G.Malini, CHENNAI V. ACIT, CHENNAI

ITA 1501/CHNY/2013

• Counselvise Citation: 150121714 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: R SIVARAMAN
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! ,% !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1501/MDS/2013 ( )( / ASSESSMENT YEAR : 2006-07 SMT. G. MALINI, NO.49, SRI VENKATESWARA PERUMAL NAGAR, ARUMBAKKAM, CHENNAI - 600 106. PAN : AGAPM 2993 E V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE IV, CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. R. SIVARAMAN, ADVOCATE -.+, / 0 / RESPONDENT BY : SH. S. DAS GUPTA, JCIT 1 / 2% / DATE OF HEARING : 08.04.2015 3') / 2% / DATE OF PRONOUNCEMENT : 17.04.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VIII, CHEN NAI, DATED 2 I.T.A. NO.1501/MDS/13 01.02.2013, CONFIRMING THE PENALTY LEVIED BY THE AS SESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SHRI R. SIVARAMAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITI ON OF ` 3,14,800/- OUT OF THE CASH CREDITS TO THE EXTENT OF ` 11,76,342/- UNDER SECTION 68 OF THE ACT. ACCORDING TO THE LD.C OUNSEL, THE ASSESSEE HAS FURNISHED ALL THE DETAILS WITH REGARD LOAN CREDITORS ALONG WITH THEIR ADDRESS. HOWEVER, THE ASSESSING O FFICER FOUND THAT IN RESPECT OF 19 PEOPLE FROM WHOM THE ASSESSEE HAS RECEIVED ` 3,14,800/-, FOUND TO BE NOT SATISFACTORILY EXPLAINE D. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS BOU GHT MONEY RANGING FROM ` 15,000/- TO ` 19,000/- ON VARIOUS OCCASIONS. ACCORDING TO LD. COUNSEL, MERELY BECAUSE THE ADDITI ON WAS MADE IN THE ASSESSMENT PROCEEDINGS, IT DOES NOT RESULT IN A UTOMATIC LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 3. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED BY WAY OF LETTER DATED 27.1.2009 STATING THAT IT WA S NOT POSSIBLE TO FIND OUT WHEREABOUTS OF THE CREDITORS, THEREFORE, T HE AMOUNT OF ` 3,14,800/- WAS OFFERED FOR TAXATION. ACCORDING TO L D. COUNSEL, THE IDENTITY OF THE CREDITORS IS NOT IN DOUBT, THE GENU INENESS OF THE 3 I.T.A. NO.1501/MDS/13 TRANSACTION IS ALSO NOT IN DOUBT. WHAT WAS DOUBTED IS THE CREDITWORTHINESS OF THE CREDITORS. ACCORDING TO LD . COUNSEL, WHAT WAS RECEIVED FROM VARIOUS PERSONS IS ONLY ` 15,000 TO ` 19,000/-. THESE ARE VERY MEAGRE AMOUNTS. THEREFORE, LEVY OF PENALTY IS NOT CALLED FOR. 4. ON THE CONTRARY, SHRI S. DAS GUPTA, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT BEFORE THE ASSESSING OFFICER THE ASSESSEE ACCEPTED FOR AN ADDITION TO THE EXTENT OF ` 3,14,800/-. THEREFORE, THE ADDITION WAS MADE IN THE ASSESSMENT PROCEEDINGS. EVEN IN THE PENALTY PROCEEDINGS, THE ASSESSEE COULD NOT PROPERLY EXPLAIN THE CREDITWORTHINESS OF THE CREDITORS. THE REFORE, THE ASSESSING OFFICER HAS RIGHTLY LEVIED THE PENALTY AN D THE CIT(APPEALS) HAS ALSO RIGHTLY CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. PENALTY U NDER SECTION 271(1)(C) OF THE ACT CAN BE LEVIED FOR FURNISHING I NACCURATE PARTICULARS OR CONCEALING ANY PART OF THE INCOME IN THE RETURN. IN THIS CASE, THE ASSESSEE CLAIMED THAT SHE RECEIVED A LOAN OF ` 11,76,342/- FROM VARIOUS PERSONS, AND RANGING FROM ` 15,000/- TO ` 19,000/- ON VARIOUS OCCASIONS. THE ASSESSING OFFICER LEVIED PE NALTY ON THE 4 I.T.A. NO.1501/MDS/13 GROUND THAT THE LOAN CREDITORS ARE NOT TAX PAYERS. THEY HAVE NOT OBTAINED PERMANENT ACCOUNT NUMBER. EVEN THOUGH THE ASSESSEE HAS CLAIMED THE LOAN OF ` 11,76,342/-, THE ASSESSING OFFICER DOUBTED CREDITWORTHINESS OF THE CREDITORS ONLY TO THE EXTEN T OF ` 3,14,800/-. NO DOUBT, IT IS FOR THE ASSESSEE TO ESTABLISH THE I DENTITY OF THE CREDITORS, GENUINENESS OF THE TRANSACTIONS AND CRED ITWORTHINESS OF THE CREDITORS. WHEN THE ASSESSEE EXPLAINED THAT SH E RECEIVED ` 15,000/- TO ` 19,000/- FROM VARIOUS PERSONS, THE IDENTITY OF THE CREDITORS ARE NOT IN DOUBT, THIS TRIBUNAL IS OF CON SIDERED OPINION THAT THERE IS NO JUSTIFICATION IN DOUBTING THE CREDITWOR THINESS OF THE CREDITORS. DURING THE ASSESSMENT YEAR 2006-07, THE LABOURERS WERE GETTING ` 200 TO ` 300 PER DAY. THESE LABOURERS ARE NOT INCOME-TAX ASSESSEES. THEY DO NOT HAVE ANY PAN. WHEN HUSBAND AND WIFE WERE GOING FOR EMPLOYMENT, THEN THE MAXIMUM SALARY THEY COULD EARN WAS ` 500 TO ` 600 PER DAY THAT WOULD COME TO NEARLY ` 15000/- PER MONTH. OUT OF THIS, IF AN INDIVIDUAL PAYS SOME MONEY TO SOMEBODY AS A LOAN AND THE DEPARTMENT ASKS FOR EVID ENCE FOR THE MONEY, IT IS IMPOSSIBLE FOR SUCH LABOURERS TO PRODU CE ANY EVIDENCE BEFORE THE INCOME TAX DEPARTMENT. THE MATTER WOULD STAND ON DIFFERENT FOOTING IN CASE THE IDENTITY OF THE CREDI TORS ARE IN DOUBT. THEREFORE, TAKING INTO CONSIDERATION THE SMALLNESS OF THE CREDIT TO THE EXTENT OF ` 15,000 TO ` 19,000 AND WAGES/SALARY PREVAILING IN THAT 5 I.T.A. NO.1501/MDS/13 ASSESSMENT YEAR, THIS TRIBUNAL IS OF CONSIDERED OPI NION THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN DOUBTING THE CREDITWORTHINESS OF THE CREDITORS IN THE ABSENCE OF ANY DOUBT WITH REGA RD TO IDENTITY OF THE CREDITORS. 6. THE OTHER CONTENTION OF THE LD. D.R. IS THAT THE ASSESSEE AGREED FOR ADDITION IN THE ASSESSMENT PROCEEDINGS. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ASSESSMENT PROCEEDIN G IS DISTINCT FROM PENALTY PROCEEDING. THE ASSESSING OFFICER IS EXPECTED TO RE- APPRECIATE THE EVIDENCE AND EXPLANATION OF THE ASSE SSEE DURING THE PENALTY PROCEEDINGS. MERELY BECAUSE THE ASSESSEE A DMITTED FOR ADDITION DURING THE ASSESSMENT PROCEEDINGS, IT DOES NOT RESULT IN AUTOMATIC LEVY OF PENALTY. BY TAKING INTO CONSIDER ATION SMALLNESS OF THE AMOUNT, AND THE ECONOMIC SITUATION PREVAILED DU RING THE ASSESSMENT YEAR UNDER CONSIDERATION, THIS TRIBUNAL IS OF CONSIDERED OPINION THAT THERE IS NO JUSTIFICATION IN LEVY OF P ENALTY TO THE EXTENT OF ` 96,329/-. ACCORDINGLY, THE ORDERS OF THE LOWER AUT HORITIES ARE SET ASIDE AND PENALTY LEVIED BY THE ASSESSING OFFICER I S DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. 6 I.T.A. NO.1501/MDS/13 ORDER PRONOUNCED ON 17 TH OF APRIL, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) (. !'# ! ) ( . . . ) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 17 TH APRIL, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-VIII, CHENNAI 4. 1 92 /CIT-VI, CHENNAI-34 5. 7: -2 /DR 6. ;( < /GF.