Sh. Ishwar Parkash, Kurukshetra V. ITO, Kurukshetra

ITA 85/CHANDI/2011

• Counselvise Citation: 8521514 RSA 2011
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-09-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 24-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: SUDHIR SEHGAL
• Keywords: Opportunity of being heard; Onus to prove
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 85 & 86/CHD/2011 ASSESSMENT YEAR: 2000-01 SHRI ISHWAR PARKASH, V ITO, WARD-1, C/O RAJINDERA BHATTA CO., KURUKSHETRA. MATHANA, KURUKSHETRA. PAN: AARPP-8491 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SUDHIR SEHGAL RESPONDENT BY: SMT. JAISHREE SHARMA DATE OF HEARING : 21.09.2011 DATE OF PRONOUNCEMENT : 30.09.2011 ORDER PER MEHAR SINGH, AM THE PRESENT APPEALS FILED BY THE ASSESSEE ARE AGAIN ST THE CONSOLIDATED ORDER DATED 27.09.2010 PASSED BY T HE LD. CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (I N SHORT 'THE ACT'). 2. IN BOTH THESE APPEALS, THE ASSESSEE CHALLENGED CONFIRMING OF PENALTY U/S 271(1)(C) OF THE ACT OF RS.1,95,024/- FOR THE ASSESSMENT YEAR 2000-01 AND RS.91,359/- FOR THE ASSESSMENT YEAR 2001-02. 3. BEFORE THE BENCH, LD. AR CONTENDED THAT THE AS SESSEE HAD DISCLOSED ALL THE RELEVANT AND MATERIAL PARTICU LARS OF INCOME NECESSARY FOR COMPUTATION OF TRUE AND CORREC T INCOME FOR THE PURPOSE OF INCOME TAX. THERE IS NO CONCEALMENT ON THE PART OF THE ASSESSEE WITHIN THE MEANING 2 OF SECTION 271(1)(C) OF THE ACT. THE ASSESSEE HAS FILED ALL PURCHASE BILLS, TRANSPORT BILLS AND EVIDENCE FOR TH E PAYMENT MADE BY THE ASSESSEE FOR THE PURCHASE OF COAL. LD. AR VEHEMENTLY CONTENDED THAT THE IMPUGNED PENALTIES HA VE BEEN IMPOSED AS THE EXPLANATION FILED BY THE ASSESS EE HAS NOT BEEN ACCEPTED BY THE AO. THEREFORE, IMPOSED PE NALTY MAY BE DELETED. 4. LD. DR PLACED RELIANCE ON THE ORDER OF THE CIT (A) IN BOTH THE CASES. 5. LD. AO LEVIED PENALTY IN RESPECT OF BOTH ASSESSM ENT YEARS UNDER REFERENCE BY OBSERVING THAT THE ADDITIO NS MADE BY THE ASSESSEE IN RESPECT OF RESPECTIVE ASSESSMENT YEARS HAVE BEEN CONFIRMED BY THE LD. CIT(A) ON THE GROUND THAT THE ASSESSEE FAILED TO EXPLAIN THE TRANSACTIONS OF TRADE CREDITORS APPEARING IN HIS BOOKS OF ACCOUNT. THE R ELEVANT FINDINGS OF THE AO IN BOTH ASSESSMENT YEARS ARE IDE NTICAL. THEREFORE, SUCH FINDINGS, AS APPEARING FOR THE ASSE SSMENT YEAR 2000-01, ARE REPRODUCED HEREUNDER FOR THE PURP OSE OF PROPER APPRECIATION OF THE FINDINGS OF THE AO: IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO FI LE ANY OTHER DETAILS/DOCUMENTS OTHER THAN THE BILLS FROM THE PARTY TO PROVE THE GENUINENESS OF THE TRANSACTIONS BEFORE THE AO AND ALSO BEFORE THE LD. CIT(A) AS WELL AS BEFORE THE HON'BLE ITAT. THE DISMISSAL OF QUANTUM APPEAL BEFORE THE CIT(A) AND THE ITAT AND HIS NON APPEARANCE OR NON- PRESENTATION OF THE CASE BEFORE THESE APPELLATE AUTHORITIES SIMPLY SPEAKS OF GRAVITY OF DEFAULT ON THE PART OF THE ASSESSEE. THEREFORE, I AM SATISFIE D THAT THE ASSESSEE HAS FURNISHED INACCURATE 3 PARTICULARS OF ITS INCOME AND THE ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE HIS CLAIM OF THE INCOME RETURNED. THE ASSESSEE HAS CONCEALED THE PARTICULARS OF ITS TRUE INCOME BY FILING A RETURN O F INCOME JUST RS.88900/- WHICH IS NOT CORRECT. HENCE, THE ASSESSEE HAS COMMITTED THE DEFAULT AS MENTIONED IN SECTION 271(1)(C) OF THE INCOME-TAX ACT. 6. LD. CIT(A) UPHELD THE FINDINGS FOR BOTH THE ASSE SSMENT YEARS BY RECORDING HIS FINDINGS IN PARA 2.5 IN THE CONSOLIDATED APPELLATE ORDER. THE FINDINGS OF THE LD. CIT(A) ARE REPRODUCED HEREUNDER : THE AO ALLOWED FRESH OPPORTUNITY OF BEING HEARD ON 23.3.2009 WHICH WAS NOT AVAILED OF BY THE APPELLANT. THE AO, THEREFORE, HELD THAT THE ASSESSE E HAS NOTHING TO SAY IN THE MATTER AND HELD HIM LIABL E FOR PENALTY U/S 271(1)(C) OF THE ACT WHICH WAS LEVI ED AT RS.1,95,024/- IN THE ASSESSMENT YEAR 2000-01 AND RS.91,359/- IN THE ASSESSMENT YEAR 2001-02. AS DISCUSSED ABOVE, VARIOUS OPPORTUNITIES ALLOWED TO THE APPELLANT BY THIS OFFICE TO PURSUE THE APPEA LS FOR BOTH THE YEARS DURING THE APPEAL PROCEEDINGS, WERE NOT AVAILED OF. THE APPELLANT HAS NOT BEEN ABLE TO ESTABLISH THE GENUINENESS OF PURCHASE OF CO AL CLAIMED TO BE MADE FROM M/S U.K.KAUR & CO., GUWAHATI. THE APPELLANT AS SUCH FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND HENCE IS HELD TO BE LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT. THE PENALTY LEVIED BY THE AO FOR BOTH THE YEARS I.E . ASSESSMENT YEAR 2000-01 AND 2001-02 ARE, THEREFORE, HEREBY CONFIRMED. 7. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS, RELEVANT RECORDS AND FACTS OF THE CASE. THE PENALT Y U/S 271(1)(C) READ WITH EXPLANATION (1) THEREUNDER, CAN ONLY BE 4 IMPOSED IF THE STATUTORY CONDITIONS ARE SATISFIED. THE LEVY OF PENALTY IS NOT MANDATORY BUT DEPENDS UPON THE DISCRETION OF THE AO TO BE EXERCISED OBJECTIVELY AN D JUDICIOUSLY. NEEDLESS TO SAY THAT THE PENALTY CANN OT BE IMPOSED IN AN AUTOMATIC MANNER. THE EXPLANATION APPENDED TO SECTION 271(1)(C) OF THE ACT IS AN EXCE PTION TO THE GENERAL RULE. IT RAISES A LEGAL FICTION, BY RAI SING WHEREOF THE BURDEN OF PROOF SHIFTS FROM THE DEPARTMENT TO T HE ASSESSEE. LEGAL FICTION, HOWEVER, AS IS WELL KNOWN , MUST BE GIVEN FULL EFFECT, WHEN THE CONDITIONS PRECEDENT TH EREOF ARE SATISFIED AND NOT OTHERWISE. IN THE PRESENT CASE, THE ADDITION HAS BEEN UPHELD BY THE CIT(A) INCLUDING IM POSITION OF PENALTY IN RESPECT OF BOTH THE ASSESSMENT YEARS AND MERE CONFIRMATION OF THE ADDITIONS IN THE APPELLATE PROC EEDINGS IS NOT SUFFICIENT TO LEVY PENALTY U/S 271(1)(C) OF THE ACT. THE PENALTY PROCEEDINGS ARE SEPARATE AND INDEPENDENT AN D THE EVIDENCES FILED IN THE COURSE OF ASSESSMENT PROCEED INGS MAY BE RELEVANT BUT CANNOT BE TREATED AS CONCLUSIVE ONE . IN THE PRESENT CASE, THE ASSESSEE HAS FILED EXPLANATION BY WAY OF DOCUMENTARY EVIDENCES WHICH WERE AVAILABLE WITH HIM HAVING REGARD TO THE TIME LATCHES. THE EXPLANATION FILED BY THE ASSESSEE HAS NOT BEEN ACCEPTED BY THE AO AND CONSEQUENTLY IMPOSED PENALTY U/S 271(1)(C) OF THE A CT. WE ARE OF THE CONSIDERED OPINION, HAVING REGARD TO THE PLETHORA OF JUDICIAL PRONOUNCEMENTS THAT MERE REJECTION OF EXPLANATION FILED BY THE ASSESSEE CANNOT RENDER HIM LIABLE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THER EFORE, WE ARE OF THE CONSIDERED OPINION THAT IT IS NOT A FIT CASE FOR THE 5 LEVY OF PENALTY AS THE ASSESSEE HAS DISCLOSED ALL T HE RELEVANT PARTICULARS AND FILED REQUISITE INFORMATIO N IN THE MATTER. 8. IN THIS VIEW OF THE MATTER, THE APPEALS OF THE A SSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER,2011. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 TH SEPT.,2011 POONAM COPY TO: 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT 5. THE D.R, INCOME-TAX DEPARTMENT, CHANDIGARH ASSISTANT REGISTRAR, ITAT, CHANDIGARH