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TMI Blog2024 (8) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... . AR. Accordingly, the reliance placed by the Ld. AR on the judgment of Hexaware Technologies Limited [ 2024 (5) TMI 302 - BOMBAY HIGH COURT] would not carry his case any further. The impugned assessment had been framed by the A.O de-hors any valid service of notice u/s. 148 - as can be gathered from the assessment order, the assessee had in the course of assessment proceedings furnished copy of an incomplete deed to explain the source of the cash deposits in his bank account. Accordingly, as it is a case where the assessee had participated in the assessment proceedings but had failed to raise any objection as regards the service of notice u/s. 148 of the Act, therefore, he stands precluded of his right from raising such objection in the course of present appellate proceedings. Before proceeding any further, we deem it fit to cull put the provisions of Section 292BB wherein as held where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4B AND u/s. 271(1)(c) of the Income-tax Act, 1961 (in short the Act ) dated 17.09.2021 and 21.01.2022, respectively for the assessment year 2013-14. 2. We shall first take up the appeal filed by the assessee in ITA No.203/RPR/2024 for A.Y.2013-14, wherein the assessee has assailed the impugned order on the following grounds of appeal: 1) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in confirming action of Ld. Assessing Officer initiating proceedings u/s. 147 r.w.s. 148, 149 and 151 of the Income-tax Act, 1961 without fulfilling stipulated conditions especially the purported approval issued without bearing DIN as required under CBDT Instruction No.19 of 2019. 2) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC is not justified in confirming action of the ld. Assessing Officer completing assessment without service of notice u/s. 148 of the Income-tax Act, 1961 and without giving adequate opportunity. 3) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC is not justified in sustaining the addition made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies but would have a material bearing on the adjudication of the core issue involved in the present appeal, therefore, the same, in all fairness be admitted. 8. Per contra, the Ld. Departmental Representative (for short 'DR') did not raise any objection to the admission of the aforesaid agreement to sell dated 24.12.2010. 9. We have given a thoughtful consideration and are of the view that as stated by the Ld. AR the aforesaid agreement to sell dated 24.12.2010 would have a strong bearing on the adjudication of the core issue involved in the present appeal, therefore, we admit the same. 10. The Ld. AR at the threshold of hearing of the appeal, submitted that as notice u/s. 148 of the Act dated 26.02.2020 did not bear DIN as was statutorily required vide CBDT Circular No.19 of 2019 dated 14.08.2019, therefore, the A.O had wrongly assumed jurisdiction and framed the assessment based on the said invalid notice. The Ld. AR in support of his aforesaid contention had relied on the judgment of the Hon'ble High Court of Bombay in the case of Hexaware Technologies Limited Vs. ACIT, Circle- 15(1)(2), Mumbai, Writ Petition No.1778 of 2023 dated 03.05.2024. Our attention was specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been framed by the A.O de-hors any valid service of notice u/s. 148 of the Act; therefore, we shall first deal with the same. A. Re: Validity of the notice issued u/s. 148 of the Act dated 26.02.2020 in absence of DIN had no existence in the eyes of law. 15. Apropos the challenge of the Ld. AR to the validity of the jurisdiction assumed by the A.O for framing the impugned assessment in absence of mentioning of DIN on the notice u/s. 148 of the Act, dated 26.02.2020, we are unable to persuade ourselves to subscribe to the same. 16. We may herein observe that the issue concerning communication of assessment order without mentioning of DIN was decided by Hon ble Delhi High Court in the case of Commissioner of Income-tax Vs. Brandix Mauritius Holdings Ltd. in favour of the assessee, wherein it was held as under: that the object and purpose of the issuance of Circular No.19/2019, dated 14-8-2019, was to create an audit trail. Thus, communication related to assessments, appeals, and orders without DIN (document identification number) would have no legal standing. The final assessment order issued by the Assessing Officer lacked a DIN, and there was no evidence on record indicating ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding any further, we deem it fit to cull put the provisions of Section 292BB of the Act, which reads as under: 292BB. Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner: Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment. Accordingly, the claim of the assessee as regards invalidity of the assessment framed by the A.O in absence of valid service of notice u/s. 148 of the Act dated 26.02.2020 being devoid and bereft of any merit cannot be accepted. 18. We shall now deal with the claim of the Ld. AR that cash deposits of Rs. 17,92,000/- was sourced out of the sale consideration of agricul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence thereof. It was further observed by the Hon'ble High Court that according to section 92 of the Indian Evidence Act, 1872 Act once the document is tendered in evidence and proved as per the requirements of section 91 then no evidence of any oral agreement or statement would be admissible as between the parties to any such instrument for the purposes of contradicting, varying, adding to or subtracting from its terms. It was further observed by the Hon'ble High Court that once ostensible sale consideration disclosed in the sale deed is accepted then, it cannot be contradicted by adducing any oral evidence. For the sake of clarity, the observations of the Hon'ble High Court are culled out as under: 4. We have thoughtfully considered the submissions made by the learned counsel and are of the view that they do not warrant acceptance. There is well-known principle that no oral evidence is admissible once the document contains all the terms and conditions. Sections 91 and 92 of the Indian Evidence Act, 1872 (for brevity 'the 1872 Act') incorporate the aforesaid principle. According to section 91 of the Act when terms of a contracts, grants or other dispositions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issed in terms of our aforesaid observations. ITA No. 204/RPR/2024 A.Y. 2013-14 21. Now, we shall deal with the captioned appeal filed by the assessee wherein he has assailed the impugned order on the following grounds of appeal: 1) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC has erred in confirming action of Ld. Assessing Officer in imposing penalty tqs.271(1)(c) Income-tax Act, 1961 and in sustaining penalty to the tune of Rs. 75,000/- computed on the amount, of addition sustained in the order u/s. 250 of the Act in quantum appeal. 2) The impugned order is bad in law and on facts. 3) The appellant reserves the right to addition, after or omit all or any of the grounds of appeal in the interest of justice. 22. On a perusal of the order of the CIT(Appeals), it transpires that the CIT(Appeals) had sustained the penalty imposed by the A.O u/s. 271(1)(c) of the Act of Rs. 75,000/- by observing as under: 6.2 The submissions of the appellant and the contentions made by the Assessing Officer in the assessment order and penalty order have been carefully considered. The appellant has also agitated the addition made by the AO by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 271(1)(c), the onus is on the assessee to offer an explanation and to establish that the explanation offered is bonafide and all facts material to the computation of his income have been disclosed. Explanation 01 has created a deeming fiction that on the failure of the assessee to offer explanation or substantiate the explanation, the amount of addition or disallowance as a result thereof shall be deemed to represent concealed income. In this connection, the Hon'ble High Court of Kerela in the case of KP Madhusudan (2002) 125 taxmann 265. has held that the initial burden of discharging the onus of rebuttal is on the assessee. The relevant portion of the above decision is quoted hereunder. A conspectus of the Explanation added by the Finance Act, 1964 and the subsequent substituted Explanations makes it clear that the statute visualised the assessment proceedings and penalty proceedings to be wholly distinct and independent of each other. In essence, the Explanation (both after 1964 and 1976) is a rule of evidence. Presumptions which are rebuttable in nature are available to be drawn. The initial burden of discharging onus of rebuttal is on the assessee. The rationale behind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has made false claims with regard to the cost of acquisition and cost of improvement. In the above circumstances, the provisions of Explanation 1 of section 271(1)(c) are squarely applicable. In the case of Zoom Communication Private Limited, the Hon'ble High Court of Delhi, reported in (2010) 191 taxman 179 has held that, if assessee makes a claim which is not only incorrect in law, but is also wholly without any basis and explanation furnished by him for making such a claim is not found to be bona fide, Explanation 1 to section 271(1)(c) would come into play and assessee will be liable to penalty. Relevant portion of this decision of the High Court is reproduced hereunder: 10. Section 271(1)(c) of the Act, to the extent it is relevant, provides for imposition of penalty in case the Assessing Officer, in the course of any proceedings under Act, is satisfied that any person had concealed particulars of his income or had furnished inaccurate particulars of such income. Explanation 1 to sub-section (1) of section 271 provides that where in respect of any facts material to the computation of the total income of any person, such person fails to offer an explanation or offers is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to penalty. 7. Further, the appellant has stated that the mistake committed by him was bonafide since he was under the belief that his income is below the taxable limit. The Hon'ble Supreme Court in the case of Darmendra Textile Processors [2008] 231 ELT 3 has held that the Penalty u/s 11AC of Central Excise Act was only civil in nature and therefore, no mens-rea was required. The Hon'ble Supreme Court in the case of MAK Data Private Limited [2013] 38 taxmann.com 448 (SC) has referred to the decisions of its coordinate benches in the cases of Darmendra Textile Processors [2008] 231 ELT 3 and Atul Mohan Bindal [2009] 9 SCC 589 and held that penalty u/s 271(1)(c) of the Income Tax Act,1961 is a civil liability and would not therefore, entail mens-rea. 7.2 The scope of Section 271(I)(c) has also been elaborately discussed by the Hon'ble Supreme Court in the case of Union of India v. Dharmendra Textile Processors [2008] 13 SCC 369 and CIT v. Atul Mohan Bindal [2009] 9 SCC 589. Dharamendra Textile Processors [2008] 231 ELT 3 wherein, it was held as under: - 2. A Division Bench of this Court has referred the controversy involved in these appeals to a larger Bench doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person has concealed the particulars of his income or furnished inaccurate particulars of such income, such person may be directed to pay penalty. The quantum of penalty is prescribed in clause (iii). Explanation 1, appended to section 271(1) provides that if that person fails to offer an explanation or the explanation offered by such person is found to be false or the explanation offered by him is not substantiated and he fails to prove that such explanation is bona fide and that all the facts relating the same and material to the computation of his total income has been disclosed by him, for the purposes of section 271(1)(c), the amount added or disallowed in computing the total income is deemed to represent the concealed income. The penalty spoken of in section 271(1)(c) is neither criminal nor quasi-criminal but a civil liability, albeit a strict liability. Such liability being civil in nature, mens rea is not essential. 7.4 Based on the above discussion, it becomes quite clear that the penalty u/s 271(1)(c) does not require the guilty mind or the mens-rea. Such being the case, the penalty levied by the Assessing Officer u/s 271(1)(c) for concealment of income is restricted t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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