CHIRAG UDDIN,AGRA V. .COMMISSIONER OF INCOME TAX (APPEALS0, INCOME TAX DEPARTMENT

ITA 12/AGR/2024

AI Insights

This case involves an appeal by Chirag Uddin against the penalty levied by the Income-tax Officer under section 271(1)(c) of the Income-tax Act, 1961, which was sustained by the Commissioner of Income-tax (Appeals). The penalty of Rs. 2,06,000 was imposed due to unexplained cash deposits of Rs. 8,25,000 in the assessee's bank account, which were treated as unexplained income. The assessee contended that the money belonged to his brother and that the account was a joint account. The Tribunal had previously restored the quantum additions to the Assessing Officer for denovo reassessment, and it was decided that the penalty issue should also be revisited in light of the new evidence and submissions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23164 (ITAT-AGRA)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 12-01-2024
• Other Referred Cases: Collector Land Acquisition, Anantnag & Ors. vs Mst. Katiji & Ors. (1987) 167 ITR 471 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SRIVASTAVA
• Assessee Lawyers: RAJENDRA SHARMA; ISSUING
• Keywords: Condonation of delay; Opportunity of being heard; Additional evidence; Reasonable cause; Reassessment proceedings
• Section: 147; 148; 144; 271(1)(c); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH, AGRA BEFORE: SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No. 12/Agr/2024 Assessment Year: 2010-11 Chirag Uddin, 28/4-1/2, Pakki Sarai, Tajganj, Agra. PAN: AAKPU3777G v. Income-tax Officer, Ward 1(1)(1), Agra. (Appellant) (Respondent) Assessee by :Sh. Rajendra Sharma, Advocate Sh. Manuj Sharma, Advocate Ms. Ayushi Pareek, Sh. Bijendra Baghel, Advocate Revenue by : Sh. Shailendra Srivastava, Sr. DR Date of hearing : 09.12.2024 Date of Pronouncement : 11/12/2024 ORDER This appeal in ITA No.12 /Agr/2024 for the assessment year 2010-11 has arisen from the appellate order dated 16.10.2023(DIN& Order No. ITBA/NFAC/S/250/2023-24/1057106997(1))passed by learned Commissioner of Income-tax(Appeals), NFAC, Delhi confirming the penalty levied by the AO of Rs. 2,06,000/- u/s 271(1)(c) of the Income-tax Act, 1961, which appeal before ld. CIT(A) in turn has arisen from the penalty order dated 25.05.2018 passed by ITA No. 12/Agr/2024 2 Assessing Officer u/s. 271(1)(c) of the Income-tax Act, 1961 levying penalty of Rs. 2,06,000/- against the assessee. 2. Grounds of appeal raised by assessee in the appeal memo filed with Income Tax Appellate Tribunal, Agra Bench, Agra, reads as under : “1. That learned CIT Appeals have erred on facts and law while sustaining the penalty imposed by the AO u/s 271(1)(c) at Rs. 2,06,000.00 по penalty is liable to be sustained, penalty imposed by the AO and sustained by the learned CIT Appeal is liable to be cancelled.That while sustaining the penalty , learned CIT(A) has completely ignored the provisions of 271(1)(c) of IT Act which are not attracted in the case of assessee. After taking into consideration, the provisions of 271(1)(c) , no penalty is liable to be imposed, penalty imposed by the AO sustained by CIT(A) is liable to be deleted. 2. That while sustaining the penalty imposed by the AO u/s 271(1)(c), in the count of offence concealment of income, the learned CIT Appeals have completely ignored the provisions of section 271(1)(c), where the addition is made u/s 68 of the Income tax Act. The penalty imposed against the addition made u/s 68 is not called for. Penal provisions are not attracted on such addition, penalty imposed by the AO, sustained by the CIT Appeal is liable to be cancelled. 3. That while sustaining the penalty, learned CIT Appeal has completely ignored the provisions of 271(1)(c) of Income tax Act which are not attracted in the case of assessee. After taking into consideration, the provisions of section 271(1)(c), no penalty is liable to be imposed, penalty imposed by the AO sustained by CIT Appeal is liable to be deleted. 4. That while sustaining the penalty imposed by the AO, the learned CIT Appeal has completely ignored that no addition on quantum is liable to be made, the appeal against addition sustained in quantum ITA No. 12/Agr/2024 3 is pending with Hon'ble ITAT. The addition made in assessment will be deleted. 5. That the appellate order dt. 16.10.2023 is bad in law.” 3. At the outset, it is observed that this appeal is filed belatedly by the assessee by 28 days before the Income-tax Appellate Tribunal, Agra, beyond the time prescribed u/s 253(3) of the 1961 Act. It is observed that the application for condonation of delay is filed by the assessee, and it is averred in the application that the assessee was sick due to which he was bed ridden and hence the appeal could not be filed in time, and prayers are made for condonation of delay. The said application is placed on record in file. I have gone through the contents of said condonation application .I am of the considered view that this delay of 28 days in filing this appeal belatedly with ITAT needs to be condoned. The assessee has shown sufficient and reasonable cause in filing this appeal belatedly with ITAT. If substantial justice and technical considerations are pitted against each other, courts will lean towards advancement of substantial justice unless malafide is at writ large on the part of the litigant. I do not find any mala fide on the part of the assessee in filing this appeal ITA No. 12/Agr/2024 4 belatedly with the Income-tax Appellate Tribunal. I further observe that the assessee is not likely to gain anything by filing the appeal belatedly by 28 days. I have also observed that the assessee has filed its appeal before ld. CIT(Appeals) in time , and has also prosecuted the matter before ld. CIT(Appeals) in the first appellate proceedings. The assessee is also persuing this appeal filed with ITAT. Even the assessee had contested quantum additions before ld. CIT(A) and ITAT. Thus, the assessee is vigilant as to its rights and duties, but however there was a delay of 28 days in filing this appeal belatedly with ITAT, which needs to be condoned as sufficient and reasonable cause is shown by the assesse. Thus, keeping in view the interest of substantial justice, I condone the delay of 28 days in filing this appeal belatedly with ITAT beyond the time prescribed u/s 253(3), and proceed to decide the appeal on merits. Reliance is placed on the decision of Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag &Ors. vs Mst. Katiji&Ors. (1987) 167 ITR 471 (SC). ITA No. 12/Agr/2024 5 4. Brief facts of the case are that the Revenue was in possession of the AIR information that Rs.8,25,000/- has been deposited in the saving bank account of the assessee, whereas the assesse has neither filed return of income nor any explanation regarding source of cash deposit was provided during verification proceedings. The case of the assessee was reopened by Revenue u/s. 147, and notice u/s 148 was issued by the AO to the assessee on 30.03.2017 after recording of reasons for re-opening of the concluded assessment. The reassessment was framed by the AO vide order dated 30.11.2017 u/s 144/147 on total income of Rs. 9,85,000/-. The AO had made addition of income of Rs.8,25,000/- in the hands of the assesseetowards cash deposits in the bank account, by treating the same as unexplained income as the assessee could not explain the sources of said cash deposits. Proceeding u/s. 271(1)(c) of the Act was initiated by the Assessing Officer, but there was no compliance by the assessee. Show cause noticewas also issued by the AO on 02.05.2018 u/s 271(1)(c), but there was no compliance by the assessee, which led to levy of penalty of Rs.2,06,000/- in the hands ITA No. 12/Agr/2024 6 of the assessee by the Assessing Officer u/s. 271(1)(c), videpenalty order dated 25.05.2018 passed by the AO u/s 271(1)(c). 5. Aggrieved by penalty levied by the AO u/s 271(1)(C), the assessee filed first appeal with ld. CIT(Appeals), wherein the assessee has submitted that the appeal against quantum order passed by the Assessing Officer is pending before ITAT. The assessee submitted that the assessee is a small trader in shoes on Feri basis and the income was below taxable limits, and hence the return of income was not filed. The assessee has also claimed that the assessee was not aware about the notices and fixation of the case before the Assessing Officer, which resulted in an ex-partere-assessment order by the Assessing Officer u/s. 144 read with section 147 of the Act. The assessee also explained that the money belongs to his brother, Nawab Uddin ,and the said bank account in which money was deposited is in the joint name with his brother Nawab Uddin, and the first holder is his brother, Nawab Uddin, who has owned up the said bank account and money deposited. The assessee even placed before ld. CIT(A), the two submissions filed before ITAT in the second appeal against quantum additions. Ld. CIT(Appeals) dismissed the ITA No. 12/Agr/2024 7 appeal of the assessee and confirmed penalty levied by the Assessing Officer u/s. 271(1)(c) of the Act. 5. Aggrieved, the assessee has filed second appeal with the Tribunal and at the outset ld. Counsel for the assessee Shri Rajendra Sharma, Advocate submitted that the appeal against quantum additions has been decided by the Tribunal in ITA No. 156/Agr/2019 (A.Y. 2010-11) vide order dated 11.12.2023, wherein the Tribunal has restored the matter back to the file of Assessing Officer for denovo determination of issue after verification of additional evidence by way of affidavit filed by the assessee’s brother and other submissions of the assessee, by holding as under : 5. Against the above order, assesseeis in appeal before us. We have heard ld. DR for the Revenue and perused the records. None appeared on behalf of the assessee. However, there is written submissions and assessee’s counsel has stated that the said account was a joint account with assessee’s brother. He stated that the first name of the joint account is also of assessee’s brother and has filed assessee’s brother affidavit in this regard stating that assessee has not deposited that cash and the same is belonging to him. 6. After careful considering, we find that a copy of the assessee’s brother affidavit is produced before us which stated that the said account was a joint account of his and younger brother and the first name was of assessee’s brother and the second name is the assessee. Further, the brother of the assessee has sworn on affidavit that all the money deposit was his and his younger brother has nothing to do with the deposits. We find that in the interest of ITA No. 12/Agr/2024 8 justice, this additional evidence needs to be verified at the level of AO. Hence, we restore the file to AO and AO shall verify all these submissions and decide as per law. Needless to add, assessee should be given adequate opportunity of being heard. 5.2 It was submitted and prayed by ld. Counsel for the assessee that this matter can also be restored back to the file of Assessing Officer for fresh determination of penalty u/s. 271(1)(c) of the Act after considering entire material on record and passing of re-assessment order u/s. 147 of the Act denovo,vide directions of ITAT vide orders dated 11.12.2023 in ITA No. 156/Agr/2019. 5.3Ld. Sr. DR fairly submitted that the matter can be restored back to the file of Assessing Officer for fresh determination of penalty u/s. 271(1)(c) of the Act. 6. I have considered rival contentions and perused material on record. I have observed that the reassessment proceedings were initiated by the Assessing Officer against the assessee by issuing notice u/s. 148 on 30.03.2017 mainly on the ground based on the information in possession vide AIR information that the assessee has deposited cash of Rs.8,25,000/- in his bank account. I have observed that the reassessment order was passed by the Assessing Officer ITA No. 12/Agr/2024 9 u/s. 147/144 of the Act, as there was no compliance on the part of the assessee, which led to addition of Rs.8,25,000/- on account of cash deposits in the bank account. Assessee has not filed any return of income. The matter against quantum additions made by the AO reached Tribunal and the Tribunal vide order dated 11.12.2023 in ITA No. 156/Agr/2019 has restored the quantum additions to the file of Assessing Officer for denovo re-assessment and to verify the additional evidences and submissions filed by the assessee for the first time before ITAT. The assessee is claiming that he is small trader in shoe on Feri basis, and the income being below taxable limits, no return of income was filed. The assessee has claimed before ITAT against quantum additions that the bank account in which cash of Rs. 8,25,000/- was deposited is a joint account with his brother Mr. Nawab Uddin and his brother Mr. Nawab Uddin has owned up the bank deposit of Rs. 8,25,000/- in the said bank account. The affidavits executed by his brother Mr. Nawab Uddin were filed before the ITAT, in the quantum proceedings, and Tribunal restored the matter back to the file of AO for fresh determination of the issue after considering affidavits and other submissions. Since ITA No. 12/Agr/2024 10 the Tribunal has restored the quantum additions back to the file of the AO to denovo frame reassessment in quantum, it will be fair and appropriate that this matter relating to levying of penalty u/s 271(1)(c) be also restored back to the file of Assessing Officer for fresh determination of issue of levying penalty u/s. 271(1)(c) of the Act, after deciding the quantum additions after considering the contentions raised by the assessee as well additional evidences filed by the assessee. Needless to say that the AO shall provide proper opportunity to both the parties. I clarify that I have not commented on the merits of the issues arising in the appeal. The appeal of the assessee is allowed for statistical purposes. I order accordingly. 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 11/12/2024. Sd/- (RAMIT KOCHAR) ACCOUNTANT MEMBER Dated: 11/12/2024 *aks/- ITA No. 12/Agr/2024 11 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT Assistant Registrar ITAT Agra "