ITO, Dhule V. Shri Jayesh C Parekh, Dhule

ITA 1249/PUN/2013

• Counselvise Citation: 124924514 RSA 2013
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 03-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMANT KUMAR C LUEVA
• Keywords: Unexplained investment
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.1249/PN/2013 (ASSESSMENT YEAR : 2005-06) INCOME TAX OFFICER, WARD 3(1), DHULE. . APPELLANT VS. SHRI JAYESH C. PAREKH, NEAR BOHARA MASJID, SHIRPUR, DIST.- DHULE. PAN : ABHPP1667L . RESPONDENT DEPARTMENT BY : MR. HEMANT KUMAR C LUEVA ASSESSEE BY : MR. PRAYAG JHA & MR. PRATEEK JHA DATE OF HEARING : 28-05-2014 DATE OF PRONOUNCEMENT : 30-05-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 26.03.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 05.03.2012 PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2005-06. 2. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ACTION OF THE CIT(A) IN DELETING PENALTY IMPOSED BY THE ASSESSING OFFICER U /S 271(1)(C) OF THE ACT AMOUNTING TO RS.3,70,339/-. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I S AN INDIVIDUAL AND IN THE COURSE OF ASSESSMENT PROCEEDINGS, HE WAS REQUIRED T O EXPLAIN THE SOURCES OF CASH DEPOSITS AMOUNTING TO RS.11,86,900/- FOUND IN HIS SAVINGS BANK ACCOUNT. THE ASSESSMENT WAS FINALIZED BY THE ASSESSING OFFIC ER EX PARTE BECAUSE ASSESSEE FAILED TO APPEAR BEFORE HIM AND IN THE ASS ESSMENT FINALIZED U/S 144 ITA NO.1249/PN/2013 A.Y. 2005-06 OF THE ACT THE AMOUNT OF CASH DEPOSITS AMOUNTING TO RS.11,80,900/- WAS TREATED AS UNEXPLAINED INVESTMENTS AND BROUGHT TO T AX AS INCOME FROM OTHER SOURCES. THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER BEFORE THE CIT(A) WAS ALSO DISMISSED ON 08.12.2011 ON ACCOUNT OF NON- RESPONSE FROM THE ASSESSEE. MEANWHILE, THE ASSESSI NG OFFICER HELD THE ASSESSEE GUILTY FOR CONCEALMENT OF INCOME QUA THE A FORESAID ADDITION WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT AND IMP OSED A PENALTY OF RS.3,70,339/- VIDE AN ORDER DATED 05.03.2012. THE SAID LEVY OF PENALTY HAS SINCE BEEN DELETED BY THE CIT(A) BY WAY OF THE IMPU GNED ORDER, AGAINST WHICH REVENUE IS IN APPEAL BEFORE US. 4. WE FIND THAT IN THE PENALTY PROCEEDINGS BEFORE T HE ASSESSING OFFICER, ASSESSEE DID NOT OFFER ANY EXPLANATION, AND THE ASS ESSING OFFICER IMPOSED PENALTY HOLDING THE ASSESSEE GUILTY OF CONCEALMENT OF INCOME WITH RESPECT TO AN ADDITION OF RS.11,86,900/- ON ACCOUNT OF UNEXPLA INED CASH DEPOSITS IN HIS SAVINGS BANK ACCOUNT. BEFORE THE CIT(A), ASSESSEE EXPLAINED THAT HE HAD TAKEN MONEY FROM 9 PERSONS, INCLUDING HIS WIFE, FOR INVESTMENT IN SHARES AND SUCH MONEY WAS DEPOSITED IN HIS SAVINGS BANK ACCOUN T. ASSESSEE FILED CONFIRMATION LETTERS ALONG WITH PAN NOS. OF THESE P ERSONS, AS NOTED BY THE CIT(A) IN PARA 6 OF HIS IMPUGNED ORDER. THE CIT(A) HELD THAT EXPLANATION PUT- FORTH BY THE ASSESSEE WAS PLAUSIBLE AND BONAFIDE AN D THEREFORE NO PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIABLE. APART FROM THE AFORESAID, THE CIT(A) ALSO NOTED THAT MERELY BECAUSE THE APPEAL IN THE QUANTUM PROCEEDINGS WAS DISMISSED EX PARTE BY THE CIT(A) CANNOT BE A GROUND TO JUSTIFY LEVY O F PENALTY U/S 271(1)(C) OF THE ACT. 5. HAVING HEARD THE RIVAL PARTIES, WE FIND THAT THE EXPLANATION REGARDING THE SOURCES OF CASH DEPOSITS FURNISHED BEFORE THE C IT(A) IN THE IMPUGNED PENALTY PROCEEDINGS, WAS NOT PUT-FORTH AT ANY STAGE BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS. WHILE THERE IS N O BAR ON THE ASSESSEE TO ITA NO.1249/PN/2013 A.Y. 2005-06 RAISE AN ISSUE, WHICH WAS HITHERTO NOT RAISED IN TH E ASSESSMENT PROCEEDINGS, SO HOWEVER, IN THE PRESENT CASE, WE FIND THAT THE S AID EXPLANATION HAS ALSO NOT BEEN TESTED BY THE CIT(A). THE EXPLANATION PUT-FOR TH BY THE ASSESSEE WAS REQUIRED TO BE TESTED BY THE CIT(A) AT LEAST TO EST ABLISH THAT THE SAME WAS BONAFIDE AND PLAUSIBLE. HOWEVER, WITHOUT ANY VERIF ICATION EXERCISE HE HAS NOT ONLY ACCEPTED THE EXPLANATION TO BE PLAUSIBLE BUT A LSO BONAFIDE. THE AFORESAID APPROACH OF THE CIT(A), IN OUR VIEW, IS Q UITE SUPERFLUOUS AND IS UNSUSTAINABLE IN LAW. NO RATIONALE HAS BEEN ADVANC ED BY THE CIT(A) AS TO WHY DOES HE CONSIDERED SUCH EXPLANATION AS PLAUSIB LE AND BONAFIDE ESPECIALLY WHEN IN THE HITHERTO PROCEEDINGS BEFORE THE INCOME-TAX AUTHORITIES, ASSESSEE DID NOT RESPOND TO ANY NOTICE OF HEARING. PERTINENTLY, IT WAS ALSO BROUGHT OUT IN THE COURSE OF HEARING BEFORE US THAT ASSESSEE HAD FILED A BELATED APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDE R OF THE CIT(A) DATED 08.12.2011, SUSTAINING THE ADDITION MADE DURING THE ASSESSMENT PROCEEDINGS. THE SAID APPEAL OF THE ASSESSEE HAS SINCE ADMITTED AND THE MATTER RESTORED BACK TO THE FILE OF THE CIT(A) FOR ADJUDICATION AFR ESH. 6. CONSIDERED IN THE AFORESAID LIGHT, IN OUR VIEW, THE MATTER DESERVES TO BE RE-VISITED BY THE CIT(A) AFRESH IN ACCORDANCE WITH LAW. ACCORDINGLY, WE SET- ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER BAC K TO THE FILE OF THE CIT(A), WHO SHALL RE-APPRAISE THE APPEAL OF THE ASSESSEE DE NOVO IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION, THE CIT(A) SHALL ALLOW T HE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEAR AND THEREAFTER PASS AN OR DER AS PER LAW. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MAY, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 30 TH MAY, 2014 SUJEET ITA NO.1249/PN/2013 A.Y. 2005-06 COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE