ITO, Shimla V. Sh. Prem Chauhan, Shimla

ITA 923/CHANDI/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57598 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-01-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 03-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: TEJ MOHAN SINGH
• Keywords: Difference of opinion
• Section: 144

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 NOS. 923 & 924/CHD/2008 A.Y. 2000-01 & 2001-02 ITO, WARD 2, V SHRI PREM CHAUHAN, SHIMLA. PROP. M/S JAI MATA TIMBER MERCHANTS, MAIN ROAD, KUKUNALA, KOTKHAI, SHIMLA. PAN: ------------- (APPELLANT) (RESPONDENT) DEPARTMENT BY: SMT. JAISHREE SHARMA ASSESSEE BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 18.01.2012 DATE OF PRONOUNCEMENT : 27.01.2012 ORDER PER MEHAR SINGH, AM THE PRESENT TWO APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE CONSOLIDATED ORDER DATED 29.08.2010 PASSED BY THE LD. CIT(A) U/S 250(6) OF T HE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT'). 2. THE FACTS AND THE GROUNDS OF APPEAL ARE IDENTICA L IN BOTH THESE APPEALS FILED BY THE REVENUE. THEREFO RE, GROUNDS RAISED IN ITA NO.923/CHD/2008 ARE REPRODUCE D HEREUNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW IN DELETING PENALTY IMPOSED U/S 271(1)(C) OF 2 THE INCOME-TAX ACT. 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE AO RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD ANY OTHER GROUND OF APPEAL WHICH MAY ARISE AT THE TIME OF HEARING. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'DR' PLACED RELIANCE ON THE PENALTY ORDER PASSED BY THE AO, WHEREAS THE LD. 'AR' PLACED RELIANCE ON THE ORD ER OF THE CIT(A). 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DERIVES INCOME FROM SALE AND PURCHASE OF TIMBER. T HE RETURN OF INCOME WAS FILED ON 07.03.2001, DECLARING INCOME OF RS.86,810/- FOR THE ASSESSMENT YEAR 2000- 01 AND FOR THE ASSESSMENT YEAR 2001-02, RETURN OF INCO ME WAS FILED ON 07.03.2001 DECLARING INCOME OF RS.74,454/-. THE ASSESSMENT WAS MADE BY THE AO U/S 144 OF THE ACT ON 31.12.2002, AT TOTAL INCOME OF RS.8,67,290/- FOR THE ASSESSMENT YEAR 2000-01 AND A T RS.3,53,900/- FOR THE ASSESSMENT YEAR 2000-01. THE CIT(A) UPHELD THE FINDINGS OF THE AO, EXCEPT AGRICULTURE INCOME. THE ASSESSEE FILED APPEAL AGAI NST THE ORDER OF THE LD. CIT(A) BEFORE ITAT WHICH WAS DISMISSED FOR NON-PROSECUTION. THE AO IMPOSED PENAL TY OF RS.2,74,073/- AND RS.1,08,147/- FOR THE ASSESSME NT YEAR 2000-01 AND 2001-02 RESPECTIVELY. THE APPEAL OF THE ASSESSEE ON MERIT, BEFORE THE BENCH WAS ALSO DISMISSED. THE AO LEVIED PENALTY ON THE GROUND OF UNSATISFACTORY EXPLANATION FILED BY THE ASSESSEE IN 3 RESPECT OF CASH CREDITS APPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE LD. CIT(A), AFTER APPRECIATION OF THE SUBMISSIONS FILED BY THE ASSESS EE IN SUCH CASES, DELETED THE PENALTY IN BOTH ASSESSMENT YEARS, LEVIED BY THE AO U/S 271(1)(C) OF THE ACT. THE RELEVANT FINDINGS OF THE LD. CIT(A), AS CONTAINED I N PARA 5 OF THE ORDER, ARE REPRODUCED HEREUNDER : I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND CAREFULLY PERUSED THE ORDER PASSED BY THE LD. AO. THE ADDITIONS HAVE BEEN MADE BY THE LD. AO ON ACCOUNT OF APPLICATION OF SECTION 44AF, AGRICULTURAL INCOME AND CASH CREDITS. BOOKS OF ACCOUNT WERE NOT PRODUCED BY THE ASSESSEE. NONE OF THE ADDITIONS CAN BE TREATED AS CONCEALMENT ON THE PART OF THE APPELLANT. THE ADDITIONS HAVE BEEN MADE DUE TO DIFFERENCE OF OPINION BETWEEN THE LD. AO AND THE ASSESSEE AND THE SAME CANNOT BE TREATED AS CONCEALMENT. THE ADDITION ON ACCOUNT OF AGRICULTURAL INCOME HAS BEEN PARTLY DELETED BY THE LD. CIT(A). THE PENALTY U/S 271(1)(C) HAS BEEN LEVIED TO FAILURE OF THE ASSESSEE TO FURNISH ACCURATE PARTICULARS/CONCEAL INCOME. SINCE THE NATURE OF ADDITIONS DO NOT REVEAL ANY CONCEALMENT ON THE PART OF THE ASSESSEE, IT IS HELD THAT THE LD. AO HAS WRONGLY LEVIED THE CONCEALMENT PENALTY U/S 271(1)(C). THEREFORE, THE PENALTY LEVIED AT RS.2,74,073/- AND RS.1,08,147/- U/S 271(1)(C) FOR THE ASSESSMENT YEAR 2000-01 AND 2001-02 IS ORDERED TO BE DELETED. 5. WE HAVE CAREFULLY PERUSED THE FACT SITUATION OF THE PRESENT CASES AND FOUND THAT THE AO HAS LEVIED THE 4 IMPUGNED PENALTY U/S 271(1)(C) OF THE ACT IN A MECHANICAL MANNER, WITHOUT APPLICATION OF MIND, TO THE FACTS OF THE PRESENT CASE. LEVY OF PENALTY DEPENDS ON THE SATISFACTION OF THE STATUTORY CONDITIONS, AS LA ID DOWN U/S 271(1)(C) OF THE ACT AND EXPLANATION THEREUNDER. MERE REJECTION OF EXPLANATION FILED BY THE ASSESSEE WILL NOT ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. IT IS ALSO SETTLED PROPOSITI ON OF LAW THAT MERE CONFIRMATION OF THE ADDITION MADE BY THE AO, IS NOT DECISIVE FACTOR TO LEVY PENALTY U/S 271(1)(C ) OF THE ACT. IN THE PRESENT CASE, THE ASSESSEE DISCLOSED A LL THE PARTICULARS OF INCOME IN THE RETURN OF INCOME AND F ILED NECESSARY EVIDENCE, TO JUSTIFY THE CASH CREDITS, APPEARING IN THE BOOKS OF ACCOUNT. HOWEVER, THE AO FOUND SUCH EXPLANATION NOT SATISFACTORY AND MADE TH E ADDITION AND SUBSEQUENTLY LEVIED PENALTY. FURTHER, CONFIRMATION OF QUANTUM BY THE ITAT WOULD NOT AUTOMATICALLY PROVIDE A GROUND FOR LEVY OF PENALTY. 7. IN VIEW OF THE FACT-SITUATION OF THE PRESENT CAS E, WE ARE OF THE CONSIDERED OPINION THAT THE FINDINGS OF THE LD. CIT(A) DO NOT SUFFER FROM ANY INFIRMITY, AS THE FACTS OF THE PRESENT CASE DO NOT FALL UNDER THE PURVIEW O F THE PROVISIONS OF SECTION 271(1)(C). FINDINGS OF THE L D. CIT(A) ARE ALSO SUPPORTED BY THE DECISION OF THE HO N'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V BALB IR SINGH (2008) 304 ITR 125 (P&H). CONSEQUENTLY, THE FINDINGS OF THE LD. CIT(A) ARE UPHELD AND THE APPEA LS OF THE REVENUE, IN BOTH CASES ARE DISMISSED. 5 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JAN.,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH JAN.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT , CHANDIGARH