Shri Kamal Basha v. The Deputy Commissioner Of Income Tax, Business Circle Viii,611, Anna Salai, Chennai-6

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR. JUSTICE T.S.SIVAGNANAMANDTHE HONOURABLE MRS. JUSTICE V.BHAVANI SUBBAROYAN TAX CASE APPEAL NO.213 OF 2009 (heard through video conferencing) Shri Kamal Basha ...Appellant Vs. The Deputy Commissioner of Income Tax, Business Circle VIII,611, Anna Salai, Chennai-6....Respondent APPEAL under Section 260A of the Income Tax Act, 1961,against the order dated 26.9.2008 passed by the Income TaxAppellateTribunalChennai'B'Bench,ChennaiinI.T.A.No.1875/Mds/ 2007 for the assessment year 2003-2004,against the order dated 07.03.2007 made in ITA.No.306/06-07 onthe file of the commissioner of Income Tax(Appeals)-IX, Chennai-34, for the Assessment year 2003-04, & as against the orderdated 28-09-2006 DCIT/BCVIII/AAIPK5393G/06-07, on the file ofthe Deputy Commissioner of Income Tax, Business Circle VIII,Chennai-6, for the Assessment year 2003-04. For Appellant : Mr.A.S.Sriraman We have heard Mr.A.S.Sriraman, learned counselappearing for the appellant - assessee and Mrs.V.Pushpa,learned Standing Counsel appearing for the respondent – Revenue. 2. This appeal by the Revenue under Section 260A of theIncome Tax Act, 1951 (for short, the Act) is directed againstthe order dated 26.9.2008 passed by the Income Tax Appellate Page numbers https://hcservices.ecourts.gov.in/hcservices/ Tribunal, Chennai 'B' Bench (for brevity, the Tribunal) inI.T.A.No.1875/Mds/2007 for the assessment year 2003-2004. 3. The appeal has been admitted on 14.7.2009 on thefollowing substantial question of law : “?Whether the Appellate Tribunal is correct in law insustaining the levy of penalty under Section 271(1)(c) of theAct on the rejection of claim of sundry creditors which wereoffered for taxation in the course of the assessment proceedingsby the Appellant even though the presumption on the concealmentof Income or furnishing of inaccurate particulars of Income asper explanation 1 was rebutted in the proceedings?” 4. It is pertinent to note that by judgment dated26.6.2019, we allowed this appeal filed by the assessee.Subsequently, it was brought to the notice of this Court by thelearned Standing Counsel appearing for the Revenue that theassessee had filed another appeal in TCA.No. 155 of 2009 againstthe very same impugned order and it was dismissed even at theadmission stage by judgment dated 20.4.2009. 5. When the matter was listed earlier, the learnedcounsel for the appellant – assessee submitted that he wouldlike to get instructions and make submissions to distinguishboth the cases. Therefore, we adjourned the matter. Today, thematter is listed for hearing. 6. It is submitted by the learned counsel appearing forthe appellant – assessee that the case in TCA.No.155 of 2009arose out of an order in a cross objection filed by theassessee, that the dismissal of TCA.No.155 of 2009 by judgmentdated 20.4.2009 can have no impact on the present appeal andthat the judgment in TCA.No.213 of 2009 dated 26.6.2019 shouldbe allowed to continue and the prayer for recalling the saidjudgment dated 26.6.2019 made by the Revenue should be rejected. 7. To test the correctness of the said submission made bythe learned counsel for the assessee, we have perused thejudgment in TCA.No.155 of 2009 dated 20.4.2009. The said appealwas filed raising three substantial questions of law, which areas hereunder : “i. Whether, the Appellate Tribunal is correct in law insustaining the levy of penalty under Section 271(1)(c) of theAct on the rejection of claim of sundry creditors which wereoffered for taxation in the course of the assessment proceedingsby the appellant even though the presumption on the concealmentof income or furnishing of inaccurate particulars of income as Page numbers 7. To test the correctness of the said submission made bythe learned counsel for the assessee, we have perused thejudgment in TCA.No.155 of 2009 dated 20.4.2009. The said appealwas filed raising three substantial questions of law, which areas hereunder : “i. Whether, the Appellate Tribunal is correct in law insustaining the levy of penalty under Section 271(1)(c) of theAct on the rejection of claim of sundry creditors which wereoffered for taxation in the course of the assessment proceedingsby the appellant even though the presumption on the concealmentof income or furnishing of inaccurate particulars of income as Page numbers per Explanation 1 was rebutted in the proceedings?ii. Whether the Appellate Tribunal is correct in law insustaining the action of the respondent in imposing penaltyunder Section 271(1)(c) of the Act even though the applicationof the deeming provisions in Section 41(1) of the Act would notcome within the ambit of the said penal provisions especiallythe explanation offered was bona fide and not rejected asmalafide ? Andiii. Whether the Appellate Tribunal is correct in law indismissing the cross objection as infructuous even though thecross objection as per the legal prescription should beconstrued as a separate proceedings requiring independentconsideration and recording of findings on the issues emanatingand urged by the cross objector/appellant herein?” 8. The Hon'ble Division Bench of this Court, afterconsidering the case of the assessee, dismissed TCA.No.155 of2009 by judgment dated 20.4.2009, the operative portions ofwhich, read as follows :“Recently, the Apex Court has considered Section 271(1)(c) ofthe Act on a reference made wherein the ratio laid down inDhilip N.Shroff Vs. Joint CIT [reported in 291 ITR 519] wasdoubted. The three Judges Bench of the Apex Court in the case ofUnion of India Vs. Dharmendra Textile Processors [306 ITR 277]has clearly enunciated that in order to invoke Section 271(1)(c)of the Income Tax Act, the existence of dishonest intention anddeliberate failure to give correct particulars is not necessary.The Supreme Court has held that the Explanation appended toSection 271(1)(c) of the Income Tax Act, 1961 indicate theelement of strict liability on the assessee for concealment orfor giving inaccurate particulars while filing the return. Theobject behind the enactment of Section 271(1)(c) read with theExplanations indicates that the Section has been enacted toprovide for a remedy for loss of revenue. The penalty under thatprovision is a civil liability. Wilful concealment is not anessential ingredient for attracting civil liability as is thecase in the matter of prosecution under Section 276C of theIncome Tax Act and held that any concealment come within thepurview of Section 271(1)(c) would automatically render theassessee for penalty under Section 271(1)(c) of the Act.7. On the facts, we have concluded that the assessee's attitudebefore the officer is inconsistent and even the inconsistentstand could not be established with the supportive evidence ormaterials. In the light of the decision of the Apex Court in thecase of Union of India Vs. Dharmendra Textiles Processors [306ITR 277], we are of the view that penalty under Section 271(1)(c) of the Act is attracted in this case. Page numbers 8. We do not find any merit in this appeal for determining anyquestion of law. The appeal is dismissed.” Page numbers 8. We do not find any merit in this appeal for determining anyquestion of law. The appeal is dismissed.” 9. In fact, the substantial question of law, which wasentertained in this appeal is the first substantial question oflaw in TCA.No.155 of 2009 and it is a verbatim repetition. Sincethe Hon'ble Division Bench considered the entire matter anddismissed the appeal holding that no substantial question of lawarose for consideration, we are not inclined to accept thesubmissions made by the learned counsel for the appellant –assessee. In fact, the learned counsel, who appeared in both thematters, is the same person and it is not clear as to why it wasnot brought to our notice by the learned counsel, when we heardTCA.No.213 of 2009. Be that as it may, in the light of the abovediscussions, the judgment in TCA.No.213 of 2009 dated 26.6.2019has to be recalled. 10. Accordingly, the judgment in TCA.No.213 of 2009dated 26.6.2019 is recalled. Consequently, TCA.No.213 of 2009 isdismissed as unnecessary. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant RegistrarRS To 1.The Income Tax Appellate Tribunal, Chennai ‘B’ Bench. 2.The Commissioner of Income Tax(Appeals)-IX, Chennai-34. 3.The Deputy Commissioner of Income Tax, Business Circle VIII, Chennai-6. Page numbers