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TAXAP/1845/2009 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1845 of
2009
=========================================================
COMMISSIONER
OF INCOME TAX-III - Appellant(s)
Versus
PANCHRATNA
REMEDIES INDIA LTD - Opponent(s)
=========================================================
Appearance
:
MR
MANISH BHATT, MRS MAUNA M BHATT
for
Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 29/03/2011
ORAL
ORDER
(Per
: HONOURABLE MS JUSTICE SONIA GOKANI)
1. In
the present tax appeal, the department, being aggrieved by the order
of the ITAT, dated 18.12.2008, has sought to challenge the same, by
proposing following question for our consideration:
” Whether the
Appellate Tribunal is right in law and on facts in canceling the
penalty levied u/s.271(1)(c) of the I.T. Act?”
2. The
only issue that is required to be addressed by this Court is, as to
whether the additions made under Section-68 of the Income Tax Act,
1961, would attract levying of penalty under Section-271(1)(c) of the
Act, if otherwise, there are no ingredients of furnishing inaccurate
particulars or concealment of any material, on the part of the
assessee.
3. To
briefly state the facts, the assessing officer, in the case of
present respondent, assessee, had levied the penalty to the tune of
Rs.5,31,571/-, following certain additions in the assessment. The
assessee when challenged these additions, the CIT Appeals, though,
confirmed the additions, but on the penalty part, it had deleted the
same in respect of disallowances on the ground of difference in bank
balance and resultantly the penalty was reduced to Rs.2,18,500/-.
Both the assessee and the department preferred appeals against this
order of CIT Appeals before the Appellate Tribunal, who rejected the
appeal of the revenue and allowed that of the assessee, by deleting
the entire penalty levied.
4. We
have heard learned Counsel, Mr. Manish Bhatt, for the department, who
has taken us through the entire record and made extensive submissions
on both the cross-appeals preferred and adjudicated by the Tribunal.
On considering carefully, the material before this Court and also, on
giving thoughtful consideration to the submissions, this Court sees
no error in the order of the Tribunal, which has essentially based
its reasonings on the factual findings of the CIT Appeals, by
elaborately reproducing its order. However, as regards addition under
Section-68 of the Act, it has held as follows:
“20. As
regards addition u/s 68 of the Act, the addition has been confirmed
by the Tribunal. However, we find that though the assessee could not
file confirmation of the cash creditors, the assessee file
confirmation of the cash creditors, the assessee file corroborative
evidence in support of his claim that the credit is genuine. There
is no direct credit by the assessee by receiving money. One of the
associate concerns of the earlier Director of M/s Nehdeep Finance
made payment to M/s Vijay Agencies and Magnus Pharma. Therefore, the
assessee debited the amount of M/s Vijay Agencies and credited the
same to the account of M/s Nehdeep Finance. The assessee filed
confirmation from these two concerns. The assessee also gave reasons
why direct confirmation from M/s Nehdip Finance could not be filed.
Since the concern belonging to erstwhile Director is also absconding,
the confirmation could not be filed. However, corroborative evidence
was file. Thus, to the extent possible the onus was discharged by
the assessee. Though, this may result into addition u/s 68 of the
Act, he same cannot be held that the assessee has furnished
inaccurate particulars of income so as to levy penalty U/s 271(1)(c)
of the Act. As per Explanation (1) of Section 271(1)(c) of the Act
each and every addition cannot result into levy of penalty. Penalty
can be levied only qua those additions where the assess either fails
to offer explanation or the explanation offered is found to be false.
Since in the present case the assessee always offered explanation
and also substantiate the claim, the Assessing Officer never found
the explanation to be false. In that circumstances, penalty in
respect of the addition of Rs.5,000/- is not leviable.”
5. The
Tribunal did not find any false explanation on the part of the
assessee, when he was called to explain the additions made in the
assessment nor did it found that there was any attempt, on the part
of the assessee of not furnishing accurate particulars of income. In
absence of any concealment and for the reasons mentioned herein
above, it has when passed the order of deletion of order of penalty,
the same requires to be sustained.
6. No
question of law having arisen before this Court, this appeal deserves
to be dismissed and is DISMISSED, accordingly.
(AKIL
KURESHI,J.)
(Ms.
SONIA GOKANI,J.)
Umesh/
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