Case Law Details
CASE LAWS DETAILS
DECIDED BY: ITAT, DELHI BENCH `F’: NEW DELHI,
IN THE CASE OF: Prithvi Pal Bindra Vs ACIT, Appeal No: ITA No. 4477 & 4478/Del/2009, DECIDED ON: February 5 2010
RELEVANT PARAGRAPH
14. We have carefully considered the rival submissions in the light of the material placed before us. The reply of the assessee in response to show cause notice against levy of concealment penalty have already been reproduced in para 5 of this order. The relevant portion of statutory provisions regulating levy of concealment penalty are reproduced below for the sake of convenience: –
“271(1) If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person –
(a)……… ….
(b)……… ……… ……
(c) has concealed the particulars of his income or furnished inaccurate particulars of such income, or
……………………………………………………….
………………………………………………………..
Explanation 1 – Where in respect of any facts material to the computation of the total income of any person under this Act, –
(A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or
(B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him,
then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed.”
15. Explanation 1 to Section 271(1)(c) describes that where in respect of any facts material to the computation of total income of any person under Income-tax Act, the assessee fails to offer an explanation or offers an explanation which is found by the AO to be false or such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income were disclosed by him, in that circumstances the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of Section 271(1) be deemed to represent the income in respect of which particulars have been concealed.
16. Viewing the above provision in the light of the facts of the present case, it is observed that it is a case where the assessee has offered an explanation which he is not able to substantiate and he also fails to prove that explanation furnished by him is bona fide and all facts relating to the same and material to the computation of his total income were disclosed.
17. In this appeal, it is the case of the assessee that due to non-availability of legible copy of seized documents, the assessee could not disclose the relevant interest income in the return filed in response to Section 153A. Such an explanation of the assessee is not substantiated as it could not be shown by the assessee that relevant copy of the instrument, according to which the interest has accrued to the assessee, was in any way illegible. Moreover, the disclosure of interest income did not depend upon the legible or illegible copy of the seized document. Prior to the date of search in earlier years the assessee has been disclosing such interest income. As discussed in the above part of this order, in the copies of return filed in regular course with respect to assessment year 1998-99 and 1999-2000 such accrued interest was disclosed by the assessee. Normally a person while preparing the return will look into the return filed for earlier years. Therefore, the disclosure of relevant interest income was not dependent upon the copies of seized documents. It has not been brought on record that what is the position with respect to regular returns filed in respect of assessment years under consideration. However, it is clear that in the returns of income filed for the assessment years under consideration in response to notice u/s 153A, such income has not been disclosed and the reason for such nondisclosure is stated to be non-availability of copy of legible seized documents. Therefore, the explanation filed by the assessee neither could be substantiated nor could be shown to be bona fide. (When interest income itself is not disclosed, there is no question of holding that all the facts relating to the interest income and material to the computation of income was disclosed by the assessee^)Thus, the assessee in the present case has failed to discharge obligations laid upon him by Explanation 1 to Section 271(1)(c). Therefore, we find no infirmity in the order of CIT (A) vide which it has been held that the assessee is liable for levy of concealment penalty.
