MAHESH KUMAR AGRAWAL vs. COMMISSIONER OF INCOME TAX

PDF · subscribers
ITA/198/2004HC RajasthanRJHC02033449200414 December 20163 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that since the order of the Tribunal relied upon a judgment (CIT Vs. Mohd. Mohatram Farooqui, 259 ITR 132 (Raj.)) which was subsequently reversed by the Supreme Court, and the Supreme Court in Mohd. Mohtram Farooqui's case had remitted the matter back to the Assessing Officer (AO) for de novo consideration, the present appeal should also be remitted to the AO. The High Court directed that the AO should decide the issue in light of the directions given by the Supreme Court in the aforementioned judgment. The Supreme Court's directions included considering whether the assessee had filed income tax returns prior to and subsequent to the relevant assessment year, and the amount of income returned during those periods, to determine if penalty proceedings were rightly initiated. The High Court explicitly stated that it was not expressing any opinion on the merits of the case and kept contentions of both sides open. The appeal was disposed of with the operative direction of remand.

What were the facts?

The assessee, Dr. Mahesh Kumar Agarwal, filed an appeal before the Rajasthan High Court challenging the Income Tax Appellate Tribunal's order which dismissed his appeal and confirmed the CIT(A)'s order. The appeal pertains to the assessment year(s) not explicitly stated but relates to a penalty of Rs. 1,72,000/- levied under Section 271(1)(c) for alleged concealment of income amounting to Rs. 5,27,345/-. The High Court admitted the appeal and framed a substantial question of law. The Tribunal's order, which was under challenge, relied on a Rajasthan High Court judgment in CIT Vs. Mohd. Mohatram Farooqui, 259 ITR 132. The assessee's counsel argued that this judgment was subsequently reversed by the Supreme Court.

What were the issues?

1. Whether, under the facts and circumstances of the case and in law, the Learned Income Tax Appellate Tribunal was justified in sustaining the penalty of Rs. 1,72,000/- under Section 271(1)(c) of the Act for alleged concealment of income of Rs. 5,27,345/-? Assessee's Contention: The assessee contended that the Tribunal relied on the judgment in CIT Vs. Mohd. Mohatram Farooqui, 259 ITR 132 (Raj.), which has been reversed by the Supreme Court. The assessee argued that the Supreme Court's decision in the case of Mohd. Mohtram Farooqui vs. Commissioner of Income Tax, Rajasthan, which remitted the matter to the Assessing Officer (AO), should be applied. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR. DB INCOME TAX APPEAL NO.198/2004 Dr. Mahesh Kumar Agarwal S/o late Shri Jamana Das Agarwal, R/o Agarwal Clinic, Santar Road, Dholpur aged about 59 years. Versus Commissioner of Income Tax, Alwar. DATE OF ORDER ::: 14.12.2016. HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE DINESH MEHTA Mr. Sanjay Jhanwar, for the appellant. Mrs. Parinitoo Jain, for the respondent.

1.

By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal preferred by the assessee and confirmed the order of the CIT(A).

2.

This Court while admitting the appeal on 23.01.2006, framed the following substantial question of law: “Whether under the facts and in the circumstances of the case and in law the Learned Income Tax Appellate Tribunal was justified in sustaining the penalty of Rs.1,72,000/- u/s. 271(1)(c) of the Act for alleged concealment of Income of Rs.5,27,345/-?” 3. in Civil Appeal No.8175/2003 in case of Mohd. Mohtram

2 Rajasthan is reproduced as under: “Having examined the question of law in the context of the facts placed on record, we are of the view that the matter needs to be remitted to the Assessing Officer (AO). In this case, the Tribunal has set aside the levy of penalty under Section 271(1)(c) of the Income Tax, 1961, on the basis that the AO has not examined the concerned persons. In this connection, it may be stated that an amount of Rs.5,92,340/- was seized by the Police Thana, Sikar from the appellant on 8th April, 1992. A Panchanama was drawn by the Department on 9th April, 1992 and the cash amount was requisitioned on the same date. Consequent to the seizure, the statement of the assessee was recorded by the Deputy of Investigation, Jaipur, wherein the assessee stated that the cash belonged to his brother, his brother-in-law and a part belonged to him. According to the Tribunal, the AO should have summoned the assessee's brother and brother-in-law. According to the Tribunal, the AO did not examine any of the concerned persons. According to the Tribunal, the AO has failed to apply his mind to the facts of the case. In the circumstances, according to the Tribunal, since the AO did not examine the relevant persons and since he did not find any explanation furnished by the assessee to be false, the entire penalty proceedings came to be quashed. In our view, on the facts of this case, the Tribunal should have remitted the case to the AO particularly, in view of the fact that the assessee has raised a legal contention on the applicability of Explanation-5 to Section 271(1)(c) of the Act. In the circumstances, we remit this case to the AO. We may add that the AO Will consider one more aspect, namely, whether the assessee has filed income tax returns in the past prior to the relevant Assessment Year 1993-94 and whether he has been filing income tax returns subsequent to the relevant assessment year. The AO will also 3 find out the amount of income returned by the assessee, if any, during the assessment years prior to Assessment Year 1993-94 and the returned income for the assessment years subsequent to the relevant Assessment Year 1993-94. This point is relevant for deciding the question as to whether penalty proceedings were rightly initiated against the assessee under Section 271(1)(c) of the Act. Before concluding, we may clarify that we do not wish to express any opinion on the merits of the case. We further clarify that contentions on both sides are expressly kept open. Subject to above, Civil Appeal stands disposed of and the matter is remitted to the AO for de novo consideration in accordance with law. No order as to costs.”

4.

In that view of the matter, since the order of this Court relied upon by the Tribunal has been reversed and the matter has been remanded back, as noted above, we remit this appeal to the AO, to decide the issue in light of the direction given by the Supreme Court in the above judgment.

5.

The appeal stands disposed of.

(DINESH MEHTA), J. (K.S. JHAVERI), J. Asheesh Kr. Yadav 72

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →