M/S MUNSHI RAM TRILOCHAN DASS vs. COMMR. OF INCOME TAX ROHTAK AND ANR.

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ITA/434/2006HC Punjab & HaryanaPHHC01075155200623 November 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises for consideration. The Court noted that the assessee had not challenged the finding of concealment itself as perverse. The finding of concealment was concurrent. The Court reasoned that procedural requirements like giving an opportunity or recording satisfaction should not be overstretched to avoid penalty when concealment is clearly established. The Tribunal's observation that penalty was justified in view of the definite finding about concealment of income, supported by the Supreme Court's decision in K.P. Madhusudhanan, was accepted. The appeal was dismissed. No issue was expressly left undecided.

What were the facts?

The assessee, M/s Munshi Ram Trilochan Dass, Kalanwali, filed an appeal before the High Court against the order of the Income Tax Appellate Tribunal (ITAT), Chandigarh, for the assessment year 1992-93. The ITAT had upheld the imposition of penalty for concealment of income, specifically related to investment in wheat outside the books of account and unexplained bank deposits. The Assessing Officer had made additions to income based on these findings. The penalty order was upheld by the Tribunal, which rejected the assessee's stand and distinguished the High Court's earlier judgment in CIT Vs. Munish Iron Store. The assessee had not furnished any explanation for the undisclosed income despite being given adequate opportunity.

What were the issues?

1. Whether, in the facts and circumstances of the present case, the impugned orders are legally sustainable in the eyes of law? (Question of law) Assessee's Contention: The assessee's appeal was allowed by the lower appellate authority based on observations in CIT Vs. Munish Iron Store (2003) 263 ITR 484. The assessee implicitly relied on this precedent for relief. Revenue's Contention: The revenue contended that the observations in Munish Iron Store's case were not rightly appreciated by the lower authority. The Tribunal upheld the revenue's stand, relying on the Supreme Court's decision in K.P. Madhusudhanan Vs. Commissioner of Income-Tax (2001) 251 ITR 99 (SC), which held that penalty is justified where an inference of deliberate concealment can be drawn. The revenue argued that with a definite finding of concealment and no explanation from the assessee, penalty was justified.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
I.T.A.No. 434 of 2006 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A.No. 434 of 2006 Date of decision:23.11.2006 M/S Munshi Ram Trilochan Dass, Kalanwali ...Appellant Versus Commissioner of Income-tax and another ...Respondents CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE RAJESH BINDAL Present:Mr.Akshay Bhan, Advocate for the appellant. ****

JUDGMENT This appeal has been preferred under Section 260-A of Income Tax Act, 1961 proposing the following substantial question of law arising out of the order dated 2.12.2005 of the Income Tax Appellate Tribunal, Chandigarh passed in ITA No.2/Chandi/2005 in respect of the assessment year 1992-93:- “Whether in the facts and circumstances of the present case the impugned orders are legally sustainable in the eyes of law?” As a consequence of the assessment for the assessment year 1992-93, an order of penalty was passed against the petitioner for Store's case were not rightly appreciated. In spite of due opportunity,

I.T.A.No. 434 of 2006 -2- the assessee could not furnish any explanation for undisclosed income. Reliance was placed on judgment of the Hon'ble Supreme Court in K.P.Madhusudhanan Vs. Commissioner of Income-Tax, (2001) 251 ITR 99 (SC) wherein it was held that where an inference could be drawn that the assessee had deliberately concealed the income, the penalty would be justified. The Tribunal observed that in view of the definite finding about the concealment of income, penalty was justified. The assessee has not sought any question on perversity of the finding on the issue of concealment. Finding on the issue of concealment is concurrent. Procedural requirement of giving opportunity to the assessee or recording satisfaction cannot be over stretched to avoid the imposition of penalty even when the same is clearly called for, where concealment of income is fully established. In view of the above, we do not find that any substantial question of law arises for consideration of this Court.

The appeal is dismissed. (Adarsh Kumar Goel) Judge November 23,2006 (Rajesh Bindal) Pka Judge

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