Dr. Mahesh Kumar Agarwal v. Commissioner Of Income Tax, Alwar

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR. DB INCOME TAX APPEAL NO.198/2004 Dr. Mahesh Kumar Agarwal S/o late Shri Jamana Das Agarwal,R/o Agarwal Clinic, Santar Road, Dholpur aged about 59 years. Versus Commissioner of Income Tax, Alwar. DATE OF ORDER ::: 14.12.2016. HON'BLE MR. JUSTICE K.S. JHAVERIHON'BLE MR. JUSTICE DINESH MEHTA Mr. Sanjay Jhanwar, for the appellant.Mrs. Parinitoo Jain, for the respondent. 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasdismissed the appeal preferred by the assessee and confirmedthe order of the CIT(A). 2.This Court while admitting the appeal on 23.01.2006,framed the following substantial question of law: “Whether under the facts and in thecircumstances of the case and in law theLearned Income Tax Appellate Tribunal wasjustified in sustaining the penalty ofRs.1,72,000/- u/s. 271(1)(c) of the Act foralleged concealment of Income ofRs.5,27,345/-?” 3.Counsel for the appellant has contended that in para 6 of the order, the Tribunal has relied on the judgment in case of CITVs. Mohd. Mohatram Farooqui, 259 ITR 132 (Raj.), which is nowreversed by the Supreme Court. The decision of Supreme Court in Civil Appeal No.8175/2003 in case of Mohd. Mohtram Farooqui, Mohalla Pirzadgan vs. Commissioner of Income Tax,Rajasthan is reproduced as under: “Having examined the question of law in thecontext of the facts placed on record, we areof the view that the matter needs to beremitted to the Assessing Officer (AO). In this case, the Tribunal has set aside thelevy of penalty under Section 271(1)(c) of theIncome Tax, 1961, on the basis that the AOhas not examined the concerned persons. Inthis connection, it may be stated that anamount of Rs.5,92,340/- was seized by thePolice Thana, Sikar from the appellant on 8[th]April, 1992. A Panchanama was drawn bythe Department on 9[th] April, 1992 and thecash amount was requisitioned on the samedate. Consequent to the seizure, the statement ofthe assessee was recorded by the Deputy ofInvestigation, Jaipur, wherein the assesseestated that the cash belonged to his brother,his brother-in-law and a part belonged to him.According to the Tribunal, the AO shouldhave summoned the assessee's brother andbrother-in-law. According to the Tribunal, the AO did notexamine any of the concerned persons.According to the Tribunal, the AO has failedto apply his mind to the facts of the case. Inthe circumstances, according to the Tribunal,since the AO did not examine the relevantpersons and since he did not find anyexplanation furnished by the assessee to befalse, the entire penalty proceedings came tobe quashed. In our view, on the facts of this case, theTribunal should have remitted the case to theAO particularly, in view of the fact that theassessee has raised a legal contention onthe applicability of Explanation-5 to Section271(1)(c) of the Act. In the circumstances, we remit this case tothe AO. We may add that the AO Willconsider one more aspect, namely, whetherthe assessee has filed income tax returns inthe past prior to the relevant AssessmentYear 1993-94 and whether he has been filingincome tax returns subsequent to therelevant assessment year. The AO will also find out the amount of income returned by theassessee, if any, during the assessmentyears prior to Assessment Year 1993-94 andthe returned income for the assessmentyears subsequent to the relevant AssessmentYear 1993-94. This point is relevant fordeciding the question as to whether penaltyproceedings were rightly initiated against theassessee under Section 271(1)(c) of the Act.Before concluding, we may clarify that we donot wish to express any opinion on the meritsof the case. We further clarify thatcontentions on both sides are expressly keptopen. find out the amount of income returned by theassessee, if any, during the assessmentyears prior to Assessment Year 1993-94 andthe returned income for the assessmentyears subsequent to the relevant AssessmentYear 1993-94. This point is relevant fordeciding the question as to whether penaltyproceedings were rightly initiated against theassessee under Section 271(1)(c) of the Act.Before concluding, we may clarify that we donot wish to express any opinion on the meritsof the case. We further clarify thatcontentions on both sides are expressly keptopen. Subject to above, Civil Appeal standsdisposed of and the matter is remitted to theAO for de novo consideration in accordancewith law. No order as to costs.” 4.In that view of the matter, since the order of this Court relied upon by the Tribunal has been reversed and the matterhas been remanded back, as noted above, we remit this appealto the AO, to decide the issue in light of the direction given bythe Supreme Court in the above judgment. 5.The appeal stands disposed of. (DINESH MEHTA), J. (K.S. JHAVERI), J. Asheesh Kr. Yadav72