Ita/155/2002 Of R. Bharathan v. The Commissioner Of Incometax, Tvm

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 27TH FEBRUARY 2008 / 8TH PHALGUNA 1929 ITA.No. 155 of 2002() --------------------- AGAINST THE ORDER DATED / / IN COCH. IN ITA.354/COCH/1996 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/ASSESSEE: ------------------------------------ R. BHARATHAN, ABKARI CONTRACTOR, KOLLAM. BY ADV. SRI.C.KOCHUNNY NAIR SRI.DALE P.KURIEN RESPONDENTS: RESPONDENT/REVENUE: -------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT SRI.GEORGE K. GEORGE, SC FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 27/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &T.R.RAMACHANDRAN NAIR, JJ. .................................................................... ....................................................................Dated this the 27th day of February, 2008. JUDGMENT C.N.Ramachandran Nair, J. This is an appeal filed by the assessee under Section 260A of the Income Tax Act challenging order of the Income Tax Appellate Tribunalconfirming penalty levied under Section 271(1)(c) of the Income Tax Actfor the assessment year 1985-86. Even though five questions are raised bythe assessee as arising from order of the Tribunal, we find only two issuesare involved. One is limitation against levy of penalty and the other,whether penalty could be levied on the facts of the case. 2. So far as the first question is concerned, we do not find there is any case for interference on ground of limitation because the penaltyproceedings under challenge is a revised proceedings continued by theofficer after the Tribunal set aside the penalty in first round and remandedthe matter to the Assessing Officer for reconsideration. In fact the originalpenalty order was set aside because the quantum of assessment was set asidefor reconsideration by the Assessing Officer. The Tribunal rightly setaside the penalty because since the penalty is based on the finding in the assessment and when such assessment is set aside for reconsideration,necessarily penalty also has to be reconsidered. It is clear from theTribunal's order that the Tribunal originally did not cancel assessment andpenalty orders, but only directed modification after fresh enquiry pertainingto some of the issues, that too, after confirming certain additions in theassessment. Since revised penalty proceedings is only a continuation of thepenalty originally initiated in time, the assessee cannot raise limitation. Wedo not find any ground to interfere with the finding of the Tribunal on thisissue. 3. So far as quantum of penalty is concerned, penalty is restricted tothree items of addition, one pertaining to income from benami businesscarried on in the name of Sri.Prakash, another attributable to undisclosedBank deposits maintained by the assessee, where the Tribunal sustained theaddition on peak credit. The last of the addition is the investment made inDKB & Co. which was also not brought to the notice of the department andonly investigation of the department revealed these items of income. Thefacts stated above prove beyond doubt concealment and therefore, there is no scope for interference with the minimum penalty levied under Section271(1)(c) of the Income Tax Act. We, therefore, dismiss the appeal. C.N.RAMACHANDRAN NAIRJudge pms T.R.RAMACHANDRAN NAIRJudge