Shri Harshad Manilal Shah, Ahmedabad V. The ITO, Ward-5(1)(3), Ahmedabad

ITA 1516/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4907 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 08-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K GOYAL
• Assessee Lawyers: HIREN TRIVEDI
• Keywords: Set aside
• Section: 271(1)(c); 274

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD , JUDICIAL MEMBER ./ I.T.A. NO. 1516/AHD/2018 ( ASSESSMENT YEAR : 2006-07) SHRI HARSHAD MANILAL SHAH 16, GOLDEN TEMPLE BUNGLOW, B/H. MANEK- BAUG HALL, AMBAWADI, AHMEDABAD / VS. INCOME TAX OFFICER WARD 5(1)(3), AHMEDABAD ./ ./ PAN/GIR NO. : AQAPS7532D ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HIREN TRIVEDI, A.R / RESPONDENT BY : SHRI N. K. GOYAL, SR.D.R. DATE OF HEARING 19/02/2020 !'# / DATE OF PRONOUNCEMENT 20/02/2020 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-5, AHMEDABAD (CIT(A) IN SHORT), DATED 0 4.04.2018 ARISING IN THE PENALTY ORDER DATED 29.09.2016 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2006-07. ITA NO. 1516/AHD/18 [SHRI HARSHAD M. SHAH VS. ITO] A.Y. 2006-07 - 2 - 2. IN THE CAPTIONED APPEAL, THE ASSESSEE SEEKS TO C HALLENGE THE IMPOSITION OF PENALTY OF RS.8,02,870/- UNDER S.271( 1)(C) OF THE ACT. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE L EARNED AR FOR THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ASSESSEE HAS DIED ON 29.10.2019. THE LEARNED AR FURTHER SUBMITTED THAT IN THE INSTANT CASE, THE RETURN WAS FILED FOR AY 2006-07 IN QUESTION ON 30.07.2006 DECLARING TOTAL INCOME AT RS.88,080/-. THEREAFTER, THE CASE WAS REOPENED ON THE BASIS OF SOME INFORMATION THAT CASH DEPOSITS AGGREGATING TO RS.24,00,024/- WAS MADE IN HDFC BANK ACCOUNT. IN THE CONTEXT, THE LEARNED AR FOR THE ASSESSEE SUBMIT TED THAT THE CASH WAS DEPOSITED OUT OF SALE OF GOLD ARTICLES, THE PRO FIT/LOSS WHEREOF WAS DULY DECLARED IN THE RETURN OF INCOME. THE LEARNED AR FOR THE ASSESSEE THUS SUBMITTED THAT REOPENING UNDER S.147 OF THE ACT MERELY BECAUSE OF CASH DEPOSITS IN BANK ACCOUNT WITHOUT RE FERENCE TO UNDERLYING RETURN OF INCOME IS NOT JUSTIFIED AND QU ANTUM ADDITIONS ITSELF DESERVES TO BE DELETED. THE LEARNED AR THUS SUBMITTED THAT THE IMPOSITION OF PENALTY UNDER S.271(1)(C) OF THE ACT WHICH IS ON A DIFFERENT PEDESTAL AND IN THE CIRCUMSTANCES NARRATE D, THE INVOCATION OF PENALTY UNDER S.271(1)(C) OF THE ACT IS NOT JUSTIFI ED WHERE THE SOURCE OF CASH DEPOSIT FROM SALE OF GOLD IS UNDENIABLE. I T WAS CONTENDED THAT THE AO HAS MERELY DISPUTED THE SALE BILLS BUT NOT T HE SALE OF GOLD BY THE ASSESSEE PER SE. THE PURCHASER OF THE GOLD HAS ALSO GIVEN CONTRADICTORY STATEMENTS ON ISSUANCE OF BILL TO THE ASSESSEE AS DISPUTED BY AO. 4. THE LEARNED AR FOR THE ASSESSEE THEREAFTER RAISE D A LEGAL GROUND FOR UNSUSTAINABILITY OF PENALTY UNDER S.271(1)(C) O F THE ACT ON CASH DEPOSITS. IT WAS POINTED OUT THAT THE AO HIMSELF H AS DRAWN VAGUE SATISFACTION FOR CONCEALING INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME AT THE TIME OF FRAMING ASSESS MENT. THE NOTICE ISSUED UNDER S. 274 R.W.S. 271(1)(C) OF THE ACT IS ALSO VAGUE AND THE ITA NO. 1516/AHD/18 [SHRI HARSHAD M. SHAH VS. ITO] A.Y. 2006-07 - 3 - SPECIFIC CHARGE TOWARDS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME IS NOT KNOWN. THE PENALTY CULMINATED ON THE BASIS OF SUCH VAGUE SATISFACTION HAS ALSO NOT CLEARLY SPECIFIED THE NATURE OF DEFAULT COMMITTED BY THE AS SESSEE. UNDER THE CIRCUMSTANCES, THE IMPOSITION OF PENALTY IS NOT SUS TAINABLE IN LAW IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH OF TR IBUNAL IN MULTIVISION INFOTECH (P.) LTD. VS. ACIT [2017] 88 T AXMANN.COM 874 (AHMEDABAD-TRIB.) . THE LEARNED AR ACCORDINGLY URGED FOR CANCELLATION OF PENALTY IMPOSED ON THE ASSESSEE WHO IS NOW DECEASED. 5. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. AS NARRATE D ON BEHALF OF THE ASSESSEE, THE CORRECTNESS OF IMPOSITION OF PENA LTY UNDER S.271(1)(C) OF THE ACT ON ALLEGED UNEXPLAINED CASH DEPOSITS IS IN QUESTION. AS POINTED OUT ON BEHALF OF THE ASSESSEE , THE SATISFACTION DRAWN BY THE AO AT THE TIME OF ASSESSMENT AS WELL A S SHOW CAUSE NOTICE FOR PROPOSED ACTION REMAINS UNDOUBTEDLY VAGU E AND AMBIGUOUS. THE PENALTY HAS BEEN IMPOSED FOR CONCEALMENT OF INC OME IN CONTRADICTION TO THE SATISFACTION FORMED. THE RATI O OF THE CO-ORDINATE BENCH IN MULTIVISION INFOTECH (P.) LTD. (SUPRA) THUS WOULD SQUARELY APPLY. THE PENALTY UNDER S.271(1)(C) OF THE ACT CA NNOT BE FASTENED ON THIS LEGAL GROUND ALONE. 7. WE HOWEVER ALSO ADVERT TO THE OTHER PLANK RAISED ON BEHALF OF THE ASSESSEE. THE CASE HAS BEEN REOPENED MERELY ON THE PREMISE THAT CERTAIN CASH HAS BEEN DEPOSITED WITHOUT NEGATING TH E CLAIM OF THE ASSESSEE TOWARDS THE SOURCE OF CASH DEPOSITED TO BE SALE OF GOLD ARTICLES. ON MERITS, THE ASSESSEE HAS PRODUCED SAL E BILLS TO SUPPORT THE SALE OF GOLD. THE SALE BILLS APPEAR TO HAVE BEEN D ISPUTED IN THE QUANTUM PROCEEDINGS BUT HOWEVER SALE OF GOLD ARTICL E PER SE REMAINS ITA NO. 1516/AHD/18 [SHRI HARSHAD M. SHAH VS. ITO] A.Y. 2006-07 - 4 - UNDISPUTED. THE SOURCE OF CASH DEPOSIT THUS CANNOT OUTRIGHTLY REJECTED. THE STATEMENT RENDERED BY THE PURCHASER IS ALSO MAR RED WITH CERTAIN CONTRADICTIONS AS POINTED OUT ON BEHALF OF ASSESSEE IN QUANTUM PROCEEDINGS. UNDER THESE CIRCUMSTANCES, THERE IS E NOUGH ROOM TO GRANT BENEFIT OF DOUBT TO THE ASSESSEE. IN OUR VIE W, MITIGATING CIRCUMSTANCES EXIST WHICH WARANTS DELETION OF PENAL TY IMPOSED UNDER S.271(1)(C) OF THE ACT. THE ORDER OF THE CIT(A) AP PEALED AGAINST IS THUS SET ASIDE AND THE AO IS DIRECTED TO DELETE THE PENALTY SO IMPOSED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 20/02/2020 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 20/02/202 0