9911796707
TMI Blog2010 (3) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... (gms.) Net weight (gms.) Value (Rs.) Residence : As per valuation report filed 1,410.200 1,208.600 6,02,955 Locket No. 862 with PNB, Patel Nagar 808.800 695.000 2,72,989 Total jewellery found 1,903.600 Jewellery declared in WT return for asst. yr. 1992-93 1,169.850 Unexplained jewellery 733.750 3. The explanation of the assessee for the rest of the jewellery i.e., 733.750 gms. was that 500 gms. of jewellery was acquired by the wife of the assessee as per will of her grandmother, Smt. Bharvan Devi, who died on 14th Oct., 1993 and the balance jewellery was purchased by the assessee out of his taxable income during the years 1994-95, 1995-96 and 1996-97. Against that explanation of the assessee, the observations of the AO as recorded in the order of the CIT(A) in quantum proceedings in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare profit of ₹ 1,02,000 on account of capital gain was not received during that year and only commission income of ₹ 72,109 was received against which the assessee had paid ₹ 62,282 to LIC and also made the payment of taxes besides incurring household withdrawals. In nutshell, it was the finding of the CIT(A) that the assessee could not prove the source of purchasing jewellery as was alleged by the assessee in those years. As per the finding of these facts, addition in quantum was upheld by the CIT(A). The matter went before the Tribunal where the appeal of the assessee was decided by the Tribunal vide order dt. 24th Feb., 2006 in IT(SS)A No. 75/Del/2001. The Tribunal, after going through the above-mentioned findings of the CIT(A) observed that the assessee could not prove the existence of jewellery and the evidence produced in the shape of will was found unreliable by the authorities below for the reasons given in their orders and, thus, it was observed that the jewellery was rightly considered to be unexplained in the hands of the assessee. Not satisfied with the upholding of addition by the Tribunal, the assessee preferred an appeal before the Hon'ble Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned that she was in a sound physical and mental condition to understand the contents of will. The language used in the will also clearly suggested that it was made only for the purpose of showing 500 gms. of jewellery bequeathed in favour of the assessee. The executant of the will had signed in Gurmukhi while the will was written in Hindi and there was nothing to suggest that she had understood the contents of the will and the contents were explained to her. The genuineness of the will was not acceptable and for remaining jewellery also the assessee could not established that it was purchased by him from the income declared in the years stated by him and mere contention that this jewellery was purchased out of income was not enough. The contention was not supported by any evidence in the shape of purchase bill or the balance sheet, etc. and, in this manner, learned CIT(A) has arrived at a conclusion that the assessee did not disclose his income truly in the return of block period and concealed the facts and furnished inaccurate particulars of income to the extent of value of jewellery. He also rejected the grounds taken by the assessee with regard to invalid initiation of penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Asstt. CIT (1993) 47 TTJ (Ahd) 22: (1993) 45 ITD 262(Ahd); (2) CIT vs. Rajinder Kumar Somani (1980) 125 ITR 756(Del); (3) CIT vs. Sardar Amarjit Singh (1981) 132 ITR 365(Del). 8. The second contention of learned Authorised Representative is that along with the assessment order no notice whatsoever was issued by the AO with regard to levy of penalty under s. 158BFA(2). He contended that the first ever notice with regard to levy of such penalty was a notice dt. 10th July, 2000 a copy of which is placed at p. 47 of the paper book. He contended that as per trite law if the penalty notice is not issued with the assessment order then penalty cannot be levied by issuing notice subsequently, and therefore also the levy of penalty in the present case is against the provisions of law. For this contention learned Authorised Representative has also relied on the aforementioned decisions. 9. So as it relates to merits, he placed reliance on the following decisions : (1) Dy. CIT vs. Suresh Kumar (2005) 95 TTJ (Kol) 926: (2005) 97 ITD 527(Kol); (2) ITO vs. P. Palaniswamy (1986) 26 TTJ (Mad) 42: (1986) 16 ITD 529(Mad); (3) Smt. Mala Dayanithi vs. Dy. CIT (2005) 92 TTJ (Bang) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f search initiated under s. 132 or books of account, other document or any assets requisitioned under s. 132A on or after the 1st Jan., 1997 as required by a notice under cl. (a) of s. 158BC, is furnished after the expiry of the period specified in such notice, or is not furnished, the assessee shall be liable to pay simple interest at the rate of two per cent of the tax on undisclosed income, determined under cl. (c) of s. 158BC, for every month or part of a month comprised in the period commencing on the day immediately following the expiry of the time specified in the notice, and'(a) where the return is furnished after the expiry of the time aforesaid, ending on the date of furnishing the return; or (b) Where no return has been furnished, on the date of completion of assessment under cl. (c) of s. 158BC. (2) The AO or the CIT(A), in the course of any proceedings under this chapter, may direct that a person shall pay by way of penalty a sum which shall not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the AO under cl. (c) of s. 158BC : Provided that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice served on assessee on 9th July, 1999. The said notice which was served upon the assessee on 9th July, 1999 was with regard to levy of interest under s. 158BFA(1) whereas at the end of the assessment order, the AO is not speaking of any interest, but it has been clearly mentioned that penalty proceedings under s. 158BFA have already been initiated separately . Therefore, we find no substance in the argument of learned Authorised Representative that there was no initiation of penalty proceedings during the course of assessment proceedings as it was clearly stated in the assessment order itself. 13. Now, it has been the contention of learned Authorised Representative that no notice accompanying the assessment order for levy of penalty under s. 158BFA(2) was issued and the only notice which was issued to assessee in this regard was notice dt. 10th July, 2000. We have carefully considered this submission of learned Authorised Representative. For raising such contention he argued that the languages of ss. 271(1)(c) and 158BFA(2) are in pari materia and according to the arguments of learned Authorised Representative, the AO could issue notice under s. 158BFA(2) only during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lordships found that it would appear that the notices were thereafter issued by the ITO to the assessee and on such a situation, the observations of Hon'ble Supreme Court regarding notices issued after the framing of the assessment were as under : The fact that notices were issued subsequent to the making of the assessment orders would not, in our opinion, show, that there was no satisfaction of the ITO during the assessment proceedings that the assessee had concealed the particulars of his income or had furnished incorrect particulars of such income. What is contemplated by cl. (1) of s. 271 is that the ITO or the AAC should have been satisfied in the course of proceedings under the Act regarding matters mentioned in the clauses of that sub-section. It is not, however, essential that notice to the person proceeded against should have also been issued during the course of the assessment proceedings. Satisfaction in the very nature of things precedes the issue of notice and it would not be correct to equate the satisfaction of the ITO or AAC with the actual issue of notice. The issue of notice is a consequence of the satisfaction of the ITO or the AAC and it would, in our o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the assessee to prove the authenticity of the said will. Rather, on the other side, the authenticity of the said will has remained unproved. It can be seen that after perusing the contents of will their Lordships of Hon'ble High Court have observed that executant of the will was 95 years of age and it was nowhere mentioned that she was in a sound physical and mental condition to understand the contents of the will. Language used in the will also clearly suggested that it was made only for the purpose of showing 500 gms. of jewellery bequeathed in favour of the assessee. The executant of the will had signed in Gurmukhi while the will was written in Hindi and there was nothing to suggest that the executant had understood the contents of the will or its contents were explained to her and it was recorded by their Lordships that there was no fallacy in the view adopted by any of the Departmental authorities whereby the genuineness of the will was not accepted. Thus, according to these findings, the will produced by the assessee to substantiate his contention was a non-genuine document prepared and produced only for the purpose of explaining the jewellery found at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised Representative, all of them relate to levy of penalty under s. 271(1)(c). We have already pointed out that there is a substantial difference between these two provisions i.e., levy of concealment penalty under s. 271(1)(c) and levy of penalty under s. 158BFA(2). However, for the sake of completeness we will discuss the decisions of jurisdictional High Court which have been relied upon by learned Authorised Representative : (i) CIT vs. Rajinder Kumar Somani (supra) : The words mentioned in the assessment order were are to be initiated separately and it was found by their Lordships that the penalty proceedings were not initiated as the word mentioned were are to be . (ii) CIT vs. Sardar Amarjit Singh (supra) : The question involved in the said decision was that whether the Tribunal was justified in reducing the penalty leviable under s. 271(1) at a figure lower than the sum of 2 per cent of the tax of every month during which the default continued, but not exceeding in the aggregate 50 per cent of the tax and, thus, the question was not regarding validity or otherwise of penalty proceedings on the basis of issuance or non-issuance of notice during the course of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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