Shri Sanjeev Bajaj, Ludhiana V. ITO, Ludhiana

ITA 143/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9089 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 11-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 29-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTALDR
• Keywords: Opportunity of being heard; Bonafide belief; Additional evidence; Reasonable cause; Onus to prove
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 143/CHD/2016 ASSESSMENT YEAR: 2008-09 SHRI SANJEEV BAJAJ, VS THE ITO, PROP.M/S NEELKANTH COMMODITIES WARD III(3), SERVICES, 140-B, LUDHIANA. KITCHLU NAGAR, LUDHIANA. PAN: ABFPB1331F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHOK GOYAL, CA RESPONDENT BY : SHRI S.K.MITTAL,DR DATE OF HEARING : 30.08.2016 DATE OF PRONOUNCEMENT : 14.09.2016 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-1, LUDHIANA DATED 28.12.2015 FOR ASSESSMENT YEAR 2008-09 CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCO ME TAX ACT ON ADDITION OF RS. 30,40,620/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. THE ASSESSEE IN THE GRO UNDS OF APPEAL ALSO CHALLENGED THE ORDER OF LD. CIT(APPE ALS) IN NOT ADMITTING ADDITIONAL EVIDENCES AS SUBMITTED BEF ORE LD. CIT(APPEALS) AT THE FIRST APPELLATE PROCEEDINGS . 2 2. BRIEFLY THE FACTS OF THE CASE ARE THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER MADE ADDITION OF RS. 30,40,620/- ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PROVIDE DETAILS OF RS. 30,40,620/- ON ACCO UNT OF CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE HAD PROVIDED DETAILS OF 10 PERSONS OUT OF 27 FROM WHOM HE ALLEGEDLY CLAIMED TO HAVE RECEIVED CAS H. THE ASSESSEE COULD NOT PROVE BASIC CONDITIONS, THER EFORE, ASSESSING OFFICER MADE ADDITION ACCORDINGLY. PENAL TY PROCEEDINGS WERE ALSO INITIATED. THE ASSESSEE PROV IDED DETAILS OF 10 PERSONS WHICH WERE ALSO INCOMPLETE WH ICH WERE FILED AT ASSESSMENT STAGE. THE ASSESSING OFFI CER, THEREFORE, NOTED THAT ASSESSEE FAILED TO PROVE IDEN TITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIO N AND HELD THAT ASSESSEE HAS WILLFULLY CONCEALED THE PART ICULARS OF INCOME AND LEVIED THE PENALTY UNDER SECTION 271( 1)(C) OF THE ACT. 3. THE PENALTY ORDER WAS CHALLENGED BEFORE LD. CIT(APPEALS) AND WRITTEN SUBMISSIONS OF THE ASSESSE E REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSE SSEE BRIEFLY EXPLAINED THAT ASSESSEE PROVIDED DETAILS OF 10 PERSONS OUT OF 27 NUMBER OF CLIENTS AT THE TIME OF ASSESSMENT PROCEEDINGS. OUT OF TOTAL, THE ASSESSIN G OFFICER ISSUED NOTICE UNDER SECTION 133(6) OF THE A CT TO ONLY 4 AND OUT OF 4, TWO BACK-TRACKED AND THE ADDRE SS OF 3 OTHER TWO COULD NOT BE VERIFIED. THE ADDITION IS M ADE WITHOUT VERIFYING THE DETAILS OF ALL THE PERSONS. AS PER DETAILS PROVIDED BY THE ASSESSEE AT THE TIME OF PROCEEDINGS, NECESSARY DETAILS HAD BEEN PROVIDED AS TO THE NAMES, ADDRESS ALONGWITH PAN NUMBER OF THE DEPOSITORS. THEREFORE, ASSESSEE PROVED GENUINE TRANSACTION IN THE MATTER. 4. THE ASSESSEE ALSO FURNISHED DETAILS OF 27 PERSON S AND SUBMITTED THAT ASSESSEE HAS DISCHARGED THE ONUS TO PROVE GENUINENESS OF THE TRANSACTION IN THE MATTER. IT WAS, THEREFORE, SUBMITTED THAT PENALTY MAY NOT BE L EVIED AGAINST THE ASSESSEE. IT WAS ALSO SUBMITTED THAT ASSESSEE PRODUCED THE ADDITIONAL EVIDENCES BEFORE I TAT CHANDIGARH IN QUANTUM MATTER BUT ITAT CHANDIGARH BENCH DID NOT ADMIT THE ADDITIONAL EVIDENCES AND DISMISSED THE APPEAL OF THE ASSESSEE. IT WAS SUBMI TTED THAT IN THE QUANTUM PROCEEDINGS, THE ASSESSEE COULD NOT FILE ADDITIONAL EVIDENCES DUE TO FAMILY CIRCUMSTANC ES AND CASE WAS DECIDED BY THE LD. CIT(APPEALS) AGAINST TH E ASSESSEE. THEREFORE, ADDITIONAL EVIDENCES WERE FIL ED BEFORE ITAT CHANDIGARH BENCH. THE ADDITIONAL EVIDE NCES FILED IN THE SHAPE OF CONFIRMATIONS FROM MOST OF TH E PERSONS WITH THEIR ADDRESS, COPIES OF BILLS RAISED BY THE ASSESSEE, THEREFORE, ASSESSEE MADE A PRAYER THAT SA ME MAY BE ADMITTED AS ADDITIONAL EVIDENCE UNDER RULE 4 6A OF THE IT RULES. IT WAS SUBMITTED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE INDEPENDENT 4 THEREFORE, ADDITIONAL EVIDENCES WHICH ARE VITAL IN NATURE, MAY BE ADMITTED IN THE PENALTY APPELLATE PROCEEDING S. IT WAS ALSO SUBMITTED THAT ADDITIONAL EVIDENCES DEPICT ING THE CONFIRMED COPIES OF ACCOUNTS, BILLS OF TRANSACT IONS WITH THE CLIENTS SHOWING THEIR FULL NAME AND ADDRES S ALONGWITH PAN CARDS WHICH HAVE BEEN FILED WITH THE PRAYER FOR ADMITTING ADDITIONAL EVIDENCE, SAME MAY BE ADMITTED BECAUSE SAME WOULD PROVE THE IDENTITY OF T HE INVESTORS AND GENUINENESS OF THE TRANSACTION IN THE MATTER AND IN SUCH CIRCUMSTANCES, PENALTY WOULD NOT BE LEVIABLE. THE ASSESSEE RELIED UPON SEVERAL DECISIO NS IN SUPPORT OF THE CONTENTION. REMAND REPORT FROM THE ASSESSING OFFICER WAS CALLED FOR. THE LD. CIT(APPE ALS), HOWEVER, NOTED THAT THE ASSESSEE MADE A REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCES BEFORE ITAT IN QUANTUM PROCEEDINGS BUT THE SAME HAVE NOT BEEN ADMITTED. THE LD. CIT(APPEALS), THEREFORE, NOTED T HAT NO REASONABLE CAUSE IS MADE OUT FOR ADMISSION OF THE ADDITIONAL EVIDENCES AND ACCORDINGLY, ADDITIONAL EVIDENCES FILED UNDER RULE 46A WERE REJECTED. PENA LTY WAS ALSO CONFIRMED BY DISMISSING APPEAL OF THE ASSE SSEE ON THIS ISSUE. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITIONAL EVIDENCES FILED BEFORE LD. CIT(APPEALS) WERE RELEVANT AND VITAL IN NATURE AND WOULD EXPLAIN THAT PENALTY IS NOT LEVIABLE IN THE MATTER. THEREFORE, SAME SHOULD HAVE BEEN ADMITTED BY LD. CIT(APPEALS) FOR 5 DECIDING THE ISSUE ON MERITS. HE HAS SUBMITTED THA T MERELY BECAUSE IN QUANTUM PROCEEDINGS, SAME ADDITIO NAL EVIDENCES WERE NOT ADMITTED BY THE TRIBUNAL, IS NO GROUND TO REJECT ADMISSION OF ADDITIONAL EVIDENCES IN THE PENALTY PROCEEDINGS WHICH ARE INDEPENDENT AND ALL TOGETHER DIFFERENT PROCEEDINGS. HE HAS SUBMITTED T HAT IN THE SAME CIRCUMSTANCES, ITAT SMC BENCH CHANDIGARH IN THE CASE OF JORAWAR SINGH VS ITO ITA NO. 629/2016 D ATED 22.07.2016 ADMITTED THE ADDITIONAL EVIDENCES BEING RELEVANT IN THE PENALTY PROCEEDINGS AND RESTORED TH E MATTER TO THE FILE OF ASSESSING OFFICER FOR RE- CONSIDERATION. COPY OF THE ORDER IS PLACED ON RECOR D. HE HAS, THEREFORE, SUBMITTED THAT ADDITIONAL EVIDENCES MAY BE ADMITTED AND MATTER MAY BE REMANDED TO THE ASSESSING OFFICER FOR RE-CONSIDERATION. 5(I) ON THE OTHER HAND, LD. DR RELIED UPON ORDERS O F THE AUTHORITIES BELOW AND SUBMITTED THAT ONCE TRIBUNAL ON QUANTUM HAVE NOT ADMITTED THE ADDITIONAL EVIDENCES, THEREFORE, SAME MAY NOT BE ADMITTED IN PENALTY PROCEEDINGS AS WELL AND APPEAL OF THE ASSESSEE MAY BE DISMISSED. 6. I HAVE CONSIDERED RIVAL SUBMISSIONS. THE PENALT Y IS LEVIED ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN TH E BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE PROVIDE D DETAILS OF 10 PERSONS OUT OF 27 PERSONS FROM WHOM ASSESSEE HAS RECEIVED THE CASH. THE LD. COUNSEL FO R THE 6 ASSESSEE FILED DETAILS OF REMAINING 17 PERSONS IN R ESPECT OF WHOM ADDITIONAL EVIDENCES HAVE BEEN FILED BEFORE LD. CIT(APPEALS) FOR ADMISSION. THE LD. CIT(APPEALS), HOWEVER, DID NOT ACCEPT ADDITIONAL EVIDENCES WHICH ARE IN THE SHAPE OF CONFIRMATIONS WITH THEIR ADDRESSES, CO PIES OF BILLS AND PAN ETC. MERELY BECAUSE ADDITIONAL EVIDENCES WERE NOT ADMITTED IN QUANTUM PROCEEDINGS, IS NO GROUND TO REJECT REQUEST OF THE ASSESSEE FOR ADM ISSION OF ADDITIONAL EVIDENCE IN PENALTY PROCEEDINGS WHICH ARE INDEPENDENT AND DIFFERENT PROCEEDINGS. SINCE THE ADDITIONAL EVIDENCES ARE RELEVANT AND REQUIRED TO B E LOOKED INTO IN THE PENALTY PROCEEDINGS, THEREFORE, LD. CIT(APPEALS) SHOULD HAVE ADMITTED THE ADDITIONAL EVIDENCES FOR THE PURPOSE OF HEARING. SIMILAR ISSU E WAS CONSIDERED BY ITAT SMC BENCH CHANDIGARH IN THE CA SE OF JORAWAR SINGH (SUPRA) IN WHICH ADDITIONAL EVIDEN CES HAVE BEEN ADMITTED BEING RELEVANT. THE ORDER IS REPRODUCED AS UNDER : IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 629/CHD/2016 (ASSESSMENT YEAR : 2008-09) JORAWAR SINGH, VS. THE INCOME TAX OFFICER, S/O SH.JOGINDER SINGH, WARD-1, VILLAGE GALEDVA, KURUKSHETRA. TEHSIL PEHOWA, DISTRICT KURUKSHETRA. PAN: ACBPS3332E 7 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 20.07.2016 DATE OF PRONOUNCEMENT : 22.07.2016 O R D E R THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), KARNAL DATED 5.4.2016 FOR ASSESSMENT YEA R 2008-09, CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271(1 )(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. DURING THE ASSESSMENT PROCEEDINGS, A DISALLOWAN CE OF RS.6,42,870/- WAS MADE OUT OF THE CLAIM OF COMMI SSION PAID BY THE ASSESSEE. THE CIT (APPEALS) AS WELL THE I.T .A.T. CONFIRMED THE ADDITION. ON THESE FACTS, PENALTY WA S LEVIED, WHICH WAS ALSO CONFIRMED BY THE CIT (APPEALS). 3. I HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES. IT IS STATED THAT THE ASSESSEE IS A L IC AGENT AND CLAIMED DEDUCTION ON ACCOUNT OF COMMISSION PAID TO SEVERAL PERSONS, WHO HAVE PROCURED NEW LIC POLICIES FROM DI FFERENT PERSONS. THE ADDITION WAS MADE BECAUSE THE ASSESSE E COULD NOT ADDUCE COMPLETE DETAILS AND LIST OF THE PERSONS TO WHOM COMMISSION WAS PAID. THE ASSESSEE HAS NOW FILED AP PLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE, IN WHICH IT I S STATED THAT THE LIST OF SUB-AGENTS AND THEIR AFFIDAVITS ALONGWI TH NAMES OF THE PARTIES WHO HAD BEEN INTRODUCED BY EACH SUB-AGE NTS ALONGWITH LIST WAS FILED AS ADDITIONAL EVIDENCE. T HE ASSESSEE PRAYED THAT THE SAME MAY BE ADMITTED FOR HEARING, S INCE THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT SINCE THE E VIDENCES HAVE BEEN FILED BEFORE THE CIT (APPEALS), THEREFORE , THERE IS NO NEED TO FILE THE SAME IN THE PENALTY PROCEEDINGS . THE LEARNED D.R., HOWEVER, SUBMITTED THAT SAME POINT WA S RAISED BEFORE THE TRIBUNAL, IN WHICH THE ASSESSEE CHALLENG ED THE ORDER OF CIT (APPEALS) IN NOT CONSIDERING THE AFFID AVITS OF NINE PERSONS FILED AT THE APPELLATE STAGE. THE CIT (APPEALS) 8 DID NOT CONSIDER THESE NINE AFFIDAVITS OF THE PERSO NS IN SUPPORT OF CLAIM OF PAYMENT OF COMMISSION BECAUSE NO REQUES T UNDER RULE 46A OF THE INCOME TAX RULES WAS MADE. THE LEA RNED D.R., THEREFORE, SUBMITTED THAT SINCE SAME AFFIDAVI TS WERE NOT CONSIDERED BY THE CIT (APPEALS), THEREFORE, THE SAM E MAY NOT BE ADMITTED FOR HEARING. 4. ON CONSIDERATION OF THE RIVAL CONTENTIONS AND MATERIAL AVAILABLE ON RECORD, I AM OF THE VIEW THAT THOUGH THE FINDINGS GIVEN IN THE QUANTUM PROCEEDINGS ARE RELEV ANT AND HAVE PROBATIVE VALUE BUT THESE ARE NOT CONCLUSIVE F OR LEVY OF PENALTY AGAINST THE ASSESSEE UNDER SECTION 271(1)(C ) OF THE ACT. IT IS WELL SETTLED THAT THE QUANTUM AND PENAL TY PROCEEDINGS ARE DISTINCT AND INDEPENDENT PROCEEDING S. THE ASSESSEE IN THE PENALTY PROCEEDINGS STILL COULD HAV E EXPLAINED THAT IT IS NOT A CASE OF LEVY OF PENALTY BASED ON T HE EVIDENCE ON RECORD. THE HON'BLE SUPREME COURT IN THE CASE O F TEK RAM VS. CIT, 262 CTR 118 (SC) AND THE HON'BLE PUNJA B & HARYANA HIGH COURT IN THE CASE OF CIT VS. MUKTA ME TAL WORKS, 336 ITR 555 (P&H) ADMITTED THE ADDITIONAL EV IDENCE BEING RELEVANT AND REQUIRED TO BE LOOKED INTO. THE ADDITION WAS MADE BY THE AUTHORITIES BELOW BECAUSE THE ASSES SEE COULD NOT PRODUCE THE COMPLETE LIST OF THE PERSONS TO WHO M COMMISSION WAS PAID AND NO EVIDENCE WAS ADDUCED IN THIS REGARD. THE ASSESSEE HAS NOW FILED AFFIDAVITS OF N INE PERSONS TO WHOM THE ASSESSEE HAD PAID THE COMMISSION ALONGW ITH LIST OF THE PARTIES IN RESPECT OF WHOM LIC POLICIES WERE OBTAINED THROUGH THE COMMISSION AGENTS. THESE ADDITIONAL EV IDENCES ARE, THEREFORE, RELEVANT AND SHALL HAVE TO BE LOOKE D INTO IN ORDER TO DECIDE WHETHER THE ASSESSEE IS ABLE TO EXP LAIN THE ISSUE FOR THE PURPOSE OF LEVY OF PENALTY. IN THIS VIEW OF THE MATTER, I ADMIT THESE ADDITIONAL EVIDENCES FOR THE PURPOSE OF HEARING. THE CONTENTION OF THE LEARNED D.R. THAT S AME ADDITIONAL EVIDENCES WERE NOT ADMITTED BY THE CIT ( APPEALS), HAS NO MERIT BECAUSE THE ASSESSEE DID NOT MAKE ANY REQUEST UNDER RULE 46A OF THE INCOME TAX RULES FOR ADMISSIO N OF THE ADDITIONAL EVIDENCE. THESE ADDITIONAL EVIDENCES SO ADMITTED WOULD HAVE BEARING ON THE ISSUE AND COULD EXPLAIN T HE MATTER 9 IN ISSUE WITH REFERENCE TO THE PENALTY MATTER. FUR THER THESE ADDITIONAL EVIDENCES WERE NOT FILED BEFORE THE AUTH ORITIES BELOW AND ASSESSING OFFICER HAS NOT LOOKED INTO THE MATTER. THEREFORE, THE MATTER SHALL HAVE TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. 5. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORD ERS OF THE AUTHORITIES BELOW AND RESTORE THE ISSUE OF LEVY OF PENALTY TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO REDECIDE THE ISSUE IN THE LIGHT OF ADDITIONAL EVIDENCE SO AD MITTED ABOVE. THE ASSESSEE IS DIRECTED TO PRODUCE THESE EVIDENCES BEFORE THE ASSESSING OFFICER FOR CONSIDERATION. THE ASSESSING OFFICER SHALL GIVE SUFFICIENT OPPORTUNITY FOR HEARING TO TH E ASSESSEE. 6. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. 7. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF ORDER IN THE CASE OF JORAWAR SINGH (SUPRA), I SET A SIDE THE ORDER OF LD. CIT(APPEALS) IN REFUSING TO ADMIT ADDITIONAL EVIDENCES. THESE ADDITIONAL EVIDENCES B EING RELEVANT, SHALL HAVE TO BE LOOKED INTO IN ORDER TO DECIDE WHETHER ASSESSEE IS LIABLE FOR PENALTY, I ADMIT THE SE ADDITIONAL EVIDENCES FOR THE PURPOSE OF HEARING. S INCE THESE ADDITIONAL EVIDENCES, SO ADMITTED, WERE NOT CONSIDERED BY THE AUTHORITIES BELOW, THEREFORE, THE MATTER SHALL HAVE TO BE RESTORED TO THE FILE OF ASSESSING OFFICER FOR RE-CONSIDERATION. 8. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDE RS OF AUTHORITIES BELOW AND RESTORE THE ISSUE OF LEVY OF PENALTY TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE 10 THE ISSUE OF PENALTY IN THE LIGHT OF ADDITIONAL EVI DENCES SO ADMITTED ABOVE. THE ASSESSEE IS DIRECTED TO PRO DUCE THESE ADDITIONAL EVIDENCES BEFORE ASSESSING OFFICER FOR HIS CONSIDERATION. THE ASSESSING OFFICER SHALL GIV E REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED 14 TH SEPT.,2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH