ITO, Gwalior v. Smt. Sudha Kangla, Gwalior

ITA 375/AGR/2009 | 2005-2006
Pronouncement Date: 04-01-2010 | Result: Dismissed

Appeal Details

RSA Number 37520314 RSA 2009
Assessee PAN AMCPK4349N
Bench Agra
Appeal Number ITA 375/AGR/2009
Duration Of Justice 3 month(s) 25 day(s)
Appellant ITO, Gwalior
Respondent Smt. Sudha Kangla, Gwalior
Appeal Type Income Tax Appeal
Pronouncement Date 04-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 04-01-2010
Date Of Final Hearing 04-01-2010
Next Hearing Date 04-01-2010
Assessment Year 2005-2006
Appeal Filed On 09-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH SMC AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.375/AGR/2009 ASST. YEAR: 2005-06 INCOME-TAX OFFICER 2(3) VS. SMT. SUDHA KANGLA GWALIOR. 42 SINDH VIHAR COLONY GWALIOR. (PAN : AMCPK 4349 N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.R. SAHU JR. D.R. RESPONDENT BY : NONE ORDER THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) DATED 06.05.2009 BY WHICH THE CIT(A) HAS DELETED THE PENA LTY AMOUNTING TO RS.2 10 000/- LEVIED BY THE A.O. UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 (THE ACT HEREINAFTER). 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. I THE REFORE DECIDED TO DISPOSE OF THIS APPEAL AFTER HEARING THE LD. D.R. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN DECLARING AN INCOME OF RS.1 00 156/- WAS FILED ON 31.10.2005 AS ASSESSMENT UNDER SECTION 143 (3) OF THE ACT WAS COMPLETED ON 31.12.2007 AT AN INCOME OF RS.8 13 520/- AFTER ADDING UNDER SE CTION 68 A SUM OF RS.6 89 360/- WHICH WAS SURRENDERED BY THE ASSESSEE TO BUY PEACE WITH THE C ONDITION THAT NO PENAL ACTION SHALL BE INITIATED AGAINST THE ASSESSEE. WHEN THE NOTICE UNDER SECTIO N 271(1)(C) WAS ISSUED THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS ENTERED INTO AN AGREEMENT FOR SOME REAL ESTATE TRANSACTION WITH SHRI RAMKISHAN VERMA AND AS PER THE AGREEMENT HE HAS REC EIVED A SUM OF RS.6 89 360/-. THE 2 AGREEMENT COULD NOT BE IMPLEMENTED AND THEREFORE THE ASSESSEE REFUNDED THE SUM OF RS.6 89 360/- TO SHRI RAMKISHAN VERMA. THE ASSESSE E SUBMITTED COPY OF THE AGREEMENT COPY OF THE AFFIDAVIT OF SHRI RAMKISHAN VERMA AND ALSO COPY OF THE SURRENDER LETTER DATED 26.12.2007 FOR SURRENDERING A SUM OF RS.6 89 360/-. BEFORE THE A. O. THE ASSESSEE THEREFORE REQUESTED TO DROP THE PENALTY PROCEEDINGS. THE ASSESSEE ALSO RELIED ON THE FOLLOWING DECISIONS:- I) CIT VS. SURESH CHANDRA MITTAL 251 ITR 9 (SC) II) CIT VS. D&H SECHERON ELECTRIDES LTD. 203 ITR 1 64 (M.P.) III) CIT VS. BETA NEPTHOL LIMITED 272 ITR 323 (M. P.) IV) CIT VS. S.V. ELECTRICALS PVT. LTD. 274 ITR 33 4 (M.P.) V) CIT VS. SHYAMLAL M. SONI 276 ITR 156 (M.P.) 4. THE A.O. WHILE NOT SATISFIED WITH THE EXPLANATIO N OF THE ASSESSEE AS THE AGREEMENT AND THE AFFIDAVIT PRODUCED BY THE ASSESSEE WERE NOT ATT ESTED BY THE NOTARY. HE WAS OF THE VIEW THAT THE CREDITWORTHINESS AND GENUINENESS OF SHRI RAMKIS HAN VERMA WAS NOT ESTABLISHED AS THE ASSESSEE STATED THAT HE WAS UNABLE TO PRODUCE SHRI RAM KISHAN VERMA AND OFFERED A SUM OF RS.6 89 360/- FOR TAXATION. HE THEREFORE TOOK TH E VIEW THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND CONCEALED THE PARTICULARS OF HER INCOME AND LEVIED PENALTY UNDER SECTION 271(1)(C) AMOUNTING TO RS.2 10 000/- BY OBSERVING AS UNDER :- IN VIEW OF THE ABOVE FACTS AS WELL AS THE FACTS DI SCUSSED IN ASSESSMENT ORDER I AM SATISFIED THAT ASSESSEE HAS FURNISHED I NACCURATE PARTICULARS OF INCOME AND CONCEALED THE PARTICULARS OF HER INCOME AND THE RE BY COMMITTED A DEFAULT WITH THE AMBIT OF SECTION 271(1)(C) READ WITH SECTI ON 274 OF INCOME-TAX ACT 1961. IN THIS CASE MINIMUM PENALTY COMES TO RS.2 08 300/- I.E. 100% OF TAX ON CONCEALED INCOME AND MAXIMUM PENALTY COMES TO RS.6 24 900/- I.E. 300% OF TAX ON CONCEALED INCOME. I THEREFORE LEVY A PENALTY O F RS.2 10 000/- (RS. TWO LAKHS TEN THOUSAND ONLY) U/S 271(1)(C) OF INCOME-TAX ACT 1961. 5. WHEN THE MATER WENT BEFORE THE CIT(A) THE CIT(A ) DELETED THE PENALTY. 3 6. LD. D.R. BEFORE ME VEHEMENTLY RELIED ON THE ORDE R OF THE A.O. PASSED UNDER SECTION 271(1)(C) OF THE ACT. 7. I HAVE CAREFULLY PERUSED THE SUBMISSIONS MADE BY THE LD. D.R. ALONGWITH THE ORDERS OF THE AUTHORITIES BELOW. I NOTED THAT THE A.O. HAS IMPOS ED THE PENALTY ON THE ASSESSEE UNDER SECTION 271(1)(C) BY OBSERVING AS UNDER :- IN VIEW OF THE ABOVE FACTS AS WELL AS THE FACTS DI SCUSSED IN ASSESSMENT ORDER I AM SATISFIED THAT ASSESSEE HAS FURNISHED I NACCURATE PARTICULARS OF INCOME AND CONCEALED THE PARTICULARS OF HER INCOME AND THE RE BY COMMITTED A DEFAULT WITH THE AMBIT OF SECTION 271(1)(C) READ WITH SECTI ON 274 OF INCOME-TAX ACT 1961. IN THIS CASE MINIMUM PENALTY COMES TO RS.2 08 300/- I.E. 100% OF TAX ON CONCEALED INCOME AND MAXIMUM PENALTY COMES TO RS.6 24 900/- I.E. 300% OF TAX ON CONCEALED INCOME. I THEREFORE LEVY A PENALTY O F RS.2 10 000/- (RS. TWO LAKHS TEN THOUSAND ONLY) U/S 271(1)(C) OF INCOME-TAX ACT 1961. 8. THE A.O. MADE THE ADDITION UNDER SECTION 68 OF T HE ACT IN RESPECT OF THE UNEXPLAINED AND SQUARED UP CREDIT AMOUNTING TO RS.6 89 360/- WHICH WAS RECEIVED BY THE ASSESSEE FROM ONE SHRI RAMKISHAN VERMA AND WHICH WAS PAID BACK. DURING TH E YEAR THE A.O. ASKED THE ASSESSEE TO PRODUCE SHRI RAMKISHAN VERMA. THE ASSESSEE COULD N OT PRODUCE SHRI RAMKISHAN VERMA ALTHOUGH THE ASSESSEE HAS STATED BEFORE THE A.O. TH AT THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH SHRI RAMKISHAN VERMA TO BUY THE PROPERTY AT IN DORE JOINTLY FOR WHICH SHRI RAMKISHAN VERMA HAS CONTRIBUTED A SUM OF RS.6 89 360/- BUT SI NCE THE AGREEMENT COULD NOT BE IMPLEMENTED ULTIMATELY THE ASSESSEE REFUNDED THE M ONEY THROUGH BANKING CHANNEL TO SHRI RAMKISHAN VERMA. THE ASSESSEE HAS GIVEN THE ADDRES S OF SHRI RAMKISHAN VERMA. COPY OF THE AGREEMENT ALONGWITH AFFIDAVIT OF SHRI RAMKISHAN VER MA WERE PRODUCED BEFORE THE A.O. THE ASSESSEE SURRENDERED A SUM OF RS.6 89 360/- TO BUY PEACE AND AVOID FURTHER LITIGATION WITH THE CONDITION THAT PENALTY UNDER SECTION 271(1)(C) SHOU LD NOT BE IMPOSED ON THE ASSESSEE. THE A.O. 4 ALTHOUGH INITIATED THE PENALTY PROCEEDINGS UNDER SE CTION 271(1)(C) FOR CONCEALMENT OF PARTICULARS OF INCOME BUT ULTIMATELY LEVIED PENALTY FOR FILING INACCURATE PARTICULAR OF INCOME AND CONCEALING THE PARTICULARS OF HER INCOME. SECTION 271(1)(C) R EADS AS UNDER :- 271.(1) IF THE ASSESSING OFFICER OR THE COMMISSION ER (APPEALS) [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDE R THIS ACT IS SATISFIED THAT ANY PERSON - (A) .. (B) .. (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME OR (D) .. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY - EXPLANATION 1- WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT - (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEA LS) OR THE COMMISSIONER TO BE FALSE OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND [FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THA T ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM] THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL FOR THE PURPOSES OF CLAUSE (C ) OF THIS SUB-SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. 9. FROM THE PERUSAL OF THE AFORESAID SECTION IT IS APPARENT THAT PENALTY U/S 271(1)(C ) IS LEVIABLE IF THE A.O. IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURN ISHED INACCURATE PARTICULARS OF THE INCOME. THE PENALTY PROCEEDINGS AND THE ASSESSMENT PROCEEDI NGS BOTH ARE DIFFERENT. EXPLANATION 1 TO SECTION 271(1)(C) STATES THAT THE AMOUNT ADDED OR D ISALLOWED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE SHALL BE DEEMED TO BE THE INCOME IN RE SPECT OF WHICH PARTICULARS HAVE BEEN 5 CONCEALED. THIS DEEMING PROVISION IS NOT ABSOLUTE ONE BUT IS REBUT TABLE ONE. IT ONLY SHIFTS THE ONUS ON THE ASSESSEE. EXPLANATION 1 REFERS TO THE TWO SITUATIONS IN WHICH PRESUMPTION OF THE CONCEALMENT OF THE PARTICULARS OF INCOME IS DEEMED. THE FIRST SITUATION IS WHERE THE ASSESSEE IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE A.O. O R THE COMMISSIONER TO BE FALSE. THE SECOND SITUATION IS WHERE THE ASSESSEE IN RESPECT OF ANY F ACTS MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME OFFERS AN EXPLANATION WHICH THE ASSESSEE I S NOT ABLE TO SUBSTANTIATE AND ALSO FAILS TO PROVE THAT SUCH EXPLANATION WAS BONAFIDE ONE AND TH AT ALL THE FACTS RELATING TO THE COMPUTATION OF TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. THE PRESU MPTION AVAILABLE UNDER EXPLANATION TO SECTION 271(1)(C) CANNOT BE DRAWN UNLESS THE CASE OF THE ASSESSEE FALLS UNDER EITHER OF THE CLAUSES (A) OR (B). 10. IN THIS CASE I NOTED THAT THE A.O. HAS NOT BRO UGHT OUT ANY SPECIFIC CHARGE FOR WHICH THE PENALTY HAS BEEN IMPOSED ON THE ASSESSEE UNDER SECT ION 271(1)(C) OF THE ACT. HE HAS NOT BROUGHT OUT WHETHER THE ASSESSEE HAS CONCEALED THE PARTICUL ARS OF INCOME OR WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THIS I S APPARENTLY CLEAR FROM THE FINDING OF THE A.O. IN THE PENALTY ORDER WHICH IS REPRODUCED AS UNDER : - IN VIEW OF THE ABOVE FACTS AS WELL AS THE FACTS DI SCUSSED IN ASSESSMENT ORDER I AM SATISFIED THAT ASSESSEE HAS FURNISHED I NACCURATE PARTICULARS OF INCOME AND CONCEALED THE PARTICULARS OF HER INCOME AND THE RE BY COMMITTED A DEFAULT WITH THE AMBIT OF SECTION 271(1)(C) READ WITH SECTI ON 274 OF INCOME-TAX ACT 1961. IN THIS CASE MINIMUM PENALTY COMES TO RS.2 08 300/- I.E. 100% OF TAX ON CONCEALED INCOME AND MAXIMUM PENALTY COMES TO RS.6 24 900/- I.E. 300% OF TAX ON CONCEALED INCOME. I THEREFORE LEVY A PENALTY O F RS.2 10 000/- (RS. TWO LAKHS TEN THOUSAND ONLY) U/S 271(1)(C) OF INCOME-TAX ACT 1961. 6 11. I HAVE GONE THROUGH THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. LTD. 282 ITR 642 IN WHICH IT WAS HELD AS UNDER: IT IS INCUMBENT UPON THE ASSESSING OFFICER TO STATE WHETHER THE PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAD BE EN FURNISHED BY THE ASSESSEE. --------------------------------------------------- ----------------- --------------------------------------------------- ------------------------ HELD THAT THE PENALTY ORDER AND THE ORDER OF THE C OMMISSIONER (APPEALS) SHOWED THAT NO CLEAR CUT FINDING HAD BEEN REACHED. THE TRI BUNAL HAD FAILED TO APPRECIATE THIS LEGAL. ISSUE. THE RATIO IN CIT V. MANU ENGINE ERING WORKS 132 ITR 306(GUJ) WAS APPLICABLE AND THE ORDER OF PENALTY COULD NOT B E UPHELD BY THE TRIBUNAL. THE ORDER WAS INVALID. 12. I NOTED THAT SIMILAR VIEW HAS BEEN TAKEN BY A BENCH OF I.T.A.T. DELHI IN ITA NO.2275/DEL/2009 IN THE CASE OF RAJ RANI MITTAL TO WHICH THE UNDERSIGNED IS THE AUTHOR. SINCE THE A.O. HAS NOT BROUGHT OUT ANY SPECIFIC CHARGE WH ETHER THE PENALTY HAS BEEN IMPOSED ON THE CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURA TE PARTICULARS OF INCOME IN MY VIEW THE PENALTY CANNOT BE SUSTAINED. I ACCORDINGLY CONFIR M THE ORDER OF THE CIT(A) DELETING THE PENALTY. 13. IN THE RESULT APPEAL OF THE REVENUE IS DISMISS ED. (ORDER PRONOUNCED IN THE OPEN COURT ON 04.01.2010) SD/- (P.K. BANSAL) ACCOUNTANT MEMBER PLACE: AGRA DATE: 4 TH JANUARY 2010. 7 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL AGRA TRUE COPY