Shri Siddharth Jalan, Kolkata V. A.C.I.T Cir - 37,kolkata, Kolkata

ITA 1004/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4953 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 29-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK KUMAR JCIT SRDR
• Assessee Lawyers: S JHAJHARIA
• Keywords: Gift; Initiation of penalty proceedings; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1004 / KOL / 2013 ASSESSMENT YEAR :2003-04 SHRI SIDDHARTHA JALAN 118A, C.R.AVENUE, KOLKATA-700 073 [ PAN NO.ACSPJ 9958 Q ] V/S . ACIT, CIRCLE-37, PODDAR COURT, 8 TH FLOOR, 18, RABINDRA SARANI, KOLKTA-700 001 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI S. JHAJHARIA, AR /BY RESPONDENT SHRI ASHOK KUMAR, JCIT, SR-DR /DATE OF HEARING 07-03-2016 /DATE OF PRONOUNCEMENT 19-04-2016 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, KOLKATA IN APPEAL NO.861 /CIT(A)-XXIV/C-37/11- 12 DATED 25.02.2013. ASSESSMENT WAS FRAMED BY ACIT CIRCLE-30, KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE HIS ORDER DATED 31.03.2006 FOR ASSESSMENT YEAR 2003 -04. PENALTY LEVIED BY ACIT, CIRCLE-37 KOLKATA U/S 271(1)(C) OF THE ACT VI DE HIS ORDER DATED 22.02.2011. ITA NO.1004/KOL/2013 A.Y. 2003-04 SH SIDDHARTHA JALAN V. ACIT, CIR-37, KOL. PAGE 2 2. ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN HIS APPEAL THAT THE LD.CIT(A) HAS CONFIRMED THE ORDER OF THE AO BY SUST AINING THE PENALTY ORDER PASSED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT . 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND EARNED INCOME FROM EXPORT BUSINESS AND INCOME FROM OTHER S OURCES. THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER A FTER MAKING CERTAIN ADDITIONS AND DISALLOWANCES TO THE TOTAL INCOME OF THE ASSESSEE ON DATED 31.03.2006. ONE OF THE ADDITIONS MADE BY THE AO WAS TOWARDS THE GIFT RECEIVED BY THE ASSESSEE FOR RS.15 LAKHS DURING THE YEAR ON THE GROUND THAT THE ASSESSEE FAILED TO SUBSTANTIATE THE TRANSACTION OF THE GIFT BY PRODUCING THE SUPPORTING EVIDENCE. ACCORDINGLY, AO RECORDED IN HI S ASSESSMENT ORDER THAT PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT IS INITIATED SEPARATELY AND WHICH WAS CONFIRMED BY THE AO BY PASSING A PENA LTY ORDER U/S 271(1)(C) OF THE ACT ON DATED 22 ND FEBRUARY 2011. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD. C IT(A) WHO CONFIRMED THE ACTION OF AO BY OBSERVING AS UNDER:- 2.3 I HAVE GONE THROUGH THE PENALTY ORDER PASSED U /S 271(1)(C)AND ALSO THE SUBMISSION OF THE LD. A/R. THE APPELLANT F ILED HIS RETURN OF INCOME SHOWING TOTAL INCOME OF RS.12,59,754/- ON 28 /12/2003. THE TOTAL INCOME OF THE APPELLANT WAS DETERMINED AT RS.1,12,8 4,370/- U/S. 143(3) ON 31/03/2006 AND THE PENALTY PROCEEDING U/S. 271(1 )(C) WAS ALSO INITIATED BY THE ASSESSING OFFICER. THE LD. CIT(A)- XIV HAS SUBSTANTIALLY UPHELD THE ADDITIONS IN THE PRESENT CASE. VIDE THE ORDER DATED 23/07/2010 IN ITA NO. 1312/KOL/2009 , THE HON'BLE ITAT, KOLKATA HAS UPHELD THE ADDITION ON RS.15,00,000/- ON ACCOUNT OF BOGUS GIFT AS THE CREDIT-WORTHINESS OF THE DONORS COULD NOT BE ESTABL ISHED. DURING THE COURSE OF PENALTY PROCEEDINGS, THE APPELLANT COULD NOT PROVE THE CREDIT- WORTHINESS OF THE DONORS AND THE GENUINENESS OF THE GIFTS BEFORE THE AO. THE AO HAS ALSO OBSERVED THAT THE BANK ACCOUNTS AS FURNISHED WERE ALSO FORGED. IN THE CASE OF CIT VS. DEEP CHAND [2011] 336 ITR 292 (PUNJ & HAR.] THE HON'BLE PUNJAB & HARYANA HON' BLE HIGH COURT HAS HELD AS UNDER:- THE GIFT AMOUNTING TO RS.1,75,000 SAID TO HAVE BEEN RECEIVED BY THE ASSESSEE WAS HELD TO BE BOGUS. ONCE THAT IS SO, THE ONLY CONCLUSION IS THAT THE ASSESSEE HAD FURNISHED INACC URATE ITA NO.1004/KOL/2013 A.Y. 2003-04 SH SIDDHARTHA JALAN V. ACIT, CIR-37, KOL. PAGE 3 PARTICULARS OF HIS INCOME AND THE ORDER OF THE TRIB UNAL DELETING THE PENALTY IS UNSUSTAINABLE IN LAW. ACCORDINGLY, IT IS HELD THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME AN D, THUS, PENALTY WAS LIABLE TO BE LEVIED AGAINST HIM UNDER S ECTION 271(1)(C) OF THE ACT. FURTHER, THE ISSUE REGARDING RECORDING OF SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IN THE COURSE OF ASSESSMENT PROCEEDINGS STANDS CONCLUDED AGAINST THE ASSESSEE IN THE JUDGEMENT OF THIS COURT REPORTED IN CIT V. P EAREY LAL AND SONS [EP] LD., [2009] 308 ITR 438 (P & H]. IN VIEW OF THE ABOVE, THE SUBSTANTIAL QUESTION OF L AW IS ANSWERED IN FAVOUR OF THE REVENUE AND THE APPEAL IS ALLOWED ACCORDINGLY. THE DECISION OF THE HON'BLE PUNJAB & HARYANA HON'BL E HIGH COURT INCOME CIT VS. DEEP CHAND (SUPRA) IS SQUARELY APPLI CABLE TO THE FACTS IN THE PRESENT CASE. CONSIDERING THE FACTS OF THE C ASE, I AM OF THE OPINION THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME AS THE SO CALLED GIFT AMOUNTING TO RS.15,000 ,00/- HAS BEEN HELD TO BE BOGUS IN THE INSTANT CASE. ACCORDINGLY, THE O RDER OF THE AO IMPOSING PENALTY OF RS.4,72,500/- U/S. 271(1)(C)IN THE INSTANT CASE IS UPHELD. THIS GROUND OF APPEAL IS DISMISSED. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF HIS A PPEAL. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE CIT(A) HAD GROSSLY ERRED IN CONFIRMING THE PENALTY IMPOSED BY THE AO, BY WRONGLY AND ILLEGALLY, INVOKING THE PROVISIONS OF S ECTION 271(1)(C) OF THE ACT. 2. THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF TH E CASE, BOTH THE AO AS WELL AS THE CIT(A) HAD FAILED TO APPRECIATE THAT THOUGH THE HON'BLE INCOME TAX APPELLATE, WHILE RENDERING THE JUDGMENT IN ITA NO. 1312 DATED 23.7.2010, HAD CONFIRMED THE ADDITION OF RS.1 5 LAKHS ON ACCOUNT OF GIFT, DOUBTING THE CAPACITY OF THE DONORS BUT A T THE SAME TIME, HAD HELD THAT IT HAD BEEN OBSERVED THAT THE ASSESSEE HA S RECEIVED THE ALLEGED GIFTS, THE ASSESSEE HAS ALSO FILED THE COPI ES OF IT ACKNOWLEDGEMENTS EVIDENCING THAT ALL THE DONOR ARE ASSESSED TO TAX AND ALSO THAT THE ASSESSEE HAS ALSO FILED COPIES OF GIFT DECLARATION. ACCORDINGLY, THE AO AS WELL AS THE CIT(A) HAD FAIL ED TO UNDERSTAND THAT FORM THE OBSERVATIONS OF THE HON'BLE INCOME TAX APP ELLATE, THAT MERE CONFIRMATION OF ADDITION OF RS.15 LAKHS DOES NOT TA NTAMOUNT TO ANY FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF ANY INCOME BY THE APPELLANT SO AS TO SUFFER THE RIGORS OF THE PENAL PROVISIONS AS ENVISAGED I SECTION 271(1)(C). ITA NO.1004/KOL/2013 A.Y. 2003-04 SH SIDDHARTHA JALAN V. ACIT, CIR-37, KOL. PAGE 4 SHRI S. JHAJHARIA, LD. AUTHORIZED REPRESENTATIVE AP PEARING ON BEHALF OF ASSESSEE AND SHRI ASHOK KUMAR LD. SENIOR DEPARTMENT AL REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. 5. THE LD. AR SUBMITTED THAT THE ASSESSEE DID NOT P REFER THE APPEAL AGAINST THE ASSESSMENT ORDER DOES NOT TANTAMOUNT TH E ACCEPTANCE OF THE CONCEALMENT OF INCOME. BUT THE ASSESSEE DID SO TO B UY THE PEACE OF MIND. THE LD. AR ALSO SUBMITTED THAT THE AO FAILED TO REC ORD HIS SATISFACTION FOR LEVYING THE PENALTY WHETHER IT IS ON ACCOUNT OF CON CEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. ON THE CONTRARY, LD. DR SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE REQUIREMENT OF S EC.271(1)(C) OF THE ACT IS THAT THE ASSESSEE SHOULD HAVE (A) CONCEALED THE PAR TICULARS OF INCOME; OR (B) FURNISHED INACCURATE PARTICULARS OF INCOME. IN THE PRESENT CASE THE LEARNED COUNSEL FOR THE ASSESSEE ALSO DREW OUR ATTENTION TO THE SHOW CAUSE NOTICE ISSUED U/S.274 OF THE ACT BEFORE IMPOSING PENALTY A ND SUBMITTED THAT THE SAID NOTICE DOES NOT SPECIFY AS TO WHETHER THE ASSESSEE IS GUILTY OF HAVING FURNISHED INACCURATE PARTICULARS OF INCOME OR OF HAVING CONCEALED PARTICULARS OF SUCH INCOME . HE POINTED OUT THAT THE PRINTED SHOW CAUSE NOTIC E DOES NOT STRIKE OUT THE IRRELEVANT PORTION VIZ., FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED PARTICULARS OF SUCH INCOME . HE DREW OUR ATTENTION IN THE CASE OF SUVAPRASANNA BHATTACHARYA V. ACIT IN ITA 1303/KOL/2010 DATED 06.11.2015 WHERE THE TRIBUNAL HAS HELD THAT IF THE SHOW CAUSE NOTICE U/S.274 OF THE ACT DOES NOT SPECIFY AS TO THE EXACT CHARGE VIZ., WHETHER THE CHARGE IS THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED PARTICULARS OF INCOME BY STRIKING OUT THE IRRELEVANT PORTION OF PRINTED SHOW CAUSE NOTICE, THAN THE IMPOSITION OF P ENALTY ON THE BASIS OF SUCH INVALID SHOW CAUSE NOTICE CANNOT BE SUSTAINED. IT IS CLEAR FROM THE AFORESAID DECISION THAT ON THE FACTS OF THE PRESENT CASE THAT THE SHOW CAUSE NOTICE U/S. ITA NO.1004/KOL/2013 A.Y. 2003-04 SH SIDDHARTHA JALAN V. ACIT, CIR-37, KOL. PAGE 5 274 OF THE ACT IS DEFECTIVE AS IT DOES NOT SPELL OU T THE GROUNDS ON WHICH THE PENALTY IS SOUGHT TO BE IMPOSED. FOLLOWING THE DEC ISION OF THIS TRIBUNAL IN THE CASE OF SUVAPRASANNA BHATTACHARYA (SUPRA), WE HOLD THAT THE ORDERS IMPOSING PENALTY IN ALL THE ASSESSMENT YEARS HAVE TO BE HELD AS INVALID AND CONSEQUENTLY PENALTY IMPOSED IS CANCELLED. FOR THE REASONS GIVEN ABOVE, WE HOLD THAT LEVY OF PENALTY IN THE PRESENT CASE CANNO T BE SUSTAINED. WE THEREFORE CANCEL THE ORDER IMPOSING PENALTY ON THE ASSESSEE AND ALLOW THE APPEAL BY THE ASSESSEE. 7. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 1 9/04/2016 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP ! - 19/04/2016 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHRI SIDDHARTHA JALAN, 118A, C.R. AVENUE , KOLKATA-700 073 2. /RESPONDENT- ACIT, CIRCLE-37, PODDAR COURT, 8 TH FLOOR, 18 RABINDRA SARANI, KOL-01 3. # $% ' / CONCERNED CIT KOLKATA 4. ' - / CIT (A) KOLKATA 5. ()* ++$% , $% , / DR, ITAT, KOLKATA 6. *,- / GUARD FILE. BY ORDER/ , /TRUE COPY/ / $% ,