2018 (9) TMI 464 - AT - Income Tax

Penalty u/section 272A(1)(c) - non-compliance to provisions of section 131(1) - Disclosure of information u/s 138 - reasonable cause on the part of the assessee in not submitting the details as called for by the ADIT (Investigation) - Held that - So far as argument of the assessee that provisions of section 131(1) and 131(1A) are different, there is no dispute to the same. However, as per the provisions of section 131(1A) for the purpose of making any enquiry or investigation relating thereto it shall be competent for the officer to exercise the powers conferred under sub-section (1) on the Income Tax Authorities referred to in that sub-section. Provisions of section 131(1A) has to be read along with the provisions of section 131(1) of the I.T. Act. Therefore, the consequences for failure to furnish the requisite details will be the same as prescribed u/s 272A(1)(c). As find from the record that there was a deliberate defiance on the part of the assessee for non-submission of the same under the pretext that some of the details are available in the records of the Income Tax Department or some of the details are available in the Website of the Ministry of Corporate Affairs. In our opinion, no prejudice would have been caused to the assessee by submitting the details as called for by the ADIT (Investigation), as per the summons u/s 131(1A) if those details are already available in the records of the I.T. Department or in the website of the Ministry of Corporate Affairs. The conduct of the assessee in the instant case, in our opinion, is not at all bona-fide. Order of the ld. CIT(A) in confirming the penalty of ₹ 10,000/- levied u/s 272A(1)(c) is upheld. - Decided against assessee

Summary

Issues Involved:
1. Jurisdiction and applicability of penalty under Section 272A(1)(c) for non-compliance with summons issued under Section 131(1A) of the Income Tax Act.
2. Merits of non-compliance with summons issued under Section 131(1A) and whether the details called for were already available with the Tax Department.
3. Relevance and jurisdiction of the details called for under Section 131(1A) for assessing the income of the appellant.

Detailed Analysis:

Issue 1: Jurisdiction and Applicability of Penalty under Section 272A(1)(c) for Non-Compliance with Summons Issued under Section 131(1A)
The appellant argued that there is no penalty prescribed for non-compliance with summons issued under Section 131(1A) and that Section 272A(1)(c) applies only to non-compliance with Section 131(1). The Tribunal found that while Sections 131(1) and 131(1A) are distinct, Section 131(1A) allows officers to exercise the powers conferred under Section 131(1). Consequently, non-compliance with Section 131(1A) attracts the same penalty provisions as Section 131(1) under Section 272A(1)(c). The Tribunal upheld the penalty, emphasizing that the legislative intent would not leave Section 131(1A) without any penal provision.

Issue 2: Merits of Non-Compliance with Summons Issued under Section 131(1A)
The appellant contended that the details sought were already available with the Tax Department or in the public domain, hence there was no basis for suspicion of income concealment. The Tribunal rejected this argument, noting that the appellant cannot decide the relevance of the information for the Income Tax purpose. Despite being given multiple opportunities and clear warnings of penal consequences, the appellant failed to provide the requested details. The Tribunal emphasized that the appellant's conduct was not bona fide and upheld the penalty.

Issue 3: Relevance and Jurisdiction of the Details Called for under Section 131(1A)
The appellant argued that the details called for were beyond the powers conferred under Section 131(1A) and were not relevant for assessing the appellant's income. The Tribunal found that the enquiries by the Income Tax Department were necessary to verify potential income tax avoidance/evasion. The Tribunal dismissed the appellant's claim that the summons were politically motivated, stating that the appellant's assumption lacked evidence. The Tribunal concluded that the appellant's deliberate non-compliance warranted the penalty.

Conclusion:
The Tribunal upheld the penalty of ?10,000 levied under Section 272A(1)(c) for non-compliance with the summons issued under Section 131(1A). The Tribunal found no merit in the appellant's arguments regarding the jurisdiction and relevance of the summons, emphasizing that the appellant's conduct was not bona fide and that the legislative intent would not leave Section 131(1A) without any penal provision. The appeal filed by the appellant was dismissed.