TMI Blog2017 (3) TMI 1581X X X X Extracts X X X X X X X X Extracts X X X X ..... thereof are to be kept in mind. Every concealment of fact may ultimately result in filing of or furnishing inaccurate particular. It was further argued that no statutory notice has been prescribed in this behalf in the Income tax Act. The judgment of Hon’ble Jurisdictional High Court in CIT Vs Kaushalya (supra) is still having a binding force on us. Thus, with utmost regards to the judgment of Karnataka High Court in CIT Vs Manjunatha Cotton & Ginning Factory (2013 (7) TMI 620 - KARNATAKA HIGH COURT ) we are bound to follow the judgment of jurisdictional High Court in CIT Vs Kaushalya (supra). - Decided against assessee. Penalty u/s 273 - assessee contended that no section was mentioned in the penalty order, therefore, the penalty has to be deleted - Held that:- On perusal of the notice issued u/s 273 r.w.s 274, (page-35 of the paper book), it was fairly agreed by the ld. counsel for the assessee that section 273(2)(b) of the Act has been mentioned in the aforesaid notice. Since, we have deliberated upon the facts/case laws in detail, while deliberating/adjudicating the appeals of the assessee u/s 271(1)(c) of the Act in earlier paras of this order, therefore, considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Department, contended that pursuant to the direction from the Hon'ble jurisdictional High Court, the Tribunal has taken a decision, therefore, there is no question of admission of substantial question of law, for which, our attention was invited to the order of the decision from Hon'ble jurisdictional High Court. It was contended that this appeal has not been admitted and advocates from both sides admitted that the matter may be sent to the Tribunal. Reliance was placed upon the decision in ITA No.996/Mum/2014, order dated 30/09/2007, (2017) 98 CCH 39 (Mumbai High Court) (Para-7), 216 ITR 660 (Bom.). So far as the merits of the cases concerned, the ld. Special Counsel, explained that the assessee himself disclosed the stocks and the units in its books of accounts and later on changed its version by claiming the same as finance charges. It was asserted that it is a case of security scam and no proof of finance transaction was at any stage produced by the assessee. It was claimed that the statement of Shri Champaklal was recorded, wherein; he categorically admitted the fault of the assessee. It was contended that assessee was provided sufficient opportunity, wherein, nothi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as transacted through this account, which resulted into credit balance of ₹ 6,69,35,305/-. The assessee could not explained the source of these credits. The stand of the Revenue is that the assessee generated huge asset and got benefit from the funds, the source of which was never explained, therefore, addition u/s 68 was made. 2.4. So far as, interest payable to M/s Champaklal Devidas is concerned, it was notices by the Assessing Officer that interest of ₹ 33,96,164/- was shown as payable on account of loan received from M/s Champaklal Devidas. This interest amount was claimed as interest paid by the assessee to M/s Champaklal Devidas. However, the assessee did not furnish any confirmation to this effect. The statement of Champaklal Devidas was recorded, wherein, he denied that any interest was recoverable from the assessee. Considering the totality of facts, the claimed amount was disallowed and added to the income of the assessee. 2.5. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in jux ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al with further direction to allow additional evidence, if any, filed by the assessee and thereafter adjudicate the same. In this background, the matter was examined by the Tribunal and was decided against the assessee vide order dated 29/10/2014 (pages 31 to 40 of the paper book). It is noted that the Tribunal has duly noted that the assessee was asked to explain the amount of ₹ 6,69,35,305/- and also its nature. The Tribunal also considered the case laws relied upon by the assessee along with the argument from both sides. The Tribunal has also discussed section 106 of the Evidence Act and finally, concluded that the assessee could not adduce any evidence in support of its contention with respect to the impugned transactions and even in the year 2014, no confirmation were filed by the assessee at any stage either from Andhra Bank or from the broker M/s Champaklal Devidas and concluded that the assessee miserably failed in discharging its onus cast upon it by virtue of section 68 of the Act r.w.s 106 of the Evidence Act, thus, in view of the overall factual matrix, additions were sustained. 2.8. Before us, the assessee wants shelter on technical grounds. The Hon'ble Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y explain the credit entry contained in his books of accounts. The burden has to be discharged with positive material (Oceanic Products Exporting Company vs CIT 241 ITR 497 (Kerala.). The legislature had laid down that in the absence of satisfactory explanation, the unexplained cash credit may be charged u/s 68 of the Act. Our view is fortified by the ratio laid down in Hon ble Apex Court in P. Mohankala (2007)(291 ITR 278)(SC). A close reading of section 68 and 69 of the Act makes it clear that in the case of section 68, there should be credit entry in the books of account whereas in the case of 69 there may not be an entry in such books of account. The law is well settled, the onus of proving the source of a sum, found to be received/transacted by the assessee, is on him and where it is not satisfactorily explained, it is open to the Revenue to hold that it is income of the assessee and no further burden lies on the Revenue to show that income is from any other particular source. Where the assessee failed to prove satisfactorily the source and nature of such credit, the Revenue is free to make the addition. The principle laid down in Ganpati Mudaliar (1964) 53 ITR 623/A. Govinda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any proceedings under this Act, is satisfied that any person- (a) [* * *] (b) has failed to comply with a notice under sub-section (2) of section 115WD or under sub-section (2) of section 115WE or under subsection (1) of section 142 or sub-section (2) of section 143or fails to comply with a direction issued under sub-section (2A) of section 142, or (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, or (d) has concealed the particulars of the fringe benefits or furnished inaccurate particulars of such fringe benefits, he may direct that such person shall pay by way of penalty,- (i) [* * *] (ii) in the cases referred to in clause (b), in addition to tax, if any, payable by him, a sum of ten thousand rupees for each such failure ; (iii) in the cases referred to in clause (c) or clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefits or the furnishing of inaccurate particulars of such income or fringe benefits. Explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire utilised amount is covered by the amounts so added or deducted in such earlier assessment years. Explanation 3.-Where any person fails, without reasonable cause, to furnish within the period specified in sub-section (1) of section 153 a return of his income which he is required to furnish undersection 139 in respect of any assessment year commencing on or after the 1st day of April, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of subsection (1) of section 142 or section 148 and the Assessing Officer or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person has taxable income, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under section 148.. 2.12. If the aforesaid provisions of the Act is analyzed with the facts of the present appeal, we are of the view that before penalty is imposed the entirety of circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and the judicial pronouncements discussed hereinabove including relied upon by the ld. representatives from both sides are analyzed, we find that the penalty was imposed by the Assessing Officer for concealment of income. The stand of the Assessing Officer was affirmed by the Ld. First Appellate Authority and also by the Tribunal. Thus, the totality of facts clearly indicates that from the beginning itself the assessee tried to conceal its income in such a way so that the legitimate tax, due to the Department, can be reduced with an intention to defraud the Revenue. There is a difference between tax planning and tax avoidance. It is a clear case of concealment of income, therefore, in our humble opinion, even the decision from Hon ble Apex Court in Reliance Petro Products (322 ITR 158)(SC) cannot come to the rescue of the assessee. It is not a case of bona-fide mistake wherein a benefit of the decision in CIT vs Skyline Auto Products pvt. Ltd. 271 ITR 335 (MP) can be extended to the assessee, rather it is a case of intentional concealment of income. For imposing penalty u/s 271(1)(c) of the Act either there should be concealment of income or furnishing of inaccurate particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Income tax (Appeals) is upheld. 2.14. So far as the contention of the ld. counsel for the assessee that appropriate section was not mentioned or inapplicable language contained in the notice was not deleted is concerned, the Ld. counsel for the assessee argued that in the notice of penalty the Assessing Officer has not specified whether the penalty is proposed on concealment of facts/income or for filing inaccurate particulars of income. The notice of penalty proceeding is illegal. Thus, further action initiated by the Assessing Officer and subsequent order of penalty is invalid. The Ld. counsel of the assessee further relied upon various decisions of the Tribunal like:- (a) Hafiz Contactor versus ACIT in ITA 6222 23/M/2013 (b) Samson Parincherry versus ACIT in ITA No. 4625-30/M/2013 (c) Gangaben P Chaudhary versus ITO in ITA No.696/M/2013 (d) Sanghavi Savla Commodity Broker P. Limited versus ACIT in 1746/M/2011 (e) A.R. Chadha Versus ACIT 80 ITD (Delhi)TM (f) JNC international versus ITO in ITA No. 1058/M/2014 (g) Rahman Krishnamachari sold Vs ACIT(2015) (D1) GJX -1712- TPAN (h) Ramkumar jalan versus ITO (105 Taxman 296) Bom (i) CIT ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one through the various decisions relied by them. We have also gone through the order of penalty passed by Assessing Officer and the order passed by Ld. Commissioner of Income Tax (Appeal). We are conscious that any of the party may raise legal issue at this stage, if the same can be emanated from the record of the case. The Hon ble jurisdictional High Court in CIT Vs Smt. Kaushalya (supra) while dealing with the similar ground about the limb of charge, whether mere mistake in language used or mere not striking off of inaccurate portion cannot by itself invalidate notice issued under section 274 of the Act. The language of the section does not speak about the issuance of notice. All that is required is that the assessee be given an opportunity of show cause. The issuance of notice is an administrative device for informing the assessee about the proposal of levy of penalty in order to enable him to explain why it should not be levied against him. If it is taken for the sake of argument that mere mistake in the language in the notice for non-striking off of inaccurate particular or marking on concealment of income portion cannot by itself invalidate the notice. Entire facts and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes as res-judicata. An order rejecting the Special Leave Petition at the threshold without detailed reasons therefore does not constitute any declaration of law or a binding precedent. And the similar view was expressed in various judgments, viz, A. The Workmen of Cochin Port Trust Vs The Board of Trustees of the Cochin Port Trust Anr AIR 1978 SC 1283; B. Ahmedabad Manufacturing Calico Printing Co Ltd Vs The Workmen Anr AIR 1981 SC 960; C. Indian Oil Corporation Ltd. Vs. State of Bihar Ors. AIR 1986 SC 1780; D. Supreme Court Employees Welfare Association Vs. Union of India Ors. AIR 1990 SC 334; E. Yogendra Narayan Chowdhury Ors Vs. Union of India Ors AIR 1996 SC 751; F. Union of India Anr. Vs Sher Singh Ors, AIR 1997 SC 1796; G. V.M. Salgaocar Bros. (P) Ltd. Vs. Commissioner of Income Tax AIR 2000 SC 1623; H. Saurashtra Oil Mills Association Gujrat Vs. State of Gujrat Anr. AIR 2002 SC 1130; I. Union of India Ors Vs. Jaipal Singh (2004) 1 SCC 121; and J. Y. Satyanarayan Reddy Vs Mandal Revenue Officer, Andhra Pradesh (2009) 9 SCC 447. 2.19. The Hon ble Apex Court in Kunhayammed Ors Vs State of Kerala Anr. AIR 2000 SC 2587, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lined to exercise its discretion so as to allow the appeal being filed. (v) If the order refusing leave to appeal is a speaking order, i.e., gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting the special leave petition or that the order of the Supreme Court is the only order binding as res-judicata in subsequent proceedings between the parties. 2.20. As there is no declaration of law which may be governed by Article 141 of the Constitution of India in the case of CIT Versus SSA S Emerald Meadows dismissed by Hon ble Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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