Sh.Jawahar Lal Jain, Chandigarh V. DCIT, Chandigarh

ITA 868/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9101 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2001-2002
• Appeal Filed On: 22-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTALDR
• Keywords: Wrong claim
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 868 TO 870/CHD/2016 A.Y.: 2001-02 TO 2003-04 SHRI JAWAHAR LAL JAIN, VS THE DCIT, SCF 18-19, SECTOR 22-D, CENTRAL CIRCLE-I, CHANDIGARH. CHANDIGARH. PAN: ABHPJ7613E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGA RWAL RESPONDENT BY : SHRI S.K.MITTAL,DR DATE OF HEARING : 24.08.2016 DATE OF PRONOUNCEMENT : 20.09.2016 O R D E R PER BHAVNESH SAINI, JM ALL THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST COMMON ORDER OF LD. CIT(APPEALS)-III, GURGAON DATED 27.05.2016 FOR ASSESSMENT YEAR 2001-02, 2002-03 AND 2003-04 CHALLENGING THE LEVY OF PENALTY UNDER SECTI ON 271(1)(C) OF THE INCOME TAX ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, ON PERUSAL OF THE RETURN OF INCOME, IT WAS SEEN THAT DURING THE YEARS UNDER CONSIDERATION, THE ASSESSEE HAD SHOWN AGRICULTURAL INCOME. THE ASSESSING OFFICER IN ORDE R TO 2 VERIFY THE GENUINENESS OF THE AGRICULTURE INCOME, DIRECTED THE ASSESSEE TO FURNISH THE FOLLOWING INFORMATION : I) OWNERSHIP PAPER OF THE LAND II) PROOF THAT AGRICULTURE ACTIVITIES WERE DONE ON THE SAID LAND III) COPY OF JAMABANDI AND FERD GIRDAWARI OF THE LAND IV) DETAIL, LOCATION AND SIZE OF THE LAND 2(I) DESPITE GIVING NUMBER OF OPPORTUNITIES, ASSESS EE FAILED TO PRODUCE THE EVIDENCE TO SUPPORT HIS CLAIM OF AGRICULTURAL INCOME. THE ASSESSING OFFICER, ACCORD INGLY, MADE ADDITIONS ON ACCOUNT OF 'INCOME FROM OTHER SOURCES' . THE ADDITIONS WERE CONFIRMED BY THE LD. CIT(APPEALS) AND APPEAL OF THE ASSESSEE HAVE BEEN DISMISSED BY ITAT VIDE ORDER DATED 10.10.2014. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO EXPLAIN THE MATTER. TH E ASSESSEE REITERATED THE STAND TAKEN IN THE QUANTUM PROCEEDINGS. THE ASSESSING OFFICER NOTED THAT ASSE SSEE FAILED TO SUBSTANTIATE THE CLAIM OF AGRICULTURE INC OME WITHOUT THE SUPPORT OF ANY EVIDENCE DURING QUANTUM AS WELL AS APPELLATE PROCEEDINGS. THE ASSESSING OFFIC ER, THEREFORE, HELD THAT ASSESSEE HAS TRIED TO CONCEAL THE INCOME AND FURNISHED THE INACCURATE PARTICULARS OF 3 INCOME UNDER SECTION 271(1)(C) OF THE ACT AND LEVIE D THE PENALTY VIDE SEPARATE ORDERS. THE PENALTY ORDERS W ERE CHALLENGED BEFORE LD. CIT(APPEALS) AND WRITTEN SUBMISSION OF THE ASSESSEE IS REPRODUCED IN THE APPELLATE ORDER IN WHICH ASSESSEE BRIEFLY EXPLAINED THAT AGRICULTURE INCOME IS EXEMPT. THE QUANTUM AND PENA LTY PROCEEDINGS ARE DIFFERENT. THE ASSESSEE RECEIVED T HE SALE PROCEEDS OF AGRICULTURE PRODUCE FROM ARHTIAS THROUGH ACCOUNT PAYEE CHEQUES WHICH WERE REGULARLY DEPOSITED IN THE BANK ACCOUNT. THE ASSESSEE FILED COPIES OF J-FORMS AND INVOICES OF ARHTIAS DURING ASSESSMENT PROCEEDINGS. DUE TO LONG TIME GAP BETWEE N DATE OF SALE OF AGRICULTURE PRODUCE AND THE DATE OF CALLING OF INFORMATION IN ASSESSMENT PROCEEDINGS, ASSESSEE COULD NOT PRODUCE GIRDAWARI FOR THE SAID L ANDS. IT WAS, THEREFORE, SUBMITTED THAT PENALTY MAY NOT B E IMPOSED. 3. THE LD. CIT(APPEALS) CONSIDERING EXPLANATION OF THE ASSESSEE, DISMISSED ALL THE APPEALS OF THE ASSESSEE . THE FINDINGS OF THE LD. CIT(APPEALS) IN PARAS 8 TO 10 A RE REPRODUCED AS UNDER : 8. THE APPELLANT HAS CLAIMED TO HAVE EARNED AGRICUL TURAL INCOME IN ALL THE YEARS UNDER CONSIDERATION. HOWEVE R NEITHER DURING THE ASSESSMENT STAGE NOR THE APPELLANT STAGE , THE APPELLANT HAS BEEN ABLE TO SUBSTANTIATE THE SAME. AS THE APPE LLANT HAD NOT FILED ANY PROOF IN SUPPORT OF THE AGRICULTURAL INCO ME SUPPOSED TO HAVE BEEN EARNED. THE AO HELD THAT THIS INCOME IS T AXABLE UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. THE ORDER OF THE AO HAS BEEN CONFIRMED BY CIT(A) AND HON'BLE IT AT. 4 THE CONTENTION OF APPELLANT WITH REGARD TO EVIDENCE PRODUCED IN SUPPORT OF AGRICULTURAL INCOME HAVE NOT FOUND FAVOU R AT THE LEVEL OF ASSESSMENT, APPEAL AND HON'BLE ITAT AS THE APPEL LANT COULD HOT CONCLUSIVELY PROVE THAT HE HAD EARNED AGRICULTURAL INCOME. THE JUDICIAL PRONOUNCEMENT RELIED UPON IS NOT APPLICABL E TO THE CASE OF THE APPELLANT'S AS COGENT AND RELIABLE EVIDENCE WER E NOT PRODUCED BY THE APPELLANT AT ANY STAGE. IT IS A SETTLED POSITION IN THE APPELLANT'S CASE TH AT HE HAD RIOT EARNED ANY AGRICULTURAL INCOME DURING THE YEARS UND ER CONSIDERATION BUT HAD SHOWN HIS OTHER INCOME AMOUNT ING RS. 62,514/- IN A.Y. 2001-02, RS. 89,954/- IN A.Y. 2002 -03 AND RS. 90,859/- IN A.Y. 2003-04 AS AGRICULTURAL INCOME IN ORDER TO EVADE TAX ON SAME. THE APPELLANT HAS THEREFORE FURNISHED INACCURATE PA RTICULARS OF HIS INCOME AND IS LIABLE TO PENALTY U/S 271(L)(C) OF TH E ACT. RELIANCE IS PLACED ON THE JUDICIAL PRONOUNCEMENT HEREUNDER. (I) A.M. SHAH & CO. VS. CIT 238 ITR 415 (GUJ) THE HON'BLE COURT HAS HELD THAT:- 'THE OBLIGATION IS NOT ONLY TO DISCLOSE PARTICULARS OF INCOME BUT TO DISCLOSE THEM CORRECTLY AND COMPLETELY. IF W HILE DISCLOSING THE PARTICULARS OF INCOME IN THE RETURN HE PUTS THEM UNDER A WRONG HEAD, HE CAN BE SAID TO BE FURNI SHING INACCURATE PARTICULARS OF INCOME. WHERE THE APPELLA NT WHILE STATING THE INCOME UNDER PARTICULAR HEAD, WORKS OUT THE INCOME CHARGEABLE TO TAX AFTER MAKING DEDUCTIONS WHICH ARE FALSELY MADE, SUCH A PROCESS WOULD MAKE THE PARTICULARS OF INCOME INACCURATE, THEREFORE, ANY CONCEALMENT OR INACCURACY IN THE PARTICULAR OF INCO ME IN THE RETURN OCCURRING AT ANY STAGE UPTO AND INCLUSIV E OF THE ULTIMATE STAGE OF WORKING OUT OF TOTAL INCOME W OULD ATTRACT THE PENALTY PROVISION OF SECTION 271(1)(C) . IN VIEW OF THE ABOVE 'DISCUSSION, THE PENALTY(S) IM POSED BY THE AO FOR AY 2001-02, 2002-03 AND 2003-04 IS CONFI RMED. 10. AS A RESULT, THE APPEAL OF THE APPELLANT I S NOT ALLOWED IN ALL THE YEARS UNDER CONSIDERATION I.E. 2001-02, 2002-03 AND 2003-04. 4. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT WRITTEN SUBMISSIONS OF THE ASSESSEE FILED 5 AT PAGE 65 OF THE PAPER BOOK HAVE NOT BEEN CONSIDER ED IN PROPER PERSPECTIVE. ON THE OTHER HAND, LD. DR R ELIED UPON ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT PENALTY IS STRICTLY A CIVIL LIABILITY AND RELIED UP ON DECISIONS OF THE HON'BLE SUPREME COURT IN THE CASES OF UOI VS DHARMENDRA TEXTILE & PROCESSORS 306 ITR 277 AND CIT VS ATUL MOHAN BINDAL 317 ITR 1. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN ALL THE APPEALS OF THE ASSESS EE. IT IS UNDISPUTED FACT THAT ASSESSEE CLAIMED AGRICULTUR E INCOME IN THE RETURN OF INCOME, HOWEVER, ASSESSEE F AILED TO SUBSTANTIATE THE ABOVESAID CLAIM AND DID NOT PRO DUCE ANY EVIDENCES IN SUPPORT OF EARNING OF THE AGRICULT URAL INCOME. IT IS ALSO ADMITTED FACT THAT ASSESSEE FAI LED TO PRODUCE JAMABANDI AND GIRDAWARI BEFORE THE AUTHORIT IES BELOW AND AS PER MATERIAL COLLECTED BY THE ASSESSIN G OFFICER, THE LAND OF THE ASSESSEE WAS FOUND TO BE N OT UNDER CULTIVATION. THESE FINDINGS OF FACT HAVE REA CHED FINALITY BECAUSE THE ITAT CHANDIGARH BENCH DISMISSE D APPEAL OF THE ASSESSEE ON THIS ISSUE IN ITA NOS. 20 5 TO 208 OF 2014 FOR ASSESSMENT YEARS 2001-02 TO 2004-05 VIDE ORDER DATED 10.10.2014. THE RELEVANT FINDINGS OF THE TRIBUNAL IN PARA 8 ARE REPRODUCED AS UNDER : 8. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY MERIT IN THESE GROUNDS OF APPEAL OF THE AS SESSEE. THE ASSESSEE CLAIMED THE EARNING OF THE AGRICULTURA L INCOME, THEREFORE ONUS UPON ASSESSEE WAS THERE TO E STABLISH EARNING OF THE AGRICULTURAL INCOME. THE ASSESSEE H AS FAILED 6 TO PRODUCE JAMABANDI AND GIRDAWARI BEFORE THE AUTHO RITIES BELOW AND AS PER MATERIAL COLLECTED BY THE ASSESSIN G OFFICER, THE LAND OF THE ASSESSEE WAS FOUND TO BE N OT UNDER CULTIVATION. THUS, ASSESSEE FAILED TO PROVE BASIC REQUIREMENTS OF PROVING THAT AGRICULTURAL ACTIVITIE S WERE DONE IN THE SAID LAND. KHASRA GIRDAWARI ARE RELEVA NT DOCUMENTS TO PROVE CULTIVATION OF THE LAND WHICH AR E ALWAYS IN POWER AND POSSESSION OF THE OWNER OF THE LAND, T HEREFORE, NON PRODUCTION OF THE SAME BEFORE THE ASSESSING OFF ICER/LD. CIT(APPEALS) CLEARLY PROVE THAT ASSESSEE HAS FAILED TO PROVE ITS CASE TO THE SATISFACTION OF THE AUTHORITIES BEL OW OF EARNING OF THE AGRICULTURAL INCOME. EVEN BEFORE US , ASSESSEE FAILED TO CONTRADICT THE FINDINGS OF FACT RECORDED BY THE AUTHORITIES BELOW, THEREFORE IN THE ABSENCE OF SPECIFIC MATERIAL IN FAVOUR OF THE ASSESSEE ON RECORD, WE DO NOT FIND ANY MERIT IN THESE GROUNDS OF APPEAL OF THE ASSESSE E. THESE ARE, ACCORDINGLY DISMISSED IN ALL THE APPEALS UNDER CONSIDERATION. 6. THE ASSESSEE IN THE PENALTY PROCEEDINGS ALSO DID NOT PRODUCE ANY EVIDENCE BEFORE THE AUTHORITIES BEL OW TO THEIR SATISFACTION TO PROVE EARNING OF ANY AGRICULT URAL INCOME. IT MAY ALSO BE NOTED HERE THAT IN ALL THES E CASES, THE ASSESSMENT ORDERS WERE PASSED UNDER SECT ION 143(3) READ WITH SECTION 153A OF INCOME TAX ACT BECAUSE SEARCH UNDER SECTION 132 OF THE ACT WAS INITIATED IN NIKAMAL BABURAM & SONS GROUP OF CHANDIGARH ON 27.10.2006. THE ASSESSEE WAS ONE OF THE PERSONS COVERED UNDER SECTION 132A, THEREFORE, THE ASSESSMENTS UNDER SECTION 143(3) READ WITH SECTION 153A WERE PASSED ON 26.12.2008. IT IS, THEREFORE, CLEAR THAT DESPITE ASSESSEE WAS AWARE OF THE FACT THAT HE HAS 7 NOT EARNED ANY AGRICULTURE INCOME, MADE A FALSE AND BOGUS CLAIM IN LATER PROCEEDINGS UNDER SECTION 153A OF THE ACT. IT IS WELL SETTLED LAW THAT FINDINGS GIVE N IN THE ASSESSMENT PROCEEDINGS ARE RELEVANT AND HAVE PROBAT IVE VALUE. IN THIS CASE, ASSESSEE PRODUCES NO FRESH EVIDENCE OR PRESENTS ANY ADDITIONAL OR FRESH CIRCUMSTANCES IN PENALTY PROCEEDINGS, THEREFORE, ASSESSEE WOULD BE DEEMED TO HAVE FAILED TO DISCHARG E ONUS PLACED ON HIM AND LEVY OF THE PENALTY WOULD BE JUSTIFIED. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS HARPARSHAD AND COMPANY LTD. 328 ITR 53 HELD AS UNDER : HELD, THAT THE REASONS GIVEN BY THE TRIBUNAL FOR QU ASHING THE PENALTY PROCEEDINGS WERE IRRELEVANT, NOT GERMANE TO THE ISSUE AND THE TRIBUNAL HAD LOST SIGHT OF ASPECTS WHICH HAD B EEN CONCLUSIVELY ESTABLISHED IN THE QUANTUM PROCEEDINGS. THE TRIBUNA L HAD FAILED TO TAKE NOTE OF THE FACT THAT PART OF THE CLAIM AS COM MISSION WAS ALLOWED TO THE ASSESSEE NOT BECAUSE R HAD RENDERED ANY SERVICES BUT BECAUSE J HAD RENDERED SERVICES FOR WHICH IT WAS P AID 1 PER CENT OF THE COMMISSION BY R OUT OF THE 3 PER CENT, RECEIVED BY HER. AS FAR AS COMMISSION TO R WAS CONCERNED, IT WAS ACCEPTED BY T HE TRIBUNAL IN THE QUANTUM PROCEEDINGS THAT SHE DID NOT RENDER ANY SERVICES AT ALL. THE ASSESSEE HAD FAILED TO OFFER ANY EXPLANATION IN RESPECT OF THE ADDITION OF RS. 1,83,078 AND IT COULD BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF INCOME OR FURNISHES INACCURATE P ARTICULARS THEREOF, BY VIRTUE OF THIS EXPLANATION. THE TRIBUNA L WAS NOT JUSTIFIED IN DELETING THE PENALTY IMPOSED BY THE INCOME-TAX O FFICER UNDER SECTION 271(L)(C) OF THE ACT. THE FINDINGS GIVEN IN ASSESSMENT PROCEEDINGS ARE RE LEVANT AND HAVE PROBATIVE VALUE. WHERE THE ASSESSEE PRODUCES NO FRE SH EVIDENCE OR PRESENTS ANY ADDITIONAL OR FRESH CIRCUMSTANCE IN PE NALTY 8 PROCEEDINGS, HE WOULD BE DEEMED TO HAVE FAILED TO D ISCHARGE THE ONUS PLACED ON HIM AND THE LEVY OF PENALTY COULD BE JUSTIFIED. EVEN IF THERE IS NO CONCEALMENT OF INCOME OR FURNIS HING OF INACCURATE PARTICULARS, BUT ON THE BASIS THEREOF TH E CLAIM WHICH IS MADE IS EX FACIE BOGUS, IT MAY STILL ATTRACT PENALT Y PROVISION. THE EXPLANATIONS APPENDED TO SECTION 271(L)(C) OF T HE ACT ENTIRELY INDICATE THE ELEMENT OF STRICT LIABILITY ON THE ASS ESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WH ILE FILING RETURN. THE OBJECT BEHIND ENACTMENT OF SECTION 271( L)(C) READ WITH THE EXPLANATIONS INDICATE THAT THE SECTION BEEN EN ACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PENALTY UNDER THAT PROVISION IS A CIVIL LIABILITY. WILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN TH E MATTER OF PROSECUTION UNDER SECTION 276C OF THE ACT. 7. IN THIS CASE, EVEN THE BOGUS CLAIM WAS CONSIDERE D TO HAVE ATTRACTED THE PENALTY PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT ASSESS ING OFFICER IS NOT CLEAR AS TO FOR WHICH OFFENCE, PENAL TY HAVE BEEN LEVIED. THE ASSESSING OFFICER IN THE ASSESSME NT ORDER AFTER CONCLUDING THIS ISSUE HAS MENTIONED THA T ASSESSEE HAS FAILED TO DISCLOSE TRUE AND FULL PARTI CULARS OF INCOME AND THUS CONCEALED THE INCOME EARNED BY H IM AND INITIATED THE PENALTY PROCEEDINGS ACCORDINGLY. THE ASSESSING OFFICER IN THE PENALTY ORDER HAS LEVIED T HE PENALTY UNDER SECTION 271(1)(C) ON FINDING IT IS FI T CASE OF PENALTY. THE LD. CIT(APPEALS) HELD THAT ASSESSE E HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND LIAB LE TO PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THEREF ORE, THE ORDERS OF THE AUTHORITIES BELOW ARE VERY CLEAR AS REGARDS LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE 9 ACT. IT MAY ALSO BE NOTED HERE THAT SINCE ASSESSEE MADE A BOGUS CLAIM OF AGRICULTURE INCOME IN ORDER TO DEF RAUD THE REVENUE AFTER SEARCH WAS CONDUCTED, THEREFORE, THE DECISION OF DELHI HIGH COURT IN THE CASE OF HAR PAR SHAD & CO. LTD. (SUPRA) CLEARLY APPLY TO THE FACTS OF TH E CASE. THE WRITTEN SUBMISSION OF THE ASSESSEE HAVE BEEN CONSIDERED BY THE AUTHORITIES BELOW. 8. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN ALL THE APPEALS OF THE ASSESSEE, SAME ARE, ACCORDINGLY, DISMISSED. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SA INI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20 TH SEPT.,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD