Sh. Harjinder Singh Raina, Jammu vs The Income Tax Officer,, Jammu on 31 December, 2018
3. I have heard the parties, and perused the material on record.
3.1 Indubitably, the assessee did not furnish any explanation of substance in the
penalty proceedings which, as rightly argued by Sh. Bansal, are separate and
distinct from the assessment proceedings, so that the same by itself cannot be
conclusive of the penalty. But, then, it is only the assessee who has to therefore
make out of a case in the penalty proceedings, i.e., as to why, despite substantive
findings of fact against him (his case) arrived at in the assessment proceedings,
which stand firmed up and, rather, have attained finality, ought to be discarded or
modified, and penalty not levied, furnishing an explanation. Rather, on the
contrary, these findings, based as they are on cogent basis and, further, by a
competent authority, can surely be relied upon in the penalty proceedings,
particularly where the assessee furnishes no substantive explanation in the penalty
6 ITA No. 73/Asr/2016 (AY 1992-93)
Harjinder Singh Raina v. ITO
proceedings (Bharat Rice Mills v. CIT [2005] 278 ITR 599 (All); CIT v. Somnath
Oil Mills [1995] 214 ITR 32 (Guj); S.S. Ratanchand Bholanath v. CIT [1994] 210
ITR 682 (MP); CIT v. Ram Niwas Agarwal [1980] 125 ITR 432 (All)). Absence of
such an explanation is a sure recipe for levy of penalty; it being the sub-stratum or
the edifice on which the assessee's case in penalty proceedings rests. This
represents trite law, often expressed by stating of a plausible explanation saving
penalty, and for which reference be made to a host of case law by the Apex Court
settling the same (viz. Mak Data (P.)