TaxTMI 
TaxTMI 
2017 (11) TMI 1824
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....) 2009-10, i.e., the relevant previous year. The company could not produce any evidence in respect of the share application money for Rs. 1.62 cr., stated to be received from 21 persons. The same was admitted as unexplained investment, booked in the name of several persons, agreeing to offer it for tax for the current year (AY 2010-11) vide sworn statement of Shri Ravi Chandran, Managing Director, u/s. 131 dated 10.09.2012. As the company did not revise its return, filed earlier on 20.11.2010 (at an income of Rs. 1,01,010/-), the same was brought to tax in its hands vide order u/s. 143(3) r/w s. 147 dated 28.03.2014 (copy on record). Several opportunities to explain the same, though to no avail, it may be mentioned, were given prior to finalizing the said assessment. However, addition to the extent of Rs. 1.02 cr. (forming part of Rs. 1.62 cr.) had been admitted as her unexplained investment by the assessee per her return dated 23.12.2013, revising her original return filed on 30.08.2010 at an income of Rs. 24,05,255/-. The said 'revision' being beyond the time prescribed for filing a revised return u/s. 139(5), the same was regularized by the issue of notice u/s. 148 on 08.01.2014....
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....d flow only from known sources. In fact, invitation for subscription to the share application of a private limited company is not in the public domain, so that only those persons who are in contact with its directors, or otherwise known to the management, having faith in it, as well as aware of the business and business prospects of such a company, would care to invest their hard money in the company, which may also require personal canvassing for and on behalf of the company by its management. The claim of the 'revised' return being voluntary, filed much after the date of the original return and, in fact, the date of the survey and, further, after the initiation of reassessment proceedings in the case of the company, is misconstrued. The default in not returning her true income occurs much earlier, upon filing her original return by the assessee on 30.08.2010, inasmuch as it is the omission to disclose the impugned sum, since admitted as an investment in the company, that is relevant and needs to be explained (refer: CIT v. Onkar Saran & Sons [1992] 195 ITR 1 (SC). This default or omission has not been explained at any stage. Merely stating of it being an attempt to buy peace or t....
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....nd for how long, any past relationship, etc. The disclosure is far from voluntary. We, accordingly, have no hesitation in confirming the impugned penalty. Reference in this context; the law being trite, apart from the decision in Mak Data (supra), be made to the following decisions settling the law in the matter: Union of India v. Dharmendra Textile Processors [2008] 306 ITR 277 (SC); K.P. Madhusudhanan vs. CIT [2001] 251 ITR 99 (SC); B.A. Balasubramaniam and Bros v. CIT [1999] 236 ITR 977 (SC); Addl. CIT vs. Jeevan Lal Shah [1994] 205 ITR 244 (SC); Sharma Alloys (India) Ltd. v. ITO [2013] 357 ITR 379 (Mad); and CIT vs. Nathulal Agarwala & Sons [1985] 153 ITR 292 (Pat)(FB), to name some. The ld. counsel, adducing a copy of the notice u/s. 274 dated 07.02.2014, argued before us that the penalty could not be levied in-as-much as the notice does not spell out as to whether the penalty proceedings were initiated in respect of concealment of particulars of income or for furnishing inaccurate particulars of income. Reliance is placed by him on the decision in CIT v. Manjunatha Cotton & Ginning Factory [2013] 359 ITR 565 (Kar), which is claimed to have been upheld by the Apex Court in ....
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....ntary. The said decision shall therefore be of no assistance to the assessee. Even as we have shown the inapplicability of the said decision in the facts and circumstances of the case, we may also, if only for the sake of completeness of the discussion in the matter, advert to the legal aspect of the matter, having been examined by the Hon'ble Courts. In CIT v. Mithila Motors [1984] 149 ITR 751 (Pat), relying on the decision in Kantamani Venkata Narayana & Sons vs. Addl. ITO [1967] 63 ITR 638 (SC), wherein it was clarified that a mistake in the notice does not invalidate the penalty proceedings, it was held that even granting that the notice u/s. 274 was defective or bad in law, the penalty proceedings would not fail as no prejudice had been caused to the assessee; the head notes of the decision reading as: (pg. 756) 'Under s. 274 of the I. T. Act, 1961, all that is required is that the assessee should be given an opportunity of show cause. No statutory notice has been prescribed in this behalf. Hence, it is sufficient if the assessee was aware of the charges he had to meet and was given an opportunity of being heard. A mistake in the notice would not invalidate penalty....
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...., of the former decision is considered as that penalty proceeding initiated violating principles of natural justice is not sustainable in law. There is no such violation, nor indeed claimed, in the present case. The assessee is well aware of the nature of charge against her, i.e., non disclosure of her admitted investment in the company, Surya Balaji Investments (P.) Ltd., in which she is a director, during the relevant year as her income per her original return, explaining the same to be voluntary. The said explanation of her conduct, i.e., of her disclosure as voluntary, has on facts been regarded by us as not, so that, as per the settled law, penalty becomes exigible. A different verdict in the case of Manjunatha Cotton & Ginning Factory (supra) must, therefore, only be regarded as on the basis of the facts of the case. Further still, nothing turns on the dismissal of the SLP against the decision in SSA's Emerald Meadows (supra) inasmuch as the same is only an in limine dismissal, which, it is well settled, does not lay down any law, as recently held once again by the Hon'ble Court in Palam Gas Service v. CIT [2017] 394 ITR 300 (SC), referring to its earlier decisions in the mat....