Commissioner Of Income Tax, Jaipur v. Dr. Giriraj Agarwal Giri

(1) DB INCOME TAX APPEAL NO.215/2008 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR JUDGMENT D.B. INCOME TAX APPEAL NO.215/2008 COMMISSIONER OF INCOME TAX, JAIPUR Vs. DR. GIRIRAJ AGARWAL GIRI DATE: 16.03.2012 HON'BLE THE CHIEF JUSTICE MR. ARUN MISHRA'HONBLE MR. JUSTICE NARENDRA KUMAR JAIN-I Mr. Sameer Jain, for the appellant. **** BY THE COURT:(PER HON'BLE JAIN, J.) Heard the learned counsel for appellant. 2.Revenue has preferred this appeal under Section260A of the Income Tax Act, 1961 (for short 'the Act') againstthe order dated 27.07.2007 passed by the Income TaxAppellate Tribunal, Jaipur Bench 'B', Jaipur, dismissing theappeal of Revenue and affirming the order of Commissioner ofIncome-Tax(Appeals)-III, Jaipur dated 22.03.2006, deletingimposition of penalty of Rs. 2,89,217/-, by the AssessingOfficer under Section 158BFA(2) of the Act. 3.Facts of the appeal, in brief, are that a notice wasissued to assessee/respondent by the Assessing Officer on12.09.2005 to show cause as to why penalty under Section158BFA(2) of the Act may not be imposed for concealing theincome of Rs.4,82,028/- in the following heads:- (2) DB INCOME TAX APPEAL NO.215/2008 _________ 4.The assessee filed his reply dated 19.09.2005 andsubmitted that the alleged undisclosed income ofRs.4,82,028/- is purely on basis of estimation and no suchdocuments or evidence to this effect was found during thecourse of search. The Assessing Officer was not satisfied withthe reply, filed by the assessee and vide its order dated23.09.2005, imposed a penalty of Rs.2,89,217/- under Section158BFA(2) of the Act. 5.Being aggrieved with the aforesaid penalty order,the assessee preferred an appeal, which was allowed by theCommissioner of Income-Tax(Appeals)-III, Jaipur vide itsorder dated 22.03.2006, holding that penalty imposed by theAssessing Officer is not justified and the same is deleted. TheAppellate Authority considered all the three items of so calledconcealed income, in detail, in para 5 and 6 of its order, whichare reproduced as under:- “5. I have carefully gone through the orderunder appeal wherein vide para-5, para-6 and para-7,the Assessing Officer has not accepted the plea of theassessee that the additions as sustained by theHon'ble ITAT on estimate basis and he has therefore,held that the assessee has concealed his income tothe extent of Rs.4,82,028/- and is liable to penalty u/s158BFA(2) of the I.T. Act. I have respectfully perusedthe order in ITSSA No.7/JP/2003 dated 23.7.2004 ofthe Hon'ble ITAT, Jaipur Bench, Jaipur. The Hon'bleITAT in para-6 of the above order with regard toincome from IUI test has held as under: “We have heard the rival submissions.We have also perused the record. We find that70 slips of tests had been found and theamount was written only on 4 slips. Thecontention of the ld. AR that these tests hadbeen carried on experimental basis cannot beaccepted as a whole truth. Therefore, havingregard to the facts of the case, we consider itreasonable to sustain this addition atRs.50,000/- only and the order of the CIT(A) ismodified to this extent.” Further in para-10 the Hon'ble ITAT with regardto the addition on account of plying of car has held asunder: “Having regard to the facts of the caseand material before us, we are also of theopinion that this is a case of pure estimationof income from plying of car. We consider it isreasonable to estimate the income from plyingof car at Rs.25,000/-. The order of the ld. CIT(A) stands modified to this extent.” In para-23, the ITAT has recorded its findingsstating that: “After perusal of record, we find thatthe AO has made estimation of expenditureinclusive of the expenses incurred on theeducation of two daughters. We also find thatno seized material was found suggestingundisclosedexpenditureformeetinghousehold expenses.” Further in para-10 the Hon'ble ITAT with regardto the addition on account of plying of car has held asunder: “Having regard to the facts of the caseand material before us, we are also of theopinion that this is a case of pure estimationof income from plying of car. We consider it isreasonable to estimate the income from plyingof car at Rs.25,000/-. The order of the ld. CIT(A) stands modified to this extent.” In para-23, the ITAT has recorded its findingsstating that: “After perusal of record, we find thatthe AO has made estimation of expenditureinclusive of the expenses incurred on theeducation of two daughters. We also find thatno seized material was found suggestingundisclosedexpenditureformeetinghousehold expenses.” In view of the above, it is clear that whateverthe additions are sustained by the Hon'ble ITAT arebased on estimation only and as such the decision ofHon'ble ITAT, Jaipur Bench, Jaipur in the case of ACITv/s B.P. Khandelwal is applicable reported in TaxWorld, Volume-XXXV, Part-1, Page-30 wherein theHon'ble Member of the ITAT has held as under: “It is also not the case of theDepartment that the assessee had furnishedany false explanation or explanationfurnished by the assessee could be foundfalse but the explanation or claim of theassessee was not acceptable to the AO and,accordingly, additions were made andreduced by appellate authorities on estimatebasis. These circumstances give a scope ofdebate and argument that the assessee maybe at fault or may not be at fault. Under (4) DB INCOME TAX APPEAL NO.215/2008 these circumstances, we do not find reasonto interfere with the first appellate order, asthe ld. CIT(A), on the basis of ratio laid downin different decisions on the issue of penaltylevied under section 271(1)(c) of the Act thatthe penal provisions cannot be attracted tocases where income of an assessee isassessed on estimate basis and the additionswere made therein on estimate basis, hasrightly deleted the penalty.” 6. In view of the above facts of the case as wellas the court decisions, I am of the considered viewthat the penalty as imposed by the Assessing Officeru/s 158BFA(2) of the I.T. Act, 1961 is not justifiedand the same is hereby deleted.” 6.Being aggrieved with the aforesaid order of theAppellate Authority, Revenue preferred an appeal before theIncome Tax Appellate Tribunal, Jaipur Bench 'B', Jaipur, butthe same was dismissed vide order dated 27.07.2007. Beingaggrieved with the same, Revenue has preferred the instantappeal before this Court. 7.Submission of the learned counsel for appellant isthat the present case was a case of search and seizure,therefore, penalty under Section 158BFA(2) of the Act wasattracted and it was rightly imposed by the Assessing Officer,which has wrongly been set aside by the Commissioner ofIncome-Tax(Appeals) as well as Income Tax AppellateTribunal. In support of his submissions, he referred thejudgment of Hon'ble Apex Court in Union of India Vs.Dharamendra Textile Processors, 2008(231) E.L.T. 3(S.C.). 8.We have considered the submissions of the learnedcounsel for appellant and examined the impugned order andother documents, placed on record. (5) DB INCOME TAX APPEAL NO.215/2008 7.Submission of the learned counsel for appellant isthat the present case was a case of search and seizure,therefore, penalty under Section 158BFA(2) of the Act wasattracted and it was rightly imposed by the Assessing Officer,which has wrongly been set aside by the Commissioner ofIncome-Tax(Appeals) as well as Income Tax AppellateTribunal. In support of his submissions, he referred thejudgment of Hon'ble Apex Court in Union of India Vs.Dharamendra Textile Processors, 2008(231) E.L.T. 3(S.C.). 8.We have considered the submissions of the learnedcounsel for appellant and examined the impugned order andother documents, placed on record. (5) DB INCOME TAX APPEAL NO.215/2008 9.So far as the case law referred by the learnedcounsel for appellant is concerned, it is sufficient to mentionthat the Hon'ble Apex Court in Union of India Vs.Dharamendra Textile Processors(supra), was dealing withthe provisions of Central Excise Act, 1944 and learned counselfor appellant is unable to point out that the provisions ofSection 11 AC of Central Excise Act, 1944 and Section 158BFA(2) of the Income Tax Act are paramateria. That apart, it isalso relevant to mention that imposition of penalty depends onfacts and circumstances of each case. In the present case, theAssessing Officer imposed the penalty on so called three itemsof so called concealed income. Each item was examined,thoroughly and in detail, by the Commissioner of Income-Tax(Appeals) as well as the Income Tax Appellate Tribunal and bya reasoned order, both came to a conclusion that additions arebased on estimation only. A fact or allegation based onestimation, cannot be said to be correct only, it can beincorrect also. Therefore, in the facts and circumstances of thecase, penalty was wrongly imposed by the Assessing Officer.In these circumstances, we find that the judgment of Hon'bleApex Court, referred by the learned counsel for appellant, isnot applicable, in the facts and circumstances of the presentcase. 10.An income tax appeal can be admitted only onsubstantial questions of law, but in our view, no substantialquestion of law is involved in the present appeal, so as toentertain it. The Appellate Authority as well as AppellateTribunal both have recorded a concurrent finding of fact that /KKC/ (6) DB INCOME TAX APPEAL NO.215/2008 additions in the present case are based on estimation only. 11.In these circumstances, we are of the view that nosubstantial question of law is involved in this appeal and the same is, accordingly, dismissed in limine. (NARENDRA KUMAR JAIN-I),J. (ARUN MISHRA),CJ. Certificate: All corrections made in the judgment/order have been incorporated in thejudgment/order being emailed. KAMLESH KUMARP.A.