TMI Blog2013 (7) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1)(c)- One has to see whether the attitude of the assessee in obtaining only the bills and not the materials/goods would amount to concealment of particulars of income or furnishing of inaccurate particulars in order to attract the provisions of section 271(1)(c) – appeal decided in favour of revenue. - - - - - Dated:- 26-4-2011 - ELIPE DHARMA RAO, VENUGOPAL M., JJ JUDGMENT The judgment of the court was delivered by Elipe Dharma Rao J.-Since the issue involved in both these tax appeals are one and the same and they are inter-connected, they were heard together and disposed of by this common judgment. The facts and the case culled out from the statement of facts filed by the Revenue goes as follows : The assessee is a dealer in glass, mirror and plywood. The assessment for the relevant assessment years under consideration were taken up for scrutiny and after survey under section 133 of the Income-tax Act, 1961 (in short "the Act"), and the same was completed under section 143(3) of the Act on March 26, 2003. During the assessment year 1999-2000, the assessee made purchases from various proprietary concerns of Shri Chandrakant T. Shah and his associates. The said Cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit that the assessee has not furnished the details of parties from whom the purchases were made and though an opportunity was given to cross-examine Mr. Chandrakant T. Shah from whom the assessee claimed to have purchased goods, the assessee had not availed of the opportunity and this vital fact was not taken into consideration by the Tribunal before passing the impugned order. He also submitted that the Tribunal failed to note that adoption of the gross profits ratio by the Assessing Officer to arrive at the taxable income of the assessee does not absolve the assessee from the liability to penalty leviable under section 271(1)(c) of the Act for having concealed the particulars of his income by resorting to the method of obtaining invoice of the goods at the higher price than the actual cost. In support of such contention, the learned standing counsel relied on the decisions of the Supreme Court reported in CIT v. Mussadilal Ram Bharose [1987] 165 ITR 14 (SC) ; [1987] 2 SCC 39 and Union of India v. Dharamendra Textile Processors [2008] 306 ITR 277 (SC). Learned counsel appearing for the assessee supported the decision of the appellate authority as well as the Tribunal. He w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 143 or fails to comply with a direction issued under sub-section (2A), or 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. . . Explanation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) 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." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority and the Tribunal have come to a conclusion that the Assessing Officer has not made out sufficient case to establish that the assessee has intentionally and deliberately concealed the income or furnished inaccurate particulars of income warranting the levy of penalty under section 271(1)(c) of the Act as it relates to gross profit addition under the head "Profits and gains of business". It is crystal clear that the seller in his sworn statement has stated that he had not made any sales and had given only the bills and, for the reasons best known to the assessee, it has not chosen to even cross-examine the seller. We do not know what also is required to attract the provisions of section 271(1)(c) of the Act, when there is clear finding that bills were only supplied and not the goods. The Tribunal as well as the appellate authority have not controverted or distinguished this fact by relying on any statement or material documents produced on the side of the assessee. The appellate authority has simply rejected the case of the Assessing Officer by following its earlier decision. It is not even discussed in the appellate order as to how the facts are similar. The Tribunal, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The object behind the enactment of section 271(1)(c) read with the Explanations indicates that the section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under section 276C." The Supreme Court in CIT v. Mussadilal Ram Bharose [1987] 165 ITR 14 (SC), while dealing with the onus of the assessee in producing the relevant materials before the authorities concerned, in paragraph 18, observed as follows (page 22) : "The position, therefore, in law is clear. If the returned income is less than 80 per cent. of the assessed income, the presumption is raised against the assessee that the assessee is guilty of fraud or gross or wilful neglect as a result of which he has concealed the income but this presumption can be rebutted. The rebuttal must be on materials relevant and cogent. It is for the fact-finding body to judge the relevancy and sufficiency of the materials. If such a fact-findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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