Mohamed Haris and M/S Welman International v. Commissioner of Income Tax, Kozhikode

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **MONDAY, THE 7TH DAY OF APRIL 2014/17TH CHAITHRA, 1936** ## **ITA.No. 58 of 2014 ()** **---------------------ITA.NO. 629/COCH/2013 FOR THE ASSESSMENT YEAR 2006-2007 OF INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN** **-------------------** ## **APPELLANT/APPELLANT :** **---------------------------------------** **SRI. MOHAMED HARIS, M/S.WELMAN INTERNATIONAL, HOTEL DIPLOMAT BUILDING RAILWAY STATION ROAD, CALICUT.** **BY ADVS.SRI.ANIL D. NAIR SRI.SREEJITH R. NAIR SMT.C.S.SULEKHA BEEVI SMT.ROSIE ATHULYA JOSEPH** ## **RESPONDENT/RESPONDENT :** **---------------------------------------------** **THE COMMISSIONER OF INCOME TAX KOZHIKODE-673 001.** **BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX** **THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 07-04-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Mn** **...2/-** ## **ITA.No. 58 of 2014 ()** ## **APPENDIX** ## **APPELLANTS' ANNEXURES :** **ANNEXURE A : COPY OF THE ASSESSMENT ORDER DATED 26.12.2008 FOR THE YEAR 2006-07. ANNEXURE B COPY OF THE PENALTY PROCEEDINGS UNDER SEC.217(1)(C). ANNEXURE C COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS).** **ANNEXURE D COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL.** ## **RESPONDENT'S ANNEXURES : NIL** **//TRUE COPY//** **P.S. TO JUDGE Mn** ## **MANJULA CHELLUR, CJ & A.M.SHAFFIQUE, J. * * * * * * * * * * * * *** I.T.A.No.58 of 2014 ---------------------------------------Dated this the 7[th] day of April 2014 ## **J U D G M E N T** ## **SHAFFIQUE, J** The assessee has preferred this appeal challenging the order passed by the Income Tax Appellate Tribunal, Cochin Bench in ITA.No.629/Coch/2013 in respect of the assessment year 2006-2007. 2. The facts involved in the above appeal would disclose that the appellant, being a partner of various firms, filed his return of income for the assessment year 2006-2007 declaring a total income of Rs.2,43,821/-. The Assessing Officer completed the assessment under Section 143(3) of the Income Tax Act (hereinafter referred to as the Act) fastening the total income of the assessee at Rs.15,51,030/-. The Assessing Officer, while passing the order made an addition of Rs.13,00,000/- to the total income I.T.A.No.58 of 2014 2 as unexplained income under the head income from other sources and consequently imposed penalty of Rs.8,84,676/-. Against the order of penalty, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) which was dismissed and a further challenge was made by the assessee before the Tribunal and the penalty was modified to 100% of the tax sought to be evaded as against the imposed penalty of 200%. 3. The assessee has preferred this appeal raising the following question of law. _“In the facts and circumstances fo the case, ought not the Tribunal to have held that in view of the conduct of the assessee in co-operating with the Department in the proceedings of assessment penalty under Sec.271(1)(c) was not leviable?_ ” 4. It is, inter alia, contended by the learned counsel for the appellant that there was no justification for imposing penalty as there was no conscious attempt on the part of the assessee to evade payment of income tax. The Tribunal I.T.A.No.58 of 2014 3 found that though the assessee has taken up a contention that he has received loans from friends and relatives, which were utilised to make deposits into the bank accounts, no materials were produced to show that the said contention was justifiable. The assessee has also agreed for an addition of Rs.13,00,000/- as he was unable to explain the source of income. The Tribunal relied upon the judgment of the Supreme Court in **MAK Data (P) Ltd. v. Commissioner of Income Tax** _[358 ITR 593 (SC)]_ in order to form an opinion that voluntary surrender by itself would not absolve the assessee from the liability of penalty and he is required to offer an explanation for concealment of furnishing of inaccurate particulars of income. It is found that the assessee has failed to furnish any material to prove his bona fide and there is no explanation with regard to the loans he received. 5. Under these circumstances, when the assessee has failed to discharge the burden casted on him under I.T.A.No.58 of 2014 4 explanation 1 of Section 271 of the Act, there is no reason to interfere with the order of penalty. However, the Tribunal reduced the penalty from 200% to 100%. Having gone through the judgment cited above and having heard the learned counsel for the appellant, we do not think that the question of law raised can be answered in favour of the assessee and accordingly the appeal is dismissed. (sd/-) **(MANJULA CHELLUR, CHIEF JUSTICE)** (sd/-) **(A.M.SHAFFIQUE, JUDGE)** jsr I.T.A.No.58 of 2014 5 I.T.A.No.58 of 2014 6