Madras High Court
Commissioner Of Income Tax vs Shri E.V.Balashanmugham on 14 December, 2005
Bench: K.Raviraja Pandian, P.P.S.Janarthana Raja
In the High Court of Judicature at Madras
Dated: 14/12/2005
Coram
The Hon'ble Mr.Justice K.RAVIRAJA PANDIAN
and
The Hon'ble Mr.Justice P.P.S.JANARTHANA RAJA
Tax Case (Appeal) No.1291 of 2005
Commissioner of Income Tax
-II, Coimbatore. ..Appellant
-Vs-
Shri E.V.Balashanmugham ..Respondent
'
PETITION under Section 260A of the Income Tax Act against the order
dated 15.9.2004 made in ITA.No.712/Mds/97 on the file of the Income
Tax Appellate Tribunal Madras 'B' Bench for the assessment year 1992-93.
!For Appellant : Mr.J.Naresh Kumar, SCGSC
^For Respondent : ---
:JUDGMENT
JUDGMENT WAS DELIVERED BY K.RAVIRAJA PANDIAN,J The Revenue has preferred this appeal against the order of the Income Tax Appellate Tribunal by formulating the following question of law :
"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the Commissioner of Income Tax (Appeals) was justified in cancelling the penalty under Section 271(1)(c) even though the assessee was not entitled to the immunity provided under Section 132(4) read with Explanation (5) to Section 271(1)(c), since the disclosure made was not full and true ?"
2. The relevant assessment year is 1992-93. The assessee filed his return of income for the assessment year 1992-93 on 28.6.1993 admitting an income of Rs.7,61,540/-. A search was conducted under Section 13 2 of the Income Tax Act on 20.2.1992 and in that, the assessee declared the additional income purported to be under Section 132(4) of the said Act, which was included in the income returned. The assessment was finalised by the Assessing Officer accepting the additional income offered. However, he made a further addition of Rs.1,08,000/- towards difference in value of gold purchases stated to have been not admitted in the disclosure under Section 132(4) of the said Act in addition to initiating the penalty proceedings under Section 271(1)(c) of the said Act and levied a minimum penalty with reference to such an alleged concealed income.
3. On appeal at the instance of the assessee, the Commissioner of Income Tax (Appeals) cancelled the entire penalty levied and allowed the appeal. Against the order of the Commissioner of Income Tax ( Appeals), an appeal was filed by the Revenue before the Income Tax Appellate Tribunal to have the order of the Commissioner of Income Tax ( Appeals) set aside. However, the Income Tax Appellate Tribunal confirmed the order of the Commissioner of Income Tax (Appeals) and dismissed the appeal filed by the Revenue. Not satisfied with that, the present appeal has been filed by the Revenue formulating the above question of law.
4. It is contended by the learned counsel for the Revenue that under Section 271(1)(c) of the said Act, if the Assessing Officer is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, the Assessing Officer may direct such person to pay by way of penalty. He further referred to Explanation (5) of the above said provision, which provides that where in the course of a search under Section 132, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purpose of imposition of a penalty under Clause (c) of Sub.section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particular of such income. Hence, the deletion of the penalty by the Commissioner of Income Tax (Appeals) as confirmed by the Income Tax Appellate Tribunal is against the statutory provision.
5. We have heard the learned counsel and perused the materials on record.
6. It is true that Explanation (5) to Section 271(1)(c) of the said Act provides as stated above and contended by the learned counsel. But, it does not stop with that. It proceeds further and says that the penalty is leviable under Section 271(1)(c) of the said Act on concealment of particulars of income or furnishing inaccurate particulars of such income, unless he, in the course of search, makes a statement under Sub.Section (4) of Section 132 of the said Act that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in Sub.Section (1) of Section 139 and also specifies in the statement the manner in which such income has been derived and pays the tax together with interest, if any, in respect of such income.
7. The Commissioner of Income Tax (Appeals) accepted the reasoning given by the assessee and had come to the conclusion, after considering the reply filed during the course of penalty proceedings as well as the statements of Shri.Vairavelu, Proprietor, Anitha Jewellery, the assessee and his wife Smt.B.Krishnaveni, that the explanation offered by them would come within the purview of Explanation (5) to Section 271(1)(c) of the said Act on the premise that the disclosure is true and correct and the immunity provided under Explanation (5) to Section 271(1)(c) of the said Act is available to the assessee.
8. In respect of the sum of Rs.1,08,000/-, the Tribunal was satisfied that the statement of Shri.Vairavelu, Jeweller, which is spontaneous and not fabricated one and thereby accepted the explanation offered by the assessee in respect of the investment in the jewellery. The Tribunal also gave a factual finding that out of 50 sovereigns, 12 sovereigns were old, which were given to the assessee 10 months prior to the marriage of his daughter performed on 11.12.1991 i.e. in February 1991. The amount offered in a sum of Rs.1,08,000/- has also been accepted as only for purchase of peace by the assessee and to avoid litigation.
9. The opinion so formed definitely comes within the purview of the said provision. Clause (2) of Explanation (5) to Section 271(1)(c) of the said Act categorically states that the statements made during the course of search by the assessee can be taken note of and by such a statement, the explanation offered by the assessee, in the opinion of the officer, is acceptable and there is no question of imposition of penalty. That is precisely the ground taken by the Commissioner of Income Tax (Appeals) to allow the appeal as confirmed by the Tribunal. We are of the view that the above view requires no re-appreciation and are of the further view that in this appeal, though the question of law has been formulated as if it arises for consideration, in view of the categorical statutory provision, we find that there is no question of law, much less, substantial question of law in this appeal, which requires reconsideration.
10. Accordingly, the tax case (appeal) is dismissed.
Index :Yes Internet : Yes To
1.The Assistant Registrar, Income-tax Appellate Tribunal, III Floor, Rajaji Bhavan, Besant Nagar, Madras 90 (with records five copies).
2.The Secretary, Central Board of Revenue, New Delhi (3 copies).
3.The Commissioner of Income Tax (Appeals), Coimbatore.
4.The Commissioner of Income Tax, Coimbatore.
RS