TMI Blog2019 (9) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... of undisclosed sale of property and bank transaction and the Assessee himself has not filed any return of income and has admitted the transaction to be undisclosed. Even otherwise, we note that the Tribunal in quantum appeal vide its order dated 06.6.2019 in assessee s own case in the same assessment year i.e. 2009-10 has upheld the action of the Ld. CIT(A) for enhancement of income. No infirmity in the impugned penalty order of the Ld. CIT(A), hence, we uphold the penalty order of the Ld. CIT(A) and reject the ground raised by the Assessee. - ITA No. 2971/AHD/2014 - - - Dated:- 14-8-2019 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER Assessee by Sh. J.P. Shah, Sr. Advocate And Sh. Manish J. Shah, A.R. Department by Sh. Prasenjeet Singh, CIT (DR) ORDER PER H.S. SIDHU, JM This appeal is filed by the assessee against the impugned order dated 12.09.2014 passed by the Ld. CIT(A)-V, Surat pertaining to assessment year 2009-10 on the following grounds:- i) On the facts and circumstances of the case and as per law, the Ld. CIT(A) erred in levying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, Ld. CIT(A) satisfied that this is a fit case for levy of penalty u/s. 271(1)(c) of the Act for concealment of income and accordingly proposed to levy a minimum penalty of 100% tax sought to be evaded at ₹ 18,63,910/- (₹ 5,41,533 + ₹ 13,22,380) u/s. 271(1)(c) of the Act vide his order dated 12.09.2014. Against the impugned penalty order dated 12.9.2014 of the Ld. CIT(A), assessee is in appeal before the Tribunal. 3. During the hearing, Ld. Sr. Counsel for the assessee has submitted that Ld. CIT(A) has erred in levying penalty u/s. 271(1)(c) when the assessee had not violated provisions of section 271(1)(c) of the Act. He further submitted that during the appellate proceedings the addition was made on enhancement u/s. 251(1) of the Act for the benefit of telescoping of income/outgoings. He further stated that the undisclosed transactions have been admitted to be undisclosed and he was ready to pay tax on it. It was further submitted that assessee had agreed to the addition in order to avoid litigation and buy peace of mind and paid tax thereon. In view of above, he requested that the penalty in dispute may be deleted. In support of his contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and report, proceedings in reply to question number 24 and 28 the assessee admitted that he has sold the property for ₹ 1,90,00,000/- on which no tax have been paid and he agreed to pay capital gains as per the provision of Income Tax Act. The assessee has not filed any return of income. The transaction of the sale of land with M/s.Shradha Developers has not been shown in the books of accounts by the assessee. The assessee had maintained account in the bank - Current Account no. 101 in Surat People's Co. Op. Bank Ltd, Katargam, Surat in which the total credit entries was of ₹ 2.71 crores. This account was not disclosed by the assessee during the assessment proceedings nor appellate proceedings. From the bank details, it was found that the amount of ₹ 1,90,00,000/- had been received from M/s Shradha Developers on the account of sale of land. An amount of ₹ 56,60,000/- has been transferred from the bank account no. SB 37906 in Surat People Co or Rank in the name of Smt. Ramuben (mother of the assessee). The assessee's mother is assessed to income tax and has filed the tax returns and the bank account has been reflected in a return of income. The bank s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee have been made in cash. The onus is on the assessee to show that the income earned from the various sources have been utilized towards the outgoings in form of expenses, investments etc. A nexus has to be established between the incomings and outgoings. In the instant case, the assessee had failed to prove that the income from the various sources have been utilized towards expenses, investments, assets etc. In absence of primary details such as balance sheet, details of assets and liabilities, fund flow statements, etc., it is not known that assessee has made investments in which assets and what are his liabilities. The situation would have been different if the assessee had filed his return of income along with the details of assets and liabilities, fund flow statements, etc. The assessee was not forthcoming with correct and true income which is evident for the conduct of the assessee during the survey proceedings as well as assessment proceedings. Even during the appellate proceedings. The details pertaining to undisclosed sale of land and secret bank account were not disclosed by the assessee but was admitted when he was confronted with the facts and agreed to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot escape penalty u/s. 271(1)(c) of the Act. The Supreme Court held that voluntary disclosure does not lead to assessee being free from mischief of penal proceedings under section 271(1)(c) in MAK DATA P Ltd. Vs. CIT (2013) 38 taxmann.com(448). The Apex Court held that Explanation to section 271(1) raises a presumption of concealment, when a difference is noticed by the Assessing Officer, between reported and assessed income. The burden then shift on the assessee to show otherwise, by cogent and reliable evidence. When the initial onus placed by the Explanation, has been discharged by assesse, the onus shifts on the revenue to show that the amount in question constituted the income and not otherwise. The Assessing Officer shall not be carried away by the plea of the assessee like voluntary disclosure , buy peace , avoid litigation , amicable settlement , etc., to explain its conduct. It is noted that Assesse had only stated that he had surrendered the additional sum with a view to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. Statue does not recognize those types of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITO makes an enquiry contemplated by section 142, under which notice is issued on the person who has made the return to produce accounts, documents or furnish verified information in writing including statement of all assets, etc. However, where the AO is satisfied that the return IS correct and complete, as were the wordings of section 143(1) at the relevant time, he has to assess the total Income without requiring the presence of the assessee or production by him of any evidence that the return is correct and complete, as laid down in section 143(1). Where, however, the AO is not satisfied out the presence of the assessee or production of evidence that the return is correct and complete, he is required to issue notice enabling the assessee to produce evidence on which he may rely in support of the return. The 'total income' in such cases of regular assessment is, assessed after hearing the evidence adduced and considering all material gathered by the AO as provided in section 143(3). It therefore, follows that in the assessment proceedings under section 143, the AO can find out whether the return of income is correct and complete. If he holds that the return of income i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and when any amount is added or disallowed in computing the total income the same shall be deemed or represent the income in respect of which particulars have been concealed. Similar view has been expressed in the case of A.M. Shah Co. Vs CIT (Guj) 238 ITR 415. The question of onus is of primary and added importance in legal acrimony. This was the position before the amendment was introduced in 1976. Mens rea was an important ingredient for the imposition of penalty. The position of law on or after 1.4.1976, is that where, in respect of any item of credit, a) the assessee fails to offer an explanation, or b) the assessee offers an explanation which the AO considers to be false, or c) the assessee offers an explanation but no material or evidence to substantiate it, he shall be deemed to have concealed such income within the meaning of section 271(1)(c). What sections 68, 69, 69B and 69C deem for the purpose of assessment was injected for the purpose of penalty by operation of a deemed provision. A proviso was added to new Explanation. It concerns cases where the assessee offers an explanation which he is not able to substantiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch this stage also, inquiry will have to be undertaken of the disclosure made in the return or in the statement annexed to the return and to arrive at a finding whether the particulars disclosed are truthful, or false or not proved to be satisfactory. In the first case, it be a positive case of no concealment in the second stage, it would be a positive case of concealment and in the third case, benefit of doubt will go in favour of the assessee. But in case, inquiry must proceed from the stage the alleged disclosure has taken place and not at that stage and close the inquiry at the threshold on the abstract principle that mere on of explanation does not result into levy of penalty. In the instant case, it is case of facts proved' as the transactions regarding the sale of property and bank entries have not been disclosed as not return of income has been filed nor recorded in the books of accounts. Similar as been expressed in the case of Vidvaqauri Natwarlal, 238 ITR 91 (Guj). Similar view has also been expressed in the following cases of jurisdictional High Court:- - Kantilal Manilal v. CIT [1981] 130 ITR 411 (Guj ): - CIT v. Suleman Abdul Satta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axing officer has considered to be false or the asssessee has offered an explanation but no material or evidence to substantiate it, he shall be deemed to have concealed such income within the meaning of section 271(1)(c). The intention to hide the actual state of affairs is clear. In the aforesaid background the Assessing Officer is not obliged to intimate the assessee that Explanation 1 to section 271(1)(c) is proposed to be applied. Scheme of the provision does not provide for such a requirement either directly or inferentially. The provision raises only a rebuttable presumption which the assessee is required rebut by placing on record materials. Further w.e.f. 10.09.1986, amendment has been made Explanation 1-B to section 271(1)(c). After this amendment, further onus has been placed on the assessee to prove that the explanation furnished by him was bonafide. The position now is that unless and until the assessee substantiates the explanation and proves that such an explanation was bonafide, the addition made to his income shall deemed to represent the concealed income. As per the proviso to this Explanation, the onus to establish that the explanation offered was bonafide facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
