Shri Vijay Balwant Patil, Nashik v. ACIT Cir.7, Nashik, Nashik

ITA 1390/PUN/2008 | 2004-2005
Pronouncement Date: 03-03-2011 | Result: Dismissed

Appeal Details

RSA Number 139024514 RSA 2008
Bench Pune
Appeal Number ITA 1390/PUN/2008
Duration Of Justice 2 year(s) 4 month(s) 7 day(s)
Appellant Shri Vijay Balwant Patil, Nashik
Respondent ACIT Cir.7, Nashik, Nashik
Appeal Type Income Tax Appeal
Pronouncement Date 03-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 04-03-2011
Date Of Final Hearing 02-03-2011
Next Hearing Date 02-03-2011
Assessment Year 2004-2005
Appeal Filed On 27-10-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER. I.T.A. NO. 1390/PN/2008 ASS ESSMENT YEAR : 2004-05. SHRI VIJAY BALWANT PATIL ASSTT. COMMISSIONER OF 4613 PETH ROAD PANCHAVATI VS. INCOME-TAX CIRCLE-2 NASHIK. NASHIK. APPELLANT. RESPONDENT APPELLANT BY : SHRI NIKHIL PATHAK. RESPONDENT BY : SHRI HEMANT KUMAR LEUWA. O R D E R PER D. KARUNAKARA RAO A.M. THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER OF THE CIT(APPEALS)-II NASHIK DATED 25-07-2008 DELETING T HE PENALTY IMPOSED BY THE AO OF RS.12 07 140/- U/S 271(1)(C) OF THE INCOM E-TAX ACT. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS AN INDIVIDUAL ENGAGED IN VARIOUS TRADING ACTIVITIES. HE WAS ALSO A PARTNER IN SOME FIRMS. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2004-05 ADMITTING A TOTAL INCOME OF RS.18 37 911/-. THE AO HAS COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT DETERMINING THE TO TAL INCOME AT RS.54 95 911/- MAKING CERTAIN ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH ITA NO. 1390/PN/2008 SHRI VIJAY BALWANT PATIL 2 CREDITS U/S 68 OF THE ACT. WHILE COMPLETING THE ASS ESSMENT THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND LE VIED A PENALTY OF RS.12 07 140/-. AGGRIEVED BY THE PENALTY ORDER THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(APPEALS). DURING THE COURSE OF APPEL LATE PROCEEDINGS THE ASSESSEE FILED DETAILED SUBMISSIONS BY HIS LETTER D ATED 18/10/007 WHICH WERE FORWARDED BY THE CIT(APPEALS) TO THE AO AND THE AO BY HIS LETTER DATED 07- 01-2008 HAS SENT HIS REPORT. THE ASSESSEE FILED FUR THER SUBMISSIONS ON 25-02- 2008. THE CIT(APPEALS) CONSIDERED THE SUBMISSIONS M ADE BY THE ASSESSEE BEFORE HIM PERUSED THE CASE LAWS CITED AND GONE TH ROUGH THE MATERIALS PAPERS AND OTHER DOCUMENTS FILED BY THE ASSESSEE. T HE CIT(APPEALS) ALSO CONSIDERED THE REPORT OF THE AO AND ALL THE MATERIA LS FILED BEFORE HIM. THE CIT(APPEALS) ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY THE AO. AFTER CONSIDERING ALL THE ABOVE SUBMISSIONS AND MATERIALS THE CIT(APPEALS) CONFIRMED THE PENALTY IMPOSED BY THE AO. AGGRIEVED BY THIS ORDER OF THE CIT(APPEALS) THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI NIKHI L PATHAK REITERATED THE CONTENTIONS MADE BEFORE THE CIT(APPEALS) AND CONTEN DED THAT THE CIT(APPEALS) HAS WRONGLY CONFIRMED THE PENALTY OF R S.12 07 140/- U/S 271(1)(C) HOLDING THAT THE ASSESSEE HAD CONCEALED H IS INCOME BY FILING INACCURATE PARTICULARS OF INCOME WITHOUT APPRECIATI NG THE CORRECT FACTS OF THE CASE. THE LEARNED COUNSEL FURTHER CONTENDED THAT TH E PENALTY WAS LEVIED BY MERELY REJECTING THE CONTENTION OF THE ASSESSEE WIT HOUT PROVING IT TO BE FALSE AND THEREFORE THERE WAS NO REASON TO LEVY THE PEN ALTY. HE THEREFORE CONTENDED THAT THE PENALTY LEVIED BY THE AO AND CON FIRMED BY THE CIT(APPEALS) BE DELETED. ITA NO. 1390/PN/2008 SHRI VIJAY BALWANT PATIL 3 4. THE LEARNED DR SHRI HEMANT KUMAR C. LEUWA ON T HE OTHER HAND SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND S UBMITTED THAT THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE PENALTY U/S 271(1)(C) IMPOSED BY THE AO. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. WE HAVE ALSO CONSIDERED THE SUBMISSION S OF THE LEARNED COUNSEL FOR THE ASSESSEE WHO SIMPLY RELIED ON THE SUBMISSIO NS MADE BY HIM BEFORE THE REVENUE AUTHORITIES. WITHOUT OFFICIALLY WITHDRA WING THE APPEAL THE LEARNED COUNSEL REQUESTED THE BENCH TO TAKE A DECIS ION BASED ON THE MERITS OF THE ISSUE. WE HAVE PERUSED THE IMPUGNED ORDER OF THE CIT(APPEALS). AT PARA 9 9.1 9.3 THE CIT(APPEALS) HELD AS UNDER : 9. I HAVE CONSIDERED THE DETAILED SUBMISSIONS OF T HE APPELLANT AND ALSO THE REASONS GIVEN BY THE A.O. IN HIS PENALTY O RDER AND ALSO THE REPORT SUBMITTED BY HIM DURING THE APPEAL PROCEEDIN GS. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O. NOTI CED CERTAIN CREDITS IN THE CAPITAL ACCOUNT OF M/S MAX TRADE OWNED BY TH E APPELLANT AMOUNTING TO RS.36 58 000/-. THE A.O. CONSIDERED TH ESE CREDITS AS UNEXPLAINED U/S 68 OF THE ACT AND COMPLETED THE ASS ESSMENT. THE A.O. ALSO INITIATED PROCEEDINGS U/S 271(1)(C) OF TH E ACT WHILE COMPLETING THE ASSESSMENT. IT IS THE CONTENTION OF THE APPELLANT THAT THERE WAS NO APPLICATION OF MIND AND THE A.O. HAS N OT SPECIFICALLY STATED AS TO WHICH ARM OF CLAUSE (C) OF SECTION 27 1(1) NAMELY INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF INCOME WAS APPLICABLE IN THE CASE OF THE APPELLANT. FOR T HIS PURPOSE THE APPELLANT RELIED ON THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF NEW SARAHAI ENGG. CO. 82 ITR 642. AS RIGHTLY POINTED-OUT BY THE A.O. IN HIS SUBMISSIONS THE FAC TS OF THE SAID DECISION ARE DIFFERENT. IN THE SAID CASE THE HONB LE HIGH COURT FOUND THAT THERE WAS NO CLEAR CUT FINDING IN THE PENALTY ORDER OR THE ORDER OF THE C.I.T.(A) AS TO WHETHER THERE WAS CONCEALMENT O F INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THE PRESENT CASE THE ITA NO. 1390/PN/2008 SHRI VIJAY BALWANT PATIL 4 A.O. VALIDLY ISSUED NOTICE U/S 274 R.W.S. 271(1)(C OF THE ACT ON 21/02/2007. THERE WAS A CLEAR CUT FINDING Y THE A.O . IN PARA 5.5 OF THE PENALTY ORDER STATING THAT THE ASSESSEE HAD DELIBER ATELY FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREBY CONCEA LED TE INCOME. THUS THERE IS A PROPER APPLICATION OF MIND BY THE A.O. IN LEVYING THE PENALTY. THE A.O. SPECIFICALLY INVOKED EXPLANATION (1) TO SECTION 271(1)(C OF THE ACT IN THIS REGARD. THEREFORE THE SUBMISSIONS OF THE APPELLANT THAT THERE IS NO APPLICATION OF MIND B TH E A.O. ARE NOT BORNE OUT OF THE FACTS. 9.1 IT WAS POINTED OUT BY THE APPELLANT THAT THE PE NALTY WAS LEVIED WITHOUT FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE AND THE A.O. CONDUCTED THE INVESTIGATION AT THE BACK OF THE APPE LLANT AND HE COULD NOT PRODUCE NECESSARY DOCUMENTARY EVIDENCE BECAUSE OF THE DEATH OF THE ACCOUNTANT ONE MR. NIKAM. IT MAY BE SEEN FROM T HE ASSESSMENT ORDER THAT THE APPELLANT WAS GIVEN SHOW-CAUSE NOTIC E ON 14/12/2006 AND 18/1/2006 BRINGING OUT THE RESULTS OF THE ENQUI RY BY THE A.O. AND ASKING THE APPELLANT TO SHOW CAUSE AS TO WHY THE UN EXPLAINED CREDITS SHOULD NOT BE CONSIDERED AS CONCEALED INCOME. THE A PPELLANT VIDE HIS LETTER DATED 26/12/2006 EXPLAINED HIS INABILITY TO FURNISH MORE DETAILS AND AGREED FOR CONSIDERING THE SAME AS HIS INCOME. THUS THE APPELLANT WAS GIVEN A REASONABLE OPPORTUNITY OF BEI NG HEARD BY GIVING SHOW CAUSE NOTICES ON 14/12/2006 AND 18/12/2006. IN FACT THE ENQUIRIES WERE CARRIED OUT BY THE A.O. U/S 133(6) OF THE ACT WITH SHAMRAO VITHAL CO.OP. BANK. THE RESULTS OF THE ENQU IRY WERE MADE AVAILABLE TO THE APPELLANT THROUGH THE SAID LETTERS AND THE APPELLANT CANNOT STATE THAT THE INVESTIGATIONS WERE CARRIED O UT AT HIS BACK. EVEN AT THE TIME OF PENALTY PROCEEDINGS THE APPELLANT W AS GIVEN SUFFICIENT OPPORTUNITY TO GIVE THE EXPLANATION. HENCE THE SUBM ISSION THAT NO OPPORTUNITY WAS GIVEN IS NOT ACCEPTABLE. 9.2 IT WAS SUBMITTED BY THE APPELLANT THAT HE AGREE D FOR THE ADDITIONS TO BUY PEACE OF MIND AND TO AVOID PROTRAC TED LITIGATION AND OFFERED THE AMOUNT TO TAX AND THE A.O. DID NOT ESTA BLISH EITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS. IT WAS ALSO STATED THAT THE A.O. FAILED TO ESTABLISH THE E LEMENT OF MENS REA WHILE LEVYING THE SAID PENALTY. THE APPELLANT SHOWE D THE CREDITS IN THE CAPITAL ACCOUNT OF M/S MAX TRADE OWNED BY HIM. ONE OF THE CREDITS IN THE CAPITAL ACCOUNT WAS STATED TO BE AN ADVANCE REC EIVED AGAINST PLOT BY CHEQUE NO. 327771 DEPOSITED SHAMRAO VITTHAL CO.O P. BANK IN ITA NO. 1390/PN/2008 SHRI VIJAY BALWANT PATIL 5 ACCOUNT NO. 1230. THE ENQUIRY MADE Y THE A.O. PROVE D THAT THE DETAILS FURNISHED BY THE APPELLANT WERE FALSE AND T HE BANK ACCOUNT WAS STANDING SOMEBODY ELSES NAME AND THERE WAS NO TRAN SACTION IN THE RELEVANT PERIOD IN THE SAID ACCOUNT. THUS THE APPE LLANT DELIBERATELY FURNISHED INACCURATE PARTICULARS AND HE CANNOT SHIF T THE RESPONSIBILITY STATING THAT THE ACCOUNTANT WHO PREPARED THE ACCOUN TS WAS NO MORE. AN ACCOUNTANT CANNOT BRING MONEY TO THE TUNE OF RS. 36 58 000/- AS CREDITS IN THE CAPITAL ACCOUNT AS A MISTAKE. THERE IS NO ACCOUNTING MISTAKE IN BRINGING THESE CREDITS INTO THE CAPITAL ACCOUNT BUT A WILLFUL ATTEMPT. THE APPELLANT ALSO AGREED FOR THE ADDITION S ONLY AFTER THE DETECTION BY THE DEPARTMENT. THERE WAS NO PROMISE B Y THE A.O. THAT THERE WOULD NOT BE PENALTY U/S 271(1)(C) OF THE ACT . THE ACT OF ADMITTING THE ADDITIONS TO THE INCOME ON ACCOUNT OF THESE UNEXPLAINED CREDITS WOULD CLEARLY AMOUNT TO CONCEALMENT OF INCO ME AND MENS REA WAS CLEARLY ESTABLISHED THE A.O. IN HIS PENALTY OR DER. SIMILARLY REGARDING THE OTHER CREDIT OF RS.11 58 000/- THE A PPELLANT WAS UNABLE TO GIVE ANY BONAFIDE EXPLANATION FOR THE SOURCES OF THE PAYMENT OF CAR LOAN TAKEN FROM ICICI BANK. THUS THE A.O. ESTABLIS HED THE DELIBERATE ATTEMPT OF THE APPELLANT OF FURNISHING INACCURATE P ARTICULARS THEREBY THE CONCEALMENT OF INCOME. IN VIEW OF THIS THE DEC ISIONS RELIED ON B THE APPELLANT REGARDING THE MENS REA HAVE NO RELEVA NCE IN THE PRESENT FACTS OF THE CASE. 9.3 THE APPELLANTS ARGUMENT THAT THE PENALTY U/S 2 71(1)(C) IS NOT LEVIALE WHEN THE ASSESSEE AGREES TO ADDITION EVEN AT A LATER STAGE IS NOT TOTALLY ACCEPTABLE. THE RELIANCE OF THE APPELLA NT ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SURESHCHAN DRA WAS ALSO DISCUSSED BY THE A.O. IN HIS REPORT DATED 07/01/200 8. THE A.O. DISTINGUISHED THE FACTS OF THE SURESHCHANDRA CASE A ND STATED THAT THE DECISION IS NOT APPLICABLE TO THE PRESENT FACTS OF THE CASE. AS ALREADY DISCUSSED Y ME THAT THERE WAS A CLEAR CUT FINDING O F THE A.O. TO PROVE THE ACT OF CONCEALMENT OF INCOME BY THE APPELLANT B Y FURNISHING INACCURATE PARTICULARS THE DECISION OF THE HONBLE SUPREME COURT RELIED ON BY THE APPELLANT IS NOT APPLICABLE HERE. IN THE VIEW OF THE ABOVE THE CIT(APPEALS) CONFIRM ED THE PENALTY. 6. FROM THE ABOVE WE FIND THAT THE CIT(APPEALS) HA S RIGHTLY DECIDED THE ISSUE AGAINST THE ASSESSEE AFTER TAKING INTO ACCOUN T BOTH THE FACTS AS WELL AS ITA NO. 1390/PN/2008 SHRI VIJAY BALWANT PATIL 6 THE LEGAL PROPOSITIONS EXISTING ON THE SUBJECT. THE REFORE WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(APPEALS) DOES NOT CALL FOR ANY INTERFERENCE. THUS WE SUSTAIN THE PENALTY MADE BY THE AO AND C ONFIRMED BY THE CIT(APPEALS). 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DAY OF MARCH 2011. SD/- SD/- (I.C. SUDHIR) ( D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED THE 4 TH MARCH 2011 WAKODE COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. ACIT 3. CIT- 4. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE