Gopal Krishan Kwatra v. Commissioner Of Income Tax, Karnal

ITA No. 135 of 2011 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Gopal Krishan Kwatra Versus Commissioner of Income Tax, Karnal ITA No. 135 of 2011 (O&M) Date of Decision: 26.5.2011 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL,ACTING CHIEF JUSTICE. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Rishab Kapoor, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1.Delay in refiling is condoned. 2.This appeal has been filed by the assessee under Section260A of the Income Tax Act, 1961 (in short “the Act”) against the orderdated 30.4.2010 passed by the Income Tax Appellate Tribunal, DelhiBench “B”, New Delhi (hereinafter referred to as “the Tribunal”) in ITANo. 2577/Del/08, relating to the assessment year 1999-2000, raising thefollowing substantial question of law:- “Whether, on the facts and circumstances of thecase, the Tribunal was right in upholding the penaltyimposed u/s 271(1)(c) of the Income Tax Act, 1961?” 3. Briefly stated, the facts necessary for adjudication as narrated in the appeal are that the assessee filed his return on28.6.1999 for the assessment year 1999-2000 declaring an income ofRs.3,72,650/-. The said return was processed under Section 143(1) ofthe Act on 10.1.2000. Re-assessment proceedings under Section 148of the Act were initiated against the assessee by issuing notice dated23.3.2006. Along with the notice, the assessee was also issued aquestionnaire to produce evidence to show the genuineness of the giftsamounting to Rs.5 lacs. The assessee surrendered the said amount ofRs.5 lacs subject to no penal action. However, the Assessing Officerafter considering the reply of the assessee did not find any substancetherein. The reassessment was completed on 28.12.2006 at an amountof Rs.8,72,650/-. The penalty proceedings under Section 271(1)(c) ofthe Act were also initiated against the assessee on 28.12.2006. TheAssessing Officer vide order dated 28.6.2007 levied a penalty ofRs.1,50,000/- against which the assessee filed an appeal before theCommissioner of Income Tax (Appeals) [in short “the CIT(A)”]. The CIT(A) vide order dated 6.6.2008 dismissed the appeal. On further appealby the assessee, the Tribunal vide order dated 30.4.2010 upheld theorder of the CIT(A) and dismissed the appeal. Hence, the presentappeal by the assessee. 4.We have heard learned counsel for the assessee. 5.The issue involved in this appeal relates to the legality ofpenalty imposed by the Assessing Officer under Section 271(1)(c) of theAct and upheld by the appellate authorities on the addition made bytreating the alleged gifts received from Shri Sanjay Mohan Aggarwal tobe not genuine and bonafide transaction. 6.The Assessing Officer had made addition of Rs.5 lakhs inthe returned income on account of bogus gifts alleged to have beenreceived from Shri Sanjay Mohan Aggarwal. It was recorded that the giftalleged to have been received from Shri Sanjay Mohan Aggarwal wasnot genuine and there was no occasion for him to have given the gift tothe assessee. The explanation furnished by the assessee in respect ofreceipt of gifts was not found to be acceptable. It was concluded thatthe assessee had introduced his unexplained money in the garb of gifts.Accordingly, the Assessing Officer had levied penalty under Section 271(1)(c) of the Act. The levy of penalty by the Assessing Officer had beenupheld by the appellate authorities. The finding recorded by theTribunal while upholding the penalty reads thus:- 6.The Assessing Officer had made addition of Rs.5 lakhs inthe returned income on account of bogus gifts alleged to have beenreceived from Shri Sanjay Mohan Aggarwal. It was recorded that the giftalleged to have been received from Shri Sanjay Mohan Aggarwal wasnot genuine and there was no occasion for him to have given the gift tothe assessee. The explanation furnished by the assessee in respect ofreceipt of gifts was not found to be acceptable. It was concluded thatthe assessee had introduced his unexplained money in the garb of gifts.Accordingly, the Assessing Officer had levied penalty under Section 271(1)(c) of the Act. The levy of penalty by the Assessing Officer had beenupheld by the appellate authorities. The finding recorded by theTribunal while upholding the penalty reads thus:- “In the case of Shri Gopal Krishan Kwatra theargument that reopening of assessment was notjustified is concerned, we are of the opinion thatassessee has not disputed reopening of theassessment during the course of assessmentproceedings. He himself surrendered the amount,additions have been confirmed, now at this secondappellate stage assessee cannot make out altogethera new case. The validity of assessment is very muchintact. One of the argument by the Ld. Counsel forthe assessee is in respect of charge framed by theAssessing Officer i.e. whether they have furnishedinaccurate particulars or they have concealed theparticulars of income. The Ld. CIT(A) has dealt this issue and we do not find any error in his order. Apartfrom that we are of the opinion that there is noambiguity in the charge which assessees wererequired to explain. From the assessment stage itwas very clear that assessees have to explain whythey have introduced their unexplained money in thegarb of bogus gift and tried to avoid the payment oftax. There is no confusion on this aspect. We couldunderstand arguments of Ld. Counsel for theassessee, if on account of some confusion aprejudice has been caused to the assessee forexplaining their position. In fact they do not have anyexplanation. In view of the above discussion we donot find any merit in these appeals. They aredismissed.” 7.No perversity or illegality could be pointed out by thelearned counsel for the appellant in the findings recorded by theTribunal holding the gift to be bogus. 8.In view of the above, no substantial question of law arisesin this appeal. Accordingly, the appeal is dismissed. (AJAY KUMAR MITTAL) JUDGE (ADARSH KUMAR GOEL)ACTING CHIEF JUSTICE