TaxTMI 
TaxTMI 
2018 (10) TMI 357
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....s) erred in holding the sum of Rs. 113,03,320/- as income without consideration as per the provision of section 56(2)(vii)(a) of the Income Tel x Act, 1961. 3. That the Commissioner (Appeals) erred in not holding the sum of Rs. 1,13,03,320/- as any sum of money or any property received In contemplation of death of payer or donor. 4. Without prejudice to the foregoing, the Commissioner (Appeals) failed to recognize the letter written by the de ceased nominating the assessee and consequent letters of Milton Keynes Council on distribution of assets to the assessee. 5. Without prejudice to the foregoing, he Commissioner (Appeals) erred in ignoring the documents submitted, holding that there is no element of personal intimacy between the assessee and payer and that the money has not been given to the assessee on will or on contemplation of death. 6. Without prejudice to the foregoing, the Commissioner (Appeals) erred in ignoring the fact that 2/3rd of the sum of Rs. 1,13,03,320/- was distributed to other two brothers as per the will of late Shri T.C. Bhardwaj and continued to make an addition of the entire Rs. 1,13,03,320/- in the income of the assess....
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....ment of income-tax and the assessee has failed to prove any personal intimacy with the payer and treated the same as income without any consideration and thereby added the same to the total income of the assessee which is assessed at Rs. 1,19,09,045/-. 5. Assessee carried the matter before the ld. CIT (A) by way of filing an appeal who has partly allowed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 6. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 7. Undisputedly, the amount of Rs. 1,13,03,320/- (GBP 158000) was credited in the assessee's account on 15.12.2008 pursuant to the cheque dated 13.11.2008 issued by Milton Keynes Council and another cheque of GBP 640 was also sent by Milton Keynes Council to the assessee on behalf of one Shri Tek Chand Bhardwaj. It is also not in dispute that Shri Tek Chand Bhardwaj who was Person of Indian Origin (PIO) as a citizen of UK, expired on 11.10.2008 at the age of 87 years. 8. In the bac....
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....hermore, Shri Tek Chand Bhardwaj was admittedly a retired civil servant and he would have executed a Will in favour of the assessee bequeathing his movable assets in favour of the assessee, if he so desired. Assessee has also not brought on record even in iota of evidence in the form of some photographs while attending the family functions etc. to prove his affinity or closeness with Shri Tek Chand Bhardwaj nor he has proved that he has ever visited him in UK. Assessee has based his entire case on the undated nomination letter otherwise required to be executed in prescribed proforma in all probability and apparently appears to be a colouring device to extract the undue benefit in collusion with Milton Keynes Council. 13. Assessee has also not produced any correspondence by way of text messages or letters between him and Shri Tek Chand Bhardwaj to prove his childhood friendship rather based his entire case on alleged nomination letter. Ld. CIT (A) has rightly observed that Milton Keynes Council has recorded in the letter issued to the assessee that they being next kin of Shri Tek Chand Bhardwaj have been nominated to receive his movable assets and to prove the fact that the asses....
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....f income or has furnished inaccurate particulars of income during assessment proceedings while interpreting the provisions contained u/s 271(1)(c) of the Act?" 18. The ld. AR for the assessee challenging the penalty order contended inter alia that show-cause notice issued by the AO u/s 274, available at page 35 of the paper book is not a valid notice to initiate the penalty proceedings as the assessee company has not been made aware if it has concealed the particulars of income or has furnished inaccurate particulars of such income and relied upon the decision rendered by the Hon'ble Karnataka High Court in case of CIT vs. Manjunatha Cotton and Ginning Factory & Ors. 359 ITR 565 (Karn); that even at the time of passing the assessment order, the AO has failed to specify himself if the assessee has concealed the particulars of income or had furnished inaccurate particulars of income rather barely stated that "penalty proceedings u/s 271(1)(c) of the Act is initiated separately"; that even at the time of levying the penalty, the AO was not categoric enough if he is levying the penalty for concealment of particulars of income or for furnishing of inaccurate particulars of such incom....
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....duced above goes to prove that assessee has not been called upon to explain if he has concealed the particulars of income or furnished inaccurate particulars of such income rather a tick has been marked against both the charges mentioned in the printed proforma. Hon'ble Karnataka High Court in case of CIT vs. Manjunatha Cotton and Ginning Factory & Ors. (supra) dealt with the identical issue threadbare and came to the following conclusion :- "63. In the light of what is stated above, what emerges is as under: a) Penalty under Section 271(1)(c) is a civil liability. b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section 271. e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. f) Ever if there is no specific finding regarding the existence of the conditions mentioned....
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....t of income or for furnishing of incorrect particulars of income q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. u) The findings recorded in the assessment proceedings in so far as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessmen....