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TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 1376
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....at the assessee has concealed his income and penalty proceeding under section 271(1)(c)of the Act was initiated. Such findings of the AO were upheld by the Ld. CIT(A) and the order of the CIT(A) have been further upheld by the ITAT Chandigarh Bench. 3. The AO vide separate orders levied the penalty under section 271(1)(c) in a sum of Rs. 7,09,390/-, which was challenged before the Ld. CIT(A). The Ld. CIT(A) considered the submissions of the assessee, however dismissed the appeal of the assessee. The findings of Ld. CIT(A) in impugned order in para 6.2 to 7 are reproduced as under: 6.2 I have considered the facts of the case. As per the provisions of section 271(1)(c), penalty can be levied, if the assessee has concealed particulars of his income or furnished inaccurate particulars of such income. For the sake of ready reference, Explanation-1 below section 271(1) is reproduced below: "Explanation 1.- Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be fal....
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....ar donor is related to the appellant who gifted amounts in US dollar ranging between 2100USD to 5100USD. The appellant was further asked to produce the copies of their bank accounts for verifying credit worthiness, etc. Since no information was provided by the appellant to the CIT(A), the addition made by the Assessing Officer was confirmed. But in deciding against the appellant, CIT(A) had certainly tried to go further to ascertain the intention of the appellant and to examine whether the appellant has concealed income and furnished inaccurate particulars of income. The Hon'ble ITAT was also not satisfied fully and, therefore, observed in its order that routing transaction through banking channels represents merely movement of funds and genuineness of transactions. 6.4 In view of the above discussion, the appellant's contention that he was under a bonafide belief that gifts received at the time of marriage were exempt and did not know that the gifts received at the time of marriage of daughter are not exempt, appears only an excuse. The appellant in his submission dated 03/09/2015 says that he is an ordinary man and is not expected or required to furnish information in accordanc....
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....ghter. Ld. Counsel for the assessee relied upon the following orders of the Tribunal: 1. Order of ITAT, Hyderabad Bench in the case of Smt. B Rajyasree, Banjara Hills, ITA No. 1741/Hyd/2013. 2. Order of ITAT, Chandigarh Bench in the case of Smt. Gurdeep Kaur, ITA No. 459/Chd/2015. 3. Order of ITAT, Chandigarh Bench in the case of M/s RKM Housing Limited, ITA No. 1351/Chd/2012. Ld. Counsel for the assessee submitted that penalty in the matter may be cancelled. 5. On the other hand Ld. DR relied upon the order of authorities below. He has referred to order of ITAT, Chandigar Bench in the case of the assessee on quantum in ITA No. 578/Chd/2011 dt. 04/01/2012 in which the Tribunal has referred to the finding of the AO and CIT(A) on quantum and confirmed the addition because the Ld. CIT(A) despite giving further opportunity to the assessee, has failed to produce any evidence before the authorities below. He therefore submitted that explanation 1 to Section 271(1)(c) of the Act is clearly attracted in the case of the assessee so as to levy the penalty under section 271(1)(c) of the Income Tax Act. He has submitted that the letter refer to by the donors are not relevant and there ....
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....xemption of income on account of bogus gifts. It may also noted here that the moment assessee has received the sum of money more than Rs. 50,000/-, it is chargeable to tax under section 56(2)(vi) of the Act. In case amount shall be less than Rs. 50,000/- in other case, the assessee shall have to prove the ingredients of Section 68 of the Income Tax Act. 7. We may note here that when the assessee preferred an appeal against the quantum addition before the ITAT, Chandigarh bench, the appeal of assessee on this issue was decided by the ITAT, Chandigarh bench in ITA No. 578/Chd/2011 vide order dt. 04/01/2012 confirming the addition on merits. The findings of the Tribunal in para 6 to 9 are reproduced as under: 6. We have carefully perused the facts of the case, rival submissions and found that the AO made an addition of Rs. 21,07,513/- on account of gifts received from NRI relatives and friends on the occasion of the marriage of assessee's daughter. The AO afforded opportunity to the assessee to show cause as to why the provisions of Section 56(2)(vi) of the Act may not be invoked in the present case as the gifts have been received by the assessee and not by the daughter of the ....
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....of the appellant Smt.Radhika Uppal. The counsel argued that the shoguns are never given to the bride but to her parents to which I agree to some extent but that is normally when one attends a wedding, the shoguns are given to the parents who receive the guests. But if someone sends a cheque for the bride, logically it should be in her name. 8. Secondly, I asked the counsel to produce some such evidence which could clinch the issue in his favour, for instance bank entries/transfer whereby the money credited to appellant's bank account was transferred to daughter/spent on her wedding-basicaly I needed the utilization of these amounts received and secondly I had asked him to give a profile of the appellant, his level and status and his relationship with the donors. For example, how is Nandini Chopra related to the appellant who gifted 5100 USD. The appellant was asked to prove the same in case of the following persons: Oru Bose 3100 USD Baldev Lakhanpal 3100 USD Amar J.Kohli 2100 USD Sukh & Bani Farukh 5100 USD Mohan Krishan Bazaz 3100 USD Sarin & Nimmi 5100 USD Rahul Malhotra 5100 USD 9. The appellant was asked to elaborate the relationship and give the copies of th....
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....bridegroom and cannot include group of individuals. The legislative intent can be clearly discernible from the context in which the word 'individual' is used in such clause 'b'. Thus, the legislative intent is clear and word 'individual' includes only the individuals, whose marriage is solemnized. The legislature consciously employed definite Article 'the' and not indefinite Article "a" before the word 'individual' in clause 'b' of the said proviso, which means the specific 'individual'. Thus, the legislative intent is clear in meaning, content and text of the word "individual". It is settled law of interpretation of statute that primacy is to be given to the text in which the intention of the law-giver has been expressed. In view of this, the case law relied upon by the ld. 'AR' does not support his contention. The assessee has failed to demonstrate non-applicability of the provision of Section 56(1)(vi) read with second proviso thereunder. Further, routing transaction through banking channel represents merely movement of funds and not the genuineness of transactions, as held by the Apex Court in various decisions. It is also undisputed fact, as recorded by the AO, which r....
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....s that the assessee had furnished inaccurate particulars of his income. The assessee had concealed the particulars of income and, thus, penalty was liable to be levied against him under section 271(1) (c) of the Income-tax Act, 1961." 8.2 Hon'ble Dehi High Court in the case of CIT Vs. Zoom Communication P. Ltd. [2010] 327 ITR 510 held as under: Held, that admittedly, in view of the provisions contained in section 40(a)(ii) of the Act, the amount of income-tax could not have been claimed as a deduction while computing income of the assessee. As regards the amount claimed on account of unusable and discarded assets, the Tribunal, was entirely incorrect in taking the view that the deduction claimed by the assessee was admissible to it under section 32(1)(iii). Clause (i) of sub-section(1) of section 32 relates to assets of an undertaking engaged in generation and/or distribution and for distribution of power. Admittedly the assessee company was not engaged in generation and distribution of power during relevant year. Thus, the provisions, of clause (i) of subsection (1) of section 32 would not apply in respect of the assets claimed to have become unusable and written off. Therefore....
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.... inaccurate particulars, but on the basis thereof the claim which is made is ex facie bogus, it may still attract penalty provision. The Explanations appendd to section 271(1)(c) of the Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The object behind enactment of section 271(1)(c) read with the Explanation indicate that the section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Wilful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution under section 276C of the Act. 8.4 Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Udham Singh & Sons [2014] 365 ITR 137 held as under: " The Assessing Officer, for the assessment year 1989-90, made an addition ofRs. 1 lakh holding there was no reasonable connection of the gift with the partner or the firm. According to him, the person residing abroad had not sent or gifted a single penny to his family members residing in India and as such the story of gifting the huge amount of Rs. 1 lakh to the assessee ....