MANINDER SINGH vs. COMMISSIONER OF INCOME TAX, BATHINDA

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ITA/380/2019HC Punjab & HaryanaPHHC01058980201928 January 2020Bench: MR. JUSTICE AJAY TEWARI,MR. JUSTICE AVNEESH JHINGAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that Section 271(1)(c) of the Income Tax Act, 1961, was clearly attracted to the facts of the present case. The court found no fault with the penalty order. The reasoning was based on the assessee's failure to offer any explanation demonstrating his bona fide in his reply to the penalty show cause notice. The assessee's argument that no penalty could be imposed on an estimated income was not accepted. The court noted that the assessee did not deny the lack of explanation for his omission in mentioning the amount in his return and for providing incorrect particulars. Therefore, the appeal was dismissed.

What were the facts?

The assessee, Maninder Singh, is appealing an order of the Income Tax Appellate Tribunal (Tribunal) which upheld a penalty imposed by the revenue. During assessment, it was discovered that the assessee had a bank account not included in his regular books of account, containing unexplained cash deposits of ₹47,60,000. The assessee initially explained ₹22,10,000 as received from his brother, who allegedly sold property in 2008 and reinvested the proceeds, handing over ₹22,10,000 to the assessee in 2010. An additional ₹3,00,000 was explained as received from his brother-in-law for safe custody. However, the younger brother provided a different explanation, stating the money was given for the assessee's needs and that the assessee had a loan bank account. The explanation was rejected, and ₹12,20,000 was added to the income using 'peek credit'. Penalty proceedings were initiated, and the assessee's reply to the show cause notice offered no bona fide explanation, merely stating that no penalty could be imposed on an estimated income. The penalty order was passed and upheld by the Tribunal.

What were the issues?

1. Whether the penalty under Section 271(1)(c) of the Income Tax Act, 1961, was rightly imposed on the assessee, considering the nature of the addition to income and the explanation offered (or lack thereof) for the penalty proceedings. Assessee's contention: The learned counsel for the appellant argued that no further inquiry was made by the assessing officer while imposing the penalty. However, the counsel did not deny that the appellant failed to offer an explanation for omitting the amount from his return or for providing incorrect particulars. Revenue's contention: The revenue's position, as implicitly understood from the judgment, is that Section 271(1)(c) is attracted to the facts of the case due to the unexplained cash deposits and the subsequent inadequate explanation provided by the assessee.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

110 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH **** ITA-380-2019 DECIDED ON: JANUARY 28, 2020 MANINDER SINGH APPELLANT VERSUS COMMISSIONER OF INCOME TAX, BATHINDA RESPONDENT CORAM: HON'BLE MR. JUSTICE AJAY TEWARI HON'BLE MR. JUSTICE AVNEESH JHINGAN Present: Mr. Deepak Aggarwal, Advocate and Mr. Shivam Bhardwaj, Advocate for the appellant. **** AJAY TEWARI, J (Oral): This appeal has been filed against the order of Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as 'Tribunal) upholding the penalty against the appellant. 2. The brief facts are that during assessment it was found that the appellant had a bank account which did not form part of his regular book of account and in that account there was an un-explained cash deposits of `47,60,000/-. Ultimately when he was asked for the explanation for the same, he disclosed that out of that a sum of `22,10,000/- was explained. Out of money received from his brother regarding which it was stated that his brother had sold property worth about `7,50,000/- in the year 2008 and kept reinvesting it by giving the same on interest to friends and relatives. In the year 2010 he handed over a sum of `22,10,000/- to the appellant since he personally did not have a PAN card. Further a sum of `3,00,000/- was explained to have been received from his brother-in-law also for safe custody. When examined the younger brother trotted out a different story. SHAM SUNDER 2020.01.31 09:05 I attest to the authenticity and integrity of this document HIGH COURT CHANDIGARH

ITA No. 380 of 2019 -2- He stated that he had given the money to the appellant because as and when the appellant required the same and also had a loan bank account. The explanation, such as a cause, was rejected and ultimately a sum of `12,20,000/- was added to the income by employing 'peek credit'. It was, thereafter, penalty proceedings were initiated. In the reply filed to the show cause notice of the penalty, the assessee did not offer any explanation which may have shown his bona fide but only stated that since his income has been assessed on estimate basis, no penalty could be imposed. After considering this reply the penalty order was passed. The same having been upheld the appellant is before this Court. 3. The only argument raised by learned counsel is that from the penalty order it is clear that no further inquiry was made by the assessing officer while imposing penalty. He has, however, not in a position to deny that no explanation was offered by the appellant for his omission in mentioning this amount and as to why incorrect particulars were mentioned. Section 271 (1)(c) is clearly attracted to the facts of the present case. 4. Resultantly no fault is found. 5. Dismissed. [AJAY TEWARI] JUDGE [AVNEESH JHINGAN] JUDGE JANUARY 28, 2020

sham

1.

Whether speaking/ reasoned : Yes / No 2. Whether reportable : Yes / No SHAM SUNDER 2020.01.31 09:05 I attest to the authenticity and integrity of this document HIGH COURT CHANDIGARH

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