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06-06-2019, Lokesh Birds, Section 271(1)(c), 271, 274, 153A, Tribunal Jaipur

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3 months 1 week ago #9698 by amit
Section - 271(1)(c), 271, 274, 153A, 153C, 132(4)
Order Date - 06-06-2019
Favouring - Revenue
Court - Tribunal Jaipur
Appellant - Lokesh Birds P. Ltd.
Respondent - DCIT
Citation - 619Taxpundit114
Appeal No. - ITA No. 653/JP/2014
Asstt. Year - 2005-06



This is an appeal filed by the assessee against the order of ld. CIT(A), Central, Jaipur dated 18/07/2014 for the A.Y. 2005-06 in the matter of penalty order passed U/s 271(1) (c) r.w.s 274 of the Income Tax Act, 1961 (in short, the Act).

2. Grounds of appeal raised by the assessee are as under:

“Learned Commissioner of Income Tax (Appeals) erred in law and on facts of the case in sustaining the penalty Rs.3,44,509/- (Rupees Three lacs Forty Four Thousand Five Hundred Nine Only) under section 271(1) (c) of the Income Tax Act 1961 imposed by the learned assessing officer (Dy. Commissioner of Income Tax, Central Circle, Ajmer). The order of imposing penalty sustained Commissioner of Income Tax (Appeals), Central Jaipur is totally bad in law, and against the natural justice and against the facts of the case. Hence deserves to be deleted in full. The appellant prays your honour to indulgence, and, amend alter, delete all or any ground of appeal on or before hearing.”

3. Rival contentions have been heard and record perused. Facts in brief are that search and seizure operations were carried out on 28.07.2004 at the business and residential premises of the assessee group. Incriminating evidence was gathered during the search operations. Notice u/s 153A was issued on 20.12 2004 and in response to this notice, the return declaring income at Rs. 1,46,530/- was filed on 28.4.2006. The assessment u/s 153C r.w.s. 153B/143(3) were completed on 29/08/2006 at the total income of Rs.13,01,050/-. Thereafter, penalty proceedings u/s. 271(1)(c) for concealment of income and furnishing of inaccurate. particulars of income were initiated at the time of assessment and a notice u/s 274 r.w.s. 271(1)(c) was issued on 3 2.2010. The assessee preferred an appeal before the CIT(A)(C) and the CIT(A)(C) sustained the addition on account of unexplained investment of Rs.10,60,900/-. Further the ITAT confirmed the finding of the CIT(A)(C) on the same. The AO observed that this was a fit case for imposing of penalty u/s 271(1)(c) since the default was clearly established since the assessee should have disclosed his true facts of his income but he failed to do so. The A.O. held that the assessee deliberately concealed the true and correct income. As per the A.O., the assessee neither disclosed the true and correct particulars of his income at the time of search nor in the return of income or even during the assessment proceedings. Accordingly, the assessee was held to be guilty of concealment of income and the penalties u/s 271(1)(c) of Rs.3,44,509/- was imposed by the A.O. vide orders dated 26.3.2010.

4. By the impugned order, the ld. CIT(A) confirmed the action of the A.O. imposing penalty of Rs. 3,44,509/- U/s 271(1)(c) of the Act. Against the said order of the ld. CIT(A), the assessee is in further appeal before the ITAT.

5. It was contended by the ld. AR of the assessee that the aforementioned amount of Rs. 10,60,000/- was separately not declared in the return of income filed by assessee for the reason that the same already stood included in the income offered by assessee's uncle Sh. Mahesh Goyal for A.Y. 2005-06 at Rs. 25,01,310/- being peak credit of all cash transactions and since credit of Rs. 23,85,291/- [35,00,000 — 11,14,709] was not taken and otherwise applied in alleged cash payment. Thus, it was claimed that the setoff of the peak of cash credits be allowed to assessee and it is for this reason that the amount of Rs. 10,60,000/- was not declared by assessee as income in as much as the same was subject matter of claim of setoff However, the claim of assessee was not accepted in quantum proceedings and accordingly the assessee paid tax on the addition. Based on such conclusion drawn in quantum proceedings penalty stood levied without making independent and fresh analysis of the contention raised.

6. As per the ld AR, that there was neither any concealment of income on part of the assessee nor any inaccurate particulars have been furnished. This is a case where assessee had made a bona-fide and legitimate claim of set-off which in the opinion of AO was not allowable and accordingly, he made the addition after disallowing assessee's claim. Though the claim of assessee was legal and most genuine, the appellate authorities also framed the opinion that the claim of assessee was not allowable. However, such sustenance of additions by appellate authorities does not in any manner suggest that the assessee had in any manner tried to conceal his income or furnish inaccurate particulars of income.

7. On the other hand, the ld DR has contended that the assessee was unable to explain the unaccounted investment in land found during the course of search as per the incriminating documents. The assessee has surrendered unexplained investment but did not offer the same either in the return of income or during the assessment proceedings, therefore, the A.O. has correctly levied penalty of concealment of income. As per the ld DR, the finding of fact by the A.O. with regard to the unaccounted investment in land was not only confirmed by the ld. CIT(A) but also by the Tribunal in the quantum

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