Devender Kumar, Hisar V. ITO, Hisar

ITA 156/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2298 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 09-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAGDISH SINGH
• Assessee Lawyers: RAJESH KUMAR GOYAL I T P
• Keywords: Principle of natural justice; TDS
• Section: 271(1)(c); 147

Judgement Text

1 ITA NOS. 156 & 157/ DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I ( 2) + SMC NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEM BER, AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 156/DEL/2017 ( A.Y 2010-11) ITA NO. 157/DEL/2017 ( A.Y 2011-12) DEVENDER KUMAR C/O. RAJESH KUMAR GOYAL, TAXATION ADVISOR, WARD NO. 12, NEAR CIVIL HOSPITAL, BARWALA HISAR AWYPK2836L (APPELLANT) VS ITO WARD-1 HISAR (RESPONDENT) APPELLANT BY SH. RAJESH KUMAR GOYAL, I.T.P RESPONDENT BY SH. JAGDISH SINGH, SR. DR ORDER PER SUCHITRA KAMBLE, JM THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDERS DATED 29/11/2016 PASSED BY CIT(A)-ROHTAK, FOR ASSESSMENT YEAR 2010-11 & 2011- 12 RESPECTIVELY. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- ITA NO. 156/DEL/2017 (2010-11) 1. THE ORDERS OF THE LEARNED I.T.O. AND THE HONOURA BLE CIT (APPEALS) ARE BAD DATE OF HEARING 26.02.2020 DATE OF PRONOUNCEMENT 19.03.2020 2 ITA NOS. 156 & 157/ DEL/2017 IN LAW AND AGAINST THE FACTS. 2. THE FIRST ADDITION CONFIRMED BY THE HONORABLE CI T (A) WAS THE ADDITION OF DISALLOWANCE OF CASH RECEIVED BY THE ASSESSEE FROM TWO OF HIS CUSTOMERS, WHO COULD NOT BE PRODUCED BEFORE THE A. O. FOR RECO RDING OF THEIR STATEMENT DUE TO PRACTICAL HARDSHIP OF BEING THEIR OUT OF STA TION FOR A LONG TIME. ALL OTHER CUSTOMERS OF THE ASSESSEE EXCEPT THESE TWO PERSONS WERE PRODUCED BEFORE THE A. O. FOR RECORDING OF THEIR STATEMENT. ADDITION OF CASH RECEIPTS OF THE ASSESSEE FROM HIS SUCH CUSTOMERS, STATEMENTS OF WHOM WERE RE CORDED BY THE ASSESSING OFFICER, HAVE BEEN DELETED BY THE HONBLE CIT (A). THE SAID ADDITIONS WERE CONFIRMED IN APPEAL NOT DUE TO DETEC TION OF ANY TYPE OF CONCEALMENT OF INCOME LIKE FAILURE OF ASSESSEE TO P ROVE THE GENUINENESS OF THE TRANSACTIONS MADE WITH SAID TWO CUSTOMERS OR LACK O F CREDITWORTHINESS OF THE SAID CUSTOMERS ETC., BUT DUE TO CIRCUMSTANCES BEING OUT OF CONTROL OF THE ASSESSEE, AS IT WAS NOT IN THE HANDS OF THE ASSESSE E TO BRING HIS SAID TWO CUSTOMERS BEFORE THE AUTHORITIES. THEREFORE, KEEPING IN VIEW THE FACT THAT THE SAID A DDITIONS HAD NOT BEEN CONFIRMED DUE TO ANY CONCEALMENT OF INCOME MADE BY THE ASSESSEE, BUT DUE TO PROVIDING BENEFIT TO THE REVENUE OF UNCERTAINTIE S CAUSED BY THE CIRCUMSTANCES. HENCE, PENALTY IS NOT LEVIABLE. 3. THE SECOND ADDITION CONFIRMED BY THE HONBLE CIT (A) WAS THE ADDITION OF DISALLOWANCE OF AN UNSECURED LOAN RECEIVED BY THE A SSESSEE, THE LENDER OF WHICH COULD NOT BE PRODUCED FOR RECORDING OF HIS ST ATEMENT DUE TO PRACTICAL HARDSHIP OF BEING SHIFTING OF HIS RESIDENCE TO AN U NKNOWN ADDRESS. THE SAID ADDITION WAS CONFIRMED IN APPEAL NOT DUE TO DETECTI ON OF ANY TYPE OF CONCEALMENT OF INCOME, BUT DUE TO CIRCUMSTANCES BEI NG OUT OF CONTROL OF THE ASSESSEE, AS IT WAS NOT IN THE HANDS OF THE ASSESSE E TO TRACE THE ADDRESS OF SAID PERSON. THEREFORE, KEEPING IN VIEW THE FACT TH AT THE SAID ADDITION HAS NOT BEEN CONFIRMED DUE TO ANY CONCEALMENT OF INCOME MAD E BY THE ASSESSEE, BUT DUE TO PROVIDING BENEFIT TO THE REVENUE OF UNCERTAI NTIES CAUSED BY THE CIRCUMSTANCES. HENCE, PENALTY IS NOT LEVIABLE. 4. THE THIRD ADDITION CONFIRMED BY THE HONOURABLE C IT (A) WAS THE ADDITION 3 ITA NOS. 156 & 157/ DEL/2017 MADE OF LIFE INSURANCE AGENCY COMMISSION INCOME EAR NED BY THE ASSESSEE LEFT TO BE INCLUDED BY HIM IN HIS INCOME TAX RETURN DUE TO OVERSIGHT. PENALTY LEVIED UPON THIS ADDITION IS IMPROPER AND BEYOND THE LAW & JUSTICE FOR THE FOLLOWING TWO REASONS:- A) INCOME TAX AT SOURCE (TDS) WAS ALREADY DEDUCTED BY THE LIFE INSURANCE CO. FROM WHOLE OF THE GROSS COMMISSION OF RS.8907/- , WHILE ONLY TWO-THIRD PART OF THE GROSS COMMISSION IS TAXABLE, AS AN AD H OC DEDUCTION OF ONE-THIRD OF GROSS COMMISSION IS ALLOWABLE AS EXPENSE IN CASE OF GROSS COMMISSION BEING UP TO RS.60000/-. AS TDS ALREADY DEDUCTED ON THE SA ID COMMISSION INCOME EXCEEDS THE TAX PAYABLE ON IT, THEREFORE NO TAX EVA SION WAS THERE. HENCE, PENALTY IS NOT LEVIABLE. B) THE SAID ADDITION OF COMMISSION INCOME HAS BEEN CO NFIRMED BY THE HONBLE CIT (A) ON ESTIMATION BASIS ONLY. THE LD. A SSESSING OFFICER MADE THE ADDITION OF WHOLE OF THE GROSS COMMISSION OF RS.8,9 07/- ASSUMING NO EXPENSE HAS BEEN INCURRED TO EARN THE SAME, THE HONBLE CIT (A) CONFIRMED THE SAID ADDITION TO THE EXTENT OF RS.8007/- ESTIMATING THE SAID EXPENSE TO BE OF RS.900/-, WHILE UNDER THE PROVISIONS OF I. T. ACT, 1961, AN AD HOC DEDUCTION OF RS.2969/- (BEING THE ONE-THIRD OF THE GROSS COMMISS ION INCOME) IS ALLOWABLE, AS GROSS COMMISSION DOESNT EXCEED RS.60000/-. AS T HE SAID ADDITION IS BASED ON ESTIMATION ONLY, NOT ON CERTAIN BASIS AND ADDITION MADE ON ESTIMATION BASIS DOESNT TANTAMOUNT TO CONCEALMENT OF INCOME. HENCE, NO PENALTY IS LEVIABLE ON THIS ADDITION. 5. THE FOURTH AND LAST ADDITION CONFIRMED BY THE H ONOURABLE CIT (A) WAS THE ADDITION OF HOUSEHOLD EXPENSES CONSIDERING IT TO BE INADEQUATE. THE SAID ADDITION WAS MADE BY THE ASSESSING OFFICER ESTIMATI NG THE HOUSEHOLD EXPENSES OF THE ASSESSEE TO BE OF RS. 100000/-, WHI LE IT WAS REDUCED BY THE HONBLE CIT (A) ESTIMATING THE SAID EXPENSES TO BE OF RS.78000/-. THIS ADDITION WAS MADE AND CONFIRMED ON ESTIMATION BASIS ONLY AND ANY ADDITION MADE ONLY ON THE ESTIMATION BASIS LIKE INADEQUACY O F HOUSEHOLD EXPENSES DOESNT ATTRACT ANY PENAL PROVISIONS OF I. T. ACT, 1961. HENCE, PENALTY LEVIED ON THIS ADDITION IS NOT SUSTAINABLE. 4 ITA NOS. 156 & 157/ DEL/2017 ITA NO. 157/DEL/2017 (A.Y. 2011-12) 1. THE ORDERS OF THE LEARNED I.T.O. AND THE HONOURA BLE CIT (APPEALS) ARE BAD IN LAW AND AGAINST THE FACTS. 2. THE FIRST ADDITION CONFIRMED BY THE HONBLE CIT (A ) WAS THE ADDITION OF DISALLOWANCE OF CASH RECEIVED BY THE ASSESSEE FROM TWO OF HIS CUSTOMERS, WHO COULD NOT BE PRODUCED BEFORE THE A. O. FOR RECO RDING OF THEIR STATEMENT DUE TO PRACTICAL HARDSHIP OF BEING THEIR OUT OF STA TION FOR A LONG TIME/ ILLNESS. ALL OTHER CUSTOMERS OF THE ASSESSEE EXCEPT THESE TW O PERSONS WERE PRODUCED BEFORE THE A. O. FOR RECORDING OF THEIR STATEMENT. ADDITION OF CASH RECEIPTS OF THE ASSESSEE FROM HIS SUCH CUSTOMERS, STATEMENTS OF WHOM WERE RECORDED BY THE ASSESSING OFFICER, HAVE BEEN DELETED BY THE HON BLE CIT (A). THE SAID ADDITIONS WERE CONFIRMED IN APPEAL NOT DUE TO DETEC TION OF ANY TYPE OF CONCEALMENT OF INCOME LIKE FAILURE OF ASSESSEE TO P ROVE THE GENUINENESS OF THE TRANSACTIONS MADE WITH SAID TWO CUSTOMERS OR LACK O F CREDIT WORTHINESS OF THE SAID CUSTOMERS ETC., BUT DUE TO CIRCUMSTANCES BEING OUT OF CONTROL OF THE ASSESSEE, AS IT WAS NOT IN THE HANDS OF THE ASSESSE E TO BRING HIS SAID TWO CUSTOMERS BEFORE THE AUTHORITIES. THEREFORE, KEEPING IN VIEW THE FACT THAT THE SAID A DDITIONS HAVE NOT BEEN CONFIRMED DUE TO ANY CONCEALMENT OF INCOME MADE BY THE ASSESSEE, BUT DUE TO PROVIDING BENEFIT TO THE REVENUE OF UNCERTAINTIE S CAUSED BY THE CIRCUMSTANCES. HENCE, PENALTY IS NOT LEVIABLE. 3. THE SECOND ADDITION CONFIRMED BY THE HONBLE CIT ( A) WAS THE ADDITION OF DISALLOWANCE OF AN UNSECURED LOAN RECEIVED BY THE A SSESSEE, THE LENDER OF WHICH COULD NOT BE PRODUCED FOR RECORDING OF HIS ST ATEMENT DUE TO PRACTICAL HARDSHIP OF BEING SHIFTING OF HIS RESIDENCE TO AN U NKNOWN ADDRESS. THE SAID ADDITION WAS CONFIRMED IN APPEAL NOT DUE TO DETECTI ON OF ANY TYPE OF CONCEALMENT OF INCOME, BUT DUE TO CIRCUMSTANCES BEI NG OUT OF CONTROL OF THE ASSESSEE, AS IT WAS NOT IN THE HANDS OF THE ASSESSE E TO TRACE THE ADDRESS OF SAID PERSON. THEREFORE, KEEPING IN VIEW THE FACT TH AT THE SAID ADDITION HAS NOT BEEN CONFIRMED DUE TO ANY CONCEALMENT OF INCOME MAD E BY THE ASSESSEE, BUT 5 ITA NOS. 156 & 157/ DEL/2017 DUE TO PROVIDING BENEFIT TO THE REVENUE OF UNCERTAI NTIES CAUSED BY THE CIRCUMSTANCES. HENCE, PENALTY IS NOT LEVIABLE. 4. THE THIRD AND LAST ADDITION CONFIRMED BY THE HONOU RABLE CIT (A) WAS THE ADDITION MADE OF LIFE INSURANCE AGENCY COMMISSION I NCOME EARNED BY THE ASSESSEE LEFT TO BE INCLUDED BY HIM IN HIS INCOME T AX RETURN DUE TO OVERSIGHT. PENALTY LEVIED UPON THIS ADDITION IS IMPROPER AND B EYOND THE LAW & JUSTICE FOR THE FOLLOWING TWO REASONS:- A) INCOME TAX AT SOURCE (TDS) WAS ALREADY DEDUCTED BY THE LIFE INSURANCE CO. FROM WHOLE OF THE GROSS COMMISSION OF RS.5232/- , WHILE ONLY TWO-THIRD PART OF THE GROSS COMMISSION IS TAXABLE, AS AN AD H OC DEDUCTION OF ONE-THIRD OF GROSS COMMISSION IS ALLOWABLE AS EXPENSE IN CASE OF GROSS COMMISSION BEING UP TO RS.60000/-. AS TDS ALREADY DEDUCTED ON THE SA ID COMMISSION INCOME EXCEEDS THE TAX PAYABLE ON IT, THEREFORE NO TAX EVA SION WAS THERE. HENCE, PENALTY IS NOT LEVIABLE. B) THE SAID ADDITION OF COMMISSION INCOME HAS BEEN CO NFIRMED BY THE HONBLE CIT (A) ON ESTIMATION BASIS ONLY. THE LD. A SSESSING OFFICER MADE THE ADDITION OF WHOLE OF THE GROSS COMMISSION OF RS.523 2/- ASSUMING NO EXPENSE HAS BEEN INCURRED TO EARN THE SAME, WHILE UNDER THE PROVISIONS OF I. T. ACT, 1961 AN AD HOC DEDUCTION OF RS. 1744/- (BEING THE O NE-THIRD OF THE GROSS COMMISSION INCOME) IS ALLOWABLE, AS GROSS COMMISSIO N DOESNT EXCEED RS.60000/-. AS THE SAID ADDITION IS BASED ON ESTIMA TION ONLY, NOT ON CERTAIN BASIS AND ADDITION MADE ON ESTIMATION BASIS DOESNT TANTAMOUNT TO CONCEALMENT OF INCOME. HENCE, NO PENALTY IS LEVIABL E ON THIS ADDITION. 3. ISSUES IN BOTH THE APPEALS ARE IDENTICAL, THEREFORE , WE ARE TAKING BRIEF FACTS OF ASSESSMENT YEAR 2010-11. RETURN DECLARING INCOME OF RS.1,53,080/- WAS FILED ON 21.07.2011 WHICH WAS PROCESSED U/S 143 (1) OF I.T. ACT, 1961. THEREAFTER, THE CASE OF THE ASSESSEE WAS REOPENED U /S 147 OF INCOME TAX ACT,1961 AND ASSESSMENT WAS FRAMED U/S 143(3)/147 O F I.T. ACT,1961 VIDE ORDER DATED 24.01.2013 AT INCOME OF RS. 9,46,320/- AFTER MAKING CERTAIN ADDITIONS TO THE TAXABLE INCOME OF THE ASSESSEE. TH E ASSESSEE PREFERRED APPEAL 6 ITA NOS. 156 & 157/ DEL/2017 BEFORE THE CIT (A) AGAINST THE ASSESSMENT ORDER DAT ED 24.01.2013 PASSED U/S 143(3)/147 OF I.T.ACT,1961. THE CIT(A) VIDE ORDER D ATED 20.08.2014 DELETED CERTAIN ADDITIONS AND CONFIRMED SOME ADDITIONS MADE BY THE ASSESSING OFFICER IN ORDER DATED 24.01.2013. THE INCOME AFTER RELIEF GIVEN BY CIT (A) IS AS UNDER:- ASSESSED INCOME RS.946320/- LESS:- NET RELIEF GIVEN BY CIT (A) VIDE ORDER DT. 20.08.2014 RS.321230/- BALANCE ASSESSED INCOME RS.625086/- IN THE MEANWHILE THE PENALTY UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961 WAS ALSO IMPOSED ON THE GROUND THAT THE ASSESS EE IS IN DEFAULT FOR CONCEALING THE PARTICULARS OF HIS INCOME TO THE EXT ENT OF RS. 4,71,506/- (INCOME AFTER RELIEF BY THE CIT(A) MINUS RETURNED INCOME I. E. RS. 6,25,086/- MINUS RS. 1,53,580/-). THUS, THE MINIMUM PENALTY @ 100% OF TH E TAXED EVADED WAS LEVIED AT RS. 94,272/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT IN THE INSTANT CASE, A DDITION TO TOTAL INCOME OF ASSESSEE WERE NOT MADE/CONFIRMATION BY THE ASSESSIN G OFFICER /CIT(A) FOR DEDUCTION OF ANY CONCEALMENT/INACCURACY OF PARTICUL ARS OF HIS INCOME. THE SAID ADDITIONS WERE MADE/CONFIRM NEARLY FOR THE REA SON OF NON AVAILABILITY OF SOME THIRD PARTIES CALLED UPON BY THE AUTHORITIES F OR RECORDING OF THEIR STATEMENTS. THE LD. AR FURTHER SUBMITTED THAT DIS ALLOWANCE OF CASH RECEIPTS FROM SOME OF THE CUSTOMERS AND DISALLOWANCE OF RECE IPTS OF UNSECURED LOANS FROM THE LENDERS AND CUSTOMERS IN BANK ACCOUNT THRO UGH CHEQUES MERELY FOR THE REASON OF NON POSSIBILITY OF PRESENCE OF SUCH C USTOMERS OF LENDERS BEFORE THE ASSESSING OFFICER FOR RECORDING OF THEIR STAT EMENT DOES NOT TANTAMOUNT TO WILLFUL FURNISHING OF INACCURATE PARTICULARS OF INC OME OR CONCEALMENT OF PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. THE 7 ITA NOS. 156 & 157/ DEL/2017 LD. AR RELIED UPON THE DECISION OF THE MUMBAI TRIBU NAL IN CASE OF SHRI AJAY LOKNATH LOHIA VS. ITO (ITA NO. 2998/MUM/2017 ORDER DATED 5/10/2018). 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER, PEN ALTY ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. FROM THE PERUSAL OF THE ORDER OF THE CIT(A ) IT CAN BE SEEN THAT THERE IS NO DETAIL FINDING GIVEN BY THE CIT(A) AS REGARDS TO HOW THE CONCEALMENT OF PARTICULAR OF INCOME RELATING TO THE CONFIRMATION I N RESPECT OF UNSECURED LOAN/RECEIPT OF CASH AND INSURANCE COMMISSION COMES WITHIN THE PURVIEW OF SECTION 271(1)(C). MERELY, HOLDING THAT CONFIRMATIO N IN RESPECT OF UNSECURED LOAN, RECEIPT OF CASH AND INSURANCE COMMISSION CLEA RLY FALL WITHIN THE AMBIT OF CONCEALMENT IS NOT SUFFICIENT. THE CIT(A) ALSO NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE DURING THE APPELLATE PROCEEDINGS. T HEREFORE, IT WILL BE APPROPRIATE TO REMAND BACK THIS ISSUE OF UNSECURED LOAN, RECEIPT OF CASH AND INSURANCE COMMISSION TO THE FILE OF THE CIT(A) FOR DECIDING IT WITH THE REASONED ORDER. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPO RTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 8. AS REGARDS TO ITA NO. 157/DEL/2017 FOR A.Y. 2011 -12, THE SAME IS IDENTICAL AND HERE ALSO THE CIT(A) HAS NOT GIVEN AN Y DETAIL FINDING AND ALSO NOT CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. THEREFO RE, IT WILL BE APPROPRIATE TO REMAND BACK THIS ISSUE OF UNSECURED LOAN, RECEIPT O F CASH AND INSURANCE COMMISSION TO THE FILE OF THE CIT(A) FOR DECIDING I T WITH THE REASONED ORDER. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. THE APPEAL OF THE AS SESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 8 ITA NOS. 156 & 157/ DEL/2017 9. IN RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH, 2020. SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/03/2020 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELH 9 ITA NOS. 156 & 157/ DEL/2017 DATE OF DICTATION 27.02.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.02.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 19 .0 3 .2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 19.03.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.03.2020 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER