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TMI Blog1993 (8) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ntemplated in s. 273(2)(c). He, however, took into consideration the submissions made on behalf of the assessee that a substantial difference had occurred on account of retrospective amendment of s. 80J. While computing the total income for the purposes of levy of penalty under the aforesaid section, he reduced the difference in the amount of relief granted under s. 80J as per the amended provisions and as per the view taken by certain High Courts prior to that amendment. He then levied penalty at 10% on the shortfall in the payment of advance tax. 3. The CIT(A) confirmed the said penalty. It was argued before the CIT(A) that there was no obligation on the part of the assessee to file an estimate of advance tax under s. 212(3A). Hence no penalty could be validly levied under s. 273(2)(c). The CIT(A) overruled such contention by relying on the provisions of s. 292B. He confirmed the said penalty. 4. Before us, the learned counsel for the assessee submitted that the order passed under s. 210 was itself invalid as the assessee had not been previously assessed. The first assessment was for asst. yr. 1976-77. That assessment was made on 30th March, 1979. The notice under s. 210 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder and in the order of the CIT(A). He submitted that the mistake of levying the penalty under a wrong section could be cured by resort to s. 292B. According to the learned Sr. Departmental Representative, the penalty could be sustained under s. 273(2)(b) for default of not furnishing an estimate by an assessee who has not previously been assessed by way of regular assessment and as required by s. 209A(1). He submitted that the order of the CIT(A) confirming the penalty requires no interference. 6. In our view the penalty in the aforesaid facts and circumstances deserves to be cancelled. The assessee received a notice for payment of advance tax on 24th Nov., 1978 in which a demand of Rs. 11,29,357 was made. The assessee promptly complied with the said notice and paid the amount demanded before the date mentioned in the said notice under s. 210. The assessee could, on account of such a circumstance, entertain a bona fide belief that, since it has paid advance tax as per the notice received from the Assessing Officer, no further enquiry into the books of account for making a correct estimate at that stage for the purpose of estimating the advance tax liability would be necessary. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession in the figure of closing stock by not recording the goods in the closing stock which were found in the stores ledger 34201 . . Plus admitted arithmetical inaccuracy in the figure of closing stock 10,135 44,335 . . . 99,478 . Rounded to . 99,480 The Assessing Officer levied minimum penalty at 100% of tax on concealed income which came to Rs. 64,862. 8. The learned CIT(A) has confirmed the same. 9. The assessee has raised various grounds running into 4 pages but the sum and substance of all these grounds is that the penalty so confirmed by the CIT(A) is contrary to the provisions of law and is also contrary to facts, material and evidence existing on records and is against the decisions of various Courts cited in the grounds of appeal. In fact such grounds of appeal are argumentative in nature which is not in consonance with the relevant rules. The grievance of the assessee is that the CIT(A) has erred in confirming the said penalty. 10. Before us, the learned counsel for the assessee vehemently argued that, so far as the addition on account of alleged suppression of stock of colour and chemicals of Rs. 44,345 is concerned, there is no concealment and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee was, however, fair enough to admit that Expln. 1 to s. 271(1)(c) would be applicable but the said Explanation only contains a rebuttable presumption which is adequately rebutted by the evidence already existing on records. The persons who prepared the issue slips could not be produced before the authorities concerned as they had left services and their whereabouts were not known. The learned counsel strongly submitted that the penalty in such a case should be cancelled. 11. The learned Sr. Departmental Representative relied on the elaborate reasons given in the penalty order passed by the Assessing Officer as well as in the order of the CIT(A) confirming the said penalty. He submitted that the Assessing Officer specifically required the assessee to produce the issue slips in which corrections were made with a view to inflate the consumption of colour and chemicals. Neither the original issue slips were produced nor the persons concerned were produced before the Assessing Officer. The assessee did not submit any further material in the penalty proceedings to discharge the burden which lay on the assessee with reference to Expln. 1 to s. 271(1)(c). The only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the assessee so far as this addition is concerned. We, therefore, direct the ITO to cancel the penalty in respect of the addition of difference in closing stock to the tune of Rs. 44,345. Penalty levied with reference to this item of income is, therefore, directed to the deleted. 12.1 However, as regards the inflation of consumption of colours and chemicals, the assessee's contention cannot be accepted. In the relevant stores ledger folio at page 79, the assessee has made various corrections in the quantity originally shown as consumed which has resulted in excess consumption of 800 kgs. of Fixer P.R. The summary of various corrections made in the relevant records resulting in an excess consumption of Rs. 33,542.88 can be summarised as under, which has been taken as per photo copy of the relevant stores ledger submitted in the compilation: Receipt Issue Qty. Kgs. Rate Value Date Ref. Qty.origi-nally Qty.corre-cted as Diff 1.7.1977 NewDyeStuff Bill No. 822 800 41.72 33542.88 5-8-79 43 100 300 200 . . . . . 20-8-79 57 100 200 100 . . . . . 15-9-79 89 100 300 200 . . . . . 21-9-78 98 100 200 100 . . . . . 30-9-78 111 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purpose of s. 271(1)(c) be deemed to represent the income in respect of which particulars have been concealed. It is true that the Explanation only introduced a rebuttable presumption but such a statutory presumption has to be rebutted by the assessee by producing necessary evidence and material to rebut the same. In view of such legal position let us examine as to what type of material and reply has been submitted by the assessee in the course of penalty as well as in the quantum proceedings. 12.2 The various evidence submitted by the assessee in the quantum proceedings have been elaborately considered by the Tribunal in the course of quantum appeal. The Tribunal vide order dt. 16th Dec., 1987 in ITA No. 1224/Ahd/1983 has elaborately examined the various contentions of the assessee. It will be worthwhile to reproduce para 8 and 9 of the order passed by the Tribunal in respect of the aforesaid addition: "8. We have given our a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this behalf and dismiss this ground." The Tribunal also rejected the assessee's miscellaneous application by passing a detailed order dt. 17th Jan., 1989, in M.A. No. 11/Ahd/88. 12.3 In the penalty proceedings also the assessee did not produce the original issue slips nor it produced the concerned persons. A brief reply dt. 14th Aug., 1982 and 27th Nov., 1984 was submitted. A perusal of these replies submitted in the course of penalty proceedings reveal that no effort was made to rebut such a statutory presumption by any convincing material on record. In the letter dt. 14th Aug., 1982 a request was made that, since appeal is pending before the CIT(A), the penalty proceedings should be kept in abeyance. Apart from this it was stated that the assessee's C.A., Mr. G.K. Choksi, is also out of station and, therefore, further time should be extended. Apart from this, it was mentioned that the penalty notice is in the standard printed form and gives no further details except merely stating that the assessee had concealed the particulars of income. The assessee requested the ITO to give the details of the items of income, which according to the ITO, is income concealed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irections of the Tribunal in its order dt. 22nd Feb., 1988 should be complied with and the decision on interest under the aforesaid sections should be given afresh in accordance with law after giving opportunity of being heard to the assessee. In view of the aforesaid order of the Tribunal dt. 2nd Feb., 1993, the present appeal has become infructuous and is, therefore, dismissed. 15. Now we will consider assessee's appeal No. 611/Ahd/1989 for asst. yr. 1985-86 against levy of penalty of Rs. 1 lac under s. 271B. The Assessing Officer levied penalty of Rs. 1 lac by holding that the assessee was not prevented by any reasonable cause in complying with the provisions of s. 44AB and was, therefore, liable for penalty under s. 271B. The CIT(A) confirmed the same. 16. The learned counsel for the assessee submitted that the accounting year pertaining to asst. yr. 1985-86 ended on 30th Sept., 1984. The return of income was furnished on 27th Sept., 1985. A revised return was furnished on 30th April, 1986. The assessee submitted along with the said revised return a tax audit report dt. 31st March, 1986. The time for furnishing of the tax audit report for asst. yr. 1985-86 was extended by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax audit report had already been furnished on 30th April, 1986. The learned counsel relied on series of decisions to support his contention that no penalty under s. 271B could be validly levied in such facts and circumstances, such as cases reported in (1989) 29 ITD 537, Progressive Constructions (P) Ltd. vs. ITO (1987) 20 ITD 182 (Hyd), National Agro Service vs. ITO (1990) 34 ITD 506 (Pune), IAC vs. Hindustan Lever Ltd. (1991) 39 ITD 147 (Bom), ITO vs. Arun Kumar Bhuwalka (1992) 40 ITD 373 (Cal), Rajasthan Rajya Sahakari Upbhokta Sangh Ltd. vs. ITO (1988) 32 TTJ (Jp) 250, CIT vs. Assam Co. (India) Ltd. (1988) 72 CTR (Cal) 195 : (1988) 174 ITR 544 (Cal) and CIT vs. Sulekha Works (P) Ltd. (1986) 54 CTR (Cal) 66 : (1985) 156 ITR 190 (Cal). He urged that the penalty should be cancelled. 17. The learned Sr. Departmental Representative relied on the reasons mentioned in the penalty order of the Assessing Officer as well as on the reasons given in the order of the CIT(A). 18. We have very carefully considered the rival submissions made by the learned representatives. We have also gone through the various decisions relied upon by the learned counsel for the assessee. It is amply clear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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