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TMI Blog2018 (9) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... Instead of furnishing the details called for, the assessee filed a letter dated 21.07.2014 raising concerns about disclosure of information u/s 138 of the IT Act. The DDIT, Unit IV(3) vide his letter dated 24.07.2014, addressed their apprehension by intimating that they are unfounded and once again requested them to furnish the details called for vide summons dated 17.07.2014 without any further delay. 3. In letter dated 05.08.2014, it was submitted by the assessee that the information regarding certain details requisitioned u/s 131(lA) of the IT Act were either before the assessing officer (AO) or irrelevant. Regarding other details it was submitted that they will arrange to submit it to the AO before whom the assessment proceedings were pending and thus refused to comply with the summons u/s 131(lA). It was brought to the attention of the assessee that the complete details as requested by summons/ notices/letters, referred to earlier, were not available in these accounts and documents as the Balance Sheet and Profit and Loss account have only net value under different heads. However, in order to carry the investigations forward the material available with the AO was taken into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 5. The assessee submitted a letter dated 03.11.2014 to the office of the DDIT(Inv) Unit-IV(3) New Delhi seeking a copy of the approval obtained by him from the Director of Income Tax in accordance with the provisions of Section 133(6) of the Income Tax Act whereas it was called upon to give evidence in exercise of powers under section 131 (lA) of the Income Tax Act in the matter of investigation in the cases of Share Holders, Directors and Members of M/s Young Indian. The details sought in the case also remained only partially complied. In the interest of natural justice one more opportunity was provided to the assessee vide office letter dated 10.11.2014 whereby the assessee was also required to show cause as to why penalty proceedings u/s 272A(l)( c) should not be initiated against it for not complying with all the terms of the summons dated 23.09.2014 issued u/s 131 (lA) of the Income tax Act. On this occasion too, instead of availing the opportunity to comply with the summons u/s 131(lA) of the Income Tax Act dated 23.09.2014 or showing cause for failure in submitting the details/ documents sought vide the said summons, the assessee vide letter dated 17.11.2014 resorted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... den duty of the Revenue to ascertain the facts when there are public allegations of revenue loss irrespective of the source of allegation as much as it is of the responsible assessee to share the details with the Revenue willingly. He further noted that waiting for the outcome of the court cases may render income tax cases fruitless due to limitation of time. Rejecting the explanation given by the assessee, the ADIT (Investigation) levied penalty of Rs. 10,000/- u/s 272A(1)(c) of the I.T. Act. 9. Before the ld. CIT(A), the assessee submitted that as stated in para 16 of the penalty order, the penalty is levied for the alleged failure to furnish information called for vide summons dated 23.09.2014. Para 8 of the penalty order refers to four specific items of information, which are allegedly not provided by the assessee and it is in respect of these four details that the penalty order has been passed. The said four details, serially numbered A, B, C and D are the ones that are mentioned in para 5 of the summons, issued u/s 131(lA) dated 23.09.2014. The assessee submitted that there can be no basis to suspect that any income has been concealed or likely to be concealed. Indeed, such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any relevance of the details called for to the assessee's taxable income, by now, some proceedings would have been initiated for taxing such income. In absence of any such proceedings, the contention of the assessee that the information is not relevant for the purpose of assessee's taxable income gets reinforced. Besides, there is every evidence of correlation between the date on which the Ld. ADIT called for the details from time to time from the assessee and the dates on which the hearings were fixed in trial courts/High Courts in the on-going litigation where the political rivals of the assessee's shareholders have filed criminal proceedings against them. This clear cut co-relation of dates demonstrates that the details are being fished out by the political rivals for creating evidence in those cases and thereby serving their political purpose. 10. Without prejudice to the foregoing submission, it was submitted that penalty u/s 272A(1)(c) applies only in case of non-compliance by any person "to whom summons is issued under sub-section (1) of section 131 .... ". It was submitted that there is no penalty prescribed for non-compliance with summons issued u/s. 131(lA) of the Act. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 131(1A) was without any basis or jurisdiction and that the question of suspicion does not arise as all details were available with the tax department or the MCA database or anybody else, are not tenable. The assessee cannot sit in the chair of the investigator and decide as to what could be the relevant information for the Income Tax purpose and what could be not. Despite the show cause given which very clearly stated that in case of non compliance, penal recourse shall be taken, "the assessee persisted in not providing the details on its own ground that it does not think that the information called for was either relevant or reasonable or justified. Even if the information was available with other public agencies or other Income Tax authorities, what was simply required was that a copy of the same could have been given in compliance which was not done. I do not deem it fit to comment or adjudicate on the contention of the assessee that the summons were merely for witch hunt or had any political angle to it in relation to the case filed in the High Court by one Mr. Swamy. This appears to be mere conjuncture and guessing and assumption by the assessee and baseless allegation on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1" and not sub-section (1A); c. The provisions of section 131(1A) are mutually exclusive from the provisions of section 131(1) inasmuch as: a. authorities mentioned under the two sub-sections are different; and b. the powers mentioned in sub-section (1) can be invoked only when proceedings are pending before the relevant authorities whereas the powers under sub-section (1A) can be invoked even where there are no proceedings pending before the concerned authorities; d. Accordingly, section 131(1A) provides fresh power of issuing summons which are not in section 131(1). 3. The Appellant prays that the penalty levied u/s. 272A of the Act in respect of summons issued u/s. 131(1A) is bad in law and ought to be deleted; WITHOUT PREJUDICE TO THE ABOVE, GROUND II: 1. On the facts and in the circumstances of the case and in law, the Learned CIT(A) failed to appreciate that even on merits, there was no non-compliance with the summons issued u/s. 131(1A) and accordingly, there was no case of levying penalty u/s. 272A(1)(c). 2. She failed to appreciate and ought to have held that: a. The details called for by the ADIT were already filed/available with the Tax Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of section 131(1A) penalty u/s 272A of the I.T. Act, 1961 cannot be levied. 15. In his alternation contention, he submitted that the assessee is a company u/s 25 of the Companies Act, 1956 and is a non-profit organization. The 12AA certificate issued to the assessee earlier was surrendered in assessment year 2016-17. He submitted that most of the information called for are available either in the records of the Department or available in the Website of the Ministry of Corporate Affairs. Therefore, there was no relevance of calling for the details again from the assessee. He submitted that calling for the information u/s 131(1A) itself is bad in law to the extent it is required for some other purpose is abuse of the provisions of law. Since the assessee had already intimated before the ADIT (Investigation) that most of the information called for by him are already available in the records of the Department or in the Website of the Ministry of Corporate Affairs, therefore, there was a reasonable cause on the part of the assessee for non-submissions of the same. Therefore, no penalty u/s 272A is leviable. 16. Referring to the decision of the Hon'ble Bombay High Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported in (2004) 2 SOT 108, he submitted that the Tribunal has canceled the penalty levied u/s 272A on the ground that although the assessee failed to submit TDS return within prescribed time, however, in view of the bona-fide conduct of the assessee in deducting and depositing tax into Government treasury and default, if any, being clearly technical and venial in nature, no penalty was leviable. He accordingly submitted that the levy of penalty u/s 272A by the ADIT (Investigation) which has been confirmed by the ld. CIT(A) should be deleted. 21. Ld. DR on the other hand heavily relied on the order of the ld. CIT(A). Referring to the provisions of section 131(1A), he submitted that for the purpose of making enquiry or investigation relating thereto it shall be competent for the officer to exercise the powers conferred under sub-section (1) on the Income Tax Authorities referred to in that sub-section. Therefore, the contention of the ld. counsel for the assessee that no penalty provisions has been prescribed for violation to provisions of section (1A) is not correct. 22. So far as the merit of the case is concerned, he submitted that the assessee deliberately did not furnish t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils of fresh allotment of 3900 equity shares made on 22.1.2011 as per the statutory filings made before MCA, the relationship of each new share holder with M/s Young Indian clearly specifying the nature of such relationship, the share issue price, the method of determining the issue price, copies of share applications the details of payments made along with the share applications and payments, if any, made thereafter. Also provide the complete details of credit to the bank account of M/s Young Indians of such share capital received from the new share applicants and share holders. D. Fair value of the new shares as on the date of issue. In this regard, also provide the complete details of the assets of M/s Young Indian as on 22.01.2011. These details may also be provided in respect of the subsidiary of M/s Young Indian." 24. We find the ld. CIT(A) confirmed the penalty so levied, the reasons of which are already reproduced in the preceding paragraph. It is the submission of the ld. counsel for the assessee that the provisions of section 131(1) and provisions of section 131(1A) are different and since the provisions of section 272A(1)(c) prescribe levy of penalty for non-complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is not applicable to the facts of the present case. 28. So far as the decision in the case of Bijaya Kumar Agarwala (supra) is concerned, it was a case u/s 3(1) of the Essential Commodities Act. We fail to understand as to how the provisions of that law can be applied to the present proceedings for non-compliance to provisions of section 131(1A) of the I.T. Act. 29. So far as the decision in the case of Kumar Jagdish Chandra Sinha (supra) is concerned, the issue was whether in a case of return filed u/s 139(4), a revised return contemplated by section 139(5) can be filed. Therefore, the facts of this case are also not applicable to the facts of the present case. Therefore, this decision is not applicable. 30. So far as the decision in the case of Contemporary Enterprises Ltd. (supra) is concerned, we find that the Tribunal has held that the conduct of the assessee was bona-fide. However in the present case there is deliberate and complete defiance to the summons issue u/s 131(1A) of the I.T. Act. Therefore, this decision is also not applicable. 31. So far as the arguments of the ld. counsel for the assessee that there was a reasonable cause on the part of the assessee in not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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