TaxTMI 
TaxTMI 
2017 (3) TMI 1581
X X X X Extracts X X X X
X X X X Extracts X X X X
....ited to various pages of the assessment order, specifically para-2 and 2.4. Reliance was placed upon the decision in COMMISSIONER OF INCOME TAX & ANR. vs. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (Karn.), COMMISSIONER OF INCOME TAX vs. VIKAS PROMOTERS (P) LTD. (277 ITR 337) (Del.), Dr. Sarita Milind Davare vs ACIT in ITA No.2187/Mum/2014 and ITA No.1154 of 2014. The crux of the argument is that when substantial question of law has been framed and admitted, therefore, the issue has become debatable, therefore, penalty is not leviable, for which reliance was placed upon the decision in 231 taxman 665 (Bom.). 2.1. On the other hand, Dr. D. Daniel, ld. Special Counsel for the Department, contended that pursuant to the direction from the Hon'ble jurisdictional High Court, the Tribunal has taken a decision, therefore, there is no question of admission of substantial question of law, for which, our attention was invited to the order of the decision from Hon'ble jurisdictional High Court. It was contended that this appeal has not been admitted and advocates from both sides admitted that the matter may be sent to the Tribunal. Reliance was placed upon the decision in ITA N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee has indulged in huge transaction in securities through its bank accounts maintained in Andhra Bank, Fort Branch, Mumbai. The ld. Assessing Officer asked the assessee to furnish the necessary details with respect to these transactions. In spite of repeated opportunities, provided to the assessee, such details could not be furnished. The notices were also remained uncomplied. At later stage, it was claimed by the assessee that it never entered into these transactions and the funds were arranged by a broker. As per the Revenue, this explanation also remained unsubstantiated. It was noticed by the Assessing Officer that substantial amount was transacted through this account, which resulted into credit balance of Rs. 6,69,35,305/-. The assessee could not explained the source of these credits. The stand of the Revenue is that the assessee generated huge asset and got benefit from the funds, the source of which was never explained, therefore, addition u/s 68 was made. 2.4. So far as, interest payable to M/s Champaklal Devidas is concerned, it was notices by the Assessing Officer that interest of Rs. 33,96,164/- was shown as payable on account of loan received from M/s Champ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s taken on record. So far as, remaining questions are concerned, after some debate, both advocates, ultimately, submitted that the matter remitted back to the Tribunal for consideration afresh by setting aside the impugned order to that extent without examining merits or demerits thereof, so far as, questions nos. (i), (ii), (iv) and (v) raised in the present appeal." 2.7. In the aforesaid background/factual matrix, the Hon'ble High Court set aside the issues (ITA No.1353 of 2009) to the file of the Tribunal with a direction to reexamine and re-adjudicate afresh, the nature and the character of the transaction involved in the appeal with further direction to allow additional evidence, if any, filed by the assessee and thereafter adjudicate the same. In this background, the matter was examined by the Tribunal and was decided against the assessee vide order dated 29/10/2014 (pages 31 to 40 of the paper book). It is noted that the Tribunal has duly noted that the assessee was asked to explain the amount of Rs. 6,69,35,305/- and also its nature. The Tribunal also considered the case laws relied upon by the assessee along with the argument from both sides. The Tribunal has als....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB)of section 10." 2.9. As per section 68 of the Act, onus is upon the assessee to discharge the burden so cast upon. First burden is upon the assessee to satisfactorily explain the credit entry contained in his books of accounts. The burden has to be discharged with positive material (Oceanic Products Exporting Company vs CIT 241 ITR 497 (Kerala.). The legislature had laid down that in the absence of satisfactory explanation, the unexplained cash credit may be charged u/s 68 of the Act. Our view is fortified by the ratio laid down in Hon'ble Apex Court in P. Mohankala (2007)(291 ITR 278)(SC). A close reading of section 68 and 69 of the Act makes it clear that in the case of section 68, there should be credit entry....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nel is not sufficient to prove the genuineness of gift. Keeping in view, the totality of facts, attendant circumstances, human probabilities, and in the absence of plausible explanation by the assessee, relevant material, and non-fulfillment of ingredients enshrined in section 68 of the Act, we find that onus cast upon the assessee was never discharged. 2.11. In the aforesaid background, now, we shall deal with section 271(1)(c) of the Act, which is reproduced hereunder for ready reference and analysis:- "271. (1) If the Assessing Officer or the Commissioner (Appeals) or the 47[Principal Commissioner or] Commissioner in the course of any proceedings under this Act, is satisfied that any person- (a) [* * *] (b) has failed to comply with a notice under sub-section (2) of section 115WD or under sub-section (2) of section 115WE or under subsection (1) of section 142 or sub-section (2) of section 143or fails to comply with a direction issued under sub-section (2A) of section 142, or (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, or (d) has concealed the particulars of the fringe benefits or furnished inaccurate pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of which had been concealed or inaccurate particulars of which had been furnished for the first preceding year; and where the amount so added or deducted in the first preceding year is not sufficient to cover the utilised amount, that part of the amount so added or deducted in the year immediately preceding the first preceding year which is sufficient to cover such part of the utilised amount as is not so covered shall be treated to be the income of the assessee, particulars of which had been concealed or inaccurate particulars of which had been furnished for the year immediately preceding the first preceding year and so on, until the entire utilised amount is covered by the amounts so added or deducted in such earlier assessment years. Explanation 3.-Where any person fails, without reasonable cause, to furnish within the period specified in sub-section (1) of section 153 a return of his income which he is required to furnish undersection 139 in respect of any assessment year commencing on or after the 1st day of April, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of subsection (1) of section 142 or section 148 and the As....
X X X X Extracts X X X X
X X X X Extracts X X X X
....IT vs Kanhaiyalal Sarupaia 299 ITR 19 (Raj.)(Para-11) v. ACIT vs Kirit Dahyabhai Patel 121 ITD 159 (Ahd.)(para-12) vi. CIT vs S.D.V. Chandru 266 ITR 175 (mad.)(Para-12) vii. Ajit B. Zota vs ACIT 40 SOT543 (Mum)(para-12) viii. Mahendra Mittal vs. ACIT 132 ITD 80 (Mum) (para-12) ix. CIT vs Shri Sunil V.Sangoi (ITA Nos. 615 to 619/Mum/2010) (para-12) x. ACIT vs Rupesh Bhalidas Patel 309 ITR (AT) 217 (Ahd) (para- 14) xi. CIT vs Avinash Ch. Gupta 40 SOT 85 (Kol.) (Para-14) xii. DCIT vs Omkareshwar R. Kalantri 42 DTR 489 (Pune) xiii. Sarla M. Ahuja vs DCIT (ITA No.1301/PN/2007 (para-16) 2.13. If the totality of facts and the judicial pronouncements discussed hereinabove including relied upon by the ld. representatives from both sides are analyzed, we find that the penalty was imposed by the Assessing Officer for concealment of income. The stand of the Assessing Officer was affirmed by the Ld. First Appellate Authority and also by the Tribunal. Thus, the totality of facts clearly indicates that from the beginning itself the assessee tried to conceal its income in such a way so that the legitimate tax, due to the Department, can be reduced with an intention to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and even if final assessed income is loss penalty is leviable because income includes deemed income also. Our view find support from the decision in CIT vs Unipol Chemicals Intermediates Ltd. 211 taxman 45 (SC), CIT vs Gold coin Health Food Pvt. Ltd. 304 ITR 308 (SC) and CIT vs RMP Plasto (P.) Ltd. (2009) 184 taxman 372 (SC). Before penalty can be imposed, the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income and the assessee has consciously concealed as was held in CIT vs Anwar Ali 76 ITR 696 (SC). In view of these facts and the foregoing discussions, the stand of the ld. Commissioner of Income tax (Appeals) is upheld. 2.14. So far as the contention of the ld. counsel for the assessee that appropriate section was not mentioned or inapplicable language contained in the notice was not deleted is concerned, the Ld. counsel for the assessee argued that in the notice of penalty the Assessing Officer has not specified whether the penalty is proposed on concealment of facts/income or for filing inaccurate particulars of income. The notice of penalty proceeding is illegal. Thus, further action initiated by the Assessing Off....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ry concealment of facts may ultimately result in filing of or furnishing inaccurate particular. It was further argued that no statutory notice has been prescribed in this behalf in the income tax Act. The assessee was very well aware about that the charge against the assessee is concealment of income. The Ld. Special Counsel further relied upon the decision of jurisdictional High Court in CIT versus Smt. Kaushalya ( 216 ITR 660)(Bom) , decision of Patna High Court in CIT versus Mithila Motors 149 ITR 751 (Pat) and the judgment of Hon'ble Apex Court in MAK DATA P. Ltd 358 ITR593(SC). 2.16. We have considered the rival contention and gone through the various decisions relied by them. We have also gone through the order of penalty passed by Assessing Officer and the order passed by Ld. Commissioner of Income Tax (Appeal). We are conscious that any of the party may raise legal issue at this stage, if the same can be emanated from the record of the case. The Hon'ble jurisdictional High Court in CIT Vs Smt. Kaushalya (supra) while dealing with the similar ground about the limb of charge, whether mere mistake in language used or mere not striking off of inaccurate portion cannot by its....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ex Court and the same was dismissed vide SLP (CC No. 11485/2016) on 05/08/2016. There is no dispute to the settled proposition of law that dismissal of the Special Leave Petition in limine by Hon'ble Apex Court does not mean that the reasoning of the judgment of the High Court against which the Special Leave Petition has been filed before this Court stands affirmed or the judgment and order impugned merges with such order of this Court on dismissal of the petition. It simply means that Apex Court did not consider the case for worth examining for the reason, which may be other than merit of the case. Nor such an order of Apex Court operates as res-judicata. An order rejecting the Special Leave Petition at the threshold without detailed reasons therefore does not constitute any declaration of law or a binding precedent. And the similar view was expressed in various judgments, viz, A. The Workmen of Cochin Port Trust Vs The Board of Trustees of the Cochin Port Trust & Anr AIR 1978 SC 1283; B. Ahmedabad Manufacturing & Calico Printing Co Ltd Vs The Workmen & Anr AIR 1981 SC 960; C. Indian Oil Corporation Ltd. Vs. State of Bihar & Ors. AIR 1986 SC 1780; D. Supreme Court Empl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion the Supreme Court may reverse, modify or affirm the judgment-decree or order appealed against while exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can therefore be applied to the former and not to the latter. (iv) An order refusing special leave to appeal may be a nonspeaking order or a speaking one. In either case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed. (v) If the order refusing leave to appeal is a speaking order, i.e., gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the c....