Avtar Singh Walia, Chamba vs Assessee

orders of ld. CIT(Appeals), Shimla dated 29.12.2014 for

assessment year 2008-09 challenging the confirmation of the

penalty under section 271(1)(c) and 271A of the Income Tax Act.

2. Briefly the facts of the case are that the assessee filed the

return of income declaring an income of Rs. 3,02,060/- on

31.03.2009 which was assessed at Rs. 5,40,694/- under section

143(3) of the Act vide order dated 09.12.2010. The assessee had

declared net profit at Rs. 1,48,234/- under section 44AD as Civil

Contractor, Rs. 42,000/- under section 44AE for plying of

trucks, Rs. 1,97,480/- under section 44AF from tour and travel

and Rs. 14,346/- as interest income. Besides the income from 2

the above sources, the assessee was also a liquor contractor and

had not disclosed the income from this source. When

confronted, assessee intimated that it has filed revised return of

income declaring total income at Rs.5,02,060/- on 26.03.2010.

The assessee was intimated that revised return was not a valid

return by virtue of sub-section 5 of Section 139 of the Act as the

same was not filed within the statutory period prescribed.

Ultimately, the assessee admitted that the revised return was

filed just to avoid penalty proceedings under section 271(1)(c) of

the Act.

3. The Assessing Officer made addition of Rs. 1,50,000/- on

this account. Further, the assessee declared interest income at

Rs. 14,346/-. As per bank details, it was noticed that assessee

had bank interest of Rs. 42,203/- with Punjab National Bank,

Dalhousie. Besides this, interest of Rs. 10,777/- for two months

was also taken into account and total addition under this head

was made at Rs. 38,634/- since the assessee did not show the

income from liquor business, interest income from tour and

travels and interest income. Therefore, penalty proceedings

under section 271(1)(c) of the Act were initiated and the

Assessing Officer vide separate order, levied the penalty of Rs.

73,740 under section 271(1)(c) of the Act.

4. The assessee challenged the penalty order before ld.

CIT(Appeals) and it was stated that assessee disclosed all the

particulars of income in the original and revised return of

income and addition is made on estimate basis and revised

return could not be filed due to domestic reasons. The ld.

CIT(Appeals), however, did not accept contention of the assessee 3

because the assessee has not disclosed the income from liquor

business and revised return was filed beyond the statutory

period. Therefore, penalty order was confirmed and appeal of

the assessee was dismissed.

5. Similarly, on the same facts the Assessing Officer held that

net profit of Rs. 1,97,480/- declared from business of tour and

travels was not covered under section 44AF of the Act and the

assessee was required to keep and maintain the books of

account as per the provisions of Section 44AA of the Act. Since

the assessee failed to maintain books of account, therefore

penalty proceedings under section 271A were initiated and in

the absence of any explanation from the side of assessee,

penalty of Rs. 25,000/- was levied under section 271A of the

Act. The ld. CI T(Appeals) confirmed the levy of penalty and

dismissed appeal of the assessee.

6. We have heard ld. Representatives of both the parties and

perused material available on record. During the course of

arguments, ld. counsel for the assessee admitted that the

income from liquor business was not disclosed in the original

return of income. The assessee admittedly filed the revised

return beyond the period of limitation just to avoid the penalty

proceedings. It is well settled law that penalty under section

271(1)(c) of the Act is leviable in respect of concealment of

income or filing inaccurate particulars of income with reference

to the original return of income. The assessee deliberately

concealed the income from liquor contract and has not disclosed

the income from liquor business in the original return of income.

Therefore, claim of assessee is wholly incorrect that the assessee 4

disclosed all the particulars of income in the original return of

income. Similarly, part of the interest was not disclosed in the

return of income filed originally. The reasons given by assessee

for filing the revised return late are not permissible under the

law. Therefore, it stands proved that assessee has concealed the

particulars of income from liquor business as well as from

interest income. Therefore, authorities below were justified in

levying the penalty against the assessee.

7. The ld. counsel for the assessee relied upon decision of

Hon'ble Punjab & Haryana High Court in the case of CI T Vs

Rajnish Nath Aggarwal 219 CTR 590 (P&H). However, the facts

of this case are clearly distinguishable from the facts of the

present case. The ld. counsel for the assessee also submitted

that assessee, even if filed the revised return belatedly but it

was voluntary, therefore penalty may not be levied. The

contention of ld. counsel for the assessee is rejected. The

Hon'ble Supreme Court in the case of Mak Data Pvt. Ltd. Vs CIT

358 ITR 593 held that the concept of voluntary surrender is not

applicable and the penalty has to be levied. Therefore, we do

not find any merit in the appeal of the assessee with regard to

levy of penalty under section 271(1)(c) of the Act.

8. Further, it is admitted fact that assessee has not

maintained any books of account for business of tour and

travels. The assessee declared income from this source under

section 44AF of the Act and the authorities below held that such

a business is not covered by Section 44AF of the Act. The ld.

counsel for the assessee also admitted during the course of

arguments that Section 44AF is not applicable to such source of 5

income. Therefore, it stands proved on record that assessee

failed to keep and maintain the books of account as required by

Section 44AA of the Act. Therefore, penalty was correctly levied

under section 271A of the Act. We do not find any merit in this

appeal of the assessee as well.

9. In the result, both appeals of the assessee are dismissed.

Order pronounced in the Open Court on 29 t h April,2015.

Sd/- Sd/-

(T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 29 t h April,2015. 'Poonam' Copy to:

The Appellant, The Respondent, The CI T(A), The CI T,DR

Assistant Registrar, I TAT Chandigarh