Karnataka High Court
The Commissioner Of Income Tax vs N Nagaraj Ballal on 1 December, 2009
Bench: K.L.Manjunath, Aravind Kumar
I I1 -I II I IN THE HIGH COURT 01:' KARNATAKA AT BANGALORE DATED THIS THE 13'? DAY OF DECEMBER PRESENT V' V' THE HONBLE MRJUSTICE THE HONBLE3 MR.JusT1_'c.§: :5 1.T.A.N0.4}.g;gg,§; % BETWEEN: V & u V' }..THE COMMISSIONER OF' " C.R.I3UILDING, " 'V ' ATTAVARA, MANGALOREZ 2.THE ASSI'S'TTANiT CC§:MMI'SS-IO1'€.'-T;R"OF INCOME1;TAXE_ -- I CIRCLE -33, ' 4 C.R.BUII.DlNG, . ATTAVARA, . -_ MANGALORE. _ ' .. APPELLANTS '(H1 Sm ';:.v}';-:.13AV1N'i:5'," ADV. FOR SR1 M.V.SESHACHAI.A. K -NNAGARAJ BALLAL, ~ H .i;- <._Ié'.-W.D.CON_'ERACTOR, _ '- '\;Ar;1r;e.AJA"RoAD, UDUPI 576 :01. .. RESPONDENT
(BY SR1 S.P.BHA'E', ADV.) N *=i¢*$*=£< THIS I.T.A. IS FILED U/S. 260 A OF THE 1NcO.Iy:E_4TAx ACT. 1961 ARISING OUT OF ORDER DATEDf':29.'[_5'_[2¥I:~O4% PASSED IN ITA NO.4.72/BANG/2001 FOR THE 'ASSvE1S.SI»I%EII.fT_é ' YEAR 199293 PRAYING THAT TH1S.HOI\IiI3I,I{j c'O'URT'I'vIA$; SE PLEASED TO (IJFORMULATE THE SI;BSTA§NTI.ALI.QUES'TIO:I_S OF LAW STATED THEREIN [ii]»ALLOW*--T1"H~E APSEEAL' S'ET'~a ASIDE THE ORDERS PASSEI}._ V.Tb BY r.'{'H'E j'v_:IN'eO'ME--TAX"
APPELLATE TRIBUNAL, e__13uANO;AI,ORE'.'..9_,. "IN ITA NO.é1~7'2/BANG/200} DTIE8/--%§/.29O4..__'»_iCOI\IE1RMINO THE ORDER OF THE APPEIII.ATE:" I.>_OI;I1jI./I_ISSIONER AND CONFIRMT HE_ ' 7 :9? THE ASST.
COMMISSIONEE .eIuRCiI.Ew3. MANGALORE ETC THIS * ON FOR HEARING THIS DAY.
ARAVIND KUM.'AR.JI., 'D'EEIV--ERED THE FOLLOWING:
x"¢UDGMENT I is in appea} assafling the Order dated
2 _28/512094 by the I:1cOme~tax Appellate Tribunal, "Bench, :'n ITA NO.-4?2/Bang/200} on the
--f_0HC}\'?Lr"i'i':£§_§ Substarmiai question Of 1aw:--
--:3:~ "{1} Whether the Appellate Authorities were correct. in holding that the revenue has to 131'ove concealment. of income when it was found that a sum of Rs.1l.63,860/' was claimed to be the income during':----the"'if assessment year 199394 was actttalljq-sthé'w.: * income of the current assessment year 'lA99_2%--.. it 93 and since the assessee l"'La(£l'._I10lZ of{ered~ any bona fide explanjatiéon which truthful the con_cealme_n_t':'»w21.sv deemed have arisen? V {2} Whether a _r_s'um_f:'o:i' R.sv.._'l'.1.,t33,86O/A shvowfii-b;y:ythleiassle-sysee as"i;'he income for the assAessrr;ent'ye.a1'»r,l'993-~94 admittedly did not find place in.lthe""-returns filed during the as-sessnicwnt"'year 91993-94 was correctly to taérdluring the assessment year the and the explanation found to be false, the penalty '~levi,ed was fully justified?
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2. We have heard Sri K.V.Aravind, iearned Counsel appearing for the appeilantswevenue and Sri S.P__._Bhat, learned counsel appearing for the respondentmass.ess'ee."=_
3. We find from the records that admission of this appeal on 5/1:23/'20f)5,5_4'th_e'jsdubstantial 9 question of law formulated as abovehaszbeedn
4. Sri K.V.Ara\/ind, learned cttounselhanppearing for the appe11ants--revenue'=--ii{fou1d «;:}ovnt'erid"t.hat amount of Rs.11,63,860/-- reeeiVed"'-.b:y during the assessmentv 'Ayefa_r also an amount of Rs.3,19,6E)8/'»% 'cVorrese'o.ndi1ig1y shown as expenses pertaining to the 'sa"me"assessment year was not reflected in .the 1*-et11rnA_ of filed for the said year and the assessment year 1993--94 the same i has b«een.__"add'ed back and to the said extent it has been '4 :'"v4.4"--reflected'in the statement of account.
@
5. Since the assessee did not disclose this amount for the assessment. year 1992433, the Assessingyflffieer initiated the proceedings under Section Income Tax Act, 1961., [hereinafter referred toas on consideration of the reply of Rs.4,80,000/-- by order dated 2«E:43',/.S§f__1.995..b',_"_~AThis"
came to be set aside by the Co.n3imissioner'Aof Ineome Tax (Appeals)-II, by an 2001 Heonfirmed by the Tribunal.
6. --~.._by7 learned counsel for appe11ants--'reVeVnvueAppellate Authority as well as the '1'ribuna.l«..yVas holding that the revenue had .---.to probe: the_ deliberate' concealment and this is contrary "to ;the.ju.dgn1e:1f'1"t«._of the Apex Court in (1972) 83 ITR 26 tscilgye' .. V'i=t:is also contended that under the scheme of the "_'_&e.._g_fil\(':tl"particularly the penalty provision the burden is T -«l.4:"sl'1£'fted on the assessee to show or offer an explanation in l respect. of inaccurate particulars and demonstrate that there was no intention of concealment, of incom.e"Vand"-as such, seeks for setting aside the orders appellate authority as confirmed by~th.ey 'p ll
8. Per contra, Sri_rS_.P.Blhat',' 1eaarried,l:'_ appearing for the respondent-assesses that the explanation offered":«-- l'~--ass'e~ssee ldtzring the assessment proceedings... by the first appellate 'assigned by the first appellate" penalty levied as confirmed by not call for interference and seeks for_4_disrnlissa.l 'of._the appeal. _ fiat/=i.ng heard the learned counsel appearing for parftiesg' the records that for the assessment l year 'i«992}93l«:lthe matter was adjudicated by the Assessing 011- yarious dates i.e., on 18/1/1994, 25/1/1994 l_l_an'c_il$2'/12/1994. Since the return of income for the :l_':ass'essment year 199394 was filed by the assessee only W on 5/4/1994 there could not have been an occasion for the Assessing Officer to come to a conclusion that":iric"Qrfie and expenditure in the assessment year 9 also not accounted for by the assessee its return' for-the"; assessment year 1993-94 in course it earlier dates and the Chartereti'a:ci:ounhtantV' 'zxrh_=oVVAavbbVeared for the assessee had the first appellate authority explaining to why the receipt of as contract receipts has and loss account for the assessment year 1993-94 and the at1'd_it0rlir1"at Para.9(b) issued in Form 3(c)[d], which altméwith the return of income for :l'iiVfg1?is¢. AgssesEs}fne'i1t_ year tttt 991993-94 dated 27/10/1993 has as to why this could not be included 9 :'asse_ss1nent year 1992w98. Thus, the cause shown 94 4yb§fthe-iasseVssee for Waiver of penalty has been accepted by appellate authority on considering the it given both by the assessee as well as the I I w I'! Chartered Accountant. which is supported by an affidavit and has rightly come to the conclusion that the was not guilty of conctealing the particulars hisilincomue' or furnishing inaccurate particulars'; '~",['he circu'n;stan«ces¢ under which the appellant. was revised return for the assessrriepntyyear'---1.9E~}2§93'.'haVs also been accepted by the 1-$iI"aippel.}at'e'*autlhority. A
10. it is seen. by the'orderv"ol%.appel.l.a;tell.authority and Tribunal that particularly the 15* nappellatev the cause shown by the asselsseee' suffer from either factual error or an'y.._4il},egality=._ and hence same requires to be .v{:onfiriried and accoI.'.(_i_i.r1gly, it is confirmed. as the judgment relied upon by the counsel for the appellants reported in case of " " 5 STEEL LTD. -----Vs.--STATE or ORISSA (1972) (SC), to contend that burden is on the assessee it that there was no deliberate concealment and Q. 10 :-
course of hearings before him on 18.1.94 and 25. The AC) could have found this only on the other hearing i.e., 12.12.94. In course of hearing the learned AR has filed a copy of the ai1'id'a§5it;;»«Vo'rn * by Sri P.V.Shenoy, CA of the appellant' on"
T stating as under:--
"That during ('the Vlcotlii'-se oi'»f:.ohe '' proceedings on Iihhat/er statement as per Anne>;1:3I'e:_l the A.O.. Asst! lneorne;
tax, Circle 1, Mhang'alor_eii'»that:'aniour1't of Rs. 1 1.6.3..860/ H . tr:'eat'ed',_ C ieodntraet receipto' the "P&L «eribsequent year en.r;l1ecll3'i».3..j1..993_ :arev.;toV.-be treated as *;:eee'i';:its.' f'o1""*thVe year ended of 125.3, 19,698 /-
A'aee'ot1n'te_d in the P&L A/ C. for _ the"'sti'oseVq--.ue1*1tVyelar ended 31.3.93 are to . iv be a1loWed__a_$_eXpe11ses for the year ended I also pointed out to the said fact of inclusion of income of Rg3--';iii'11.';163.86o/-- and expenciiture of l.e_':Rd5'.v3'V,19.o98/~ pertaining to A.Y. 1992493 it 'has been reported at Para.No.9{b] of Form 3CD dated 27.10.93 filed along with IKE'. Return for the A.Y. 1993-94.