Shri Bodh Raj Narang, Panchkula V. ITO, Panchkula

ITA 1187/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80852 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Assessee Lawyers: S K MUKHI
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 1187/CHD/2013 ASSESSMENT YEAR: 2006-07 SHRI. BODH RAJ NARANG VS. THE I.T.O., WARD -1, PANCHKULA PANCHKULA PAN NO. AAKPN2656F (APPELLANT) (RESPONDENT) APPELLANT BY : SRI. S.K. MUKHI RESPONDENT BY : SHRI J.S. NAGAR DATE OF HEARING : 05/08/2014 DATE OF PRONOUNCEMENT : 19.08.2014 ORDER PER T.R.SOOD, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 17/10/2013 OF CIT(APPEALS), PANCHKULA. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONCURRING WITH THE ORDERS PASSED U/S 271(1)(C) IMPOSING PENALTY TO THE TUNE OF RS. 1,82,638/- OF THE ASSESSING OFFICER WHICH IS IL LEGAL, WITHOUT JURISDICTION, ARBITRARY AND HIGHLY EXCESSIV E THUS BAD IN LAW AND SO NEEDS TO BE QUASHED. 2. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONCURRING WITH THE ORDERS PASSED U/S 271(1)(C) IMPOSING PENALTY TO THE TUNE OF RS. 1,82,638/- OF THE ASSESSING OFFICER WITHOUT APP RECIATING THE EXPLANATION AND EVIDENCES FILED BY THE APPELLAN T WITHOUT APPRECIATING THE FACTS THAT PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS WHICH IS ILLEGAL, WITHOUT JURISDICTION, ARBITRARY THUS BAD IN LAW AND SO NEED S TO BE QUASHED. 3. THAT WITHOUT PREJUDICE TO ABOVE THE APPELLANT DISPU TES THE QUANTUM OF PENALTY AS HIGHLY EXCESSIVE AND UNCALLED FOR AND ALSO DISPUTES THE VERY IMPOSITION OF PENALTY U/S 27 1 (1)(C) OF THE INCOME TAX ACT, 1961. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT ASSESSEE WAS MAINTAINING A BAN K ACCOUNT WITH CENTURION BANK OF PUNJAB LTD AND CERTAIN DEPOSITS WERE MADE I N THAT ACCOUNT. SINCE NO EXPLANATION COULD BE FILED, A SUM OF RS. 13,04,610/ - ON ACCOUNT OF PEAK DEPOSIT WAS ADDED TO THE INCOME OF THE ASSESSEE AND PENALTY PROCEEDINGS WERE ALSO INITIATED. WHEN THE ASSESSEE FILED APPEAL AGAINST THESE ADDITIONS, THE SAME WAS REJECTED BY CIT(A). HOWEVER, WHEN THE MATTER TRAVE LED TO THE TRIBUNAL, PART OF THE EXPLANATION OF THE ASSESSEE REGARDING SALE OF THE JOINT PROPERTY WHICH WAS OWNED BY NINE CO-OWNERS FOR WHICH MONEY WAS RETAINE D BY THE ASSESSEE WAS ACCEPTED AND CREDIT FOR RS. 5,45,000/- WAS ALLOWED. FURTHER CREDIT OF RS. 1 LAKH WAS GIVEN ON ACCOUNT OF OPENING CASH BALANCE AND BA LANCE ADDITION WAS CONFIRMED. 4. IN RESPONSE TO SHOW CAUSE NOTICE FOR LEVY OF PEN ALTY, SIMILAR EXPLANATION WHICH WAS GIVEN DURING QUANTUM PROCEEDINGS WERE GIV EN BUT THE SAME WERE NOT ACCEPTED AND THE ASSESSING OFFICER ULTIMATELY LEVIE D PENALTY ON THE BALANCE ADDITION AT THE MINIMUM RATE OF 100% AMOUNTING TO R S. 1,82,638/-. ON APPEAL, THE ACTION OF THE ASSESSING OFFICER WAS CONFIRMED B Y LD. CIT(A). 5. BEFORE US, LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE ORDER OF TRIBUNAL AND QUANTUM PROCEEDINGS IN ITA NO. 51/CHD/2010 FOR ASSESSMENT YEAR 2006-07 AND POINTED OUT THAT ASSESSEE HAD GIVEN EXPLANATION REGARDING THE BALANCE OF AMOUNT ALSO FROM SALE OF ANOTHER PIECE OF AGRICULTU RAL LAND FOR WHICH POWER OF ATTORNEY WAS ALREADY EXECUTED AND COPY OF THE POWER OF ATTORNEY WAS FILED, WHICH FACT HAS BEEN TAKEN NOTE OF BY THE CIT(A) AND TRIBUNAL. THEREFORE, IT IS CLEAR THAT ASSESSEE HAS GIVEN BONAFIDE EXPLANATION FOR DEPOSIT IN THE BANK ACCOUNT AND THE EXPLANATION HAS NOT BEEN PROVED FAL SE, THEREFORE, PENALTY IS NOT ATTRACTED. 6. ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER AND CIT(A). 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND FORCE IN THE SUBMISSIONS OF LD. COUNSEL FOR THE ASSESSEE. THE ASSESSEE HAS G IVEN VARIOUS EXPLANATIONS REGARDING VARIOUS DEPOSITS IN THE BANK AND PART OF THE EXPLANATION IN THE FORM OF SALE OF AGRICULTURAL LAND AND PAST SAVINGS HAS ALRE ADY BEEN ACCEPTED BY THE TRIBUNAL. THE EXPLANATION WAS NOT ACCEPTED TO THE E XTENT OF RS. 6,59,610/- FOR WHICH IT WAS STATED THAT ANOTHER PIECE OF LAND WAS SOLD FOR WHICH ONLY POWER OF ATTORNEY WAS EXECUTED. THIS WAS NOT ACCEPTED BY THE TRIBUNAL BUT IT DOES NOT MEAN THAT THIS EXPLANATION WAS FALSE. IT IS A BONAF IDE EXPLANATION WHICH HAS NOT BEEN PROVED TO BE FALSE BY THE REVENUE AND, THEREFO RE, IN OUR OPINION THE PENALTY CANNOT BE LEVIED. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DELETE THE PENALTY. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19.08.20 14 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19 TH AUGUST, 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR