TaxTMI 
TaxTMI 
2024 (8) TMI 220
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....n confirming action of Ld. Assessing Officer initiating proceedings u/s. 147 r.w.s. 148, 149 and 151 of the Income-tax Act, 1961 without fulfilling stipulated conditions especially the purported approval issued without bearing DIN as required under CBDT Instruction No.19 of 2019. 2) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC is not justified in confirming action of the ld. Assessing Officer completing assessment without service of notice u/s. 148 of the Income-tax Act, 1961 and without giving adequate opportunity. 3) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC is not justified in sustaining the addition made by way of cash deposit to the extent of Rs. 6,62,000/- out of total cash deposit of Rs. 17,92,000/- in total income treating the same as undisclosed income from other sources. 4) The impugned order is bad in law and on facts. 5) The appellant reserves the right to addition, after or omit all or any of the grounds of appeal in the interest of justice." 3. Succinctly stated, the A.O based on information that though the assessee had made cash deposi....
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....aid "agreement to sell" dated 24.12.2010 would have a strong bearing on the adjudication of the core issue involved in the present appeal, therefore, we admit the same. 10. The Ld. AR at the threshold of hearing of the appeal, submitted that as notice u/s. 148 of the Act dated 26.02.2020 did not bear DIN as was statutorily required vide CBDT Circular No.19 of 2019 dated 14.08.2019, therefore, the A.O had wrongly assumed jurisdiction and framed the assessment based on the said invalid notice. The Ld. AR in support of his aforesaid contention had relied on the judgment of the Hon'ble High Court of Bombay in the case of Hexaware Technologies Limited Vs. ACIT, Circle- 15(1)(2), Mumbai, Writ Petition No.1778 of 2023 dated 03.05.2024. Our attention was specifically drawn by him to Para 31 of the aforesaid order. It was averred by the Ld. AR that as the notice issued u/s. 148 of the Act in absence of DIN had no existence in the eyes of law, therefore, no valid jurisdiction could have been assumed by the A.O for framing the impugned assessment. 11. Alternatively, the Ld. AR submitted that notice u/s. 148 of the Act was sent to the assessee on email address, i.e. "bhagwatgiri 1972@gmi....
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....on the notice u/s. 148 of the Act, dated 26.02.2020, we are unable to persuade ourselves to subscribe to the same. 16. We may herein observe that the issue concerning communication of assessment order without mentioning of DIN was decided by Hon'ble Delhi High Court in the case of Commissioner of Income-tax Vs. Brandix Mauritius Holdings Ltd. in favour of the assessee, wherein it was held as under: "that the object and purpose of the issuance of Circular No.19/2019, dated 14-8-2019, was to create an audit trail. Thus, communication related to assessments, appeals, and orders without DIN (document identification number) would have no legal standing. The final assessment order issued by the Assessing Officer lacked a DIN, and there was no evidence on record indicating exceptional circumstances, as outlined in Circular No. 19/2019, that would justify the manual communication of the final assessment order without a DIN. Further, failing to assign a DIN was not a correctable error under Section 292B." However, the aforesaid judgment of Hon'ble High Court of Delhi was thereafter challenged by the revenue in SLP (CIVIL) DIARY NO(S). 46964 OF 2023 before the Hon'ble Apex Court, whe....
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....ith the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was- (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment." Accordingly, the claim of the assessee as regards invalidity of the assessment framed by the A.O in absence of valid service of notice u/s. 148 of the Act dated 26.02.2020 being devoid and bereft of any merit cannot be accepted. 18. We shall now deal with the claim of the Ld. AR that cash deposits of Rs. 17,92,000/- was sourced out of the sale consideration of agricultural land that was sold by the assessee along with family members. As is discernible from the record, the assessee along with his relatives had sold certain pieces of agricultural land, viz. Khasra No.249/1, 4, (area 1.86 acre) to Smt. Radha Devi Chandwani, W/o. Late Brijlal Chandwani, R/o. Anupam Nagar, Ward No.19, Tehsil & District: Rajnandgaon vide a registered sale deed for a sale c....
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....ing, varying, adding to or subtracting from its terms. It was further observed by the Hon'ble High Court that once ostensible sale consideration disclosed in the sale deed is accepted then, it cannot be contradicted by adducing any oral evidence. For the sake of clarity, the observations of the Hon'ble High Court are culled out as under: "4. We have thoughtfully considered the submissions made by the learned counsel and are of the view that they do not warrant acceptance. There is well-known principle that no oral evidence is admissible once the document contains all the terms and conditions. Sections 91 and 92 of the Indian Evidence Act, 1872 (for brevity 'the 1872 Act') incorporate the aforesaid principle. According to section 91 of the Act when terms of a contracts, grants or other dispositions of property has been reduced to the form of a documents then no evidence is permissible to be given in proof of any such terms of such grant or disposition of the property except the document itself or the secondary evidence thereof. According to section 92 of the 1872 Act once the document is tendered in evidence and proved as per the requirements of section 91 then no ....
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....rming action of Ld. Assessing Officer in imposing penalty tqs.271(1)(c) Income-tax Act, 1961 and in sustaining penalty to the tune of Rs. 75,000/- computed on the amount, of addition sustained in the order u/s. 250 of the Act in quantum appeal. 2) The impugned order is bad in law and on facts. 3) The appellant reserves the right to addition, after or omit all or any of the grounds of appeal in the interest of justice." 22. On a perusal of the order of the CIT(Appeals), it transpires that the CIT(Appeals) had sustained the penalty imposed by the A.O u/s. 271(1)(c) of the Act of Rs. 75,000/- by observing as under: "6.2 The submissions of the appellant and the contentions made by the Assessing Officer in the assessment order and penalty order have been carefully considered. The appellant has also agitated the addition made by the AO by way of a separate appeal. The appellant had pleaded that the cash deposits in the bank account was made from the proceeds from the sale of an agricultural land. Further, the appellant has pleaded that the agricultural land was sold for a price of Rs. 17,00,000/- whereas the registration was executed at Rs. 11,30,000/- at the request of the buyer.....
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....ion, the amount of addition or disallowance as a result thereof shall be deemed to represent concealed income. In this connection, the Hon'ble High Court of Kerela in the case of KP Madhusudan (2002) 125 taxmann 265. has held that the initial burden of discharging the onus of rebuttal is on the assessee. The relevant portion of the above decision is quoted hereunder. "A conspectus of the Explanation added by the Finance Act, 1964 and the subsequent substituted Explanations makes it clear that the statute visualised the assessment proceedings and penalty proceedings to be wholly distinct and independent of each other. In essence, the Explanation (both after 1964 and 1976) is a rule of evidence. Presumptions which are rebuttable in nature are available to be drawn. The initial burden of discharging onus of rebuttal is on the assessee. The rationale behind this view is that the basic facts are within the special knowledge of the assessee. Section 106 of the Indian Evidence Act, 1872 gives statutory recognition to this universally accepted rule of evidence. There is no discretion conferred on the Assessing Officer as to whether he can invoke the Explanation or not. Explanation 1,....
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....eld that, if assessee makes a claim which is not only incorrect in law, but is also wholly without any basis and explanation furnished by him for making such a claim is not found to be bona fide, Explanation 1 to section 271(1)(c) would come into play and assessee will be liable to penalty. Relevant portion of this decision of the High Court is reproduced hereunder: "10. Section 271(1)(c) of the Act, to the extent it is relevant, provides for imposition of penalty in case the Assessing Officer, in the course of any proceedings under Act, is satisfied that any person had concealed particulars of his income or had furnished inaccurate particulars of such income. Explanation 1 to sub-section (1) of section 271 provides that where in respect of any facts material to the computation of the total income of any person, such person fails to offer an explanation or offers is to be found he offers an explanation which an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income, have been disclosed by him, then the amount added or disallowed in comput....
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....Central Excise Act was only civil in nature and therefore, no mens-rea was required. The Hon'ble Supreme Court in the case of MAK Data Private Limited [2013] 38 taxmann.com 448 (SC) has referred to the decisions of its coordinate benches in the cases of Darmendra Textile Processors [2008] 231 ELT 3 and Atul Mohan Bindal [2009] 9 SCC 589 and held that penalty u/s 271(1)(c) of the Income Tax Act,1961 is a civil liability and would not therefore, entail mens-rea. 7.2 The scope of Section 271(I)(c) has also been elaborately discussed by the Hon'ble Supreme Court in the case of Union of India v. Dharmendra Textile Processors [2008] 13 SCC 369 and CIT v. Atul Mohan Bindal [2009] 9 SCC 589. Dharamendra Textile Processors [2008] 231 ELT 3 wherein, it was held as under: - "2. A Division Bench of this Court has referred the controversy involved in these appeals to a larger Bench doubting the correctness of the view expressed in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai and Anr. (2007 (8) SCALE 304). The question which arises for determination in all these appeals is whether Section 11AC of the Central Excise Act, 1944 (in short the 'Act) inserted by Financ....
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.... explanation or the explanation offered by such person is found to be false or the explanation offered by him is not substantiated and he fails to prove that such explanation is bona fide and that all the facts relating the same and material to the computation of his total income has been disclosed by him, for the purposes of section 271(1)(c), the amount added or disallowed in computing the total income is deemed to represent the concealed income. The penalty spoken of in section 271(1)(c) is neither criminal nor quasi-criminal but a civil liability, albeit a strict liability. Such liability being civil in nature, mens rea is not essential." 7.4 Based on the above discussion, it becomes quite clear that the penalty u/s 271(1)(c) does not require the guilty mind or the mens-rea. Such being the case, the penalty levied by the Assessing Officer u/s 271(1)(c) for concealment of income is restricted to the addition confirmed by the CIT(Appeals) vide his order dated 13- 03-2024 in DIN no. ITBA/NFAC/S/250/2023- 24/1062530837(1) of Rs. 6,62,000/- and interest income not offered to tax of Rs. 60,021/-. The AO is directed to re-compute the penalty u/s 271(1)(c) on this addition of Rs. 7,2....