BINOD KUMAR SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) HEARD learned counsel for the applicant, Mr. Bharat Ji Agarwal, Senior Advocate appeared on behalf of the respondent Union of India assisted by Mr. Govind Krishna, Advocate and perused the record. Learned counsel for the applicant contended that the applicant is income tax payee. While filing the income tax return for assessment year 2004 -05, in computation of the income chart, he claimed deduction under Section 80GGA of Income Tax Act (hereinafter referred to as "the Act") amounting to Rs. 5.85 lacs, which was given as donation to Swami Sahajanand Educational Trust, Varanasi and the same was verified and accepted by the assessing officer. Subsequently, The Commissioner of Income Tax, Varanasi in exercise of power under Section 263 of the Act issued notice to the applicant calling for objection, if any, for recall of the deduction allowed under Section 80GGA of the Act. It was also found that the aforesaid Educational Trust was not approved for deduction under Section 80GGA of the Act, which was earlier verified by the assessing officer and deduction was allowed. Hence, there was no wilful evasion of tax on the part of the applicant. After reassessment of the tax, penalty was imposed under Section 271(1)(c) of the Act. However, the Tribunal has revoked the order of penalty after recording the finding that there was no wilful evasion of tax by the applicant. Whether the said Trust was approved for exemption, the applicant was not aware. When it was found that the said Trust was not approved for exemption by the Income Tax Department, after reassessment, whatever liability of tax was imposed, the same was paid by the applicant.

(2.) LEARNED counsel for the applicant contended that since the penalty imposed under Section 271(1)(c) of the Act against the applicant was revoked and there was no concealment of the fact then the criminal prosecution is also not maintainable against the applicant in view of the judgment of the Apex Court in the case of K.C. Builders and Another Vs. The Assistant Commissioner of Income Tax : JT 2004 (2) SC 100.

(3.) CONSIDERED the submissions of learned counsel for the parties. From perusal of the complaint, it appears that false statement was made and verified by the applicant when income tax return was submitted claiming deduction of Rs. 5.85 lacs under Section 80GGA of the Act which was accepted by the assessing officer. The Commissioner of Income Tax, Varanasi in exercise of power under Section 263 of the Act issued notice to the income tax assessee why the deduction allowed under Section 80GGA of the Act should not be withdrawn. Subsequently, it was found that Swami Sahajanand Educational Trust, Varanasi was not registered and approved by the Income Tax Department with regard to the deduction under Section 80GGA of the Act. Hence, there was not only reassessment but even for concealment of the fact, the penalty was imposed under Section 271(1)(c) of the Act. There was prosecution for wilful attempt to evasion of tax under Section 276(C) of the Act and the prosecution under Section 277 of the Act for giving false statement and verification. While considering the appeal against penalty, the appellate Tribunal decided that there was no wilful attempt for evasion of tax by the applicant, penalty imposed against the applicant, was invoked. Para 26 and 27 of the judgment of the Apex Court in the case of K.C. Builders (supra) is quoted herein below: