Vipin T<Hosla v. Commissionerof Income Tax,Chandigarhand Another

~," ... IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH, Income Tax Appeal No. 381 of'2007Date of decision:29,-3.2011 Vipin t<hosla ---Appellant Versus Commissionerof Income Tax,Chandigarhand another --- Respondents CORAM:HON'BlEMR. JUSTICE ADARSH KUMAR GOElHON'BlEMR. JUSTICE AJAY KUMAR MITTAl Present:Mr. AkshayShan, Advocatefor the appellant-assessee.for the appellant-assessee. Ms. Urvashi Dhugga, Senior Standing Counselfor the respondent-Revenwe. AJAY KUMAR MITTAL, J. The paper-bookof this case has not been received from theconcernedBranchas the sameis said to have been burnt in the fireincident that took place in the premises of this Court on the night of 30thJanuary, 2011. learned counsel for the appellant has made available twocopies of paper-bookto the Court for reconstructionof the file. 'The saidcopies are taken on record and the file of the appeal is treated as,having. been reconstructed. 2.This appealunder Section 260A of the Income-Tax 'Act, 1961(for short "the Act") has been filed by the assesseeagainstthe orderdated 9.4.2007,passed by the Income Tax Appellate Tribuhal Chandigarn ck""""...... ~"""~"'~'II.".,JI:)".,) 'c'c"" "');'?"'-"""'\..,J !iI ._~-- --_c_cc_------- -2- Income Tax Appeal No. 381 of 2007 Bench'A',Chandigarh(inshort"theTribunal")InITANo.558/CHANDII2005, relating to th~ assessmentyear 1991-92.3.The appeal was admitted by this Court for determinationof thefollowing substantialquestion of law: "Whether in the facts and circumstances of the case penaltyproceedings could lie when a disclosure made under the KarVivad SamadhanScheme,for thesameincome,stoodaccepted?" 4. 2.This appealunder Section 260A of the Income-Tax 'Act, 1961(for short "the Act") has been filed by the assesseeagainstthe orderdated 9.4.2007,passed by the Income Tax Appellate Tribuhal Chandigarn ck""""...... ~"""~"'~'II.".,JI:)".,) 'c'c"" "');'?"'-"""'\..,J !iI ._~-- --_c_cc_------- -2- Income Tax Appeal No. 381 of 2007 Bench'A',Chandigarh(inshort"theTribunal")InITANo.558/CHANDII2005, relating to th~ assessmentyear 1991-92.3.The appeal was admitted by this Court for determinationof thefollowing substantialquestion of law: "Whether in the facts and circumstances of the case penaltyproceedings could lie when a disclosure made under the KarVivad SamadhanScheme,for thesameincome,stoodaccepted?" 4. 4.Sincethedisputehereinis with regardto justificationofimposition of penalty on Rs.1,51,000/-, only the factsrelevant fordetermination of that controversy are noticed which, as narrated in theappeal, are that the assessee,who claimed to be in the business of saleand purchase of cars, admittedly, made investment of an amount of Rs.10,08,000/- in the shapeof booking of nine vehicles in the name ofdifferent persons.The amount so invested by the assesseewas notdisclosed to the Income Tax Department.The bookings so made weregot cancelled by the assesseeon 6.3.1991 and during investigation, theabovefactcameto light. The 'assessee,however,subjectto theconditions of imposing no penalty on him and not initiating prosecutionagainst him, surrendered an amount of Rs. 6,50,000/- in his account, butlater on retracted from his stand. The assessingofficer made an additionof Rs. 8,68,000/- and aggrieved thereby, the assesseepreferred appealbefore the Commissioner of Income-tax (Appeals) [in short "CIT(A)"].TheCIT(A) sustainedadditionof Rs.2,68,0001- only,asunexplained,investment.The Revenue challenged the order of the CIT(A) before theTribunal.The Tribunal accepted the plea of the Revenue and whilesustaining addition of Rs. 2,68',0001-,made further addition of an amountimposition of penalty on Rs.1,51,000/-, only the factsrelevant fordetermination of that controversy are noticed which, as narrated in theappeal, are that the assessee,who claimed to be in the business of saleand purchase of cars, admittedly, made investment of an amount of Rs.10,08,000/- in the shapeof booking of nine vehicles in the name ofdifferent persons.The amount so invested by the assesseewas notdisclosed to the Income Tax Department.The bookings so made weregot cancelled by the assesseeon 6.3.1991 and during investigation, theabovefactcameto light. The 'assessee,however,subjectto theconditions of imposing no penalty on him and not initiating prosecutionagainst him, surrendered an amount of Rs. 6,50,000/- in his account, butlater on retracted from his stand. The assessingofficer made an additionof Rs. 8,68,000/- and aggrieved thereby, the assesseepreferred appealbefore the Commissioner of Income-tax (Appeals) [in short "CIT(A)"].TheCIT(A) sustainedadditionof Rs.2,68,0001- only,asunexplained,investment.The Revenue challenged the order of the CIT(A) before theTribunal.The Tribunal accepted the plea of the Revenue and whilesustaining addition of Rs. 2,68',0001-,made further addition of an amount ..~. Ir I- ~:::»0u:I:-C) ::I:<Cz~~<C::I:~aJ<C.,z=>c.. ". ., ..~. Ir I- ~:::»0u:I:-C) ::I:<Cz~~<C::I:~aJ<C.,z=>c.. ". ., of Rs. 1,51,0001-.Proceedingsunder Section 271 (1)(c) of the Act wereinitiated against the assesseefor imposition of penalty for concealingtheparticularsof income.Theassesseewasheldliableforpenalty.Accordingly an amount of Rs.II 1,85,2121- was imposed as penalty on the.asiesseeby theassessingofficer, by orderdated28.3.2004.TheIiassessingofficer while imposingpenaltyon concealedincomeof Rs.1,51,0001- recorded that the assesseeunder the 'Kar Vivad Sam?dhanIScheme(KVSS) had paid tax on Rs. 2,68,0001-, which was the additionsustained by the CIT(A) and no penalty was leviable thereon. However,./the Tribunal had increasedthe disallowancefrom Rs. 2,68,0001- to Rs.4,19,0001-and,therefore,additionof Rs.1,51,0001- wasnot coveredunder the KVSS. The CIT(A),however, deleted the penalty by o'rder dated17.3.2005, in the appeal preferred by the assessee.The Revenue went inappeal before the Tribunal. The Tribunal after consideration of the matter,recordeda finding that it was a caseof imposition of penalty andaccordingly, by the order under appeal reversed the order of the CIT(A)and this is how the assesseeis in,appeal before this Court. 5.We have heard learned counsel for the parties and perused., the record. 6.The only point for determination in this case is,' whether thepenalty imposed on the assessee,under Section 211 (1)(c) of, the Act onRs. 1,51,0001- for concealment of income was justified?penalty imposed on the assessee,under Section 211 (1)(c) of, the Act onRs. 1,51,0001- for concealment of income was justified? 7.As noticed earlier, the penalty imposed initiallywas deleted by,the CIT(A), but the said order having been reversedby the Tribunal,thereby restoring the order of penalty is the only subject matter of thisappeal at the instanceof the Revenue.Here we would first notice thefindings of the Tribunal recorded in the above context which read thus:,the CIT(A), but the said order having been reversedby the Tribunal,thereby restoring the order of penalty is the only subject matter of thisappeal at the instanceof the Revenue.Here we would first notice thefindings of the Tribunal recorded in the above context which read thus: '"))) \,,"" '"~." ", 0},~" " '-'~-~ ' 'me Tax ADDeal No. 381 of 2007 -4-, "4. Before coming to any conclusion, we are supposed to seewhethertheassesseeconcealedincomeorfurnishedinaccurateparticularsofincome.AsIstatedqbove,theassesseedeclaredRs. 1,86,370/-in its incomewhichwasassessedat Rs. 10,62,355/-underSection143(3)ot the Act.Thereis no disputeto the fact that the assesseeinvestedtheamountof Rs. 10,08,000/-in the booking of nine vehiclesinthe bogus names which was not disclosed to the department.TheassesseeofferedRs.6,50,000/-whilemaking1:hestatement,to be added to his income.On a specificqueryfrom the Bench whether the assesseemaintainedits regularbooks, it was accepted that accounts were not maintainedbythe assessee.In such a situationanotherquestionariseswhetherthe claimof the assesseewasbona fide prior toinvestigationby the department,the obviousreply is ' NO'becausetill the date of startingof enquiry,no returns werefurnishedbytheasse&seementioningtheinvestmen,tinbookingof thecars.Therefore,it canbesaidthattheassesseedeliberatelyconcealedthe particularsIof income bynot furnishing the true facts. In such a situation, it can be said/that the assessee deliberately defied the provisions of law.,The decision of the Chandigarh Bench of the Trib~nal in thecase of Lalit Jain Vs. ITO (ITA No. 674/Chandi/2006 orderdated 29.12.2006) wherein one of us (A.M.) is signatory to theorderclearlycomes to the rescueof the revenuebecauseonus is on the assessee to prove with positive evidence thatthere is no concealmentof income or furnishingof inaccurate Itf :r .-a:::::)0ruFI::r:I-t')J:;«:Z«>-~,~:L:.~:)J«'''''''):Z.=>~:l.. Itf :r .-a:::::)0ruFI::r:I-t')J:;«:Z«>-~,~:L:.~:)J«'''''''):Z.=>~:l.. particulars.Decision of the ChandigarhBench of the Tribunalin the case of Mis. Malwa S:xpress Highway Private Ltd. vs.-. ACIT (ITA No. 618/Chandi/2006order dated 29.12.2006)alsogoesin favour of the revenue.The decisionof 'the Hon'bleKeralaHigh Court in the caseof ITO VS. 8abuBhal HemChand Saha (246 ITR 677) is also worth mentioning wherein itwas held: "Thattheburdenwas on the assesseeto show thatthere was no concealmentof income and hence he wasnot liable for penalty. Since the ohus of pr()of was on theassessee,the Tribunalshouldhave found whether theonus was discharged by the assessee. The Tribunal hadexercisedthepowerwronglyby holding'that thoughthere was a change in the assessee'sexplanationthatcould not render him liable for penal actio!}. The orderhad to be set aside." 5. In the present case :also the assesseehas not dischargedhis onus by proving th~ fact that clain;1of the assesseewasbona fide further fortifies the case of the revenue. The Hon'bleJurisdictionalHigh Court in the case of CIT vs. Mangha RamOmParkash(276 ITR 362) whereinassessee failed todischarge the onus which was laid upon it to explain' the cashcredit, the imposition of penalty was held to be valid furtherfortifiesthe case of the revenue. The decision of the Hon'ble.Gujarat High Court in the case of A.M. Saha & Co. vs. CIT(238 ITR 415) (Guj.) wherein the levy of penalty was held tobe valid further fortifies the case of the,revenue. 'Similaris the --~::>:)..)::',"),."..".:;,.'.!#"..'.,-'...~'...~}1;~\",]'.,",)".:" situation in the case of CIT vs. HoshiarpurExpress TransportCo.Ltd.(162ITR393)(P&H)whereintheassesseemaintainedtwo sets of accountsand had not shownits fullincome in its return, the levy of penalty was held to be valid bythe Hon'ble JurisdictionalHigh Court." 8. 8.A perusal of the .order of the Tribunal would go to shoyv that forreversing the order of the CIT(A), the Tribunalconsideredall the factorsand ultimately, concluded that the claim of the assessee was not bona fideas no returns were furnishedby the assesseementioning the investmentin the bookingof the cars till the day the inquiryinto the matter wasstarted.TheTribunalobservedincleartermsthattheassesseedeliberatelyconcealedthe partic~lars of income by f\ot furnishing the truefacts and, thus, defied the provisions of law. The Triburlal unampiguouslyheld thattheonuswason the assesseeto showthat therewasnoconcealmentofincomeor furnishingof inaccurateparticul~rsofhisincome. Further, the counsel for the assessee was unable to demonstratethat the additionof Rs. 1,51,0001- wascoveredunder the KVSS.Noillegality or perversitycould be pointed out by the learned counsel for the,assessee to persuade this Court to interfere with the aforesaid findings ofthe Tribunal. 9.In viewof theabove,thesubstanti~1questio'noflawisanswered against the assessee and the appeal is dismissed. (i