Itta/53/2000 Of Commner Of Income Tax Vizag v. M/S Janata Textiles

IN THE HIGH COURT OF JUDICATURE, ANDHRAPRADESH AT HYDERABAD FRIDAY, THE TWENTY FIRST DAY OF JUNETWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICESRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE MS. JUSTICE G.ROHINI I.T.T.A. No.53 OF 2000 Between: Commissioner of Income Tax,Visakhapatnam ..... Appellant AND M/s. Janata Textiles, Park West Road, Vizianagaram .....Respondent The Court made the following : JUDGMENT:(per the Hon’ble the Chief Justice Sri K.J. Sengupta) This appeal has been filed against the judgment andorder of the learned Income Tax Appellate Tribunal,Hyderabad Bench dated 17.2.2000 on the following substantial questions of law: a.Whether on the facts and in thecircumstances of the case, the AppellateTribunal is justified in deleting penalty leviedunder Sec.271(1)(c)? b. Whether on the facts and in thecircumstances of the case, the AppellateTribunal is right in holding that the onus ofproof in establishing fictitious liabilities lies onthe department and the same was notdischarged by it? c. Whether on the facts and in thecircumstances of the case, the AppellateTribunal is right in deleting the penaltymerely because that the assessee pleadedthat it paid the amounts by way of demanddrafts to the creditors during the subsequentyears even without there being any evidenceadduced by the assessee. d.Whether the Appellate Tribunal is justifiedin accepting the plea of the assessee evenwithout there being any material bought onrecord by the assessee for establishing thefactual existence of the creditors and receiptof demand draft by them on record? e. Whether the findings recorded by theAppellate Tribunal are based on any materialon record? The Assessing Officer imposed penalty ofRs.6,36,301/- on the alleged concealment of incomeunder Sec. 271(1)(c) of the Income Tax Act, 1961 and anappeal has been preferred before the Commissioner. Theassessee was unsuccessful to get the amount of penalty deleted. The learned Tribunal on appeal being preferred,allowed deletion of penalty. Learned counsel for the appellant contends that thelearned Tribunal was not right in deleting penalty amountlevied under Sec.271(1)(c). He contends the there wasclear concealment of income and this would be apparentfrom the records of the Assessing Officer as well as theCommissioner of Income Tax and in view of the saidfinding of concealment, the penalty amount is justified. Learned counsel for the respondent submits thatwhen the Tribunal has reached the fact-finding that thereis no concealment, this court cannot substitute its ownfinding. On hearing the learned counsel for the parties andafter going through the impugned order, we consider,what the learned counsel for the respondent says iscorrect. The learned Tribunal, on facts, reached theconclusion as follows: “… In view of the above facts andcircumstances of the case, we find that there cannotbe any ground of concealment and consequent levy ofpenalty mainly on the ground that the addition made inthe assessment was confirmed by the Income TaxAppellate Tribunal. When the genuineness of thosecreditors was doubted by the Assessing Officer, theassessee might not have been successful inexplaining the position to the complete satisfaction ofthe Assessing Officer. These are the matters ofdifference of opinion or at the maximum the attitude of appreciation of evidence on record. But for this, wedo not find any case of concealment in this case.Therefore, it is our considered opinion that the levy ofpenalty on the alleged concealment of income to theextent of Rs.9,13,998/- is uncalled for in this case….” “… In view of the above facts andcircumstances of the case, we find that there cannotbe any ground of concealment and consequent levy ofpenalty mainly on the ground that the addition made inthe assessment was confirmed by the Income TaxAppellate Tribunal. When the genuineness of thosecreditors was doubted by the Assessing Officer, theassessee might not have been successful inexplaining the position to the complete satisfaction ofthe Assessing Officer. These are the matters ofdifference of opinion or at the maximum the attitude of appreciation of evidence on record. But for this, wedo not find any case of concealment in this case.Therefore, it is our considered opinion that the levy ofpenalty on the alleged concealment of income to theextent of Rs.9,13,998/- is uncalled for in this case….” According to us, concealment amounts to totalsuppression of facts, which is not brought to the attentionof any Income Tax Authority. But, if the facts are placedand those facts are not correct facts, such incorrect factscannot be said to be concealment. Belief or disbeliefcannot be the foundation of concealment. When the factsare placed, there cannot be any concealment. In thiscase, that’s what has happened exactly. Whateverexplanation of facts was placed before the AssessingOfficer, might not have been accepted or believed but thatcannot be said to be concealment. The imposition ofpenalty under Sec. 271(1)(c) of the Income Tax Act canbe made only when the precondition of beingconcealment of the income is satisfied. When theprecondition is not satisfied, the imposition of penalty isnot sustainable. We, thus, conclude that the learnedTribunal has reached correct finding and we do not findany reason to interfere with the same. Accordingly, the appeal is dismissed. No order as tocosts. _______________________ June 21, 2013MAS Kalyan Jyoti Sengupta, CJ. __________G.Rohini, J.