IN THE INCOME TAX APPELLATE TRIBUNAL
"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
Vs.
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
ORDER
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
ITAT.
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
unadmitted.
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
confirmed.
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
n.p.
|