TMI Blog2012 (7) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Years 1999-2000, 2001-02, 2002-03 and order dated 28.11.2008 for Assessment Year 2000-01 respectively. 2. The common ground raised in all these appeals relates to levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 ( the Act hereinafter). 3. Ld. Representatives of the parties submitted that the facts of all these cases are identical, therefore, the facts for Assessment Year 1999-2000 may be considered for deciding all these appeals. 4. The brief facts of the case are that a survey under section 133A of the Act was carried out on 19.12.2003 in the case of M/s Shri Mahabir Cold Storage, Farrukhabad. During the course of post survey enquiry, some bank account of Oriental Bank of Commerce, Farrukhabad were detected. The accounts of M/s. Ashish Potato Co. and M/s M.M. Traders were introduced by the assessee in the Bank. The assessee Shri Mohan Lal Rastogi has surrendered both the above Bank accounts as his undisclosed benami accounts. Meanwhile, the assessee revised his return which was filed on 15.01.2004. The brief summary of original returns filed, revised returns filed, additions made and penalty levied for different years noted from page no.9 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name of M/s. Ashish Potato Co. in distinction to that of M/s. Shri Mahavir Cold Storage. Also no proof of individual business of M/s. Shri Mahavir Cold Storage was found nor claimed. Further during the course of assessment proceedings, the firm M/s Shri Mahavir Cold Storage, for Assessment Year 2001-02, the assessee Shri Mohan Lal Rastogi never appeared to adduce evidences to the fact that retail trading of potatoes was carried out. Nor was any evidence of such nature furnished by the assessee through any written communication. The transaction in bank as per copy of account reveals that account was for discounting of drafts only. The assessee failed to produce Mandi Samiti Register, purchase and sale register, evidence regarding transportation bill etc. The bank account was only for draft coming and immediate withdrawal of cash. The Assessing Officer levied penalty in Assessment Year 1999-2000 observing as under :- I have gone through the reply filed by the assessee. In this connection, it is mentioned here that the assessee had filed revised return of income only after detecting an undisclosed account in the names of M/s Ashish Potato Co. and M/s M.M. Traders with oriental Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome from individual business is also to be included with the other income, hence revised return was filed applying 5% rate of profit on sales at Rs.53,000/- for Assessment Year 1999-2000 for proprietory business. On account of investment in such business, the assessee offered for taxation Rs.2,25,000/- in the revised return in respect of investment and credit purchase on the basis of peak theory. Ld. Authorised Representative submitted that I.T.A.T. has accepted the income declared by the assessee on the basis of peak theory. However, in respect of rate of profit the I.T.A.T. has applied 7% rate of profit instead of 5%. Ld. Authorised Representative further submitted that the assessee has filed complete details in respect of amount surrendered in the form of chart of accounts with Oriental Bank of Commerce in the name of M/s Ashish Potato Co. M/s M.M. Traders which were not shown in the original return. Ld. Authorised Representative submitted that the assessee has voluntarily revised the return and furnished all the details which have been accepted by the I.T.A.T. Therefore, the Ld. Authorised Representative submitted that in the light of the facts, penalty under section 271(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such person fails to offer an explanation or offers an explanation which is found by the [Assessing] Officer or the [Commissioner (Appeals)] [or the Commissioner] to be false, or (B) such person offers an explanation which he is not able to substantiate [and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him], then, the amount added or disallowed in computing the 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 particulars have been concealed. 8.1 The basic conditions for invoking section 271(1)(c) of the Act are that during the course of any proceedings under this Act including assessment proceedings, if the Assessing Officer found that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income, the penalty under section 271(1)(c) of the Act is leviable. The explanation to said section provides certain deemed circumstances where concealment from penalty is leviable. The admitted facts in the case und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting to Rs. 61,35,844 on agreed basis. The Assessing Officer treated the sum of Rs. 61,35,844 as income from undisclosed sources under section 69A of the Income-tax Act, 1961, and also levied penalty. The Commissioner (Appeals) cancelled the penalty and this was confirmed by the Tribunal. On appeal to the High Court: Held, allowing the appeal, that the assessee had concealed the material facts and given incorrect statement of facts in the application and also not provided information required by the Assessing Officer, after receipt of notice. Accordingly the action of the assessee was neither bona fide nor voluntary. The manner in which the assessee had tried to prolong the case before the Assessing Officer by not providing information immediately and by narrating incorrect facts in the letter dated December 6, 2006 showed that the assessee had concealed the income and disclosure was not voluntary but under compulsion being cornered by the Assessing Officer. Penalty had to be imposed. 8.3 Hon ble Gujrat High Court in the case of LMP Precision Engg. Co. Ltd. vs. DCIT, 330 ITR 93 (Guj) after noting facts, held as under :- (head note) The Deputy Director of Income-tax (Investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... segments of Rs. 18 lakhs each for assessment yean 1986-87, 1987-88 and 1988-89. The revised return declaring a sum of Rs.78,56,613 came about as a consequence of follow-up proceedings undertaken by the Deputy Director of Income-tax in relation to the other three suppliers, viz., SC, NB and NPST. Therefore, the assessee could not be stated to have voluntarily come forward to disclose income which had unintentionally been omitted from the original return of income. The imposition of penalty was valid. 8.4 Hon ble Punjab Haryana High Court in the case of Prem Pal Gandhi vs. CIT, 335 ITR 23 held (head note) The assessee derived income from property dealings. After assessment was completed, the Assessing Officer noticed that the assessee had substantial transactions in the bank which were not disclosed and proceedings were Initiated for reassessment. The assessee filed a revised return and offered the peak credits in the bank account and interest thereon, with a condition that no penalty be imposed and he may not be prosecuted. The Assessing Officer did not accept the conditions. The Assessing Officer completed the assessment and also imposed penalty. The Commissioner (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative, however, relied upon the decision of Hon ble Punjab Haryana High Court and others (supra) in support of his contention that it is not a case of concealment in which decision in the case of Suresh Chand Mittal (supra) has also been considered. However, the said decision in the case of Suresh Chand Mittal has been considered by the Hon ble Punjab Haryana High Court in its later decision in the case of Prem Pal Gandhi vs. CIT (supra) and penalty has been confirmed. Therefore, said decisions would not support the case of the assessee. Further the assessee made surrender of undisclosed income only when he was confronted with the incriminating material against him and cornered by the Revenue Department after making detailed enquiry. Therefore, the said decision would not support the case of the assessee. The ld. Authorised Representative further relied upon the orders of I.T.A.T., Agra Bench in which the Tribunal found that explanation furnished by the assessee stands substantiated by evidence brought on record. In the light of the decisions of various High courts, noted above, first of all decision of Tribunal cannot be given preference and further when the assessee himself ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
