Late Sri. C.M. Bopaiah, Bangalore v. ACIT, Bangalore

ITA 887/BANG/2009 | 2005-2006
Pronouncement Date: 21-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 88721114 RSA 2009
Bench Bangalore
Appeal Number ITA 887/BANG/2009
Duration Of Justice 8 month(s) 21 day(s)
Appellant Late Sri. C.M. Bopaiah, Bangalore
Respondent ACIT, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 21-05-2010
Date Of Final Hearing 29-04-2010
Next Hearing Date 29-04-2010
Assessment Year 2005-2006
Appeal Filed On 31-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO. 887/BANG/2009 ASSESSMENT YEAR : 2005-06 LATE SRI C.M. BOPAIAH REPRESENTED BY L/R MS. KUNTHI NO.51 208 SFS YELHANKA NEW TOWN OPP. MOTHER DIARY BANGALORE - 560 064. : APPELLANT VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 1(2) BANGALORE. : RESPONDENT APPELLANT BY : SHRI C. RAMESH C.A. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI ADDL. C IT(DR) O R D E R PER A. MOHAN ALANKAMONY ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-VI BANGALORE IN ITA NO: 145 TO 150 /ACIT/CC 1(2)/BLORE/CIT(A)/2008-09 DATED: 1/7/2009 FOR THE ASSESSMENT YEAR 2005- 06 [U/S 271(1)(C) OF THE ACT]. ITA NO.887/BANG/ 09 PAGE 2 OF 13 2. THE DECEASED ASSESSEE AN INDIVIDUAL WAS IN TH E BUSINESS OF REAL ESTATE COMMISSION AGENT BESIDES IN RECEIPT OF INCOME FROM SALARY OTHER SOURCES HOUSE PROPERTY ETC. 3. THE LEGAL HEIR OF THE ASSESSEE HAS RAISED TEN G ROUNDS IN AN EXHAUSTIVE AND ILLUSTRATIVE MANNER. HOWEVER THE C RUX OF THE ISSUE IS CONFINED TO THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY U/S 271(1)(C) OF THE ACT WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCE S OF THE ISSUE. 4. THE BACK-GROUND OF THE ISSUE IN BRIEF IS THAT THERE WAS AN ACTION U/S 132 OF THE ACT IN THE PREMISES OF THE AS SESSEE WHO WAS ONE OF THE ASSOCIATES OF DASHARATHRAMI REDDY WHO WAS DEALI NG IN PURCHASE AND SALE OF LANDS IN SOUTH INDIA AND DURING THE SEARCH CERTAIN INCRIMINATE DOCUMENTS ALLEGED TO HAVE BEEN UNEARTHED. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AF TER ANALYZING THE VARIOUS SEIZED DOCUMENTS AS WELL AS TAKING INTO ACCOUNT THE CONTENTIONS OF THE ASSESSEE AND FOR THE DETAILED RE ASONS SET-OUT IN THE IMPUGNED ASSESSMENT ORDER THE AO HAD CONCLUDED THE ASSESSMENT BY MAKING THE FOLLOWING ADDITIONS: DISALLOWANCE OF SUB-AGENT COMMISSION RS. 19 180 DISALLOWANCE OF SALARY 4 26 600 UN-EXPLAINED EXPENSES U/S 69C 2 00 000 UN-EXPLAINED CREDIT U/S 68 1 00 000 ADDITION TO STCG 13 08 830 40 83 319 ITA NO.887/BANG/ 09 PAGE 3 OF 13 6. ACCORDING TO THE PENALTY ORDER U/S 271(1)(C) O F THE ACT DATED: 30.9.2008 THAT CONSEQUENT ON THE ASSESSEES QUANTUM APPEAL BEFORE THE CIT(A) THE ASSESSEES INCOME WAS RECOMPUTED AT RS. 35 51 070/- AS AGAINST THE ORIGINAL COMPUTATION OF THE ASSESSEES INCOME DETERMINED AT RS.40 83 320/- AND THUS THE ASSESSEE GOT A RELIEF OF RS.5 32 250/- (HOWEVER THE AO ON PAGE 6 VIDE PARA 8(D) OF THE P ENALTY ORDER HAD MENTIONED THE CIT(A) HAD DELETED THE ADDITIONS OF RS.6 86 190 AND THUS THERE WAS A DIFFERENCE BEING RS.1 53 940: RS.68619 0 532250). 7. AGAINST THE ORDER OF THE CIT(A)S ON QUANTUM AP PEAL THE ASSESSEE HAD FURTHER PURSUED THE MATTER WITH THE TRIBUNAL. THE TRIBUNAL HAD VIDE ITS FINDING IN ITA NOS:1278 TO 1283(B)/08 DATED: 29.5.2009 FOR THE AYS 99-00 TO 05-06 FOR THE WELL FOUND REASONS SET- OUT THEREIN MADE CERTAIN DELETION AND CONFIRMATION AND THE DETAILS O F WHICH ARE AS UNDER: NAME OF THE HEADS DELETION CONFIRMATION SUB-AGENT COMMISSION RS. 9 590 - UNEXPLAINED EXPENSES U/S 69C 50 000 - STCG - RS.13 08 8 30 7.1. WHILE CONFIRMING THE STCG THE HONBLE TRIBUN ALS REASONING WAS THAT 6..SUCH UNSUBSTANTIATED ON MONEY STORY CANNOT B E ENCOURAGED BY ACCEPTING SUCH VERSIONS ACCORDINGLY THE ORDER OF THE CIT(A) WITH REGARDS TO ADDITION OF RS.13 08 890/- NEEDS TO NO INTERFERENCE FROM OUR SIDE. SAME IS CONFIRMED. 8. REVERTING BACK TO THE ISSUE ON HAND THE AO IN HIS PENAL PROCEEDINGS HAD LEVIED A PENALTY CONSIDERING ONLY THE EXTENT OF ADDITIONS ITA NO.887/BANG/ 09 PAGE 4 OF 13 SUSTAINED IN QUANTUM APPEAL BY THE CIT (A). WHILE TAKING INTO COGNIZANCE OF THE DELETIONS MADE BY THE CIT (A) THE AO MADE A FAUX PAS IN TAKING THE FIGURE OF RS.686190/- AS AGAINST RS.532250/- (AS PE R HIS OWN ADMISSION ON PAGE 2 AT PARA 5 OF HIS PENALTY ORDER). 8.1. IN THE PENALTY ORDER THE AO BRUSHING ASIDE THE ASSESSEES CONTENTIONS WENT AHEAD WITH THE LEVY OF PENALTY ON THE BASIS OF THE EXTENT OF ADDITION SUSTAINED IN QUANTUM APPEAL BY THE CIT (A). 9. AGGRIEVED THE ASSESSEE TOOK UP THE ISSUE WITH THE CIT (A) FOR REMEDY. THE LD. CIT (A) HAS AFTER WEIGHING TH E FORCEFUL CONTENTION OF THE ASSESSEE OBSERVED THUS - 8. SO FAR AS AY 2005-06 IS CONCERNED THE HONBLE TRIBUNAL HAS CONFIRMED THE ACTION OF THE COMMISSIONER OF INCOME- TAX (A) OF ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAINS. T HE ORDER OF ITAT IS MADE PART OF THIS ORDER AS ANNEXURE-I. IT IS AL SO REMARKED THAT THE APPELLANT HAS NOT COME FOR JUSTICE WITH CLEAN H ANDS. A PRINCIPLE OF EQUITY IS THAT ONE WHO COMES WITH CLEAN HANDS MU ST NOT BE PENALIZED. FOLLOWING THE PRINCIPLES OF EQUITY I UP HELD THE PENALTY. 10. DISILLUSIONED WITH THE FINDING OF THE CIT(A) THE ASSESSEE HAS COME UP WITH THE PRESENT APPEAL . 10.1. THE FORCEFUL CONTENTIONS OF THE LD. A R ARE SUMMARIZED AS UNDER: (I) THE CIT (A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAD FURNISHED ALL THE DETAILS TO THE AO AND THAT THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS WARRANTING LEVY OF PENALTY; (II) THE CIT(A) SHOULD HAVE APPRECIATED THE FACT THAT TH E COMPUTATION OF LTCG MADE BY THE ASSESSEE THOUGH WAS DISTURBED B Y THE AO WARRANTING INITIATION AND LEVY OF PENALTY WAS SUPPO RTED BY ITA NO.887/BANG/ 09 PAGE 5 OF 13 EVIDENCES AND THEREFORE THERE WAS NEITHER CONCEAL MENT NOR FURNISHING INACCURATE PARTICULARS OF INCOME; - HE HAS FAILED TO APPRECIATE THE FACT THAT AS ON THE DATE OF LEVY OF PENALTY THE ASSESSEE WHO HAD FILED THE RETURN H AD EXPIRED AND THE PENALTY WAS LEVIED ON THE LEGAL REPRESENTAT IVE OF THE ASSESSEE; - HE HAS FAILED TO APPRECIATE THE FACT THAT THE PERSO N WHO HAD FILED THE RETURN EXPIRED AND FOR THE ALLEGED CONCEA LMENT IN THE SAID RETURN THE LEGAL REPRESENTATIVE COULD NOT HAV E BEEN PENALIZED; - HE HAS ERRED IN PARTLY CONFIRMING THE PENALTY WITHO UT GIVING A FINDING ON THE SUBMISSIONS MADE THE L.R OF THE ASS ESSEE THAT FOR THE ALLEGED DEFAULT OF A DEAD PERSON HIS L R C ANNOT BE PENALIZED; FAILED TO APPRECIATE THE POSITION OF LAW ; (III) THE HONBLE TRIBUNAL HAD UNFORTUNATELY NOT APPRECIA TED THE FACTS OF THE ASSESSEE WHICH WERE SUPPORTED BY VARIOUS EVI DENCES. THE CLAIM OF COST OF PURCHASE WAS NOT ON AN ESTIMATE BU T ON PAYMENTS MADE THROUGH BANK ACCOUNTS WHICH WERE VERIFIABLE. THE VENDORS TO WHOM THE PAYMENTS WERE MADE WERE IN EXISTENCE AN D IT WAS OPEN FOR THE AO AND ALSO TO THE APPELLATE AUTHORITI ES TO ENQUIRE AND CONFIRM THE FACTS. ON THIS ISSUE THE CASE WAS NOT TAKEN UP BEFORE THE HONBLE HIGH COURT FOR THE REASON THAT D URING THE APPELLATE PROCEEDINGS THE ASSESSEE EXPIRED AND THE LEGAL HEIR DOESNT HAVE THE FINANCIAL RESOURCES FOR FURTHER LI TIGATION; - THE CLAIM OF PAYMENT OF ON MONEY FOR PURCHASES OF T HE PROPERTIES WAS NOT AN UNSUBSTANTIATED STORY BUT CAN BE SUBSTANTIATED ON THE BASIS OF EVIDENCES IN THE FORM OF ENTRIES IN THE BANK ACCOUNTS OF THE ASSESSEE; - THE BASIC PURPOSE OF REITERATING THE FACTS AND EVID ENCES IN REGARD TO THE ACTUAL PURCHASE CONSIDERATION WAS ONL Y WITH A VIEW TO BRING ON RECORD THE FACT THAT THE CLAIM OF ACTUAL PURCHASE CONSIDERATION WAS MADE ON A BASIS WHICH CA N BE PROVED AND THEREFORE THERE WAS NO CASE FOR CONFIR MING THE ADDITION ATTRIBUTING CONCEALMENT AND CONSEQUENTIAL LEVY OF PENALTY; (IV) IT IS A DECIDED POSITION OF LAW THAT MERE ADDITION TO THE INCOME DECLARED AND ACCEPTED BY THE ASSESSEE WAS NOT SUFFI CIENT TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT; - THE FINDINGS OF THE HONBLE TRIBUNAL THAT THE CLAIM OF THE ASSESSEE WAS A RESULT OF UNSUBSTANTIATED ON MONEY S TORY WAS NOT CORRECT; AND THAT THE ASSESSEE HAD NOT COME FOR JUSTICE WITH CLEAN HANDS WAS ALSO NOT CORRECT; ITA NO.887/BANG/ 09 PAGE 6 OF 13 - THAT THE CLAIM OF THE ASSESSEE WAS SUBSTANTIATED AN D ON SEARCH WHILE FILING THE RETURNS OF INCOME THE ASSESSEE HA D PREPARED STATEMENT OF AFFAIRS INCORPORATING ALL TRANSACTIONS AND INVESTMENTS; THAT NO ADDITIONS MADE TO THE INCOME D ECLARED HAVE BEEN CONFIRMED EXCEPT STCG WHICH WAS A SUBJECT MATTER OF THIS APPEAL ALSO PROVES THE FACT THAT THE ASSESS EE HAD IN FACT COME WITH CLEAN HANDS; (V) THE ASSESSEE WAS ALIVE WHEN THE ASSESSMENT WAS CONC LUDED BUT WAS NO MORE WHEN THE APPELLATE PROCEEDINGS WERE ON. EVEN THOUGH OPPORTUNITIES WERE PROVIDED TO THE LEGAL HEI R OF THE ASSESSEE WHILE DISPOSING OF THE PENAL PROCEEDINGS THE LEGAL HEIR WAS UNAWARE OF THE CIRCUMSTANCES LEADING TO THE CLA IMS WERE MADE BY THE ASSESSEE; - THAT THE ABOVE FACTS WERE PLACED BEFORE THE CIT(A) DURING THE COURSE OF APPELLATE (PENALTY) PROCEEDINGS WHICH HA VE NOT BEEN DULY CONSIDERED BY THE CIT(A) WHILE PASSING TH E IMPUGNED ORDER UNDER DISPUTE; - RELIES ON THE CASE LAWS: (A) HINDUSTAN STEEL LTD. V. STATE OF ORISSA (1972) 83 ITR 26 (SC) (B) T.ASHOK PAI V. CIT (2007) 292 ITR 11 (SC) (C) D.M.MANASVI V. CIT (1972) 86 ITR 557 (SC) (D) ANANTHARAM VEERASINGHAIAH & CO. V. CIT (1980) 123 ITR 457 (SC) (E) ITAT PUNE IN THE CASE OF KANBAY SOFTWARE INDIA (P) LTD DCIT (2009-TIOL 278) (F) UNION OF INDIA V. RAJASTHAN SPINNING & WEAVING MILLS 224 CTR 11 (SC) 10.2. DURING THE COURSE OF HEARING THE LD. A R HA D FURNISHED A PAPER BOOK CONTAINING 1 63 PAGES WHICH CONSISTS O F INTER ALIA COPIES (I) WRITTEN SUBMISSIONS; (II) STATEMENT OF AFFAIRS AND COMPUTATION OF INCOME FOR THE AY 2004-05 ETC. 10.3. ON THE OTHER HAND THE LD. D R WAS VERY EMPH ATIC IN HER URGE THAT THE AUTHORITIES BELOW HAVE AFTER DULY CONSIDE RING THE FACTS AND CIRCUMSTANCES OF THE ISSUE ARRIVED AT A CONCLUSION IN A JUDICIOUS MANNER ITA NO.887/BANG/ 09 PAGE 7 OF 13 WHICH REQUIRES NO INTERFERENCE AT THIS STAGE. IT W AS THEREFORE PLEADED THAT THE IMPUGNED ORDER OF THE LD. CIT(A) REQUIRES TO BE SUSTAINED. BEFORE DEPARTING THE LD. D R HAD PLACED A STRONG RELIANCE ON THE FINDING OF THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF SMT. TAPATIPAL V. CIT REPORTED IN 241 ITR 468 TO OUTWIT THE LD. A.RS PLEA THAT N O PENALTY COULD BE LEVIED ON THE LEGAL HEIR OF DECEASED ASSESSEE. 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS DILIGENTLY PERUSED THE RELEVANT RECORDS AND ALSO THE CASE LAWS ON WHICH THE EITHER PARTY HAD PLACED STRONG RELIANCE TO DRIVE HOME THEI R RESPECTIVE POINTS. 11.1. DUE TO COMPLEXITY OF THE ISSUE IT IS BEING DEALT WITH IN A CHRONOLOGICAL ORDER AS UNDER: (1) THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS MADE CERTAIN ADDITIONS FOR THE REASONS SET OUT IN HIS IMPUGNED ORDER AND HAVING SATISFIED THAT THE ASSESSEE CONCEA LED THE PARTICULARS OF HIS INCOME AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND ON THE BASIS OF WHICH HE HAD INITIATED PENALTY PROCEEDING S U/S 271(1)(C) OF THE ACT. SINCE THE PENAL PROCEEDINGS HAVE BEEN INITIATED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT WE FIND NO INFIRMITY ON THE ACTION OF THE AO IN THE MATTER AND UPHOLD THE SAME. (2) DURING THE COURSE PENALTY PROCEEDI NGS THE AO AFTER DULY CONSIDERING THE CONTENTIONS OF THE ASSESSEE AND ALS O TAKING INTO ACCOUNT THE FINDING OF THE LD. CIT(A) ON QUANTUM APPEAL AND WENT AHEAD WITH ITA NO.887/BANG/ 09 PAGE 8 OF 13 LEVYING OF PENALTY ON THE BASIS OF THE EXTENT THE A DDITIONS SUSTAINED ON QUANTUM APPEAL BY THE CIT(A). (3) HOWEVER AS POINTED OUT IN THE FO RE-GOING PARAGRAPH CONSEQUENT ON THE ASSESSEES QUANTUM APPEAL BEFORE THE CIT(A) THE ASSESSEES INCOME WAS RECOMPUTED AT RS.35 51 070/- AS AGAINST THE ORIGINAL COMPUTATION OF THE ASSESSEES INCOME DETE RMINED AT RS.40 83 320/- AND THUS THE ASSESSEE GOT A RELIEF OF RS.5 32 250/- AS PER PARA 5 OF THE PENALTY ORDER OF THE AO (HOWEVER THE AO ON PAGE 6 VIDE PARA 8(D) OF THE PENALTY ORDER HAD MENTIONED THAT THE CIT(A) HAD DELETED THE ADDITIONS OF RS.6 86 190 AND THUS THE DIFFERE NCE BEING RS.1 53 940= RS.686190 532250). IT IS PERTINENT TO MENTION HERE THAT THIS BENCH HAS BEEN DEPRIVED OF PLACING A COPY OF THE ORDER OF THE CIT(A) ON QUANTUM APPEAL ON ITS RECORD TO ASCERTAIN THE AUTHENTICITY OF THE AO TO ARRIVE AT T HE ADDITION SUSTAINED BY THE CIT(A) AS THERE WAS A DIFFERENCE BETWEEN THE A DDITIONS PURPORTED TO HAVE BEEN DELETED BY THE CIT(A) AND THE FIGURES CUL LED OUT BY THE AO; (4) SUBSEQUENTLY THE HONBLE TRIBUNAL IN ITS FINDING CITED SUPRA IN THE QUANTUM APPEAL HAD GIVEN ITS RULING ON THE FOLLOWIN G ISSUES: RELIEF : (I) SUB-COMMISSION EXPENDITURE RS. 9 590 (II) UNEXPLAINED EXPENDITURE U/S 69 OF THE ACT RS. 50 000 CONFIRMED : SHORT TERM CAPITAL GAINS RS.13 08 830 ITA NO.887/BANG/ 09 PAGE 9 OF 13 (5) DURING THE COURSE OF PENALTY PROCEEDINGS THE LD. CIT(A) HAD TAKEN INTO ACCOUNT THE FINDING OF THE HONBLE TRIBUNAL ON QUAN TUM APPEAL IN SO FAR AS THE CONFIRMATION OF THE STCG CONCERNED AND ACCOR DINGLY UPHELD THE PENALTY ORDER IN TOTO. WHILE DOING SO THE LD. CI T(A) HAD PERHAPS OVERLOOKED THE RELIEF TO THE EXTENT OF RS.59 590/- GIVEN BY THE HONBLE TRIBUNAL TO THE ASSESSEE ON TWO COUNTS AS MENTIONED SUPRA. (6) LET US NOW TURN TO THE LEGAL POSITION ON THE ISSUE: RELIANCE BY THE ASSESSEE : (I) HINDUSTAN STEEL LTD. V. STATE OF ORISSA 83 ITR 26 (SC) THE ISSUE BEFORE THE HIGHEST JUDICIARY OF THE LAND WAS WHETHER PENALTY CAN BE LEVIED FOR FAILURE TO REGISTER AS A DEALER UNDER SATES TAX ACT; IF THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT IT WAS NOT A DEALER? SINCE THE ASSESSEE ACTED IN THE HONEST AND GENUINE BELIEF THA T IT WAS NOT A DEALER LEVY OF PENALTY CANNOT BE JUSTIFIED. WITH HIGHEST REGARDS WE WOULD LIKE TO POINT OUT TH AT THE ASSESSEE CANNOT TAKE SANCTUARY IN THE RULING OF THE HONBLE COURT A S ISSUE ON HAND IS ON A DIFFERENT FOOTING AND THUS DISTINGUISHABLE. (II) D.M.MANASVI V. CIT GUJARAT II REPORTED IN 86 ITR 557 (SC) : THE ISSUE BEFORE THE HONBLE COURT WAS WHETHER IT IS NECESSARY TO GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE I SSUE OF PENALTY NOTICE AND WHETHER THE NOTICE SHOULD BE ISSUED IN THE COURSE O F THE ASSESSMENT PROCEEDINGS? ALSO WHETHER THE FINDING THAT THE BUSI NESS OF THE FIRM BELONGED TO THE ASSESSEE AND THE SCHEME WAS TO DISGUISE PROF ITS AMOUNTS TO CONCEALMENT? THE ASSESSEE NEED NOT BE GIVEN AN OPPO RTUNITY OF BEING HEARD BEFORE THE INCOME-TAX OFFICER FEELS SATISFIED ABOUT THE NECESSITY OF INITIATING PENAL PROCEEDINGS. ALSO IT IS NOT NECESSARY THAT TH E NOTICE SHOULD BE ISSUED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. WH AT IS ACTUALLY REQUIRED UNDER S. 271(1) IS THAT THE INCOME-TAX OFFICER SHOU LD HAVE BEEN SATISFIED IN ITA NO.887/BANG/ 09 PAGE 10 OF 13 THE COURSE OF ASSESSMENT PROCEEDINGS REGARDING THE APPLICABILITY OF THE SECTION. FURTHER IN THIS CASE THE TRIBUNAL HAD ENOU GH MATERIAL TO HOLD THAT THE ASSESSEE HAD DELIBERATELY CONCEALED THE PARTICU LARS OF HIS INCOME. THERE WAS A DEFINITE FINDING THAT A DEVICE HAD BEEN DELIB ERATELY CREATED BY THE ASSESSEE FOR CONCEALING HIS INCOME. IN FACT THE ABOVE RULING OF THE HONBLE APEX COURT IS FAVOURABLE TO THE REVENUE RATHER THAN TO COME TO THE RESCUE OF THE AS SESSEE. SINCE THE ASSESSING OFFICER HAVING SATISFIED DURING THE COURS E/CONCLUSION OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAD IN FA CT CONCEALED HIS PARTICULARS OF INCOME AND FURNISHED INACCURATE PART ICULARS OF SUCH INCOME AND THUS HE WAS IN HIS REALM TO INITIATE PENAL PROCEEDINGS. HIS ACTION WAS REINFORCED BY THE RULING OF THE HONBLE TRIBUNA L REFERRED SUPRA. (III) ANANTHARAM VEERASINGAIAH AND CO. V. CIT A. 23 ITR 457 (SC ): THE ISSUE BEFORE THE HONBLE SUPREME COURT WAS ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE AND PENALTY UND ER S. 271(1)(C) WAS INITIATED. WHETHER PENALTY UNDER S. 271(1)(C) IS LE VIABLE? IN ORDER TO LEVY PENALTY THE REVENUE HAS TO PROVE THAT THE SOURCE OF UNEXPLAINED EXPENDITURE DID NOT ARISE FROM INTANGIBLE ADDITIONS TO BOOK PRO FITS IN THE EARLIER ASSESSMENT YEARS. INTANGIBLE INCOME ' IS MADE A PA RT OF THE REAL INCOME OF THE ASSESSEE AND HAS CONCRETE EXISTENCE. MATTER REM ANDED TO TRIBUNAL FOR FRESH DETERMINATION ON THESE GROUNDS. THE HONBLE COURT HAD NOT REGISTERED ITS RULING ON THE ISSUE. IN STEAD THE ISSUE WAS SENT BACK TO THE TRIBUNAL TO LOOK INTO IT AFRESH. THUS IN OUR CONSIDERED VIEW THIS FINDING OF THE HONBLE COURT HAS NO RELEVANCE TO THE ISSUE ON HAND SINCE THE HONBLE TRIBUNAL HAS SEALE D THE ISSUE IN FAVOUR OF THE REVENUE THUS 6. WE FIND THAT WHAT WAS SEIZED DURING THE SEARCH REVEALS LESS AMOUNT OF PURCHASE OF COST OF ACQUISIT ION. THE AMOUNT OF THE SAID SALE DEED WITH REGARDS TO PAYMENT IN QUESTION CANNOT BE NEGATED BY THE STORY OF ON MONEY CLAIMED TO BE USED FOR SO CALLED REAL AMOUNT OF ITA NO.887/BANG/ 09 PAGE 11 OF 13 ACQUISITION AS PER SALE AGREEMENT. IN FACT THE A SSESSEE HAS NOT COME FOR THE JUSTICE WITH CLEAN HANDS SUCH UNSUBSTANTIATE D ON MONEY STORY CANNOT BE ENCOURAGED BY ACCEPTING SUCH VERSIONS ACCORDINGL Y THE ORDER OF THE CIT(A) WITH REGARDS TO ADDITION OF RS.13 08 830/- N EEDS NO INTERFERENCE FROM OUT SIDE.. RELIANCE BY THE REVENUE : (I) THE HIGH COURT OF CALCUTTA IN THE CASE OF SMT.T APATIPAL V. CIT REPORTED IN (2000) 241 ITR 468 HAS RULED THAT PENALTY UNDER S.271(1)() OF THE ACT CAN BE VALIDLY LEVIED ON LEGAL REPRESENTATI VE OF DECEASED ASSESSEE . 12. IN AN OVERALL CONSIDERATION OF THE FACTS AND C IRCUMSTANCES OF THE ISSUE AND ALSO LEGAL PRONOUNCEMENTS AS DELIBERA TED UPON IN THE FORE- GOING PARAGRAPHS WE ARE OF THE UNANIMOUS VIEW THAT THE ASSESSING OFFICER WAS WITHIN HIS REALM TO INITIATE PENAL PROCEEDINGS AND LEVY OF PENALTY ON THE LEGAL HEIR OF THE DECEASED ASSESSEE UNDER SECTI ON 271(1)(C) OF THE ACT. 12.1. HOWEVER THE IMPUGNED PENALTY ORDER SUFFERS FROM ARITHMETIC FLAW AND ALSO THE RELIEF/CONFIRMATION HANDED OUT BY THE HONBLE TRIBUNAL IN THE QUANTUM APPEAL WHICH HAD NOT BEEN TAKEN INTO AC COUNT WHILE IMPOSING THE PENALTY. IN THE INTEREST OF EQUITY AND FAIRNESS WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE SHOULD BE REMITTED BACK ON THE FILE OF THE AO TO CARRY OUT THE DIRECTIONS OF THIS BENCH AS MENTIONED SUPRA . WHILE DOING SO THE AO SHALL KEEP IN VIEW ITA NO.887/BANG/ 09 PAGE 12 OF 13 (I) TO WORK OUT THE AMOUNTS I DELETED BY THE CIT(A) IN QUANTUM APPEAL IMPECCABLY; (II) THE RELIEF GIVEN BY THE HONBLE TRIBUNAL TO BE GIVE N EFFECT TO; AND ALSO THE AMOUNT OF RS.13 08 830/- CONFIRMED UNDER T HE HEAD STCG TO BE KEPT IN VIEW; & (III) BEFORE CARRYING OUT THE ABOVE EXERCISE AFFORD A RE ASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 12.2. BEFORE PART WITH THE ISSUE THIS BENCH IS IN CLINED TO MAKE ITS POSITION CLEAR THAT IT CAN NEITHER COMMENT NOR REVI EW THE FINDINGS OF THE HONBLE TRIBUNAL TO AN ISSUE WHICH HAS BEEN DELIBER ATED UPON AND ARRIVED AT A CONCLUSION BY IT. FURTHERMORE THE ISSUE BEFO RE THIS BENCH IS WHETHER THE AUTHORITIES BELOW WAS JUSTIFIED AND WITHIN THE DOMAIN OF THE RELEVANT PROVISIONS OF THE ACT TO INITIATE PENAL PROCEEDINGS AND SUBSEQUENT LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AND NOTHING ELSE. WE ARE THEREFORE DECLINED TO CONCEDE TO THE ASSESSEES REQUEST ON TH IS COUNT. 13. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF MAY 2010. SD/- SD/- ( SMT. P. MADHAVI DEVI ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 21 ST MAY 2010. DS/- ITA NO.887/BANG/ 09 PAGE 13 OF 13 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE.