KATIK RAM KURREY, BILASPUR,BILASPUR V. .INCOME TAX OFFICER, WARD-2(1), BILASPUR, BILASPUR

ITA 222/RPR/2024

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Katik Ram Kurrey appealed against the penalty imposed by the Income Tax Officer, which was confirmed by the Commissioner of Income Tax (Appeals) and subsequently challenged in the Income Tax Appellate Tribunal. The penalty was levied due to non-compliance with notices and failure to explain the source of a substantial cash deposit of Rs. 54,00,500 in his bank account, which was treated as concealed income. The Tribunal dismissed the appeal, agreeing with the lower authorities that the appellant had not substantiated his claims or responded adequately to the notices served.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469806 (ITAT-RAIPUR)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 17-05-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: YOGESH SETHIA
• Keywords: Unexplained cash credit; Principle of natural justice; Initiation of penalty proceedings; Non compliance
• Section: 148; 144; 142(1); 250; 271(1)(c); 68

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 222/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2013-14 Katik Ram Kurrey, Uslapur, Bilaspur, 495001 Chhattisgarh PAN : CWSPK4214Q .......अपीलाथȸ / Appellant बनाम / V/s. Income Tax Officer, Ward-2(1), Aaykar Bhawan, Vyapar Vihar, Bilaspur 495001 Chhattisgarh. ……Ĥ×यथȸ / Respondent Assessee by : Shri Yogesh Sethia, CA Revenue by : Dr. Priyanka Patel, Sr. DR. सुनवाई कȧ तारȣख / Date of Hearing : 28.11.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 09.12.2024 2 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.222 /RPR/2024 आदेश / ORDER PER Bench: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) u/s 250 of the Income-tax Act, 1961 (in short ‘the Act’) dated 29.12.2023, which in turn arises from the penalty order passed by the Assessing Officer (A.O.) under Section 271(1)(c) of the Act, dated 21.05.2019 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal before us: “Ground No. 1: In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in deciding the appeal ex-parte without proper service of the notice as per provisions of the Act and without following the principles of natural justice. Ground No. 2: In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in confirming imposition of penalty amounting of Rs.14,94,000/- under section 271(1)(c) of the Income Tax Act, 1961. Ground No.3: In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in confirming action of Ld. Assessing Officer in holding that the appellant has concealed the particulars of income and the fact being contrary. Ground No.4: The impugned order is bad in law and on facts Ground No. 5:. The appellant reserves the right to addition, after or omit all or any of the grounds of appeal in the interest of justice.” 2. After considering the reasons given by Shri Yogesh Sethia, Learned Authorized Representative (for short, Ld. AR) for the assessee, the delay involved in filing of the present appeal is condoned. 3 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.222 /RPR/2024 3. On a perusal of the record, we find that though the AO vide his show cause notice u/s 271(1)(c) of the Act dated 15.11.2018 had called upon the assessee to put forth an explanation, as to why he may not be saddled with penalty for “concealment of income”, and had fixed the matter on 15.12.2018, but the same remained un-complied with. Again, the notice u/s.271(1)(c) of the Act dated 08.04.2019 fixing the hearing of the matter on 24.04.2019 was issued by the AO, but the same too was not complied with by the assessee. The AO, considering the fact that the assessee had nothing to say qua the imposition of penalty as regards the addition of Rs.54,00,500/- that was made by him while framing the assessment in his case u/s. 144 r.w.s. 147 of the Act, dated 15.11.2018, thus, imposed a penalty of Rs.14,94,000/- u/s 271(1)(c) of the Act. 4. On appeal, the assessee continued with his lackadaisical approach, and once again, despite having been afforded five opportunities vide notices dated 08.02.2021, 30.11.2022, 07.12.2022, 08.12.2023 and 15.12.2023 did not find it fit to appear/participate in the proceedings before the first appellate authority. The CIT(A), considering the aforesaid conduct of the assessee held a firm conviction that he was not interested to pursue the appeal in any productive manner, thus, proceeded with and disposed of the appeal vide an ex-parte order. 5. The Ld. CIT(A) after deliberating at length on the facts involved in case before him, found no infirmity in the view taken by the AO qua the penalty that was imposed by him u/s 271(1)(c) of the Act, and thus, upheld the same. For the sake of clarity, the observations of the Ld. CIT(A) are culled out as under: 4 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.222 /RPR/2024 “10. The appellant has challenged the initiation of penalty proceedings u/s 271(1)(c) in Ground of Appeal Nos.1 and 2 of appeal. The excerpts of the penalty order are as under: \"In this case no return was filed by the assessee for the A.Y 2013-14. Notice u/s. 148 of the income tax Act, 1961 was issued to the assessee. Assessee did not comply with the notice u/s. 148 of the Income-tax Act, 1961 and no return was filed by the assessee. Since there was no return filed, the AO assessed the total income at to tune of Rs. 54,00,500/- u/s. 147 r.w.s. 144 of the Income-tax Act, 1961 on 15.11.2018 and served to the assessee. 2. The assessee has deposited cash of Rs. 54,00,500/- in his saving bank account in Indian Bank, source of which was not explained. Amount of Rs. 54,00,500/- has escaped assessment and was not offered for taxation purpose, hence, treated as concealed income. Penalty proceeding u/s. 271(1)(c) initiated for concealment of income. 3 Considering the above, the AO passed order u/s 147 r.w.s. 144 of the income-tax Act on 15.11.2018 considering the Income of Rs. 54,00,500/- and initiated penalty u/s 271(1)(c) of the income-tax Act, 1961 for concealment of income. 4. Considering the order, the show cause notice u/s 271(1)(c) of the IT. Act, 1961 was issued on 15.11.2018 and the case was fixed for hearing on 05/12/2018 Thereafter, again notice u/s 271(1)(c) of the 1.T. Act, 1961 was issued on 08/04/2019 case was fixed for hearing on 29/04/2019. On the hearing date the assessee neither attended nor any written reply was filed. Since there is no compliance from the side of the assessee, it is clear that he has nothing to say in the matter. Non-compliance to statutory notices itself tantamount to admittance of default. Thus the concealed income is taken at Rs. 54,00,500/- for imposing penalty u/s 271(1)(c) of the IT Act, 1961. 5. Hence the assessee is in default and is liable for penalty u/s. 271(1)(c) of the Act, 1961. Considering the above, minimum penalty u/s. 271(1)(c) of the Income- tax Act, 1961 comes to Rs. 14,93,655/- (100% of tax) and maximum penalty u/s. 271(1)(c) of the Income Tax Act, 1961 comes to Rs. 44,80,965/- (300% of Tax). The penalty u/s. 271(1)(c) of the Income Tax Act, 1961 is being levied of Rs. 14,94,000/- (Rs. Fourteen Lakh Ninety Four Thousand only). This order is being passed after prior approval from JCIT, Range-2, Bilaspur vide letter F.No.JCIT/Range-2/BSP/Approval/2019-20 dated 20.05.2019. Issue demand notice and challan.\" 11. I have carefully considered the facts and circumstances of the case. In the absence of appellant's reply to hearing notices u/s. 250 of the Income- 5 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.222 /RPR/2024 tax Act, 1961 the appellant's Grounds of appeal and other Statement of facts are perused as made available on ITBA portal/Form 35 etc. Further other details on ITBA involving assessment order u/s. 144/147 of the I.T.Act dated 15.11.2018 and order u/s. 271(1)(c) dated 21.5.2019 against which this appeal is filed, is carefully perused. In the statement of facts the appellant stated that he derives income from execution of civil contract works. On perusal of these facts apparently the appellant is contending that, the deposit of cash relates to sale of agricultural land. Further, contended that, however the A.O had initiated 148 proceedings as per the information with AO as obtained from annual information reporting (AIR) filings available with the I.T. Department and treated the entire amount of Rs. 54,00,500/- as unexplained cash credit u/s. 68 of the Act. Accordingly, the appellant holds to the ground that the AO has erred in imposing penalty u/s. 271(1)(c) of the I.T. Act as the assessment proceedings and penalty proceedings are distinct and observations made in assessment these order cannot be the sole ground for levy of penalty. Keeping in view contentions/objections of the appellant, it is noteworthy from facts as available on record/emanating from AOs penalty order the bare 271(1)() dated21.5.2019 and its connected assessment order u/s. 144/147 of the IT. Ad dated 15.11.2018. Both these orders clearly show visible facts of the case Act different from the objections of the appellant. 11.1 On perusal of the above 271(1)(c) order of the AO, it is clear that the same has been initiated while concluding the assessment proceedings u/s 144/147 of the I.T. Act dated 15.11.2018. This penalty proceedings were initiated due to concealment of income. The penalty order of the A.O confirms issue of show cause notice u/s. 271(1) (c) dated 15.11.2018 posted for hearing on 5.12.2018. Due to non compliance by the appellant, again notice u/s. 271(1)(c) was issued on 8.4.2019, posting the case for hearing on 29.4.2019. Considering non response by the appellant to these show cause notices, the A.O concluded it as tantamount of admittance of default and accordingly levied penalty u/s. 271(1)(c) vide order dated 21.5.2019. Originally appellant is a non filer for A.Y. 2013-14 and A.O has observed that there is a substantial cash deposit in appellant's Indian Bank savings Alc. for Rs. 54,00,500/- and accordingly notice u/s. 148 dated 31.8.2017 was issued and served on the appellant as per Para 3 of assessment order. Prior to the issue of 148 notice, apparently I.T. department has given an electronic non-filing query to the appellant from a system generated letter for A.Y. 2013-14 on noticing the cash deposit of Rs. 54,00,500/- in appellant's bank for A.Y 2013-14. In response to this appellant apparently filed a reply \"No taxable income, agricultural income and sale of agricultural land. Not taxable.\" In view of this cryptic response by the appellant involving non filing of return in response to the system generated letter, the A.O has claimed to have issued and served 148 notice dated 31.8.2017 on the appellant as per Para 1,2 and 3 of the assessment order. Further at Para 4, A.O clearly brings out various occasions involving issue of letters/notices to the appellant on 16.5.2018, 12.6.2017, 10.7.2018 and 7.8.2018 seeking appellant to file the Income tax return in response to notices u/s. 142(1) issued and served for which the appellant never responded and the order was completed u/s. 147 r.w.s. 144 assesing the 6 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.222 /RPR/2024 income at Rs. 54,00,500/- and levy of penalty u/s. 271(1)(c) for concealment. Moreover the quantum appeal is also decided by the undersigned and the additions made by the assessing officer were upheld. 11.2 I agree that the judicial consensus in regard to levy or not to levy penalty u/s.271(1)(c) of the I.T. Act is that the parameters of judging the justification for addition made in the assessment case of the assessee is different from the penalty imposed on account of concealment of income or filing of inaccurate particulars of income and that certain disallowance/addition could legally be made in the assessment proceeding on the preponderance of probabilities, but no penalty could be imposed u/s 271(1)(c) on the preponderance of probabilities and revenue has to prove the guilty mind of the assessee. 11.3 But upon careful consideration, it is precisely for the cash deposit of Rs 54,00,500/- that the appellant could not make any necessary compliances by submitting proof/evidences and same was referred at Para 2 of 271(1)(c) order warranting A. O to initiate proceedings u/s. 271(1)(c) of the I.T.Act. In the light of this clear fact as emanating from relevant orders of the Assessing Officer, it is understood that the appellant is well aware of all the facts right from the beginning involving system generated letter for filing/seeking return of income to subsequent issue and service of notice u/s. 142(1) dated 12.10.2016 and 271(1)(c) first and second notices dated 15.11.2018 and 8.4.2019. The Appellant also could not bring on record anything contrary to these facts referred by the A.O and merely holding to the view that the cash deposit was from sale of agricultural land is far from acceptability to consider having any substance in appellant's contentions as verifiable. Further, as per the statement of facts referred by the appellant itself, it refers to the appellant deriving income from execution of civil contract works. Accordingly, appellant's grounds of appeal are not maintainable and acceptable considering the facts on record and as brought out by Assessing Officer in the penalty order u/s. 271(1)(c) of I.T. Act. Thus appellant has concealed the particulars of income and provisions of section 271(1)(c) are clearly attracted in the case. Thus penalty levied u/s 271(1)(c) is upheld. In consequence Ground No 1 and 2 are dismissed. 12. The appellant has contested the penalty order being bad in law and without jurisdiction in Ground No. 3 of appeal. But appellant has not furnished any submission to justify the ground so raised. Thus this ground is dismissed. 13. Through Ground No. 4 the appellant craved leave to add, alter, delete, modify or withdraw any of the above grounds at the time of hearing. No such option has been exercised. Hence, this ground of appeal is also dismissed. 14. In result, the appeal is dismissed.” 7 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.222 /RPR/2024 6. The assessee being aggrieved with the aforesaid order has carried the matter in appeal before us. 7. We have heard the learned authorized representatives of both the parties, perused the orders passed by the lower authorities and the material available on record. 8. Ld. AR at the threshold submitted that as the assessee had made cash deposits of Rs.54 lacs (approx.) out of the sale proceeds of agricultural land that was sold by him during the subject year, therefore, there was no justification for the lower authorities, i.e. AO and Ld. CIT(A), to have drawn adverse inferences and held the same as having been sourced out of his unexplained sources/income. Further, the Ld. AR on being directed to place on record the sale deed, failed to do so. 9. Considering the fact that the assessee neither before the lower authorities; nor before us had till date placed on record any document to substantiate his claim as regards the source of cash deposits in his bank account, therefore, we find no infirmity in the view taken by the A.O, that the assessee who had not filed his return of income for the subject year, had thus, concealed his income which had sourced the subject cash deposits in his bank account. As the assessee had till date neither in the course of the assessment proceedings or the penalty proceedings, come forth with any explanation that as to why penalty u/s. 271(1)(c) as regards the addition made in his hands u/s. 68 of the Act regarding the unexplained cash deposits of Rs.54 lacs (supra) made in his bank account during the year under consideration 8 Katik Ram Kurrey vs.Income Tax Officer, Ward-2(1), Bilaspur ITA No.222 /RPR/2024 was not called for, therefore, we find no reason to dislodge the view taken by the lower authorities who in absence of any explanation of the assessee as regards the source of cash deposited in his bank account had rightly imposed the penalty u/s. 271(1)(c) of the Act. 10. Resultantly, the appeal filed by the assessee being devoid and bereft of any merits is dismissed. Order pronounced in open court on day 09th December, 2024. Sd/- Sd/-Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 09th December, 2024. *#Hem/SB आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. The Pr. CIT, Raipur-1 (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File आदेशानुसार / BY ORDER, // True copy// Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "