ANISH KUMAR vs. COMMISSIONER OF INCOME TAX BATHINDA
What did the High Court hold?
The High Court held that no substantial question of law arises for adjudication. The findings of the ITAT, Commissioner (Appeals), and AO that the appellant furnished incorrect particulars with intent to evade tax do not suffer from any error of jurisdiction or law. The absence of a clear and cogent explanation for the wrong value of assets and incorrect purchase date is sufficient to infer that the appellant intended to evade tax. Consequently, the appeal filed by the assessee is dismissed. The penalty, though reduced by the ITAT from 300% to 100%, was upheld based on the inference of intent to evade tax.
What were the facts?
The assessee, Anish Kumar, appealed against an order of the Income Tax Appellate Tribunal (ITAT), Amritsar, which upheld the Commissioner of Income Tax (Appeals) order and the assessment order. The dispute pertains to the assessment year(s) not explicitly stated but related to the sale of land on 30.12.2005 for Rs.1,26,04,166. The assessee claimed the properties were purchased in 1991 and 1996, but the Assessing Officer (AO) found the cost of acquisition to be Rs.70,078 and the purchase dates to be 29.5.1998. The AO levied additional tax and a penalty of 300%. The Commissioner (Appeals) dismissed the assessee's appeal. The ITAT affirmed the findings but reduced the penalty to 100%. The assessee is challenging the ITAT's order.
What were the issues?
1. Whether a substantial question of law arises for adjudication regarding the levy of penalty under the Income Tax Act, 1961, when the assessee claims an inadvertent error regarding the cost of acquisition of land was wrongly held sufficient to invite penalty, and the revenue failed to discharge the burden of proving intent to evade tax. Assessee's contentions: The penalty is not leviable as no finding has been recorded that the appellant intended to evade tax or intentionally over-stated the cost of acquisition. An inadvertent error relating to the cost of acquisition was wrongly held sufficient to invite penalty. The revenue failed to discharge the burden of proving intent to evade tax. Revenue's contentions: Not recorded in the judgment.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
(Appeals), Bathinda, and the assessment order. Counsel for the appellant submits that penalty though reduced by the Income Tax Appellate Tribunal from 300% to 100%, is not leviable as no finding has been recorded that the appellant intended to evade tax or intentionally over-stated the cost of acquisition of land. It is further submitted that an inadvertent error, relating to cost of acquisition of the assets, has been wrongly held to be sufficient to invite penalty. The burden to prove intention to evade tax has not been discharged by the revenue, thereby rendering the penalty illegal and void.
We have heard counsel for the appellant, perused the Varinder Kumar 2013.10.23 14:21 I attest to the accuracy and integrity of this document High Court Chandigarh
Income Tax Appeal No.226 of 2013 - 2 - impugned orders and find no reason to hold that any substantial question of law, much less questions framed by the appellant, arise for adjudication. The appellant filed a return of income disclosing sale of land. Upon scrutiny of the return under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), it is discovered that the assessee had sold two properties on 30.12.2005 for a consideration of Rs.1,26,04,166/-, allegedly, purchased in 1991 and 1996. After considering the documents on record, the cost of acquisition, vis-a-vis, the appellant, was found to be Rs.70,078/-. The Assessing Officer also found that properties had been purchased on 29.5.1998 and not in the year 1991-92 as claimed by the assessee. The assessee was unable to tender any explanation, thereby inviting additional tax as well as a penalty of 300%. The Commissioner of Income Tax (Appeals) dismissed an appeal filed by the assessee. Aggrieved by these orders, the appellant filed an appeal before the Income Tax Appellant Tribunal. The findings recorded by the Commissioner of Income Tax (Appeals) and the Assessing Officer were affirmed but the penalty has been reduced from 300% to 100% by taking a lenient view of the matter.
The findings recorded by the Income Tax Appellate Tribunal, the Commissioner of Income Tax (Appeals) and the Assessing Officer, that the appellant furnished incorrect particulars with intent to evade tax, do not suffer from any error of juri iction or of law. The absence of any clear and cogent explanation with respect to wrong value of assets as well as incorrect date of purchase, is sufficient to raise an inference that the appellant Varinder Kumar 2013.10.23 14:21 I attest to the accuracy and integrity of this document High Court Chandigarh
Income Tax Appeal No.226 of 2013 - 3 - intended to evade tax and, therefore, faulted. In view of what has been stated hereinabove, the appeal is dismissed. ( RAJIVE BHALLA )
JUDGE ( DR. BHARAT BHUSHAN PARSOON ) 11.10.2013 JUDGE VK Varinder Kumar 2013.10.23 14:21 I attest to the accuracy and integrity of this document High Court Chandigarh
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