TaxTMI 
TaxTMI 
2021 (7) TMI 870
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....3,859 under section 271(1)(c) of Income Tax Act, 1961. The action of ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said penalty of Rs. 7,73,859/-. 2. In the facts and circumstances of the case and in law the ld. AO has erred in imposing penalty under section 271(1)(c) without specifically pointing out in the show cause notice, whether the penalty was proposed on concealment of particulars of income or for furnishing inaccurate particulars of income." 4. During the course of hearing, the ld AR submitted that as far as addition of Rs. 2,79,000/- and of Rs. 10,05,301/- confirmed by the CIT(A) is concerned, the impugned penalty order should have been passed by 31.03.2011 and given that the penalty order has been passed on 22.03.2013, hence, as far as the above two additions are concerned, they have become barred by limitation on 31.03.2011 and cannot be made a part of the order of penalty passed on 22.03.2013. These two items may, therefore, be deleted from the impugned penalty order. Regarding the third addition of Rs. 8,30,000 is concerned, it was submitted that the only basis on which the ....
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....red loans below Rs. 20,000/- taken in cash 2,79,000/- Assessee did not file appeal against the said appeal before either the CIT(A) or ITAT 3. Unsecured loans through cheque but genuineness not proved 8,30,000/- Set-aside back to AO for re-examination 4. Unexplained advances against flat bookings 10,05,301/- Addition confirmed by ITAT 5. Disallowance u/s 40A(3) 1,33,200/- Addition confirmed by ITAT Total 38,28,001/- In view of the items at S.No. 1 & 3 above being set-aside back to the file of the AO, the ITO, Ward 3(1) passed an order u/s 143(3)/250/set-aside on 06.12.2010 at a total income of Rs. 37,26,110/- in which the amounts of Rs. 15,80,000/- and of Rs. 8,30,000/- were added back as unexplained credits. Being aggrieved of the said order, the Appellant appealed to the CIT(A) who deleted the addition of Rs. 15,80,000/- (which was later on added in the hands of the sister concern M/s Orbit Polytech Pvt. Ltd.) and confirmed the addition of Rs. 8,30,000/-, vide her order dated 19.09.2011. No appeal was apparently filed against the said order. Thereafter, the impugned penalty order u/s 271(1) (c) ....
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....evant dates would be: a) either on or by 31.03.2008, or b) on or by 31.03.2011, whichever is later. Hence, the order of penalty ,as far as addition of Rs. 2,79,000/- and of Rs. 10,05,301/- confirmed by the CIT(A) was concerned, should have been passed, in any case, by 31.03.2011. It was passed on 22.03.2013, hence, as far as the above two additions are concerned, they have become barred by limitation on 31.03.2011 and cannot be made a part of the order of penalty passed on 22.03.2013. These two items may, therefore, be deleted from the impugned penalty order. 4. Now what is left is only the addition of Rs. 8, 30,000/- which is the total of the credits received by the following creditors: S.No. Name of Creditor Amount 1. Shri Roop Singh Rathore 1,65,000/- 2. Shri Dashrath Singh 75,000/- 3. Shri Dinesh Sharma 2,00,000/- 4. Shri Shrawan Lal 3,00,000/- 5. Shri Surendra Singh 90,000/- Total 8,30,000/- GROUND NO. 1 OF APPEAL: Before, these credits are discussed, it may be submitted that penalty proceedings have been held to be proceedings separate from asse....
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.... penalty was levied was that the addition of Rs. 8,30,000/- had been confirmed by the CIT(A) as well as the ITAT. The ITO did not consider the explanation submitted by the assessee which is reproduced at para 9(2) of the order in these words: 9.2) Unsecured loan taken through cheques amounting to Rs. 8,30,000/-: During the course of assessment proceedings, the AO himself has admitted that the assessee company has taken unsecured loans of Rs. 8,30,000/- from five persons through cheques. Since the amounts were received through banking channel, it automatically proves the identity of the lenders and the genuineness of the transactions. Since the payment was received from banking channels, the AO, using his statutory powers, could have gathered further evidence from these persons as well as the bank directly. On account of such inaction on the part of the AO the assessee company has already suffered tax and interest thereon. In view of the fact that the AO himself stated that the amounts have been received through cheques, no penalty is imposable." From the explanation offered above, it is clear that: admittedly the amounts in question had been rece....
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.... the present case is concerned, it is abundantly clear that after the identity of the creditor and the genuineness of the transaction were established, the only issue was the creditworthiness of the creditor. Since the money had come through the banking channel, so the AO could have made necessary inquiries from the bank to establish the creditworthiness. The burden of proof had now shifted to the AO. Unfortunately, the AO did not make any inquiry of his own to try and establish true facts. Penalty proceedings being independent proceedings he should have made fresh inquiries at his level.. For example, if the creditors were agriculturists, he could have got inquiries made as to their land holding, the quantum of agriculture produce, the likely amount for which it could have been sold, to try and find out their worth in money terms, and whether they had the financial wherewithal to advance that much amount of money. He could have obtained a copy of the relevant bank account to find out how much money was there in the bank, and whether the credit could be explained from the bank balance. This he did not do, and relied solely and totally on the findings at the quantum level b....
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....has not struck out the inapplicable part of the said notice, and so it is not clear whether the penalty notice has been issued for filing inaccurate particulars of income or for concealment of income. There are now a plethora of decisions on the issue that if the correct limb of the penalty notice is not ticked , or the inapplicable part of the notice is not struck off, the notice becomes invalid, and consequentially, the penalty proceedings become invalid. Attention is drawn towards the following decisions on this issue: a) CIT v. Manjunatha Cotton & Ginning Factory [2013] 359 ITR 565(Kar.); b) CIT v. SSA's Emerald Meadows [2016] 242 Taxman 180 (SC); c) Yum Restaurants (India) (P.) Ltd. v. ITO[2017] 58 ITR(T) 107(Delhi-Trib.); d) Mohd. Sharif Khan v. Dy. CIT [2017] 58 ITR(T) 260(Jaipur- Trib.). Copies of the decisions at S.No. b), c) & d) above are annexed herewith and marked as Annexures A/5, A/6 & A/7. It is pertinent to point out that in the case of Mohd. Sharif Khan supra the Hon'ble ITAT, Jaipur has, after considering the relevant case laws, has held that if the relevant portion of the penalty notice is no....
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....and remand the matter to the file of AO with certain directions 5. 06.12.2010 Assessment order for set aside case completed at a total income of Rs. 37,26,110/- i.e. on the same income which was determined vide order u/s 143(3) dated 28.12.2007 6. 19.09.2011 ITA No. 329/10-11 Ld. CIT(A) deleted the addition of Rs. 15,80,000/- and confirmed the addition of Rs. 8,30,000/- and confirmed other additions. 7. 22.03.2013 Imposed penalty u/s 271(1)(c) of Rs. 7,73,859/- 3. From the above chronology of the event of the case it is evident that vide order dated 24.09.2009, the Hon'ble ITAT remand back the matter to the file of AO with certain directions. Therefore, no penalty was imposed consequent upon the order dated 24.09.2009 of the Hon'ble ITAT as the matter was pending with theAO and it was premature for imposing penalty under sec. 271(1)(c) of the I.T. Act, 196. The penalty under sec. 271(1)(c) of the I.T. Act, 1961 was imposed only after the order dated 19.09.2011 of the ld. CIT(A). The said penalty has been imposed with the stipulated time frame after the receipt of the order of Ld. CIT(A)." 6. Further, the ld. D....
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.... the name of advance against flat booking as the name amount were shown as receipts in the books of the assessee. However, Proper receipts were issued against these payments. Accordingly, the action of the learned AO is illegal, unjustified arbitrary and against the facts of the case. Relief may please be granted by quashing the order being illegal and without authority of law. 7. We have heard the rival contentions and perused the material available on record. In this case, the original assessment order u/s 143(3) was passed on 28.12.2005 during the course of which the penalty proceedings were initiated and thereafter, the matter was carried in appeal before the ld CIT(A) and thereafter, before the Tribunal wherein on certain issues, the matter was set-aside to the file of the AO to decide the same afresh. In the set-aside proceedings, the matters which were remanded by the Tribunal were again brought to tax by the AO against which the assessee carried the matter in appeal before the ld CIT(A) where part relief was granted and part addition were confirmed. And with the order of the ld CIT(A) dated 19.09.2011, the matter in the quantum proceedings attained finality and ....
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....enue is that since the assessment order, in the course of which the penalty was initiated in respect of all these three matters, was subject matter of appeal before the Tribunal and the Tribunal has set-aside the matter on certain other issues with certain directions, it was premature to impose penalty on receipt of the order of the Tribunal as the matter was pending with the AO and once, the set-aside order was passed by the AO, the same was again subject matter of appeal before the ld CIT(A), and on receipt of order of the ld CIT(A) dated 19.09.2011, the impugned penalty order has been passed on 22.03.2013 which is well within the limitation period as prescribed u/s 275 of the Act. 12. On perusal of the provisions u/s 275 of the Act, we find that the provisions of section 275(1)(b) and (c) are not applicable in the instant case. What is relevant is the provisions contained in section 275(1)(a) of the Act. In terms of section 275(1)(a), it has been provided that no order imposing a penalty under this chapter shall be passed in a case where the relevant assessment order is the subject-matter of an appeal to the Commissioner(Appeals) under section 246A or an appeal to the Appella....
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....ings have not attained finality as the Tribunal has remanded two of the matters back to the file of AO for fresh examination and the order so passed by the AO in the set-aside proceedings has again been the subject matter of appeal before the ld CIT(A) and with the passing of the order of the ld CIT(A) and in absence of further appeal by either of the parties, the assessment proceedings are completed and the matter has attained finality and the period of limitation should therefore be counted from the date of receipt of such order of the ld CIT(A) by the Commissioner in terms of proviso to section 275(1)(a) of the Act rather than from the date of receipt of such order of the Tribunal by the Commissioner in terms of section 275(1)(a) of the Act. In this regard, useful reference can be drawn to the decision of the Hon'ble Delhi High Court in case of Salora International Limited vs CIT [2018] 91 taxmann.com 287 (Delhi) wherein the Hon'ble Delhi High Court was pleased to held as under: "11. A plain and textual reading of Section 275(1A) (section 275(1)(a)) clarifies that the expiry of six months prescribed is to be reckoned "from the date of completion of proceedings or from t....
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....d in view of correct limb of penalty provisions not been specified showing non -application of mind by the AO, the penalty proceedings should be held as invalid. 18. In this regard, we refer to the notice issued u/s 271 r/w 275 dated 28.12.2007 wherein it has been stated as under: "whereas in the course of assessment proceedings for AY 2005- 06, it appears to me that you have concealed particulars of your income or furnished inaccurate particulars of such income, you are hereby requested to appear and show cause why an order should not be made imposing penalty u/s 271(1)(c) r/w 274 of the Act." 19. We therefore find that while issuing the notice u/s 271(1)(c), the specific charge in terms of concealment of particulars of income or furnishing of inaccurate particulars of income is not ascertainable. We now refer to the penalty order dated 22.03.2013, wherein the AO has stated that "in view of aforesaid discussion, it is clearly established and satisfied that the assessee has concealed the income to the tune of Rs. 21,14,801/- and is liable for penalty u/s 271(1)(C) of the Act." We therefore find that even though at the time of initiation of penalty proceedings, the AO....
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.... & re-assessment proceedings, after giving adequate opportunities, the assessee company could not explain the identity and creditworthiness of the transactions as discussed in length in foreging paras. The assessee did not produce agriculturist from whom loans below 20,000/- was received amounting to Rs. 2,79,500/-, hence it is to say by the AR of the assessee that due to engagement of the assessee in various business activities does not have any weight. Similarly, the assessee has not preferred further appeal before appellate authority against this issue which also established that the assessee had introduced its unaccounted money in its books of accounts in the shape of cash credits shown in the name of various agriculturist below Rs. 20,0000/-. The additions made on account of unsecured loan taken through cheque amounting to Rs. 8,30,000/- and on account of unexplained credit in the name of advance against flat booking of Rs. 10,05,301/- had been confirmed by the ld. CIT(A) as well as Hon'ble ITAT which also established that the assessee had introduced its unaccounted money in its books of accounts in the shape of cash credits. Further, the facts of the case laws quoted by the A....
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....d their creditworthiness has not been proved. The contention of the assessee before the ld. CIT(A) were that the loans were taken by cheque and confirmation of Shri roop Singh Rathore and Shri Shrawan Lal were submitted to the AO hence the Ao was not justified in making addition under section 68 only on the basis of the creditors not being assessed to tax and non submission of their bank statements. The ld. CIT(A) has, however, sustained the addition. 7. Before the Tribunal, the assessee has reiterated the same arguments that the whole payment of Rs. 8,30,000/- were received by cheque, all creditors confirmed the amount (pages 33 to 37 of the PB), all the transactions are well entered and considered in the books of account and bank balance as on 31.03.2005 shows sufficient fund. It has been further submitted that in case of any doubt, the AO should have issued summon under section 131 to the creditors. Reliance has been placed on the following decisions:- CIT vs. P Mahan Kal (2007) 291 ITR 278 (SC) CIT vs. Hanuman Agarwal (1985) 151 ITR 150 (Pat.) 8. The ld. D/R on the other hand has tried to justify the orders of the lower authorities that none ....
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....hereby confirmed. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 02/03/2021. ============= Document 1 5.2 निरà¥à¤£à¤¯ ऋण निरà¥à¤§à¤¾à¤°à¤£ अधिकारी का कहना है कि अपीलारà¥à¤¥à¥€ ने कथित रूप से कृषकों से रू.2,79,500/- के असà¥à¤°à¤•à¥à¤·à¤¿à¤¤ ऋण पà¥à¤°à¤¾à¤ªà¥à¤¤ किये थे, जो कि नगद में थे और पà¥à¤°à¤¤à¥à¤¯à¥‡à¤• रू.20,000/- से कम था। निरà¥à¤§à¤¾à¤°à¤£ अधिकारी के अनà¥à¤¸à¤¾à¤° अपीलारà¥à¤¥à¥€....
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....¤§ में अपीलारà¥à¤¥à¥€ अपना उतरदायितà¥à¤µ निà¤à¤¾à¤¨à¥‡ में असफल रहा है। इस संबंध में धारा 271(1)(c) के सà¥à¤ªà¤·à¥à¤Ÿà¥€à¤•à¤°à¤£-1 के पà¥à¤°à¤¾à¤µà¤§à¤¾à¤¨ विचारणीय है। उकà¥à¤¤ सà¥à¤ªà¤·à¥à¤Ÿà¥€à¤•à¤°à¤£ के अनà¥à¤¸à¤¾à¤° जहाठकिसी वà¥à¤¯à¤•à¥à¤¤à¤¿ की कà¥à¤² आय की संगणना करने के लिठकिनà¥à¤¹à¥€à¤‚ महतà¥à¤µà¤ªà¥‚रà¥à¤£ तथà¥à¤¯à¥‹à¤‚ की बà¤....
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....¤•à¤²à¥à¤ª नहीं होता है। साथ ही साथ माननीय उचà¥à¤šà¤¤à¤® नयायालय दà¥à¤µà¤¾à¤°à¤¾ UOI & Ors v. Dharmendra Textile Processors & Ors.[2008] 306 ITR 277 (SC) के केस में दिये गये निरà¥à¤£à¤¯ के आधार पर यह कहा जा सकता है कि शासà¥à¤¤à¤¿ अधिरोपित करने हेतॠआपराधिक मनः सà¥à¤¥à¤¿à¤¤à¤¿ को सिदà¥à¤§ करना आवशà¥à¤¯à¤• नहीं है। उपरोकà¥à¤¤ विवेचना के आà....
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....ी कà¥à¤·à¤®à¤¤à¤¾ के संबंध में परà¥à¤¯à¤¾à¤ªà¥à¤¤ साकà¥à¤·à¥à¤¯ है। इस आधार पर निरà¥à¤§à¤¾à¤°à¤£ अधिकारी ने रूपये 8,30,000/- को अपीलारà¥à¤¥à¥€ की छिपाई आय मानकर उस पर धारा 271 (1) (c) के अंतरà¥à¤—त शासà¥à¤¤à¤¿ अधिरोपित की है। इस संबंध में अपीलारà¥à¤¥à¥€ का कहना है कि चूà¤à¤•à¤¿ ये रूपये बैंक चैक से आà¤....
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....ै। इस असà¥à¤°à¤•à¥à¤·à¤¿à¤¤ ऋण के संबंध में परà¥à¤¯à¤¾à¤ªà¥à¤¤ साकà¥à¤·à¥à¤¯ पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ करने में हà¥à¤ˆ असफलता से सिदà¥à¤§ होता है कि अपीलारà¥à¤¥à¥€ के पास इस असà¥à¤°à¤•à¥à¤·à¤¿à¤¤ ऋण की बाबत कोई सà¥à¤ªà¤·à¥à¤Ÿà¥€à¤•à¤°à¤£ नहीं है। इस संबंध में धारा 271(1)(c) के सà¥à¤ªà¤·à¥à¤Ÿà¥€à¤•à¤°à¤£-1 के पà¥à¤°à¤¾à¤µà¤§à¤¾à¤¨ विचारणीय हैं। उà....
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....•à¤°à¤£ के अनà¥à¤¸à¤¾à¤° यह वहा आय है, जिसके संबंध में विशिषà¥à¤Ÿà¤¿à¤¯à¥‹à¤‚ को छिपाया गया है। इस पà¥à¤°à¤•à¤¾à¤° आय की विशिषà¥à¤Ÿà¤¿à¤¯à¥‹à¤‚ को छिपाया गया है तो आयकर अधिकारी के समकà¥à¤· धारा 271 (1) (c) के अंतरà¥à¤—त शासà¥à¤¤à¤¿ अधिरोपित करने के अतिरिकà¥à¤¤ और कोई विकलà¥à¤ª नही होता है। साथ हà....
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....¤µà¤¾à¤¹à¥€ के दौरान जà¥à¤žà¤¾à¤¤ हà¥à¤† कि अपीलारà¥à¤¥à¥€ ने फलैट बà¥à¤•à¤¿à¤‚ग के तौर पर 11 वà¥à¤¯à¤•à¥à¤¤à¤¿à¤¯à¥‹à¤‚ से अगà¥à¤°à¤¿à¤® के रूप में रूपये 10,05,301 /- की राशि पà¥à¤°à¤¾à¤ªà¤¤ की है। यह समसà¥à¤¤ राशि रोकड़ में कृषकों से पà¥à¤°à¤¾à¤ªà¥à¤¤ हà¥à¤ˆ है। अपीलारà¥à¤¥à¥€ इस संबंध में ऋणदाताओं की पहचान और ऋण देने ....
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....¤¹à¥‹ तो शासà¥à¤¤à¤¿ की कारà¥à¤¯à¤µà¤¾à¤¹à¥€ के दौरान उसके संबंध में कोई सà¥à¤ªà¤·à¥à¤Ÿà¥€à¤•à¤°à¤£ निररà¥à¤¥à¤• है। दà¥à¤µà¤¿à¤¤à¥€à¤¯ दौर में माननीय आयकर अपीलीय पà¥à¤°à¤¾à¤§à¤¿à¤•à¤°à¤£ दà¥à¤µà¤¾à¤°à¤¾ दिये गये निरà¥à¤£à¤¯ से सà¥à¤ªà¤·à¥à¤Ÿ है कि इस रोकड़ जमा के संबंध में अपीलारà¥à¤¥à¥€ ऋणदाताओ की पहचान और ऋण देनà¥....
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....¿à¤¸à¤•à¥‡ संबंध में विशिषà¥à¤Ÿà¤¿à¤¯à¥‹à¤‚ को छिपाया गया है। चूà¤à¤•à¤¿ अपीलारà¥à¤¥à¥€ रूपये 10,05,301 /- के कथित अगà¥à¤°à¤¿à¤® की पà¥à¤°à¤¾à¤®à¤¾à¤£à¤¿à¤•à¤¤à¤¾ सिदà¥à¤§ करने में असफल रहा है इसलिये उकà¥à¤¤ सà¥à¤ªà¤·à¥à¤Ÿà¥€à¤•à¤°à¤£ के अनà¥à¤¸à¤¾à¤° यह वह आय है, जिसके संबंध में विशिषà¥à¤Ÿà¤¿à¤¯à¥‹à¤‚ को छिपाया गया है। इस पà¥à....
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....कि रूपये 10,05,301/- के कथित अगà¥à¤°à¤¿à¤® के संबंध में धारा 271 (1) (c) के अंतरà¥à¤—त शासà¥à¤¤à¤¿ अधिरोपित करना नà¥à¤¯à¤¾à¤¯à¥‹à¤šà¤¿à¤¤ है और मैं उस शासà¥à¤¤à¤¿ को पà¥à¤·à¥à¤Ÿ करता हूà¤à¥¤ इस पà¥à¤°à¤•à¤¾à¤° अपील के इस आधार को निरसà¥à¤¤ किया जाता है। 5.7 अपील का चौथा आधार 4. The appellant may kindly be allowed to add, amend or alter any or any or all of the grounds on or before the hearing. 5.8 निरà....
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....¤¾à¤°à¤£ अधिकारी की संतà¥à¤·à¥à¤Ÿà¤¿ को सिदà¥à¤§ नहीं करता है। मैने अपीलारà¥à¤¥à¥€ के तरà¥à¤•à¥‹à¤‚ पर विचार कर लिया है। धारा 271 (18) के पà¥à¤°à¤¾à¤µà¤§à¤¾à¤¨à¥‹à¤‚ के अनà¥à¤¸à¤¾à¤° जहाठनिरà¥à¤§à¤¾à¤°à¤£ या पà¥à¤¨à¤ƒ निरà¥à¤§à¤¾à¤°à¤£ के आदेश में किसी निरà¥à¤§à¤¾à¤°à¤¿à¤¤à¥€ की कà¥à¤² आय की संगणना करने में कोई रकम जोड़ी ....