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TMI Blog2012 (11) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... e view taken by the Tribunal.The burden is on the assessee to take the plea that, even if the explanation is not acceptable, the material and attending circumstances available on record do not justify the sum found credited in the books being treated as a receipt of income nature." There is no infirmity in the order of the lower authorities on this issue and accordingly, addition is sustained - In the result, Appeal filed by the Assessee stand dismissed. Penalty u/s 271(1)(c) – Held that:- Following the decision of court in case of [ Hindustan Steel v. State of Orissa 1969 (8) TMI 31 - SUPREME COURT] held that :- "An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer. (vii) That the Ld. Commissioner of Income Tax (A) erred in not giving the due weight to the explanation filed by the appellant before Assessing Officer and he should have held the assessment order deserves to be quashed. (viii) That the Ld. Commissioner of Income Tax (A) erred in not considering that the charging of interest is not proper and no interest is chargeable. (ix) The appellant craves leave to raise any further ground(s) of appeal at the time of hearing before your honour." 4. Apropos issue of legality of the service of the notice. Ld. Commissioner of Income Tax (A) considered the issue as under:- "A perusal of record shows that a notice u/s. 148 of the I.T. Act was issued on 29.5.2001 which appears to have been served on one Shri Dilbag Singh on the same date through Notice Server of the department. On the office copy of this notice there appears a number 1754 dated 31.5.2001. It clearly shows that this notice was issued on 29.5.2001, served through notice server on Shri Dilbang Singh on the same date; after entering it in the dispatch register at Sr. No. 1754 on 31.5.2001 it was dispatched by post also vide postal receipt No. 2653 date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice in this case and assessee's counsel could not controvert the factual findings in the above Ld. Commissioner of Income Tax (A)'s order. Accordingly, this ground is dismissed. 7. Another issue raised by the assessee in this case is that Ld. Commissioner of Income Tax (A) erred in law in summarily dismissing the objections of the appellant on the validity of the reasons to reopen. 8. I have carefully considered the submissions and perused the records. I find that there is no specific ground as mentioned in the ground of appeal before Ld. Commissioner of Income Tax (A), wherein the assessee has agitated on the validity of the reasons to reopen. However, I note that on this issue Ld. Commissioner of Income Tax (A) has observed as under:- "As regard the initiation of proceedings on the directions of Higher Authorities, the appellant has not made it a ground in its grounds of appeal. However, on merits this contention of the assessee is not acceptable on the ground that at the time of initiating proceedings the Assessing Officer had applied its mind and formed its own belief although the information was supplied by the Investigation Wing/ Survey Wing. The Assessing Officer p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asion on which the gift was received with him are missing. Therefore, Assessing Officer held that the money actually belonged to the assessee and he assessed the same as income from undisclosed sources. 12. Furthermore the Assessing Officer held that for taking the bogus gifts assessee has also paid a premium of 10% to 15% of the gift. Hence, Assessing Officer made addition on this account also as follows:- I.T.A. No. 2856 - M/s Miter Sain (HUF) - Rs. 52,500 I.T.A. No. 2857 - Smt. Usha Sindhu - Rs. 22,500 I.T.A. No. 2858 - Smt. Shashi Sindhu - Rs. 45,000 I.T.A. No. 2919 - Sh. Vrit Pal Sindhu (HUF) - Rs. 22,500 13. Upon assessee's appeal Ld. Commissioner of Income Tax (A) noted that assessee has not submitted any information regarding the relationship of the donor with the assessee and the occasion on which the gift was made. Ld. Commissioner of Income Tax (A) further found that Assessing Officer has noted that the donor has denied of having made any gift. Ld. Commissioner of Income Tax (A) further referred the decisions of the Hon'ble Apex Court in the case of CIT v. Durga Prasad More [1971 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer, is not satisfactory. It is only then that the sum so credited may be charged to income-tax as the income of the assessee of that previous year. The expression "the assessee offers no explanation" means the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. The opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on the record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material on record. Application of mind is the sine qua non for forming the opinion. In cases where the explanation offered by the assessee about the nature and source of the sums found credited in the books is not satisfactory there is, prima facie, evidence against the assessee, viz., the receipt of money. The burden is on the assessee to rebut the same, and, if he fails to rebut it, it can be held against the assessee that it was a receipt of an income nature. The burden is on the assessee to take t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged donor Sh. Sanjeev Gupta has stated to the Director of Enforcement that he was actually a part-time student and he did not visit India at the time when alleged accounts were opened, nor was he present at the time when they were closed. He has further submitted that he had not deposited any money into these accounts nor did he send any money to anybody for depositing in these accounts. 20. Therefore, Assessing Officer held that assessee has failed to establish the genuineness of the gifts during the course of assessment proceedings, appellate proceedings and penalty proceedings also. Hence, Assessing Officer held that assessee has wilfully and intentionally tried to evade tax. Accordingly, Assessing Officer proceeded to levy penalty @150%. 21. Upon assessee's appeal Ld. Commissioner of Income Tax (A) confirmed the Assessing Officer's action. 22. Against the above order the assessee is in appeal before me. 23. I have heard the rival contentions in light of the material produced. I note that in the quantum appeals considered by me hereinabove, I have already confirmed the additions made in this regard. However, I have also noted that levy of penalty is not automatic on c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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