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Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
Before: SHRI G.S. PANNU, HONBLE & SHRI C.N. PRASAD, HONBLE,
PER C.N. PRASAD (JM) 1. This appeal is filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)–45, Mumbai dated 22.02.2016 for the Assessment Year 2007-08 in sustaining the penalty of ₹.1,79,510/- levied u/s 271(1)(c) of the Act.
2 ITA.No.4204/MUM/2016 (A.Y: 2007-08) Yogendra Prafulla Mogre 2. Briefly stated the facts are that, the assessee an individual derived income from salary, profession and other sources, filed return of income on 05.09.2007 declaring total income of ₹.2,50,090/-. Notice dated 27.03.2012 u/s. 148 was issued to the assessee and the re-assessment was completed on 08.02.2013 u/s. 143 r.w.s. 147 of the Act determining income of the assessee at ₹.8,35,090/-. While completing the re-assessment the Assessing Officer made addition of ₹.5,85,000/- being professional income received by the assessee from M/s. International Copper Promotion Council. In the course of assessment proceedings for the Assessment Year 2008-09 the Assessing Officer noticed that assessee received professional fee of ₹.18,85,000/- from M/s. International Copper Promotion Council and since the assessee did not offer this income to tax the said income was brought to tax during Assessment Year 2008-09.
During Appellate proceedings before the Ld.CIT(A) for the Assessment Year 2008-09 it was accepted by the assessee that out of ₹.18,85,000/- an amount of ₹.5,85,000/- should be assessed for the Assessment Year 2007-08 as undisclosed professional fee. Thus the Assessing Officer for the Assessment Year under consideration brought to tax this professional fee of ₹.5,85,000/- in the re-assessment order passed u/s. 143(3) r.w.s. 147 of the Act. Penalty proceedings were 3 ITA.No.4204/MUM/2016 (A.Y: 2007-08) Yogendra Prafulla Mogre initiated u/s. 271(1)(c) of the Act by issue of notice u/s. 274 r.w.s. 271(1)(c) dated 08.02.2013. subsequently another show cause notice dated 08.08.2013 was issued u/s. 274 r.w.s. 271(1)(c) of the Act requiring the assessee to show cause as to why penalty u/s. 271(1)(c) of the Act should not be levied in respect of the undisclosed professional receipts of ₹.5,85,000/- treated as income of this year. However, the assessee did not file any reply to the show cause notice or furnished any explanation as to why penalty should not be levied. Therefore, in the absence of any explanation by the assessee the Assessing Officer invoking the Explanation 1 to section 271(1)(c) of the Act concluded that assessee furnished inaccurate particulars of income and this was deliberate and was executed with a malafide intention to defraud the revenue and evade the due taxation. Accordingly, minimum penalty of ₹.1,79,510/- was levied.
Assessee preferred appeal before the Ld.CIT(A) who also confirmed the levy of penalty observing that the assessee did not voluntarily included the income but the same was a result of addition made from undisclosed professional fee in the Assessment Year 2008-09, part of which was received in the Assessment Year 2007-08, therefore, there is concealment of income.
4 ITA.No.4204/MUM/2016 (A.Y: 2007-08) Yogendra Prafulla Mogre 5. Learned Counsel for the assessee before us submits that there is a mistake on the part of the Chartered Accountant in not including the professional fee from the proprietary concern of the assessee in the return of income filed. Therefore, he submits that it is an inadvertent mistake of the Chartered Accountant who omitted to declare the professional receipts of the assessee in the return of income. He submits that there is no deliberate intention to evade taxes by the assessee. Learned Counsel for the assessee further submits that it is only a mistake for which no penalty should be levied. Learned Counsel for the assessee placed reliance on the decisions of the Hon'ble Supreme Court in the case of Price Waterhouse Coopers PVT. Ltd. v. Commissioner of Income Tax [348 ITR 306] and Commissioner of Income Tax v. Suresh Chandra Mittal [251 ITR 9].
Ld. DR vehemently supported the orders of the lower authorities and submits that there is a deliberate concealment of income by the assessee as he failed to offer the professional receipts during the Assessment Years 2007-08 and 2008-09. The fact of not offering these professional receipts came to light in the course of Assessment Proceedings for the Assessment Year 2008-09 based on which the assessment for the current Assessment Year was reopened and addition was made by the Assessing Officer bringing to tax the undisclosed professional receipts. Therefore,
5 ITA.No.4204/MUM/2016 (A.Y: 2007-08) Yogendra Prafulla Mogre he submits that since there is a concealment of income by the assessee the Assessing Officer is justified in levying penalty and the Ld.CIT(A) rightly confirmed the same. Further it is submitted that the case laws relied on by the assessee are not applicable to the facts of the assessee’s case.
We have heard the rival submissions, perused the orders of the authorities below and case laws relied on before us. In this case in the course of Assessment Proceedings for the Assessment Year 2008-09 it came to light that the assessee omitted to offer the professional receipts of ₹.18,85,000/- of his proprietary concern namely M/s. Dream Theater Motion Picture Company in his computation of total income. In the course of Appellate proceedings for the Assessment Year 2008-09 the assessee accepted that part of such receipts related to the current Assessment Year i.e. 2007-08 and accepted the undisclosed professional receipts. Based on this acceptance before the Ld.CIT(A) the assessment for the Assessment Year 2007-08 was reopened and the undisclosed professional receipts of ₹.5,85,000/- was brought to tax in this year. Show cause notices were issued to the assessee to explain as to why the penalty should not be levied u/s 271(1)(c) of the Act. However, the assessee did not file any explanation in response to the show cause notices issued by the Assessing Officer u/s. 274 r.w.s. 271(1)(c) of the 6 ITA.No.4204/MUM/2016 (A.Y: 2007-08) Yogendra Prafulla Mogre Act. In the absence of any explanation the Assessing Officer invoking Explanation 1 to section 271(1)(c) of the Act imposed minimum penalty on the addition made towards undisclosed professional income which the Ld.CIT(A) sustained.
It is the submission before us that there is a mistake on the part of the Chartered Accountant in reporting the professional receipts of the proprietary concern of the assessee in the return of income. However, this statement/submission of the assessee was not substantiated with any corroborative evidence. There is nothing on record to suggest that there is a mistake on the part of the Chartered Accountant in not including the income of proprietary concern of the assessee in the computation of total income. It is not even the case of the assessee that he has provided all the information regarding his income to his Chartered Accountant but the Chartered Accountant failed to include this income in the computation. Assessee cannot level allegations on his Chartered Accountant without any substance. Chartered Accountant cannot be blamed for assessee’s own fault in not reporting such huge professional income received by the assessee not only in one Assessment Year but in two Assessment Years i.e. in 2007-08 and 2008-09. Thus in the absence of any explanation what so ever before the Assessing Officer in response to notice u/s. 274 r.w.s. 271(1)(c) of the Act and also in the absence of any corroborative evidence
7 ITA.No.4204/MUM/2016 (A.Y: 2007-08) Yogendra Prafulla Mogre to show that there is a mistake on the part of the Chartered Accountant in reporting the professional receipts in the return of income a mere statement of the assessee that there is a mistake on the part of the Chartered Accountant is hard to believe and accept. In the circumstances we uphold the levy of the penalty imposed by the Assessing Officer and sustained by the Ld.CIT(A). The case laws relied on by the assessee are distinguishable on facts. Grounds raised by the assessee are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on the 27th September, 2017.