TMI Blog2010 (3) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... ing investigation carried out by the Investigation Wing of the Department, it was found that the assessee along with two other HUFs whose Karta s were brothers had shown gifts from NRIs through sources non-resident internal account totalling to Rs. 69 lakhs. The Chartered Accountant of the assessee, authorized by the family members deposed before the Investigation Wing in statement made under section 131 that such gifts were bogus and offered amount of Rs. 69 lakhs involved in these gifts as additional income in the hands of different HUF assessees. The statement had been recorded on 26-2-1996. In case of the assessee-HUF, gift was received was to the tune of Rs. 17 lakhs much had been declared as undisclosed additional income. However, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so by Tribunal by order dated 31-1-2006 in ITA No. 4338/Mum./2002. 2.1 The Assessing Officer had also initiated penalty proceedings for concealment of income under section 271(1)( c ). The assessee submitted that it had neither concealed any particulars of income nor furnished inaccurate particulars of income. The assessee also pointed out that ground for initiating penalty proceedings were not precise and the notice was vague and, therefore, no penalty could be imposed. It was also submitted that the penalty could not be imposed on the ground of furnishing of inaccurate particulars when the proceedings had been initiated on ground of concealment of particulars of income. The Assessing Officer, however, did not accept the contention rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstantive provisions. The explanation only clarified the existing law to clear any ambiguity surrounding the meaning of the provision and these cannot be treated as substantive provision. CIT(A) referred to several judgments in this regard. It was held by him that the assessee in this case had concealed particulars of income for which, the penalty was leviable under the main provision of section 271(1)( c ) and not under the Explanations. The assessee also argued that the Explanation 4, which explained the meaning of the phrase "amount of tax sought to be evaded" was not workable as there was no difference between returned income and the assessed income and, therefore, it was pointed out that machinery provision for working out of conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative, particularly emphasized the argument that the Assessing Officer had issued show cause for concealing particulars of income but penalty had been imposed for furnishing of inaccurate particulars of income. Thus, the penalty imposed was on a ground different from the ground on which the penalty had been initiated and, therefore, the penalty was vitiated and should be deleted. He placed reliance on the following decision in support of his case : ( i ) K.M. Bhatia (Quarry) v. CIT [1992] 193 ITR 379 (Guj.) ( ii ) CIT v. Manu Engg. Work [1980] 122 ITR 306 (Guj.) ( iii ) CIT v. Lakhdhir Lalji [1972] 85 ITR 77 (Guj.). 4.1 On the other hand, the Learned Departmental Representative strongly supported the orders of the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty has been imposed for furnishing inaccurate particulars of income and, therefore, penalty is legally invalid. Reliance has placed on several judgments of Hon ble High Court of Gujarat, as mentioned in Para 4 earlier. We are unable to accept the argument advanced because the Hon ble High Court of Gujarat in the judgments cited held that penalty imposed on the ground different from the ground on which it was initiated was not proper because in such a case it could not be said that the assessee had been given reasonable opportunity of hearing in relation to the ground on which penalty had been imposed. The position in the present case is different. In this case the assessee had been given opportunity. In fact, the assessee had itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is imposable under the main provision and there is no need to refer to any Explanations. As regards the merit of the case, the claim of the assessee that amount paid for receiving the gift was from the cash received on surrender of tenancy right is not supported by any evidence. The gifts had also been received much before the surrender of tenancy. The amount has therefore been rightly assessed as income from other sources attracting tax rate of 30 per cent, which has also been affirmed by the Tribunal in the quantum appeal. The assessee had sought to evade tax by paying tax at lower rate. The penalty in our view is imposable as held earlier under the main provisions of section 271(1)( c ). 7. In view of the foregoing discussion, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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