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01-03-2019, Manzar Alikunju, Section 148, 40(a)(ia), Tribunal Cochin

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2 months 1 week ago #8747 by amit
Section - 148, 40(a)(ia), 194H, 69, 271(1)(c)
Order Date - 01-03-2019
Favouring - Allowed for statistical purposes
Court - Tribunal Cochin
Appellant - Manzar Alikunju
Respondent - ACIT
Citation - 319Taxpundit187
Appeal No. - I.T.A. Nos.131&132/Coch/2016
Asstt. Year - 2009-09 & 2009-10



These appeals filed by the assessee are directed against different orders of the CIT(A), Kottayam dated 28/01/2016 and pertain to the assessment years 2008-09 and 2009-10.

2. First we will take up the appeal in ITA No.132/Coch/2016 for the assessment year 2009-10. The assessee has raised the following grounds:

1. The CIT (Appeals) failed to consider in the right perspective the explanation offered by the appellant in his written reply dated 18/06/2012 before the officer and also the explanation offered in the course of appellate proceedings.

2. The lower authorities erred in imposing a penalty of Rs.3,99,604/- without considering in the right perspective the explanation and circumstances under which commission was made while filing the return.

3. The CIT (Appeals) ought to have held that the appellant has not deliberately concealed any particulars of income or furnished inaccurate particulars of income for the AY 2009-10.

4. The CIT(A) ought to have noted that the appellant agreed for the addition in the assessment to avoid unnecessary litigation and for purchase of peace in the facts and circumstances of the case.

5. The lower authorities ought to have noted that in the course of assessment proceedings initially, the bank A/c number informed to the appellant was different and therefore the appellant has stated that there is no such bank account number in his name. The lower authorities failed to consider the matter in the right perspective.

6. The lower authorities er ed in taking the total cash credit of Rs.11,10,650/- deposits on various days throughout the year, without considering the withdrawals in the said Bank account, as concealed amount for imposing penalty.

3. The facts of the case are that the assessee is a franchisee of TATA Teleservices Ltd and also a dealer in automobile parts. The assessee filed its return of income for the assessment year 2009-10 returning a total income of Rs.6,78,150/-. The assessment u/s. 143(3) of the Act was completed on 28/12/2011 determining a total income of Rs.18,53,800/-. In pursuance of an AIR information received, the Assessing Officer completed the assessment by adding back Rs.11,10,650/- u/s. 69 of the Act. Though the assessee objected the addition initially, the assessee agreed with the addition made by the Assessing Officer. Subsequently, the Assessing Officer issued order u/s. 271(1)(c) of the Act, initiating penalty for concealment of income and furnishing inaccurate particulars of his income in the return filed on 02/12/2009. Accordingly, the Assessing Officer levied a minimum penalty of Rs.3,99,604/- u/s. 271(1)(c) of the Act.

4. Before the CIT(A), the assessee submitted that his brother, an NRI had operated Savings Bank account with South Indian Bank Ltd. Karunagapally in assessee’s name for his family and this account was not related to any of the assessee’s business. It was submitted that the account was closed even before the penalty order and this fact came to his knowledge very late. Since the account was opened and operated in assessee’s name, it was submitted that he had agreed to add the cash credits in the account of the assessee’s total income to avoid litigation and for purchase of peace. The assessee submitted that the mutually accepted demand was already paid by the assessee. Hence, it was prayed that the penalty imposed u/s. 271(1)(c) of the Act may be dropped.

5. The CIT(A) observed that the assessee concealed the existence of the Bank account from the Department. According to the CIT(A), the assessee had furnished inaccurate particulars of his income in the return of income filed. The CIT(A) rejected the explanation offered by the assessee and confirmed the levy of penalty u/s. 271(1)(c) of the Act.

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