Smt Shwetha, Hyderabad V. ITO, Hyderabad

ITA 1211/HYD/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5964 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 01-02-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 29-12-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: SYED JAMEELUDDIN
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMEBR ITA NO.1211/HYD/09 : ASST T. YEAR 2005-05 SMT. SWETHA D/O. SHRI JAWAHARLALJI, HYDERABAD ( PAN AYFPS 5599 M) V/S. INCOME-TAX OFFICER, WARD-4(4), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SYED JAMEELUDDIN RESPONDENT BY : SHRI K.V.N.CHARYA O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005- 06 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME- TAX(APPEALS). 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ONLY ISSUE INVOLVED IN THIS APPEAL IS REGARDING VALIDIT Y OF PENALTY IMPOSED UNDER S.271(1)(C) OF THE ACT AMOUNTING TO RS.9 LAKHS. HE SUBMITTED THAT THE ASSESSEE HAS RECEIVED GIFT OF RS.30 LAKH S THROUGH DEMAND DRAFTS AND HAS FILED CONFIRMATION OF THE DONOR, SHRI RAMESH JAIN, BEFORE THE ASSESSING OFFICER. HE REFERRED TO THE LETTER DATED 5.6.2007 OF THE ASSESSEE ADDRESSED TO THE ASSESSING OFFICER W HEREIN THE ASSESSEE SUBMITTED THAT THE GIFT WAS GENUINE AND THE DONOR WAS ITA NO.1211/HYD/09 SMT. SWETHA D/O. SHRI JAWAHARLALJI, HYDERABAD. 2 HER DISTANT RELATIVE. IN THIS LETTER, ASSESSEE HAS SUBMIT TED THAT SHE COULD NOT PRODUCE THE DONOR OR PROVE THE GENUINENESS OF THE GIFT AS THE DONOR AND HIS AUDITORS WERE NON-COOPERATIVE. THE ASSESSEE HAS WRITTEN TO THE ASSESSING OFFICER STATING THAT SHE WAS PREG NANT AND STAYING AT HYDERABAD AT THE RELEVANT POINT OF TIME AN D AS SUCH, COULD NOT TRAVEL TO MUMBAI TO MEET THE DONOR PERSONALLY T O REQUEST HIM TO COME TO INCOME-TAX OFFICE, AND IN ORDER TO PURCHASE PEACE WITH THE DEPARTMENT AND FOR EARLY SETTLEMENT OF THE MATTERS WI THOUT ANY DELAY HAS PAID RS.11 LAKHS TOWARDS TAX LIABILITY, AND HAS REQU ESTED THE ASSESSING OFFICER TO ACCEPT THE SAME SUBJECT TO NON-LEVY OF PENALTIES. HE SUBMITTED THAT IT WAS A BILATERAL CONTRACT WITH THE D EPARTMENT FOR TAXING THE AMOUNT OF GIFT AS INCOME IN THE HANDS OF TH E ASSESSEE, SUBJECT TO NON-LEVY OF PENALTY ON THE ASSESSEE. HE RELIED ON THE FOLLOWING DECISIONS, FILING COPIES THEREOF IN THE PAPER -BOOK, IN SUPPORT OF THE ABOVE ARGUMENTS- (A) CIT V/S. SURESH CHANDRA MITTAL (251 ITR 9)-SC (B) CIT V/S. M.GEORGE (160 ITR 511)-KER (C) CIT PATIALA V/S. SURAJ BHAN (159 TAXMAN 26)-P&H (D) CIT-II V/S. RAJNISH NATH AGGARWAL (207 TAXATION 211 )- P&H (E) CIT V/S. M.W.W. (315 ITR 467)-P&H (F) ACIT V/S. DR. VIPIN MEHRA (208 TAXATION 73)(TRIB.)- DEL. (G) K.DEEDAR AHMED V/S. ITO, ADONI. (97 ITD 240) HE FURTHER RELIED ON THE DECISION OF THE PUNJAB AND HA RYANA HIGH COURT REPORTED AT 185 TAXMAN 64 AND OF THE ALLAHABAD HIGH COURT IN THE CASE OF ADDITIONAL CIT LUCKNOW V/S. KISHAN SINGH CHAND (106 ITR 534). ITA NO.1211/HYD/09 SMT. SWETHA D/O. SHRI JAWAHARLALJI, HYDERABAD. 3 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE REFERRED TO THE RELEVANT PORTIONS OF THE ASSESSM ENT ORDER, WHEREIN THE ASSESSING OFFICER HAS RECORDED THAT THE DONOR, SHRI RAMESH JAIN, WAS NOT HAVING ANY ACCOUNT IN THE BANK AN D THE DRAFTS WERE NOT ISSUED FORM THE CURRENT ACCOUNT MENTIONED BY T HE ASSESSEE. HE SUBMITTED THAT ON ENQUIRY, IT WAS FOUND THAT RAMESH JAIN IS NOT ASSESSED TO TAX IN THE WARD NO.12(3)(2) MUMBAI AND HAS NOT FILED HIS RETURNS OF INCOME THEREIN AND THE PERMANENT ACCOUNT NO. OF RAMESH JAIN GIVEN BY THE ASSESSEE WAS NOT FOUND IN THE PAN DATA BASE OF THE INCOME-TAX DEPARTMENT. HE SUBMITTED THAT ALL THE DOCUM ENTS SUBMITTED BY THE ASSESSEE WERE NOT GENUINE AND SEEMS TO B E FABRICATED ONES. HE SUBMITTED THAT HAD THE ENQUIRY IN T HE MATTER NOT BEEN CONDUCTED BY THE ASSESSING OFFICER, THE ASSESSEE WOULD NO T HAVE PAID DUE TAXES ON HER INCOME. THE LEARNED DEPARTMENTA L REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER IS NOT ENTITLED UNDER LAW TO ENTER INTO ANY CONTRACT WITH THE ASSESSEE FO R NOT LEVYING PENALTY UNDER S.271(1)(C) OF THE ACT. HE SUBMITTED TH AT THE CASE-LAW RELIED UPON BY THE ASSESSEE ARE DISTINGUISHABLE ON FACTS. HE RELIED ON SERIES OF DECISIONS INCLUDING THE FOLLOWING- (A) CIT V/S. SRINIVASA PAI (242 ITR 29)-KER. (B) CALICUT TRADING CO. V/S. CIT (178 ITR 430)-KER. (C) CIT V/S. ANANTHAN CHETTIAR (273 ITR 401)-MAD (D) BILAND RAM HARGAN DASS V/S. CIT (171 ITR 390)-ALL (E) M.S.MOHAMMED MARZOOK (LATE) AND ANR.V/S. ITO (283 ITR 254)-MAD (F) K.P.MADHUSUDHANAN V/S. CIT (251 ITR 99)-SC ITA NO.1211/HYD/09 SMT. SWETHA D/O. SHRI JAWAHARLALJI, HYDERABAD. 4 (G) ORDER OF THE TRIBUNAL IN ITA NO.1100/HYD/96 DATED DECEMBER, 2000. 4. LEARNED COUNSEL FOR THE ASSESSEE, IN HIS REJOINDER SUBMITTED THAT THE ASSESSEE IS NOT GUILTY OF CONCEALMENT O F INCOME AND THE ASSESSING OFFICER HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO SHOW THAT SHE IS NOT GUILTY OF FILING OF INACCUR ATE PARTICULARS OF INCOME. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. WE FIND THAT THE PENALTY PROCEEDINGS UNDER S.271(1)(C) OF THE ACT ARE QUASI-JUDICIAL IN NATURE AND SHOULD REACH A LOGICAL CO NCLUSION. WE FIND THAT THE ASSESSEE SHOULD HAVE BEEN CONFRONTED WITH THE R EPORT OF THE ASSESSING OFFICER OF THE DONOR, RAMESH JAIN, INTIMATING T HAT RAMESH JAIN WAS NOT ASSESSED TO TAX IN THAT WARD AND THE PAN NUMBER GIVEN WAS NOT FOUND IN THE PAN DATA BASE OF THE INCOME-TAX D EPARTMENT. THE ASSESSEE HAS PLEADED THAT SHE, BEING PREGNANT AND RESI DING AT HYDERABAD AT THE RELEVANT POINT OF TIME, COULD NOT CON TACT THE DONOR, RAMESH JAIN FOR NECESSARY CONFIRMATION OF THE GIFTS. IN THE PENALTY PROCEEDINGS, WHICH ARE INDEPENDENT OF THE ASSESSMENT PROCEE DINGS, ASSESSEE IS ENTITLED TO LEAD EVIDENCE IN SUPPORT OF HER CASE TO PROVE THE IDENTITY OF THE DONOR AND THE GENUINENESS OF THE TRANSACTION OF GIFT. IN THE FACTS OF THE CASE, WE ARE OF THE OPINION THAT I T SHALL BE IN THE INTERESTS OF JUSTICE TO PROVIDE THE ASSESSEE ONE MORE OPPOR TUNITY TO PROVE HER CASE BEFORE THE REVENUE AUTHORITIES. WE A CCORDINGLY SET ASIDE THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER, WITH A DIR ECTION TO PROVIDE WITH REASONABLE OPPORTUNITY OF PROVING HER CASE, AFTER CONFRONTING THE ASSESSEE WITH THE ADVERSE MATERIAL IN THE POSSESSION OF THE ITA NO.1211/HYD/09 SMT. SWETHA D/O. SHRI JAWAHARLALJI, HYDERABAD. 5 DEPARTMENT AND THE ASSESSEE SHALL BE AT LIBERTY TO LEAD EVIDENCE IN SUPPORT OF HER CASE. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, ASSESSEE'S APPEAL IS ALLOWED FOR STATI STICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 5.2.10 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 5TH FEBRUARY, 2010 COPY FORWARDED TO: 1. SMT. SWETHA D/O. SHRI JAWAHARLALJI, SHRI SYED J AMEELUDDIN, I.T. CONSULTANT, 16-7-302, 'ERRAM COTTAGE', AZIMPURA , HYDERABAD. 2. INCOME TAX OFFICER, WARD-4(4), HYDERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS) V HYDERABAD 4. COMMISSIONER OF INCOME-TAX IV, HYDERABAD. 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.