OFFICER OUGHT TO HAVE RECORDE D CATEGORICAL FINDING FOR THE BREACH FOR WHICH HE IMPOSING PENALTY UPO N THE ASSESSEE. THE DISCUSSION MADE BY THE HONBLE COURT IN PARA-9 IS WORTH TO NOTE. IT READS AS UNDER: 9. REGARDING THE CONTENTION THAT THE ASSESSING OFF ICER WAS AMBIVALENT REGARDING UNDER WHICH HEAD THE PENALTY WAS BEING IM POSED NAMELY FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS, WE MAY RECORD THAT THOUGH IN THE ASSESSMENT ORDER T HE ASSESSING OFFICER DID ORDER INITIATION OF PENALTY ON BOTH COUNTS, IN THE ULTIMATE ORDER OF PENALTY THAT HE PASSED, HE CLEARLY HELD THAT LEVY O F PENALTY IS SUSTAINED IN VIEW OF THE FACT THAT THE ASSESSEE HAD CONCEALED TH E PARTICULARS OF INCOME. THUS INSOFAR AS FINAL ORDER OF PENALTY WAS CONCERNE D, THE ASSESSING OFFICER WAS CLEAR AND PENALTY WAS IMPOSED FOR CONCE ALING PARTICULARS OF INCOME. IN LIGHT OF THIS, WE MAY PERUSE THE DECISIO N OF THIS COURT IN CASE OF MANU ENGINEERING WORKS (SUPRA). IN THE SAID DECI SION, THE DIVISION BENCH CAME TO THE CONCLUSION THAT LANGUAGE OF 'AND/ OR' MAY BE PROPER IN ITA NO NO.790/CHD/2015 4 ISSUING A NOTICE FOR PENALTY, BUT IT WAS INCUMBENT UPON THE ASSESSING AUTHORITY TO COME TO A POSITIVE FINDING AS TO WHETH ER THERE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER AN Y INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY TH EM. IF NO SUCH CLEAR CUT FINDING IS REACHED BY THE AUTHORITY, PENALTY CA NNOT BE LEVIED. IT WAS A CASE IN WHICH IN FINAL CONCLUSION THE AUTHORITY HAD RECORDED THAT 'I AM OF THE OPINION THAT IT WILL HAVE TO BE SAID THAT THE A SSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PART ICULARS OF SUCH INCOME.' IT WAS IN THIS RESPECT THE BENCH OBSERVED THAT 'NOW THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOT ICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CASE OR A QUASI-CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDING AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSE SSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURN ISHED BY THE ASSESSEE. NO SUCH CLEAR CUT FINDING WAS REACHED BY THE IAC AN D, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IAC WAS L IABLE TO BE STRUCK DOWN.' 7. AS PER THE ABOVE JUDGMENT IF AN ASSESSING OFFICER USED EXPRESSION OR IN BETWEEN THE CONCEALMENT OF INCOME/FURNISHING INACCURATE PARTICULARS, THEN THAT SHOW CAUSE NOTICE BE NOT FATAL TO THE PROCEEDINGS, BUT WHILE VISITING THE ASSESSEE WITH PENALTY THE LD.AO OUGHT T O HAVE RECORDED A SPECIFIC FINDING, FOR WHICH BREACH, HE HAS VISITED THE ASSESSEE WITH PENALTY I.E. WHETHER HE HAS VISITED THE ASSESSEE WITH PENALT Y FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. IN THE PENALTY ORDER HE CANNOT USE BOTH THE EXPRESSION. W HILE ISSUING SHOW CAUSE NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF T HE ACT FOR INVITING EXPLANATION OF THE ASSESSEE, AS TO WHY PENALTY UNDER SE CTION 271(1)(C) OF THE ACT BE NOT IMPOSED UPON THE ASSESSEE, CAN USE EXPRESSION OR BETWEEN FURNISHING INACCURATE PARTICULARS VIS-- VIS CONCEALMENT OF INCOME. HOWEVER, WHILE ADJUDICATING THE ISSUE ITA NO NO.790/CHD/2015 5 REGARDING IMPOSITION OF PENALTY, THE LD.AO HAS TO RECORD A CO NCLUSIVE FINDING FOR WHICH HE IS IMPOSING THE PENALTY, I.E. WHETHER HE IS IMPOSING PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME OR FOR CONCEALMENT OF INCOME. THE LD.AO CANNOT USE PHRASE THAT PENALT Y IS BEING IMPOSED FOR FURNISHING INACCURATE PARTICULARS/CONCEALMENT O F INCOME. THIS PHRASEOLOGY DOES NOT DISCLOSE THE FORMATION OF O PINION AT THE END OF THE ASSESSING OFFICER, AND SUCH PENALTY ORDER IS NO T SUSTAINABLE. THUS, WE CANCEL THE IMPUGNED PENALTY AND ALLOW THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 8 TH NOVEMBER, 2019. SD/- SD/- (N.K. SAINI) VICE-PRESIDENT (RAJPAL YADAV) JUDICIAL MEMBER