TCA.No.213 of 2009 IN HIGH COURT OF JUDICATURE AT MADRAS DATED : 04.8.2020 CORAM HONOURABLE MR. JUSTICE T.S.SIVAGNANAM AND HONOURABLE MRS. JUSTICE V.BHAVANI SUBBAROYAN TAX CASE APPEAL NO.213 OF 2009 (heard through video conferencing) Shri Kamal Basha ...Appellant Vs. Deputy Commissioner of Income Tax, Business Circle VIII, 611, Anna Salai, Chennai-6. ...Respondent APPEAL under Section 260A of Income Tax Act, 1961, against order dated 26.9.2008 passed by Income Tax Appellate Tribunal Chennai 'B' Bench, Chennai in I.T.A.No.1875/Mds/ 2007 for assessment year 2003-2004. For Appellant : Mr.A.S.Sriraman For Respondent : Mrs.V.Pushpa, SC 1/8 http://www.judis.nic.in TCA.No.213 of 2009 Judgment was delivered by T.S.SIVAGNANAM,J We have heard Mr.A.S.Sriraman, learned counsel appearing for appellant - assessee and Mrs.V.Pushpa, learned Standing Counsel appearing for respondent Revenue. 2. This appeal by Revenue under Section 260A of Income Tax Act, 1951 (for short, Act) is directed against order dated 26.9.2008 passed by Income Tax Appellate Tribunal, Chennai 'B' Bench (for brevity, Tribunal) in I.T.A.No.1875/Mds/2007 for assessment year 2003-2004. 3. appeal has been admitted on 14.7.2009 on following substantial question of law : ?Whether Appellate Tribunal is correct in law in sustaining levy of penalty under Section 271(1)(c) of Act on rejection of claim of sundry creditors which were offered for taxation in course of assessment proceedings by Appellant even though presumption on concealment of Income or furnishing of inaccurate particulars of Income as per explanation 1 was rebutted in proceedings? 4. It is pertinent to note that by judgment dated 26.6.2019, we allowed this appeal filed by assessee. Subsequently, it was brought 2/8 http://www.judis.nic.in TCA.No.213 of 2009 to notice of this Court by learned Standing Counsel appearing for Revenue that assessee had filed another appeal in TCA.No. 155 of 2009 against very same impugned order and it was dismissed even at admission stage by judgment dated 20.4.2009. 5. When matter was listed earlier, learned counsel for appellant assessee submitted that he would like to get instructions and make submissions to distinguish both cases. Therefore, we adjourned matter. Today, matter is listed for hearing. 6. It is submitted by learned counsel appearing for appellant assessee that case in TCA.No.155 of 2009 arose out of order in cross objection filed by assessee, that dismissal of TCA.No.155 of 2009 by judgment dated 20.4.2009 can have no impact on present appeal and that judgment in TCA.No.213 of 2009 dated 26.6.2019 should be allowed to continue and prayer for recalling said judgment dated 26.6.2019 made by Revenue should be rejected. 7. To test correctness of said submission made by learned counsel for assessee, we have perused judgment in TCA.No.155 of 2009 dated 20.4.2009. said appeal was filed raising three substantial questions of law, which are as hereunder : 3/8 http://www.judis.nic.in TCA.No.213 of 2009 i. Whether, Appellate Tribunal is correct in law in sustaining levy of penalty under Section 271(1)(c) of Act on rejection of claim of sundry creditors which were offered for taxation in course of assessment proceedings by appellant even though presumption on concealment of income or furnishing of inaccurate particulars of income as per Explanation 1 was rebutted in proceedings? ii. Whether Appellate Tribunal is correct in law in sustaining action of respondent in imposing penalty under Section 271(1)(c) of Act even though application of deeming provisions in Section 41(1) of Act would not come within ambit of said penal provisions especially explanation offered was bona fide and not rejected as malafide ? And iii. Whether Appellate Tribunal is correct in law in dismissing cross objection as infructuous even though cross objection as per legal prescription should be construed as separate proceedings requiring independent consideration and recording of findings on issues emanating and urged by cross objector/appellant herein? 4/8 http://www.judis.nic.in TCA.No.213 of 2009 8. Hon'ble Division Bench of this Court, after considering case of assessee, dismissed TCA.No.155 of 2009 by judgment dated 20.4.2009, operative portions of which, read as follows : Recently, Apex Court has considered Section 271(1)(c) of Act on reference made wherein ratio laid down in Dhilip N.Shroff Vs. Joint CIT [reported in 291 ITR 519] was doubted. three Judges Bench of Apex Court in case of Union of India Vs. Dharmendra Textile Processors [306 ITR 277] has clearly enunciated that in order to invoke Section 271(1)(c) of Income Tax Act, existence of dishonest intention and deliberate failure to give correct particulars is not necessary. Supreme Court has held that Explanation appended to Section 271(1)(c) of Income Tax Act, 1961 indicate element of strict liability on assessee for concealment or for giving inaccurate particulars while filing return. object behind enactment of Section 271(1)(c) read with Explanations indicates that Section has been enacted to provide for remedy for loss of revenue. penalty under that provision is civil liability. Wilful concealment is not essential ingredient for 5/8 http://www.judis.nic.in TCA.No.213 of 2009 attracting civil liability as is case in matter of prosecution under Section 276C of Income Tax Act and held that any concealment come within purview of Section 271(1)(c) would automatically render assessee for penalty under Section 271(1)(c) of Act. 7. On facts, we have concluded that assessee's attitude before officer is inconsistent and even inconsistent stand could not be established with supportive evidence or materials. In light of decision of Apex Court in case of Union of India Vs. Dharmendra Textiles Processors [306 ITR 277], we are of view that penalty under Section 271(1)(c) of Act is attracted in this case. 8. We do not find any merit in this appeal for determining any question of law. appeal is dismissed. 9. In fact, substantial question of law, which was entertained in this appeal is first substantial question of law in TCA.No.155 of 2009 and it is verbatim repetition. Since Hon'ble Division Bench considered entire matter and dismissed appeal holding that no substantial question of law arose for consideration, we are not inclined to accept submissions made by learned counsel for 6/8 http://www.judis.nic.in TCA.No.213 of 2009 appellant assessee. In fact, learned counsel, who appeared in both matters, is same person and it is not clear as to why it was not brought to our notice by learned counsel, when we heard TCA.No.213 of 2009. Be that as it may, in light of above discussions, judgment in TCA.No.213 of 2009 dated 26.6.2019 has to be recalled. 10. Accordingly, judgment in TCA.No.213 of 2009 dated 26.6.2019 is recalled. Consequently, TCA.No.213 of 2009 is dismissed as unnecessary. No costs. 04.8.2020 To Income Tax Appellate Tribunal, Chennai B Bench. RS 7/8 http://www.judis.nic.in TCA.No.213 of 2009 T.S.SIVAGNANAM, J AND V.BHAVANI SUBBAROYAN, J RS TCA.No.213 of 2009 04.8.2020 8/8 http://www.judis.nic.in Kamal Basha v. Deputy Commissioner of Income-tax, Business Circle VIII, Chennai