SHRI VISHNU TAMBI , JAIPUR V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, JAIPUR

ITA 965/JPR/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6507 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 17-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PT J VIHYKFKHZ IZRFKHZ
• Assessee Lawyers: S L PODDAR
• Keywords: Difference of opinion
• Section: 271(1)(c); 153A; 13; 145(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,B JAIPUR JH ,U-DS-LSUH] MIK/;{K ,O LAANHI XKSLKBZ] U;KF;D LNL; DS LE{K BEFORE: SHRI N.K. SAINI, V.P. & SHRI SANDEEP G OSAIN, JM VK;DJ VIHY LA-@ ITA NO.965 TO 969/JP/2018 FU/KZKJ.K O'K Z@ A.YS : 2005-06, 2006-07, 2007-08, 2009-10 & 2010-11 SHRI VISHNU TAMBI C-33, SIKAR HOUSE, OUTSIDE CHANDPOLE GATE, JAIPUR CUKE VS. THE DCIT CENTRAL CIRCLE-1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABYPT 8365 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR, ADVOCATE JKTLO DH VKSJ LS@ REVENUE BY: MS. CHANCHAL MEENA , ADDL. CIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 14/09/2020 MN?KKS'K.KK DH RKJH[K@ DATE OF PRONOUNCEMENT: 14/09/2020 VKNS'K@ ORDER PER BENCH. THESE FIVE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST COMMON ORDER OF LD.CIT (A)- 4, JAIPUR DATED 02.07 .2018 FOR THE ASSESSMENT YEARS 2005-06, 2006-07, 2007-08, 2009-10 & 2010-11 PASSED UNDER 271(1)(C ) OF THE INCOME TAX ACT, 19 61 ON THE GROUNDS MENTIONED HEREINBELOW. ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 2 ITA NO. 965/JP/2018 A.Y. 2005-06 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 WITHOUT STRIKING OFF THE IRRELEVANT PORTION OF THE PRINTED SHOW CAUSE NOTICE DATED 26-12-2011 VIZ. FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED P ARTICULARS OF SUCH INCOME IS BAD IN LAW. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 IS AGAINST THE PRINCIPLES OF JUDICIAL CONSISTE NCY AND THEREFORE, BAD IN LAW. 3. THAT THE ORDER PASSED BY THE AO U/S 271(1)( C) O F THE I.T. ACT, 1961 IS VOID AB INITIO DESERVES TO BE QUA SHED AS NO SATISFACTION WAS RECORDED WITH REFERENCE TO CONCEAL MENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE A O HAS ERRED IN IMPOSING THE PENALTY OF RS. 13,000/- U/S 2 71(1)(C ) OF THE I.T. ACT, 1961 ITA NO. 966/JP/2018 A.Y. 2006-07 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 WITHOUT STRIKING OFF THE IRRELEVANT PORTION OF THE PRINTED SHOW CAUSE NOTICE DATED 26-12-2011 VIZ. FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED P ARTICULARS OF SUCH INCOME IS BAD IN LAW. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 IS AGAINST THE PRINCIPLES OF JUDICIAL CONSISTE NCY AND THEREFORE, BAD IN LAW. ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 3 3. THAT THE ORDER PASSED BY THE AO U/S 271(1)( C) O F THE I.T. ACT, 1961 IS VOID AB INITIO DESERVES TO BE QUA SHED AS NO SATISFACTION WAS RECORDED WITH REFERENCE TO CONCEAL MENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE A O HAS ERRED IN IMPOSING THE PENALTY OF RS. 12,000/- U/S 2 71(1)(C ) OF THE I.T. ACT, 1961 ITA NO. 967/JP/2018 A.Y. 2007-08 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 WITHOUT STRIKING OFF THE IRRELEVANT PORTION OF THE PRINTED SHOW CAUSE NOTICE DATED 26-12-2011 VIZ. FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED P ARTICULARS OF SUCH INCOME IS BADE IN LAW. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 IS AGAINST THE PRINCIPLES OF JUDICIAL CONSISTE NCY AND THEREFORE, BAD IN LAW. 3. THAT THE ORDER PASSED BY THE AO U/S 271(1)( C) O F THE I.T. ACT, 1961 IS VOID AB INITIO DESERVES TO BE QUA SHED AS NO SATISFACTION WAS RECORDED WITH REFERENCE TO CONCEAL MENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE A O HAS ERRED IN IMPOSING THE PENALTY OF RS. 12,000/- U/S 2 71(1)(C ) OF THE I.T. ACT, 1961 ITA NO. 968/JP/2018 A.Y. 2009-10 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 WITHOUT STRIKING OFF THE IRRELEVANT PORTION OF THE PRINTED SHOW CAUSE NOTICE DATED 26-12-2011 VIZ. FURNISHED ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 4 INACCURATE PARTICULARS OF INCOME OR CONCEALED P ARTICULARS OF SUCH INCOME IS BADE IN LAW. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 IS AGAINST THE PRINCIPLES OF JUDICIAL CONSISTE NCY AND THEREFORE, BAD IN LAW. 3. THAT THE ORDER PASSED BY THE AO U/S 271(1)( C) O F THE I.T. ACT, 1961 IS VOID AB INITIO DESERVES TO BE QUA SHED AS NO SATISFACTION WAS RECORDED WITH REFERENCE TO CONCEAL MENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE A O HAS ERRED IN IMPOSING THE PENALTY OF RS. 10,000/- U/S 2 71(1)(C ) OF THE I.T. ACT, 1961 ITA NO. 969/JP/2018 A.Y. 2010-11 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 WITHOUT STRIKING OFF THE IRRELEVANT PORTION OF THE PRINTED SHOW CAUSE NOTICE DATED 26-12-2011 VIZ. FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED P ARTICULARS OF SUCH INCOME IS BADE IN LAW. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE ORDER PASSED BY THE AO U/S 271(1)( C) OF TH E I.T. ACT, 1961 IS AGAINST THE PRINCIPLES OF JUDICIAL CONSISTE NCY AND THEREFORE, BAD IN LAW. 3. THAT THE ORDER PASSED BY THE AO U/S 271(1)( C) O F THE I.T. ACT, 1961 IS VOID AB INITIO DESERVES TO BE QUA SHED AS NO SATISFACTION WAS RECORDED WITH REFERENCE TO CONCEAL MENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE A O HAS ERRED IN IMPOSING THE PENALTY OF RS. 7,000/- U/S 27 1(1)(C ) OF THE I.T. ACT, 1961 ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 5 2.1 DUE TO PREVAILING COVID-19 PANDEMIC CONDITION, THE HEARING OF THE APPEAL IS CONCLUDED THROUGH VIDEO CONFERENCE. F IRST OF ALL, WE TAKE UP THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 FOR ADJUDICATION AS PER THE GROUNDS OF APPEAL RAISED HE REINABOVE. 3.1 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE HAS NOT PRESSED THE GROUND NO. 1 TO 3. HENCE, THE SAME ARE DISMISSED BEING NOT PRESSED. 4.1 THE GROUND NO. 4 RAISED BY THE ASSESSEE RELAT ES TO CHALLENGING THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE PENALTY L EVIED BY THE AO U/S 271(1) (C ) OF THE ACT. 4.2 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE WHOLESALE BUSINESS OF SAREES AND SALWAR SUITS UNDER THE NAME AND STYLE OF M/S MANISH ENTERPRISES. A SEARCH AND SEIZU RE OPERATION WAS CARRIED OUT ON 23.07.2009 AT THE RESIDENTIAL AN D BUSINESS PREMISES OF THE ASSESSEE. NOTICE U/S 153A OF THE IN COME TAX ACT, 1961 WAS ISSUED ON 07.12.2009. IN RESPONSE TO NOTIC E U/S 153A, THE ASSESSEE HAS FILED RETURNS IN THE ABOVE ASSESSM ENT YEARS. THE AO HAS COMPLETED THE ASSESSMENT U/S 143(3)/153 A OF THE INCOME TAX ACT, 1961 INTER-ALIA MAKING TRADING ADDI TIONS BY ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 6 APPLYING THE GP RATE OF 10% AS AGAINST GP RATE DECL ARED BY THE ASSESSEE IN ALL THE ASSESSMENT YEARS. 4.3 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) WHO RESTRICTED THE G.P . RATE AT 8.5% ON ESTIMATE BASIS. 4.4 SUBSEQUENTLY, THE AO LEVIED THE PENALTY IN THE ABOVE CASE U/S 271(1)( C) OF THE ACT WITH RESPECT TO ADDITION CONF IRMED BY THE LD. CIT(A). ON APPEAL, BEFORE THE LD. CIT(A), HE CONFIR MED THE PENALTY LEVIED BY THE AO. 4.5 NOW AGGRIEVED BY THE ORDER OF THE LD. CIT(A) RE GARDING CONFIRMING THE PENALTY U/S 271(1)(C) OF THE ACT, TH E ASSESSEE HAS PREFERRED AN APPEAL BEFORE US ON THE GROUND MENTION ED HEREINABOVE. 4.6 DURING THE COURSE OF HEARING, THE LD.AR OF THE REITERATED THE SAME ARGUMENTS AS RAISED BY HIM BEFORE THE LD. CIT( A) AND HE ALSO RELIED ON THE FOLLOWING WRITTEN SUBMISSION SUBMITTE D BEFORE US. GROUND NO. 4 : - ASSESSMENT YEAR 2005-06 IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEAR NED ASSESSING OFFICER HAS ERRED IN IMPOSING THE PENALTY OF RS. 13 ,000/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 7 ASSESSMENT YEAR 2006-07 IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEAR NED ASSESSING OFFICER HAS ERRED IN IMPOSING THE PENALTY OF RS. 12 ,000/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. ASSESSMENT YEAR 2007-08 IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEAR NED ASSESSING OFFICER HAS ERRED IN IMPOSING THE PENALTY OF RS. 12 ,000/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. ASSESSMENT YEAR 2009-10 IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEAR NED ASSESSING OFFICER HAS ERRED IN IMPOSING THE PENALTY OF RS. 10 ,000/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. ASSESSMENT YEAR 2010-11 IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEAR NED ASSESSING OFFICER HAS ERRED IN IMPOSING THE PENALTY OF RS. 7, 000/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 1. FACTS OF THE CASE -:- THE LEARNED ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT U/S 143(3)/153A OF THE INC OME TAX ACT, 1961 FOR ALL THE ASSESSMENT YEARS PERTAINING T O BLOCK PERIOD. THE BELOW TABLE SHOWS THE ADDITION MADE AND CONFIRMED YEAR WISE- SR.NO. ASSESSMENT YEAR ADDITION MADE BY THE AO ADDITION SUSTAINED BY THE LD. CIT(A) 1 2005-06 79289 41135 2 2006-07 126930 70984 3 2007-08 105608 58723 4 2009-10 152688 84449 5 2010-11 94864+17892 47254 ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 8 IN THE ORIGINAL ASSESSMENT ORDER THE ADDITION WAS MADE BECAUSE CERTAIN INCRIMINATING DOCUMENTS WERE F OUND IN THE FORM OF APPROVAL MEMOS AND BLANK BILL BOOK O F A SURAT DEALER. BUT NO SPECIFIC MISUSE OF THOSE MATER IAL WAS FOUND. THE LEARNED AO UNDER THE SUSPICION HAS INVOK ED THE PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT, 1961 AND APPLIED THE GP RATE BY ENHANCING GP RATE M ADE THE ADDITION @ 10% AGAINST DECLARED GP WHICH IS ARO UND 8% IN ALL THE YEARS. IN THE ASSESSMENT NO SPECIFIC ADDITION WAS MADE ON THE BASIS OF INCRIMINATING MATERIAL FOUND. THE ADDI TION WAS ONLY ON ESTIMATED BASIS. 2. NO PENALTY CAN BE LEVIED ON ESTIMATED ADDITIONS. IN THIS CASE THE LEARNED ASSESSING OFFICER MADE ADDITION AS PER TABLE ABOVE ON ACCOUNT OF APPLICATI ON OF GP RATE OF 10%. THERE IS NO FINDING IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F HIS INCOME. THE LEARNED ASSESSING OFFICER HAS NOT GIVEN ANY SPECIFIC FINDING THAT THE ASSESSEE HAS CONCEALED TH E INCOME. SIMPLY HE HAS INVOKED THE PROVISION OF SECTION 145( 3) OF THE IT ACT, 1961 AND ESTIMATED THE INCOME OF THE AS SESSEE ON THE BASIS OF EARLIER HISTORY OF THE ASSESSEE. TH US IT IS A CASE OF AN ESTIMATE AGAINST AN ESTIMATE HENCE NO PE NALTY IS LEVIABLE IN SUCH A CASE WHERE ADDITION ARE BASED PU RELY ON ESTIMATE BASIS. THE FOLLOWING CASES ARE QUOTED FOR SUPPORT (I) GULRAJ VASWANI VS. ACIT, (!TSSA NO. 21/JP/06) I N TAX WORLD VOI-XXXIX PAGE-35 HELD THAT 'BEFORE TRIBUNAL IT HAS BEEN SUBMITTED THAT AT EVERY LEVEL THERE HAS B EEN AN ESTIMATION VARYING AS PER DIFFERENCE OF OPINION FR OM AUTHORITY TO AUTHORITY AND HENCE PENALTY CANNOT BE LEVIED ON ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 9 THE ESTIMATED ADDITION ASSESSEE HAS ALSO SUBMITTED T HAT NO SATISFACTION ABOUT CONCEALMENT OF INCOME HAS BEEN R ECORDED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSES SMENT PROCEEDINGS TRIBUNAL HAVE CONSIDERING THESE FACTS DELETED THE PENALTY (II) SMT. BITOLI DEVI VS. ACIT(2007), 110 TTJ (LUCK ) 735 (UNLESS ANY POSITIVE CONCEALMENT IS FOUND NO PENALT Y IS LEVIABLE ON BASIS OF ADDITION MADE ON ESTIMATE) (III) ENFIELD INDUSTRIES LTD. VS. DCIT, (2007) 13 S OT 28 (URO)/107 ITD 1 (KOL.) (ONUS WOULD LIE HEAVILY WITH DEPARTMENT TO PROVE CONCEALMENT FOR PURPOSE OF IMPOSING PENALT Y UNDER SECTION 158 BFA(2)) (IV) CIT V. P.H.I. SEEDS INDIA LTD. 159 TAXMAN 9 (DELHI):- THE ACT DOES ENVISAGE OR EXPLICITLY PROVIDE THAT IN EVERY CASE WHERE RETURN IS NOT ACCEPTED AS CORRECT AND ASSESSM ENT IS FRAMED AT A HIGHER INCOME THAN THAT PRESENTED, PENA LTY PROCEEDINGS U/S 271 (1)(C) MUST BE INITIATED. SECTI ON 271(1)(C) IS ATTRACTED ONLY WHEN THE ASSESSEE HAS C ONCEALED HIS INCOME. WHEN TWO OPINIONS ARE POSSIBLE, ADOPTING ONE OF THE M CAN SCARCELY BE VIEWED AS MALAFIDE, WITH INTENT TO EVAD E THE PAYMENT OF INCOME TAX. (V) PENALTY CAN NOT BE LEVIED ONLY ESTIMATED ADDITION AND RELIANCE IS PLACED ON THE FOLLOWING DE CISIONS: - 1. CIT VS. S. RAHAMAT KHAN BIRBAL KHAN BADRUDDIN & PAR TY, 240 ITR 778 (RAJ.) 2. ACIT VS. BANSIWALA IRON & STEEL RE-ROLLING MILLS, 2 1 TW 533 (JP) 3. CIT VS. SUBHASH TRADING CO., 221 ITR 110 (GUJ.) ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 10 4. HARIGOPAL SINGH VS. CIT, 258 ITR 85 (P&H) 5. ACIT VS. GANPAT LAL GOYAL, 32 TW 91 (JP) IN VIEW OF THE AFORESAID FACTS IT IS A CASE MOST JU STIFIED FOR DELETION OF THE PENALTY. 3. DEFINITE FINDING ABOUT CONCEALMENT IS NECESSARY - UNDER SECTION 271(1)(C) OF THE ACT THE AUTHORITY I S GIVEN THE DISCRETION TO LEVY A PENALTY IF THERE IS CONCEA LMENT OF PARTICULARS OF INCOME AND EVEN AS REGARDS THE QUANT UM OF THE PENALTY THERE IS A DISCRETION. OF GREATER IMPORTANC E IS THE NECESSITY FOR A DEFINITE FINDING THAT THERE IS CONC EALMENT, AS WITHOUT SUCH A FINDING OF CONCEALMENT, THERE CAN BE NO QUESTION OF IMPOSING ANY PENALTY. THE MERE REVISION OF THE INCOME TO A HIGHER FIGURE BY THE ASSESSING AUTHORI TY DOES NOT AUTOMATICALLY WARRANT AN INFERENCE OF CONCEALMENT O F THE EXPENDITURE ON THE CONSTRUCTION. THE ADDITION TO TH E INCOME OF THE ASSESSEE BASED ON ESTIMATE BASIS. CONCEALMENT I MPLIES SOME DELIBERATE ACT ON THE PART OF THE ASSESSEE IN WITHHOLDING THE TRUE FACTS FROM THE AUTHORITIES. THE FACT THAT THE VALUER ASSESSED THE BUILDING AT A FIGURE HIGHER THAN THE O NE REPORTED BY THE ASSESSEE DOES NOT BY ITSELF LEAD TO THE INFE RENCE THAT THERE HAD BEEN CONCEALMENT CIT VS. K.R. CHINNI KR ISHNA CHETTY (2000) 246 ITR 111 (MAD.) 4.7 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS PASSED BY THE REVENUE AUTHORITIES. 4.8 WE HAVE HEARD THE LD. COUNSELS FOR BOTH THE PAR TIES AND WE HAVE ALSO PERUSED THE MATERIALS PLACED ON RECORD, DELIBE RATED UPON JUDGEMENTS CITED BY THE PARTIES AS WELL AS THE ORDERS OF THE R EVENUE AUTHORITIES. FROM THE FACTS, WE NOTICED THAT THE AO HAD MADE THE ADDI TION ON ACCOUNT OF APPLICATION OF G.P. RATE OF 10% WHEREAS NO FINDINGS WERE RECORDED BY ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 11 THE AO IN THE ASSESSMENT ORDER THAT THE ASSESSEE HA D FURNISHED INACCURATE PARTICULARS OF INCOME OR HAD CONCEALED THE INCOME. THE AO HAD INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT AND EST IMATED THE INCOME OF THE ASSESSEE ON THE BASIS OF EARLIER HISTORY OF THE CASE. THEREFORE, WE ARE OF THE VIEW THAT IT IS A CASE OF AN ESTIMATE AGAINS T AN ESTIMATE. HENCE, NO PENALTY IS LEVIABLE IN SUCH A CASE WHERE ADDITIONS ARE BASED PURELY ON ESTIMATE BASIS. WE ALSO DRAW STRENGTH FROM THE FOLL OWING CASE LAWS. (I) GULRAJ VASWANI VS. ACIT, (!TSSA NO. 21/JP/06) I N TAX WORLD VOI-XXXIX PAGE-35 HELD THAT 'BEFORE TRIBUNAL IT HAS BEEN SUBMITTED THAT AT EVERY LEVEL THERE HAS BEEN AN ESTIMATION VARYING AS PER DIFFERENCE OF OPINION FR OM AUTHORITY TO AUTHORITY AND HENCE PENALTY CANNOT BE LEVIED ON THE ESTIMATED ADDITION ASSESSEE HAS ALSO SUBMITTED T HAT NO SATISFACTION ABOUT CONCEALMENT OF INCOME HAS BEEN R ECORDED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSES SMENT PROCEEDINGS TRIBUNAL HAVE CONSIDERING THESE FACTS DELETED THE PENALTY (II) SMT. BITOLI DEVI VS. ACIT(2007), 110 TTJ (LUCK ) 735 (UNLESS ANY POSITIVE CONCEALMENT IS FOUND NO PENALT Y IS LEVIABLE ON BASIS OF ADDITION MADE ON ESTIMATE) (III) ENFIELD INDUSTRIES LTD. VS. DCIT, (2007) 13 S OT 28 (URO)/107 ITD 1 (KOL.) (ONUS WOULD LIE HEAVILY WITH DEPARTMENT TO PROVE CONCEALMENT FOR PURPOSE OF IMPOSING PENALT Y UNDER SECTION 158 BFA(2)) (IV) CIT V. P.H.I. SEEDS INDIA LTD. 159 TAXMAN 9 (DELHI):- THE ACT DOES ENVISAGE OR EXPLICITLY PROVIDE THAT IN EVERY CASE WHERE RETURN IS NOT ACCEPTED AS CORRECT AND ASSESSM ENT IS FRAMED AT A HIGHER INCOME THAN THAT PRESENTED, PENA LTY ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 12 PROCEEDINGS U/S 271 (1)(C) MUST BE INITIATED. SECTI ON 271(1)(C) IS ATTRACTED ONLY WHEN THE ASSESSEE HAS C ONCEALED HIS INCOME. WHEN TWO OPINIONS ARE POSSIBLE, ADOPTING ONE OF THE M CAN SCARCELY BE VIEWED AS MALAFIDE, WITH INTENT TO EVAD E THE PAYMENT OF INCOME TAX. (V) PENALTY CAN NOT BE LEVIED ONLY ESTIMATED ADDITION AND RELIANCE IS PLACED ON THE FOLLOWING DE CISIONS: - 1. CIT VS. S. RAHAMAT KHAN BIRBAL KHAN BADRUDDIN & PAR TY, 240 ITR 778 (RAJ.) 2. ACIT VS. BANSIWALA IRON & STEEL RE-ROLLING MILLS, 2 1 TW 533 (JP) 3. CIT VS. SUBHASH TRADING CO., 221 ITR 110 (GUJ.) 4. HARIGOPAL SINGH VS. CIT, 258 ITR 85 (P&H) 5. ACIT VS. GANPAT LAL GOYAL, 32 TW 91 (JP) 4.9 WE ARE ALSO OF THE VIEW THAT U/S 271(1)(C ) OF THE ACT, THE AUTHORITY HAS BEEN GIVEN DISCRETION TO LEVY THE PENALTY IN CA SE THERE IS A CONCEALMENT OF PARTICULARS OF INCOME AND ALSO WITH REGARD TO QUANTUM OF PENALTY. HOWEVER, IT IS A BASIC NEED OF THE PROVISI ONS OF LAW THAT DEFINITE FINDING IS REQUIRED TO BE RECORDED BY THE REVENUE O FFICER FOR REACHING TO A CONCLUSION WITH REGARD TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND WITHOUT ANY SU CH FINDINGS, THERE CANNOT BE ANY QUESTION OF IMPOSITION OF ANY PENALTY . THE MERE REVISION OF INCOME TO A HIGHER FIGURE ON ESTIMATE BASIS BY THE AO DOES NOT ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 13 AUTOMATICALLY WARRANT AN INFERENCE OF CONCEALMENT O F INCOME BY THE ASSESSEE. THE ADDITION TO THE INCOME OF THE ASSESSE E IN THIS CASE IS BASED ON ESTIMATE BASIS WHEREAS THE CONCEALMENT IN OUR VI EWS IMPLIES SOME DELIBERATE ACT ON THE PART OF THE ASSESSEE IN WITHH OLDING THE TRUE FACTS FROM THE AUTHORITIES. ON THIS PROPOSITION, WE DRAW STRENGTH FROM THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE O F CIT VS K.R. CHINNI KRISHNA CHETTY (2000) 246 ITR 121 (MAD). THEREFORE, KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT IN THIS CASE THE ADDITIONS WER E MADE ON THE BASIS OF ESTIMATION AND AS DISCUSSED IN THE CASES REFERRED A BOVE, THE PENALTY CANNOT BE LEVIED ON THE BASIS OF ESTIMATED ADDITION S. THEREFORE, WE ALLOW THIS GROUND OF APPEAL RAISED BY THE ASSESSEE AND DE LETE THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT(A). THUS GRO UND NO. 4 OF THE ASSESSEE IS ALLOWED. 5.0 AS REGARDS THE OTHER APPEALS OF THE ASSESSEE FO R THE ASSESSMENT YEAR 2006-07, 2007-08, 2009-10 & 2010-11, THE LD.A R OF THE ASSESSEE DURING THE COURSE OF HEARING HAS NOT PRESSED THE GR OUND NOS. 1 TO 3. HENCE, THE SAME ARE DISMISSED BEING NOT PRESSED. ITA NO. 965/JP/2018 SHRI VISHNU TAMBI VS DCIT, CENTRAL CIRCLE-1, ,JAI PUR 14 5.1 AS REGARDS THE GROUND NO. 4 OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07, 2007-08, 2009-10 & 2010-11, THE DECI SION TAKEN BY THE BENCH IN THE ASSESSMENT YEAR 2005-06 SHALL APPLY MU TATIS MUTANDIS IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2 006-07, 2007-08, 2009-10 & 2010-11 BEING THE SIMILAR FACTS AND CIRC UMSTANCES OF THE CASE OF THE ASSESSEE. THUS GROUND NO. 4 OF THE ASSESSEE IN THE ABOVE ASSESSMENT YEARS IS ALLOWED. 6.0 IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 /09/202 0. SD/- SD/- ,U-DS-LSUH LANHI XKSLKBZ (N.K. SAINI) (SANDEEP GOSAIN) MIK/;{K@ VICE PRESIDENT U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14/09/2020. *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT - SHRI VISHNU TAMBI, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-THE DCIT, CENTRAL CIRCLE-1, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR . 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 965 TO 969/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSTT. REGISTRAR