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Shri Ramesh L. Patel 259, Ashirwad Indl. Estate Bldg. No. 5, Ram Mandir Road Goregaon (W), Mumbai 400014 Vs. Income Tax Officer - 24(3)(4) Pratyksha Kar Bhavan Bandra Kurla Complex Mumbai 400051
June, 29th 2015
                            "D" Bench, Mumbai

                 Before Shri D. Manmohan, Vice President
                and Shri Sanjay Arora, Accountant Member

                     ITA Nos. 1125 & 1136/Mum/2013
                         (Assessment Year: 2006-07)

     Shri Ramesh L. Patel                Income Tax Officer - 24(3)(4)
     259, Ashirwad Indl. Estate          Pratyksha Kar Bhavan
     Bldg. No. 5, Ram Mandir Road        Bandra Kurla Complex
     Goregaon (W), Mumbai 400014         Mumbai 400051
                             PAN - AAQK6782P
                Appellant                        Respondent

                    Appellant by:      None
                    Respondent by:     Shri Love Kumar

                    Date of Hearing:       17.06.2015
                    Date of Pronouncement: 26.06.2015


Per D. Manmohan, V.P.

     These two appeals are filed by the assessee, against the orders passed
by the CIT(A)-34, Mumbai. ITA No. 1125/Mum/2013 is quantum appeal
whereas ITA No. 1136/Mum/2013 is appeal filed against levy of penalty
under section 271(1)(c) of the Act. The quantum appeal is barred by
limitation by 1105 days.

2.     The case was last posted for hearing on 13.03.2015 and at the request
of the assessee the case was adjourned to 17.06.2015 but on this day none
appeared on behalf of the assessee. We, therefore, proceeded to dispose of
these appeals exparte, qua assessee.

3.     It is not in dispute that the order passed by the CIT(A), in the
quantum proceedings, was communicated to the assessee on 01.12.2009.
With regard to the delay in filing the appeal assessee filed an affidavit stating
that in the course of preparation of the appeal against the order of the CIT(A)
confirming the penalty under section 271(1)(c), it was noticed that the
assessment order contained various incorrect facts which need to be
                                        2           ITA No. 1125&1136/Mum/2013
                                                               Shri Ramesh L. Patel

challenged before the Appellate Authority. It was further submitted that the
assessee being not educated he could not properly understand the order of
the CIT(A) dated 16.11.2009, therefore failed to file an appeal before the

4.      It may be noticed that the assessee is represented by a Chartered
Accountant in all the proceedings. In fact in the penalty proceedings Shri B.
Sharma appeared. Similarly, in the quantum proceedings also Shri Pawan
Sharma, Chartered Accountant appeared before the CIT(A). The order
passed by the CIT(A) was taken into consideration in the penalty
proceedings since the AO, in the order passed under section 271(1)(c) of the
Act, made clear mention of the outcome of the quantum proceedings before
the CIT(A). Thus it cannot be said that the assessee was not aware of the
procedure. In fact he has filed an explanation dated 27.04.2010 in the
penalty proceedings and while negating the contentions of the assessee, the
officer made a categorical mention about the fact that the addition made by
the AO was confirmed by the CIT(A) and thus the assessee has committed
default within the meaning of Explanation 1 to section 271(1)(c) of the Act.
Having regard to the circumstances of the case we are of the view that the
substantial delay, of filing the appeal against the quantum proceedings, is
not on account of any sufficient cause. We, therefore, dismiss the appeal as

5.      With regard to the levy of penalty, the case of the assessee is that the
learned CIT(A) erred in confirming the penalty of `10,60,016/-. It may be
noticed from the assessment order as well as the order passed under section
271(1)(c) of the Act that the major addition was that cash deposits appearing
in assessee's bank account to the tune of `33,15,849/- was treated as
unexplained cash credit. Penalty proceedings were initiated on the ground
that assessee has furnished incorrect particulars of income and also
concealed his income with a deliberate intention to avoid tax liability.
Assessee did not furnish any satisfactory explanation either before the AO or
before the CIT(A) to prove that the addition made by the AO is not
maintainable and it is not a case of concealment of income or furnishing of
                                         3            ITA No. 1125&1136/Mum/2013
                                                                 Shri Ramesh L. Patel

incorrect particulars. In fact the learned CIT(A), in the penalty proceedings,
analysed the facts of the case and observed in para 2.3.3 as under: -

     "2.3.3 The above clearly indicates that the appellant was not able to
     reconcile the alleged cash deposits in the bank accounts and hence the
     advances alleged to have been received from the debtors were proved to
     be bogus. Had the assessment was not selected for scrutiny the issue of
     bogus debtors would not have come to light. When the sources of the
     cash deposits were not able to explain by the appellant, the natural
     corollary is the unaccounted cash earned by the appellant was ploughed
     back in the guise of advances from customers. Thus the appellant had
     manipulated the accounts and thereby either it inflated the advances or
     advances were shown in the name of non existing/fictitious customer.
     Thus the accounts were fudged, and based on these cooked up accounts
     only the income was offered. Hence the income declared in the return of
     income to this extent was incorrect. When the amounts were beyond the
     scope of reconciliation, the appellant had to admit the same as income. It
     is not a case of making an incorrect claim. The information given in the
     return of income and income computed on this basis is incorrect. Hence
     the appellant filed a return of income which is incorrect or erroneous or
     false. Thus not only the information in the return of income is incorrect or
     inaccurate, but the income declared itself is also incorrect. Hence it is a
     clear case of not only filing of inaccurate particulars of income but also
     concealment of income. This the reason why the appellant did not
     agitate the order of the CIT(A) before the ITAT. The appellant had relied
     on various case laws in the above submission but the fact in the
     appellants case are not the same and hence they are all distinguished.
     In view of the above, minimum penalty levied is hereby

6.     Having regard to the circumstances of the case, and in the absence of
any fresh material brought on record before us, we do not find any infirmity
in the order passed by the CIT(A). We, therefore, dismiss the appeal filed by
the assessee.

7.     In the result, ITA No. 1125/Mum/2013 is dismissed as unadmitted on
the ground that it was barred by limitation and ITA No. 1136/Mum/2013 is
dismissed on merits.

Order pronounced in the open court on 26th June, 2015.

                 Sd/-                                       Sd/-
            (Sanjay Arora)                            (D. Manmohan)
         Accountant Member                             Vice President

Mumbai, Dated: 26th June, 2015
                                       4            ITA No. 1125&1136/Mum/2013
                                                               Shri Ramesh L. Patel

Copy to:

   1.   The   Appellant
   2.   The   Respondent
   3.   The   CIT(A) ­ 34, Mumbai
   4.   The   CIT­ 24, Mumbai City
   5.   The   DR, "D" Bench, ITAT, Mumbai

                                                      By Order

//True Copy//
                                                   Assistant Registrar
                                           ITAT, Mumbai Benches, Mumbai
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