Shri Rasiklal K.Suthar, Ahmedabad V. The ACIT.,Circle-10, Ahmedabad

ITSSA 164/AHD/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8156 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-07-2011
• Assessment Year: misc
• Appeal Filed On: 30-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Assessee Lawyers: S N DIVATIA
• Keywords: Opportunity of being heard; Principle of natural justice; Question of law; Block assessment; Revised return
• Section: 132

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A N PAHUJA, ACCOUNTANT MEMBER IT(SS)A NO.164/AHD/2009 [BLOCK PERIOD:- ENDING 16.11.2000] RASIKLAL K SUTHAR, 11, VIMALNATH APARTMENT, 2, SHRIMALI SOCIETY, NAVRANGPURA, AHMEDABAD V/S ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-10, AHMEDABAD PAN: ACVPS 7050 D [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI S N DIVATIA, AR REVENUE BY:- SHRI S K MEENA, DR DATE OF HEARING :- 25-07-2011 DATE OF PRONOUNCEMENT :- 12-08-2011 O R D E R A N PAHUJA: THIS APPEAL BY THE ASSESSEE AGAINST AN ORDER DATED 17- 09-2009 OF THE LD. CIT(APPEALS)-XVI, AHMEDABAD, RA ISES THE FOLLOWING GROUNDS:- [1] THE ORDER PASSED U/S 250 OF THE ACT ON 17-09-2009 FOR BLOCK PERIOD BY CIT(A)-XVI, ABAD PARTLY CONFIRMING THE PENALTY IMPOSE D U/S 158BFA BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST T HE PRINCIPLES OF NATURAL JUSTICE. [2] THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN UPHOLDING T HE PENALTY U/S 158BFA(2) LEVIED BY AO IN RESPECT OF ADDITION OF RS.3 LAKHS CONFIRMED IN QUANTUM PROCEEDINGS. [3] THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE PENALTY IN RESPECT OF ADD ITION OF RS.3 LAKHS . 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT A SEARCH U/S 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED T O AS THE ACT] WERE CONDUCTED ON 16-11-2000 IN THE PREMISES OF GU RUKRUPA GROUP, INCLUDING THE ASSESSEE, WHEN CASH, JEWELLERY AND A NUMBER OF INCRIMINATING DOCUMENTS WERE SEIZED. CONSEQUENTLY, A NOTICE DATED 23-09-2002 U/S 158BC OF THE ACT WAS SERVED UPON THE ASSESSEE ON 2 IT(SS)A NO.164/AHD/2009 25-09-2002 FOR FILING RETURN OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD. IN RESPONSE, THE ASSESSEE FILED RETURN FOR THE BLOCK PERIOD ON 25-10-2002, DECLARING UNDISCLOSED INCOME OF RS.2,51 ,000/-. SINCE THE ASSESSEE DID NOT EXPLAIN CASH OF RS. 1,40,000/- SEIZED FROM HIS RESIDENCE NOR FURNISHED DETAILS AND EVIDENCE IN RE SPECT OF UTILIZATION OF RS. 3 LACS RECEIVED FROM M/S SATKAR HOUSING SOCIETY AS MENTIONED ON PAGE 19 OF ANNEXURE A-1/11 SEIZED FROM THE RESIDENCE OF SHRI JAYANTIBHAI S PATEL, THE ASSESSIN G OFFICER[AO IN SHORT] ADDED THESE AMOUNTS BESIDES A PROFIT OF RS. 64,216/- FOR THE AY 2000-01, THE ASSESSEE HAVING FILED THE RETURN ON LY ON 30.3.2001 AFTER THE SEARCH. ACCORDINGLY, UNDISCLOSED INCOME O F RS.7,55,216/- WAS DETERMINED VIDE HIS ORDER DATED 29.11.2002. INT ER ALIA, PENALTY PROCEEDINGS U/S.158BFA(2) OF THE ACT WERE ALSO INI TIATED . 3. ON APPEAL, THE LD. CIT(A) UPHELD THE A DDITION OF RS.15,000/- OUT OF SEIZED CASH OF RS. 1,40,000/- BE SIDES RS.3 LACS AND RS.64,216/-.ON FURTHER APPEAL, THE ITAT VIDE TH EIR ORDER DATED 24.4.2009 IN IT(SS)A NO.391/AHD./2003 UPHELD THE AD DITION OF RS. 3 LACS AND DELETED THE ADDITION OF RS.64,216/- WHILE THE ASSESSEE DID NOT PREFER ANY APPEAL AGAINST THE ADDITION OF RS.15 ,000/-, 4. AFTER RECEIPT OF THE AFORESAID ORDER OF HON'BL E ITAT, A FRESH OPPORTUNITY OF HEARING WAS ACCORDED TO THE ASSESSEE VIDE LETTER DATED 10.01.2009 REQUESTING HIM TO SHOWCAUSE AS TO WHY PENALTY U/S.158BFA(2) OF THE ACT SHOULD NOT BE LEVIED. IN R ESPONSE, THE ASSESSEE VIDE HIS LETTER DATED 16.01.2009 SUBMITTED THAT ALL THE DETAILS AND EXPLANATION CALLED FOR WERE FURNISHED D URING THE ASSESSMENT PROCEEDINGS AND WHICH HAVE BEEN OVERLOOK ED BY THE ASSESSING OFFICER. THE LD. CIT(A) HAD ALSO CONFIRME D MOST OF THE ADDITIONS MERELY ON PRESUMPTION AND SURMISES, THE A SSESSEE STATED. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE AO WHILE REFERRING TO THE EARLIER DECISION OF THE ITAT IN Q UANTUM APPEAL , LEVIED A PENALTY OF RS.4,42,414/- @100% OF THE TAX SOUGHT TO BE 3 IT(SS)A NO.164/AHD/2009 EVADED ON THE UNDISCLOSED INCOME OF RS.6,30,220/-,D ETERMINED IN CONSEQUENCE OF ORDER OF THE LD. CIT(A). 5. ON APPEAL, THE LEARNED CIT(A) UPHELD THE LEVY OF PENALTY ON THE UNDISCLOSED INCOME OF RS.3,00,000/- + 15,000 = RS.3,15,000/- IN THE FOLLOWING TERMS:- 2.1 SINCE THE LAST ADDITION OF RS.64,216/- HAS BEEN D ELETED BY THE HON'BLE ITAT IN THE QUANTUM ORDER, MINIMUM PENALTY L EVIED ON THIS ADDITION IS DELETED. 2.2 AS REGARDS THE ADDITION OF RS. 3 LAC, THE HONBLE I TAT HAS HELD AT PARA 9 OF THEIR ORDER AS UNDER:- ' WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, A SEARCH OPERATION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 16/11/2000 AND SIMULTANEOUSLY. ON THAT DATE SEARCH OPERATION WAS ALSO CONDUCTED IN THE CASE OF SHRI JAYANTIBHAI S.PATEL. DURING THE COURSE OF THE SEARCH AT THE PREMISES OF SHRI JAYANTIBHAI S.PATEL, CERTAIN DOCUMENTS WERE FOUND WHICH REVEALED PAYMENT OF RS.3 LACS TO THE AS SESSEE BY SATKAR HOUSING SOCIETY. THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS ADMITTED THAT FACT OF RECEIPT OF RS.3 LACS FROM SAT KAR HOUSING SOCIETY HOWEVER, THE ASSESSEE FURTHER EXPLAINED THAT THE AMO UNT WAS RECEIVED BY THE ASSESSEE FOR MAKING CERTAIN EXPENDITURES ON BEH ALF OF THE SAID SATKAR HOUSING SOCIETY. THE ASSESSING OFFICER OBSERVED THA T NO EVIDENCE OF EXPENSES INCURRED BY THE ASSESSEE COULD BE FILED BY THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER TREATED THE ENTIRE RECEIPT OF RS.3 LACS AS INCOME OF THE ASSESSEE AND ADDED THE SAME TO THE BL OCK RETURN INCOME. IN APPEAL, THE ID. CIT (APPEALS) ALSO CONFIRMED, THE AB OVE ACTION OF THE ASSESSING OFFICER. WE FIND THAT BEFORE US ALSO, THE ASSESSEE COULD NOT FILE ANY EVIDENCE OR MATERIAL TO SHOW THAT THE AMOUNT WA S RECEIVED FOR INCURRING EXPENDITURE ON BEHALF OF SATKAR HOUSING S OCIETY AND SUCH EXPENDITURE WAS ACTUALLY INCURRED BY THE ASSESSEE. THE ASSESSEE AS AN ALTERNATIVE PLEA ALSO SUBMITTED THAT, IN CASE, THE AM OUNT IS FOUND TO BE ADDED AS INCOME OF THE ASSESSEE, THEN BENEFIT OF TEL ESCOPING OF THE SAME WITH THE RETURNED INCOME OF RS.2.51 LACS SHOULD BE ALLOWED. WE FIND THAT INCOME OF RS.2.51 LACS REPRESENTS INVESTMENT MADE I N FOR BY THE ASSESSEE. THE ID. CIT (APPEALS) HAS GIVEN A CATEGOR ICAL FINDING THAT INVESTMENT IN SUCH FDR WERE MADE-ON A DATE PRIOR TO THE RECEIPT OF RS. 3 LACS BY THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS BROUGHT NO MATERIAL BEFORE US TO CONTROVERT THE ABOVE FINDINGS OF THE I D. CIT (APPEALS). THE ASSESSEE HAS NOT BEEN ABLE TO SHOW THAT THE INVESTM ENT IN FDR WAS MADE OUT OF HIS ABOVE RECEIPT OF RS.3 LACS. IN THE ABOVE FACTS AND CIRCUMSTANCES 4 IT(SS)A NO.164/AHD/2009 OF THE CASE, WE DO NOT FIND ANY GOOD REASON TO INTER FERE WITH THE ORDER OF THE ID CITI APPEALS). HENCE, THIS GROUND OF THE AP PEAL OF THE ASSESSEE IS DISMISSED.' 2.2.1 IT IS CLEAR FROM THE ORDER OF FINAL FACT FINDIN G AUTHORITY THAT THE APPELLANT FAILED TO FURNISH ANY EVIDENCE THAT THE AMOUN T OF RS.3 LAC FROM SATKAR CORPORATION WAS RECEIVED FOR INCURRING EXPENSES ON B EHALF OF THE SATKAR HOUSING SOCIETY & SUCH EXPENSES WAS ACTUALLY INCURRED BY T HE ASSESSEE. THIS FINDING IS SUFFICIENT TO PROVE THAT THERE WA S NO BONAFIDE REASONS FOR THE APPELLANT NOT TO SHOW THE INCOME OF RS. 3 LAC RECEIVED FROM SATKAR CORPORATION AS HIS UNDISCLOSED INCOME IN THE BLOCK RETURN. THE PENALTY LEVIED BY THE ASSESSING OFFICER ON THIS ADDITION OF RS.3 LACS IS THEREFORE CONFIRMED. 2.3 AS REGARDS THE RETURNED INCOME OF RS.2,51,000/- TH E APPELLANT SATISFIES THE CONDITIONS LAID DOWN IN PROVISO TO SECTION 1 58BFA(2) I.E. I) THE APPELLANT HAS FURNISHED A RETURN U/S. 158BC II) THE APPELLANT PAID THE BALANCE TAX OF RS.10,733/- AS PER RETURNED INCOME & OFFERED THE CASH OF RS.1,40,000 (SEIZED) TO BE ADJUSTED AGAINST THE TAX PAYABLE. III) EVIDENCE OF BALANCE PAYMENT OF TAX WAS ENCLOSED WITH THE RETURN OF INCOME & IV) IN THE APPEAL THE APPELLANT HAS NOT CHALLENGED THE ADDITION OF RS.2,51,000/-. THEREFORE, PENALTY U/S 158BFA(2) CANNOT BE LEVIED IN RE SPECT OF THE RETURNED INCOME OF RS.2,51,000/-. 2.4 SINCE THE APPELLANT HAS NOT CHALLENGED THE ADDITI ON OF RS.15,000/- OF EXCESS CASH CONFIRMED BY THE CIT(A), IN MY VIEW PENALTY U/ S 158BFA(2) IS LEVIABLE ON THIS ADDITION ALSO. 3 IN SHORT THE AO IS DIRECTED TO LEVY MINIMUM PENALTY ON THE ADDITION OF UNDISCLOSED INCOME OF RS.3,00,000/- + RS.15,000/- = R S.3,15,000/- ONLY. THE PENALTY LEVIED ON THE BALANCE AMOUNT OF INCOM E IS DELETED. 6. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A) UPHOLDING LEVY OF PE NALTY ON THE UNDISCLOSED INCOME OF RS. 3,15,000/-. THE LEARNED A R ON BEHALF OF THE ASSESSEE IN THEIR WRITTEN SUBMISSIONS PLEADED THAT THE ASSESSEE IS PRACTICING AS A CONSULTING ENGINEER SINCE 1980 AND HIS FAMILY CONSISTED OF HIMSELF, HIS WIFE-RAMABEN, HIS SON-PRA JESH AND DAUGHTER-DIGI SHAH WHO WAS SERVING WITH AEC. THEREF ORE, 5 IT(SS)A NO.164/AHD/2009 CONSIDERING THE NATURE OF PROFESSION, SIZE, STATUS AND STANDARD OF LIVING OF THE FAMILY ETC., THE CASH OF RS.15,000/- TREATED AS UNDISCLOSED INCOME CANNOT BE SAID TO BE UNBELIEVABL E OR UNREASONABLE. HENCE, NO PENALTY SHOULD BE LEVIED. A S REGARDS THE ADDITION OF RS.3,00,000, BASED ON THE LOOSE PAPER N O.19 IN ANN-A- 1/11, IT WAS SUBMITTED THAT HIS EXPLANATION WITH REGARD TO THE ADDITION HAS NOT BEEN FOUND TO BE FALSE OR UNTRUE A ND THE ASSESSEE RECEIVED CONFIRMATION FROM THE SOCIETY WHEREIN IT HAS BEEN CLEARLY STATED THAT THE SAID AMOUNT WAS GIVEN TOWARDS EXPEN SES LIKE NA- NOC PERMISSION, PLAN PASSING ETC. SINCE THE EXPLANA TION OFFERED BY THE ASSESSEE IS BONA FIDE AND IT IS NOT FOUND TO BE FALSE OR UNTRUE, THEREFORE, NO PENALTY SHOULD BE LEVIED IN RESPECT OF THIS ADDITION. INTER ALIA, THE LD. AR RELIED UPON DECISIONS IN CIT VS. DODSAL LIMITED,312 ITR 119(BOM.);CIT VS. SATYENDRA KUMAR D OSI ,315 ITR 172(RAJ) & ITO VS. SMT. PRAMILA PRATAP SHAH,100 ITD 160 (BOMBAY).THE LEARNED DR, ON THE OTHER HAND, SUPPORT ED THE FINDINGS OF THE LD. CIT(A) WHILE RELYING UPON DECISION IN AD DL. CIT VS. JEEVAN LAL SHAH,205 ITR 244(SC). 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. AT THE OUTSET, WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF SEC. 158BFA(2) OF THE ACT, WHICH READ AS UNDER: '158BFA(2)- THE AO OR THE CIT(A) IN THE COURSE OF ANY PROCEEDINGS UNDER THIS CHAPTER, MAY DIRECT THAT A P ERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THA N THE AMOUNT OF TAX LEVIABLE BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SO LEVIABLE IN RESPECT OF THE UNDISCLOSED INCOME DE TERMINED BY THE AO UNDER CL. (C) OF S. 158BC: PROVIDED THAT NO ORDER IMPOSING PENALTY SHALL BE MA DE IN RESPECT OF A PERSON IF- (I) SUCH PERSON HAS FURNISHED A RETURN UNDER CL. (A ) OF S. 158BC; (II) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HA S BEEN PAID OR, IF THE ASSETS SEIZED CONSIST OF MONEY, THE ASSESSEE OF FERS THE MONEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYABLE; 6 IT(SS)A NO.164/AHD/2009 (III) EVIDENCE OF TAX PAID IS FURNISHED ALONG WITH THE RETURN; AND (IV) AN APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN: PROVIDED FURTHER THAT THE PROVISIONS OF THE PRECEDI NG PROVISO SHALL NOT APPLY WHERE THE UNDISCLOSED INCOME DETERMINED B Y THE AO IS IN EXCESS OF THE INCOMES SHOWN IN THE RETURN AND IN SU CH CASES THE PENALTY SHALL BE IMPOSED ON THAT PORTION OF UNDISCL OSED INCOME DETERMINED WHICH IS IN EXCESS OF THE AMOUNT OF UNDI SCLOSED INCOME SHOWN IN THE RETURN.' 7.1 AS IS APPARENT FROM THE AFORESAID PROVISIONS , IN A CASE WHERE THE INCOME FINALLY ASSESSED UNDER SECTION 158BC(C) OF THE ACT IS THE ONLY UNDISCLOSED INCOME RETURNED BY THE ASSESSEE, B ASED ON RETURN FILED UNDER SUB-CLAUSE(A) OF SECTION 158BC OF THE A CT AND THE ASSESSEE FULFILLS ALL THE CONDITIONS STIPULATED IN CLAUSE (I) TO (IV) OF THE FIRST PROVISO, I.E. PAYMENT OF TAX ON THE UNDIS CLOSED INCOME OR REQUEST TO THE OFFICER TO ADJUST FULL TAX AGAINST C ASH IF ANY SEIZED AND HELD BY THE DEPARTMENT SUFFICIENT TO ADJUST THE TAX AND IF THE ASSESSEE FILES STATEMENT THAT NO APPEAL WILL BE FIL ED AGAINST THE UNDISCLOSED INCOME RETURNED AND ASSESSED BASED ON R ETURN FILED, NO PENALTY COULD BE LEVIED. HOWEVER, PENALTY WOULD BE LEVIABLE IN ALL CASES WHERE UNDISCLOSED INCOME FINALLY ASSESSED UND ER SUB-SEC. (C) OF SECTION 158BC IS IN EXCESS OF THE UNDISCLOSED IN COME RETURNED BY THE ASSESSEE IN THE RETURN FILED UNDER CLAUSE (A) O F SECTION 158BC. IN SUCH CASES, THERE IS NO COMPLETE IMMUNITY FROM P ENALTY ON THE TAX PAYABLE ON THE UNDISCLOSED INCOME RETURNED BY THE A SSESSEE EVEN THOUGH THE ASSESSEE HAS COMPLIED WITH ALL THE CONDI TIONS OF CLAUSES (I) TO (IV) OF THE 1ST PROVISO AS STATED ABOVE. IF ON FINAL ASSESSMENT UNDER SUB-SECTION (C) OF SECTION 158BC IT IS FOUND THAT THE ADDITION MADE TO THE UNDISCLOSED INCOME RETURNED BY THE ASSE SSEE IS. SUBSTANTIAL IN RELATION TO THE INCOME RETURNED BY T HE ASSESEE, THEN THE AO HAS TO EXAMINE AS TO WHETHER OR NOT PENALTY ON THE TOTAL INCOME ASSESSED INCLUDING UNDISCLOSED INCOME RETURN ED BY THE ASSESSEE, IS LEVIABLE, NO MATTER THE ASSESSEE COMP LIED WITH THE 7 IT(SS)A NO.164/AHD/2009 CONDITIONS OF THE FIRST PROVISO ABOVE REFERRED IN R ESPECT OF THE UNDISCLOSED INCOME RETURNED BY THE ASSESSEE. SO FAR AS RANGE OF PENALTY BETWEEN 100% TO 300% OF TAX IS CONCERNED IT WILL DEPEND UPON THE NATURE OF CONCEALMENT, CONDUCT OF THE ASSE SSEE ETC. WHICH WILL HAVE TO BE CONSIDERED WHILE FIXING QUANTUM OF PENALTY. 7.2 APPLYING THE AFORESAID PRINCIPLES TO THE FACT S OF THIS CASE, WE NOTICE THAT THE ADDITION FINALLY MADE TO THE RETURN ED UNDISCLOSED INCOME IS RS. 3.15 LACS. IN THE INSTANT CASE, THE ASSESSEE DID NOT SUBMIT ANY EVIDENCE AT ALL THAT THE AMOUNT OF RS. 3 LACS RECEIVED FROM THE M/S SATKAR HOUSING SOCIETY WAS TOWARDS EXP ENSES ON BEHALF OF THE SOCIETY, AS CLAIMED BY HIM. SIMPLY FI LING A CONFIRMATION FROM THE SAID SOCIETY THAT THE AMOUNT WAS MEANT FOR EXPENSES, DOES NOT ESTABLISH THAT; ESPECIALLY WHEN NOT AN IOTA OF EVIDENCE HAS BEEN PLACED BEFORE THE AO OR THE LD. CIT(A) AND EVEN BEF ORE THE ITAT IN QUANTUM PROCEEDINGS THAT THE SAID AMOUNT WAS UTILIS ED FOR INCURRING ANY EXPENDITURE AND EVEN IF SO, WHAT WAS THE NATURE OF SUCH EXPENDITURE. IT IS ONLY IN THESE CIRCUMSTANCES THAT THE ITAT IN QUANTUM PROCEEDINGS CONCLUDED THAT WE FIND THAT BEFORE US ALSO, THE ASSESSEE COULD NOT FILE ANY EVIDENCE OR MATERIA L TO SHOW THAT THE AMOUNT WAS RECEIVED FOR INCURRING EXPENDITURE ON BE HALF OF SATKAR HOUSING SOCIETY AND SUCH EXPENDITURE WAS ACTUALLY I NCURRED BY THE ASSESSEE. EVEN DURING PENALTY PROCEEDINGS BEFORE THE AO OR TH E LD. CIT(A) NOT EVEN A WHISPER HAS BEEN MADE IN RESPECT OF NATURE OF EXPENDITURE FOR WHICH AMOUNT WAS UTILISED. BEFORE U S ALSO ,APART FROM MAKING MERE ASSERTIONS, NOT AN IOTA OF EVIDENC E HAS BEEN PLACED BEFORE US BY THE ASSESSEE AS TO HOW THE AMO UNT WAS UTILSED NOR SUBSTANTIATED THE NATURE OF EXPENDITURE INCURRE D ,STATED TO HAVE BEEN MENTIONED IN THE CONFIRMATION FORM THE SOCIETY . IT IS AN ADMITTED FACT THAT THE AMOUNT OF RS. 3 LACS HAS B EEN RECEIVED BY THE ASSESSEE. AS ALREADY STATED, THE ASSESSEE DID N OT FILE ANY EVIDENCE OR MATERIAL TO SHOW THAT THE AMOUNT WAS RE CEIVED FOR INCURRING EXPENDITURE ON BEHALF OF SATKAR HOUSING S OCIETY AND SUCH 8 IT(SS)A NO.164/AHD/2009 EXPENDITURE WAS ACTUALLY INCURRED BY THE ASSESSEE. THE FACTS RELATING TO INCURRING OF EXPENDITURE AND THE RELEV ANT DATES WHEN THE EXPENDITURE WAS ACTUALLY INCURRED CAN ONLY BE IN TH E KNOWLEDGE OF THE ASSESSEE . HOWEVER, NEITHER BREAK UP OF EXPENDI TURE NOR EVEN ANY EVIDENCE IN SUPPORT OF THE NATURE OF SUCH EXPE NDITURE OR EVEN DATES OF INCURRING OF EXPENDITURE IS AVAILABLE ON R ECORDS BEFORE LOWER AUTHORITIES IN QUANTUM APPEAL OR EVEN DURING PENALTY PROCEEDINGS. BEFORE US ALSO, SITUATION IS NO BETTER . IN THESE CIRCUMSTANCES, PARTICULARLY IN THE ABSENCE OF ANY E VIDENCE , CLAIM THAT EXPLANATION SUBMITTED BY THE ASSESSEE IS BONAF IDE, IS NOT BORNE OUT FROM ANY MATERIAL ON RECORD AND CONSEQUENTLY, C AN NOT BEEN ACCEPTED .INDISPUTABLY, DETERMINATION OF UNDISCLOSE D INCOME HAS ATTAINED FINALITY AFTER THE ORDER OF THE ITAT. 7.3 LIKEWISE IN RESPECT OF CASH OF RS. 15,000/- TR EATED AS UNDISCLOSED INCOME, OUT OF SEIZURE OF RS. 1,40,000 /-, THE LD. CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE AND DELETED THE ADDITION TO THE EXTENT OF RS. 1,25,000/-.IN THE ABSENCE OF ANY EVID ENCE, THE LD. CIT(A) UPHELD THE ADDITION OF RS. 15,000/-. THE LD. AR DID NOT EVEN PLACE BEFORE US ,A COPY OF THE SAID DECISION OF THE LD. CIT (A) WHILE ADMITTEDLY AMOUNT HAS BEEN ACCEPTED AS UNDISCLOSED INCOME. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN THE LD. AR DID NOT PLACE ANY MATERIAL BEFORE US AS TO HOW THE AMOUNT IS NOT UND ISCLOSED INCOME OF THE ASSESSEE, WE DO NOT FIND ANY INFIRMITY IN TH E FINDINGS OF THE LOWER AUTHORITIES, UPHOLDING LEVY OF PENALTY IN REL ATION TO THE AFORESAID AMOUNT. APPARENTLY, THE CASE OF THE ASSES SEE DOES NOT FALL IN FIRST PROVISO TO SEC. 158BFA(2) OF THE ACT. IT M AY BE POINTED OUT THAT THE ASSESSEE DID NOT EVEN RAISE A SPECIFIC GR OUND REGARDING LEVY OF PENALTY IN RELATION TO THE AMOUNT OF RS. 1 5,000/- AND ONLY A GENERAL GROUND NO.1 HAS BEEN TAKEN. 7.4 WE MAY FURTHER POINT OUT THAT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE APPLICABLE WHERE CONCEALMENT IS DETECTED DURI NG THE COURSE OF 9 IT(SS)A NO.164/AHD/2009 ASSESSMENT PROCEEDINGS OR THE ASSESSEE FURNISHED INACCURATE PA RTICULARS OF INCOME. WHEREAS IN RESPECT PENALTY UNDER SECTION 158-BFA (2) OF THE ACT, THE PENALTY IS IMPOSABLE IN RESPECT OF UNDISCLOSED INCOME DET ERMINED BY THE AO. THERE IS NO PARALLEL PROVISION IN SECTION 158BFA(2) SIM ILAR TO EXPLANATION 1 OF SECTION 271(1)(C) OF THE ACT WHERE PENALTY IS IMPOSABLE WHEN THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION, WH ICH IS FOUND BY THE AO OR THE LD. CIT (APPEALS) TO BE FALSE OR OFFERS AN EXPLANATION , WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION I S BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTA TION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. THE PROVISIONS OF SECTION 158 -BFA (2) ARE BASED ON DETERMINATION OF UNDISCLOSED INCOME ADMITTED BY THE A SSESSEE UNDER SECTION 158-BC (1)(A) OF THE ACT AND NOT ON CONCEALMENT OF IN COME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. HON'BLE SUPREME CO URT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILES PROCESSORS [2008] 1 66 TAXMAN 65 (SC), ( 2007-TIOL-159-SC-CX ) HELD THAT IN CIVIL LIABILITIES LIKE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT THERE IS NO N ECESSITY OF PROVING MENS REA ON THE PART OF THE ASSESSEE. THEREFORE, AFTER THE DECISI ON OF HON'BLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILES PROCESSORS EVEN I N CASE OF IMPOSITION OF PENALTY U/S. 271(1)(C), THE REVENUE IS NOT REQUIRED TO PROVE THAT ASSESSEE HAD WILFULLY CONCEALED THE INCOME OR HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE CONCEPT OF MENS REA CANNOT BE IMPORTED IN TH E PROVISIONS OF SECTION 158BFA(2) OF THE ACT . THE EFFECT OF SUCH LEGAL POSITIO N IS THAT ONUS IS NOT ON THE REVENUE EITHER TO PROVE THE GUILTY MIND OR THE SUFFI CIENT CAUSE ON THE PART OF ASSESSEE. THE ONUS IS ENTIRELY ON THE ASSESSEE TO PROVE HIS BO NA FIDES ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE. IF THE ASSESSEE CAN DISCHARGE SUCH ONUS, THEN LEVY OF PENALTY WOULD NOT BE JUSTIFIED .TH E PENALTY UNDER SECTION 158BFA(2) IS IMPOSABLE WITH REFERENCE TO THE UNDISCLOSE D INCOME DETERMINED BY THE AO. THE QUESTION WHETHER UNDISCLOSED INCOME HAS BEEN CORRECTLY DETERMINED OR NOT CANNOT BE RAISED NOW AFTER THE FINDINGS OF TH E ITAT IN QUANTUM APPEAL. THE LEGISLATURE PROVIDED OPPORTUNITY TO THE ASSESSEE UND ER FIRST PROVISO TO SECTION 158BFA (2) OF THE ACT TO ADMIT THE UNDISCLOSED INCOME EVEN AFTER THE MATERIAL WAS FOUND FROM HIS POSSESSION UNDER PROCEEDINGS U/ S. 132 OF THE ACT AND WHICH FORMED THE BASIS OF DETERMINATION OF UNDISCLO SED INCOME. THE 10 IT(SS)A NO.164/AHD/2009 ASSESSEE HAVING FAILED TO AVAIL SUCH CONCESSIONS AS PROVIDED IN FIRST PROVISO TO SECTION 158-BFA (2) OF THE ACT, THE PROVISIONS OF SECOND PROVISO COME INTO PLAY. 7.5 NOW ADVERTING TO DECISIONS RELIED UPON BY THE LD.AR. FIRST SUCH DECISION IS DODSAL LIMITED(SUPRA).IN THIS DECISION, THE ONLY QUESTION RAISED BEFORE THE HONBLE HIGH COURT WAS AS TO WHETHER THE PROVISION OF SEC.158BFA(2) OF THE ACT IS DIRECTORY OR MANDATORY. HON BLE HIGH COURT HELD THAT BOTH THE CIT(A) AND TRIBUNAL HAVING RECORDED REASONS FOR EXERCISE OF THEIR DISCRETION AND THE REVENUE HAVING NOT CHALLENGED THE S AID FINDING OF FACT AS TO THE EXERCISE OF DISCRETIONARY POWER, NO INTERFERENCE WA S NECESSARY. THE LD. AR ON BEHALF OF THE ASSESSEE HAS NOT DEMONSTRATED AS TO HOW THE SAID DECISION HELPS THE ASSESSEE IN THE PECULIAR FACTS AND CIRCUMSTANCES I N THE INSTANT CASE, ESPECIALLY WHEN THE REVENUE DID NOT CHALLENGE THE FIN DINGS OF FACTS AS TO THE EXERCISE OF THE DISCRETIONARY POWER IN THE CITED CASE.. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT RELIANCE ON THIS DECISION IS MISPLAC ED. 7.6 AS REGARDS DECISION IN SATYENDRA KUMAR DOSI( SUPRA), IN THAT DECISION, THE LD. CIT(A) CANCELLED THE PENALTY SINC E NON-ALLOWANCE OF THE OPENING CAPITAL BALANCE BY THE AO AND THE REDUCTIO N OF THE OPENING CAPITAL BALANCE BY THE CIT(A)-CENTRAL, JAIPUR, FROM 35 LACS TO 15 LACS, FOLLOWING DIFFERENT METHOD AND WORKING OF THE SAME THAN THAT OF THE ASSESSEE , COULD NOT BE TERMED AS UNDISCLOSED INCOME OF ASSESSEE FOR THE PURPOSE OF LEVY OF PENALTY UNDER S. 158BFA(2) OF THE ACT. ON APPEAL, THE ITAT UPHELD THE FINDINGS OF THE LD. CIT(A) WHILE OBSERVING THAT THE ADDITION WAS THE RESULT OF ESTI MATION OF THE OPENING CAPITAL INVOLVED PRIOR TO THE BLOCK PERIOD AND IN THE BLOCK ASSESSMENTS WHILE COMPUTING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD, CAP ITAL POSSESSED BY THE ASSESSEES PRIOR TO THE BLOCK PERIOD AS REVEALED FROM THE LE DGER AND THE MATERIAL SEIZED DURING THE SEARCH COULD NOT BE TREATED AS UNDISCLO SED INCOME OF THE FIRST ASSESSMENT YEAR IN THE BLOCK PERIOD. IN THESE CIRCUMSTANCES, HON;BLE HIGH COURT WHILE HOLDING THAT THE PROVISIONS OF S. 158BFA(2) O F THE ACT PROVIDING FOR IMPOSITION OF PENALTY IN RESPECT OF THE UNDISCL OSED INCOME DETERMINED BY THE AO UNDER CL. (C) OF S. 158BC IS D ISCRETIONARY AND NOT MANDATORY ,CONCLUDED AS UNDER: 11 IT(SS)A NO.164/AHD/2009 13. MOREOVER, IN THE INSTANT CASE, AFTER DUE EXAMIN ATION OF THE FACTS AND THE MATERIAL ON RECORD, THE CIT(A) AND LEARNED TRIBUNAL HAVE CONCURRENTLY FOUND THAT THE DIFFERENCE OF THE UNDIS CLOSED INCOME ASSESSED AND THE UNDISCLOSED INCOME SHOWN IN THE RE TURN DOES NOT RELATE TO THE BLOCK PERIOD AS SUCH. THE TRIBUNAL HA S ARRIVED AT THE FINDING THAT THE ASSESSEES HAD CLAIMED TO GIVE REDU CTION OF AMOUNTS CALCULATED ON REASONABLE BASIS ON ACCOUNT OF THEIR OPENING CAPITAL AS ON 1ST APRIL, 1995 FROM THE UNACCOUNTED MONEY-LE NDING BUSINESS PRIOR TO BLOCK PERIOD OUT OF THE UNDISCLOSED INCOME DETERMINED IN THEIR HANDS. THE LEARNED TRIBUNAL HAS RIGHTLY HELD THAT THE ADDITION IS RESULT OF ESTIMATION OF THE OPENING CAPITAL INVOLVE D PRIOR TO THE BLOCK PERIOD AND IN THE BLOCK ASSESSMENTS WHILE COMPUTING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD, CAPITAL PO SSESSED BY THE ASSESSEES PRIOR TO THE BLOCK PERIOD AS REVEALED FRO M THE LEDGER AND THE MATERIAL SEIZED DURING THE SEARCH COULD NOT BE TREATED AS UNDISCLOSED INCOME OF THE FIRST ASSESSMENT YEAR IN THE BLOCK PERIOD. THUS, IN VIEW OF THE CONCURRENT FINDING OF FACT ARR IVED AT BY THE TWO APPELLATE AUTHORITIES, AS AFORESAID, IN OUR CONSIDE RED OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATIO N OF THIS COURT IN THESE APPEALS. 7.61 AS IS APPARENT FROM THE AFORESAID OBSERVATION S OF THE HONBLE HIGH COURT, FACTS AND CIRCUMSTANCES IN THE CITED DE CISION WERE ALTOGETHER DIFFERENT FROM THE FACTS AND CIRCUMSTANC ES IN THE INSTANT APPEAL BEFORE US. IN THE INSTANT CASE, THE ASSESSEE DID NOT SUBMIT ANY EVIDENCE AT ALL IN SUPPORT OF HIS PLEA THAT THE AMOUNT OF RS. 3 LACS RECEIVED FROM THE SATKAR HOUSING SOCIETY WAS T OWARDS EXPENSES TO BE INCURRED ON BEHALF OF THE SOCIETY. S IMPLY FILING A CONFIRMATION FROM THE SAID SOCIETY THAT THE AMOUNT WAS MEANT FOR EXPENSES ,DOES NOT ESTABLISH THAT ,ESPECIALLY WHEN NOT AN IOTA OF EVIDENCE HAS BEEN PLACED BEFORE THE AO/ LD. CIT(A) AND BEFORE THE ITAT IN QUANTUM PROCEEDINGS AND EVEN DURING PENALT Y PROCEEDINGS THAT THE SAID AMOUNT WAS FOR INCURRING ANY EXPENDIT URE AND HAD BEEN ACTUALLY UTILISED FOR THE SAID PURPOSE. DURING THE PENALTY PROCEEDINGS BEFORE THE AO OR THE LD. CIT(A) NOT EVE N A WHISPER HAS BEEN MADE IN RESPECT OF NATURE OF EXPENDITURE FOR W HICH AMOUNT WAS UTILISED. BEFORE US ALSO ,APART FROM MAKING MERE AS SERTIONS, NOT AN IOTA OF EVIDENCE IS PLACED BEFORE US BY THE ASSESSE E AS TO HOW THE 12 IT(SS)A NO.164/AHD/2009 AMOUNT WAS UTILSED NOR SUBSTANTIATED THE NATURE OF EXPENDITURE INCURRED ,STATED TO HAVE BEEN MENTIONED IN THE CON FIRMATION FORM THE SOCIETY. IN FACT, THE AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE, CLAIMING THAT THE SAME WAS FOR INCURRING EXPENDITU RE WHILE NOT AN IOTA OF EVIDENCE IS ON RECORD REGARDING INCURRING O F SUCH EXPENDITURE ACTUALLY. IN THESE CIRCUMSTANCES ,RELIANCE ON THE A FORESAID DECISION IS TOTALLY MISPLACED. 7.7 REGARDING DECISION IN SMT. PRAMILA PRATAP SH AH(SUPRA),IT WAS HELD IN THIS DECISION THAT IF THE FACTS AND CIRCUMSTANCE S OF THE CASE SHOW THE BONA FIDE OF THE ASSESSEE IN NOT DISCLOSING THE INCOME IN THE RETURN, THEN PENALTY SHOULD NOT BE IMPOSED AND THE TECHNICALITIES, IF ANY, SHOULD NOT COME IN THE WAY OF JUSTICE. IN THE CITED DECISION, THE ITAT FOUN D THAT THAT SEARCH OPERATION WAS CARRIED OUT AFTER THE DEATH OF THE ASSESSEE WHEREIN NO INCRIMINATING MATERIAL WAS FOUND EITHER AT THE PREMISES OF DECEASED ASSESSEE OR FRO M THE LOCKERS OPERATED BY HIM OR FROM THE POSSESSION OF HIS WIFE ,LEGA L HEIR BEFORE THE ITAT. THE WIFE OF ASSESSEE WAS NOT AWARE OF THE FINANCIAL AFFA IRS OF THE DECEASED ASSESSEE. IN THESE CIRCUMSTANCES, THE LEGAL HEIR FILED THE 'NIL' UNDISCLOSED INCOME IN THE RETURN UNDER SECTION 158BC. HOWEVER, SUBSEQUENTL Y, SHE CAME TO KNOW THROUGH THE CHARTERED ACCOUNTANT OF THE DECEASED ASSESSEE THAT HE HAD SOLD SOME SHARES IN HIS LIFE TIME AND THE SALE PROCEEDS HAD BE EN CREDITED IN HIS ACCOUNT IN THE BOOKS OF M/S. NATWARLAL & CO., A FIRM IN WHICH THE ASSESSEE WAS PARTNER. AS SOON AS, SHE CAME TO KNOW ABOUT SUCH FACTS, SHE FILED THE REVISED RETURN DISCLOSING THE CAPITAL GAIN ON SALE OF SUCH SHARES. THE ASSESSING OFFICER WAS NOT AWARE OF SUCH INCOME AS NOTHING WAS REVEALED IN T HE COURSE OF SEARCH. IN THESE CIRCUMSTANCES , THE ITAT CONCLUDED THAT THE BONA FIDE OF THE LEGAL HEIR WHO FILED THE RETURN CANNOT BE DOUBTED AND CONSEQUENT LY, THE ASSESSEE CANNOT BE PENALISED MERELY BECAUSE, BY MISTAKE, INCOME WHICH IS N OT 'UNDISCLOSED INCOME', WAS OFFERED TO TAX AS 'UNDISCLOSED INCOME. HOWEVE R, IN THE INSTANT APPEAL BEFORE US ,SUCH ARE NOT THE FACTS NOR THE LD. AR DEMONSTRATED AS TO HOW THE SAID DECISION HELPS THE ASSESSEE. IN THESE CIRCUMSTANCES, W E ARE OF THE OPINION THAT THE NONE OF THE DECISIONS RELIED UPON BY THE LD. AR IS APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. 13 IT(SS)A NO.164/AHD/2009 8. MOREOVER, IT IS NOT THE CASE OF THE ASSESSEE THAT OPPORTUNITY OF BEING HEARD WAS NOT GIVEN. THE AO FOLLOWED THE PROCEDURE PRESCRIBE D IN SECTION 158-BFA (3) FOR IMPOSING PENALTY UNDER SECTION 158-BFA (2) OF THE ACT. IN VIEW OF THE ABOVE, ESPECIALLY WHEN THE ASSESSEE CONSISTENTLY FAILED TO PROVE HIS BONA FIDES AT EVERY STAGE IN QUANTUM PROCEEDINGS AND EVEN IN PENALTY PROCE EDINGS ,APPARENTLY ONUS LAID DOWN UPON THE ASSESSEE IS NOT DISCHARGED AND CONSEQUEN TLY, THE LEVY OF PENALTY UNDER SECTION 158BFA(2) OF THE ACT IS JUSTIFIED WITH REFERENCE TO THE UNDISCLOSED INCOME OF RS. 3.15 LACS ,DETERMINED BY THE AO . IN VIEW THEREOF, WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY UNDER SECTION 158-BFA (2) HAS RIGHTLY BEEN IMPOSED BY THE AO IN RELATION TO THE AFORESAID UNDISCLOSED INCOME OF RS.3 LACS AND RS.15,000/- AND WE DO NOT FIND ANY INF IRMITY IN THE IMPUGNED ORDER PASSED BY THE LD. CIT (APPEALS), CONFIRMING THE PENALTY LEVIED UNDER SECTION 158-BFA (2) OF THE ACT. CONSEQUENTLY, GROUND NOS. 1 TO 3 IN THE APPEAL ARE DISMISSED. 9. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 12 -08-2011 SD/- SD/- ( BHAVNESH SAINI ) JUDICIAL MEMBER ( A N PAHUJA ) ACCOUNTANT MEMBER DATED : 12 -08-2011 COPY OF THE ORDER FORWARDED TO: 1. RASIKLAL K SUTHAR, 11, VIMALNATH APARTMENT, 2, S HRIMALI SOCIETY, NAVRANGPURA, AHMEDABAD 2. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-10, AH MEDABAD 3. CIT CONCERNED 4. CIT(A)-XVI, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-A, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD