Shri Rameshbhai C.Rajput, Ahmedabad V. The Income tax Officer,Ward-10(1), Ahmedabad

ITA 1628/AHD/2012

• Counselvise Citation: 162820514 RSA 2012
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 26-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TIRKEY
• Assessee Lawyers: RAMESHBHAI C RAJPUT HIMSELF
• Keywords: Unexplained investment; Revised return; Bonafide mistake
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI MUKUL KUMAR SHRAWAT, JM AND A. MOHAN A LANKAMONY, AM) ITA NO. 1628/AHD/2012 A. Y.: 2006-07 RAMESHBHAI C. RAJPUT, MATRU SMRUTI 6, PARAG SOCIETY, NEW VIKAS GRUH ROAD, PALDI, AHMEDABAD P. A. NO. AAQPR 4793 K VS THE INCOME TAX OFFICER, WARD 10(1), NARAYAN CHAMBERS, ASHRAM ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RAMESHBHAI C. RAJPUT (ASSESSEE HIMSELF) RESPONDENT BY SHRI A. TIRKEY, SR. DR DATE OF HEARING: 19-09-2012 DATE OF PRONOUNCEMENT: 19-10-2012 O R D E R PER MUKUL KUMAR SHRAWAT : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF THE LEARNED CIT (A)-XVI, AHMEDABAD DATED 1 ST JUNE, 2012. THE ONLY ISSUE AS RAISED IN THE GROUNDS OF APPEAL IS IN RESPECT OF CONFIRMATION OF PENALTY LEVIED U/S 271 (1) (C) OF THE IT ACT OF RS.89,232/-. 2. THE FACTS IN BRIEF AS EMERGED FROM THE CORRESPON DING ORDER PASSED U/S 271 (1) (C) OF THE ACT DATED 25-03-2011 AND THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT DATED 31-12-2008 ARE ITA NO.1628/AHD/2012 (AY: 2006-07) RAMESHBHAI C. RAJPUT VS ITO, WARD- 10(1), AHMEDABAD 2 THAT THE ASSESSEE IN INDIVIDUAL CAPACITY HAD DECLAR ED INCOME OF RS.1,30,460/- AS PER THE RETURN SHOWING AN INCOME B Y WAY OF SHARE OF PROFIT AND REMUNERATION FROM THE FIRM M/S. N. R. CO RPORATION. THE PENALTY HAS BEEN IMPOSED IN RESPECT OF AN INCOME WH ICH WAS ASSESSED BY THE AO AS CONSULTANCY INCOME OF RS.1,6 4,000/-. PENALTY HAS ALSO BEEN IMPOSED IN RESPECT OF UNEXPLA INED INVESTMENTS IN SHARES OF RS.1,82,580/-. IN RESPECT OF CONSULTANCY INCOME WHICH WAS DETECTED BY THE AO THAT IN THE BAN K STATEMENT THE SAID AMOUNT WAS REFLECTED. HOWEVER, AS PER THE ASSE SSEE DUE TO OVERSIGHT IT WAS NOT REFLECTED IN THE RETURN OF INC OME. REGARDING UNACCOUNTED INVESTMENT IN SHARES AN ADDITION OF RS. 6,07,288/- WAS MADE, HOWEVER, IT WAS REDUCED TO RS.1,82,521/- BY T HE ORDER OF THE LEARNED CIT(A). THE ASSESSEE HAS FURNISHED EXPLANAT ION BEFORE THE REVENUE AUTHORITIES THAT DUE TO ILL HEALTH HE HAD M EMORY LOSS WHICH RESULTED INTO NON-DISCLOSURE OF THESE TWO FIGURES. IN THIS REGARD, THE ASSESSEE HAS GIVEN IN WRITING AS FOLLOWS: DUE TO THE PECULIAR FACTS OF YOUR ASSESSEES CASE, AS EXPLAINED HEREUNDER AN AMOUNT OF RS.1,64,000/- WAS ADMITTEDLY ACCEPTED BY THE ASSESSEE BEING THE CONSULTANCY CHARGES AS AD VISOR FOR DOCUMENTS & REGISTRATION OF DEEDS ETC. WHICH OUGHT TO BE INCLUDED AND WERE NOT INCLUDED AND THEREFORE BE AS SESSED AS INCOME. FOR THE REMAINING ADDITION, ADDITION OF RS.5,06,450 /- GETS DELETED, SO ALSO ADDITION OF RS.6,07,288/- GETS RED UCED TO RS.1,82,580/- AND THUS SUBSTANTIAL RELIEF HAS BEEN GRANTED BY THE HONBLE CIT(A). THERE WAS CERTAINLY ERROR ON THE PART OF YOUR ASSES SEE BUT IT WAS UNINTENTIONAL AND BONAFIDE MISTAKE AS CLARIFIED HEREUNDER: ITA NO.1628/AHD/2012 (AY: 2006-07) RAMESHBHAI C. RAJPUT VS ITO, WARD- 10(1), AHMEDABAD 3 SINCE F. Y. 2003-04 DURING WHICH THE ASSESSEE HAD A CARDIAC PROBLEM AND BYPASS SURGERY WAS CARRIED, SINCE THEN HE IS NOT KEEPING GOOD HEALTH. ALSO DURING F. Y. 2006-07 AND 2007-08 ASSESSEE HAD BRAIN HEMRAGE WHICH HAD BADLY AFFECTED CERTAIN CELLS OF BRAIN DUE TO WHICH ASSESSEE TENDS TO LOSE MEMORY FOR CERTAIN PERIOD WHICH LASTED FOR ABOUT TWO YEARS AND TREATMENT RELATING TO IT IS STILL IN PROGRESS. DUE TO THIS GENUINE STATE OF AFFAIRS, ASSESSEE WAS UNABLE TO FURNISH CORRECT PARTICULARS OF HIS TOTAL TAXABLE IN COME AND ALSO WAS UNABLE TO PRODUCE NECESSARY EVIDENCES DURING TH E COURSE OF ORIGINAL PROCEEDINGS. LATER ON DETAILS / EVIDENC ES WERE COLLECTED AND PRODUCED BEFORE THE HONBLE CIT(A) AS A RESULT OF WHICH SUBSTANTIAL RELIEF HAS BEEN GRANTED. CONSIDERING THIS PECULIAR FACTS OF MY CASE AND IN A BSENCE OF MALAFIDE INTENTION, I HUMBLY REQUEST YOUR HONOUR TO KINDLY DELETE THE PENALTY. 3. ON THE DATE OF HEARING BEFORE US, THE APPELLANT WAS PRESENT HIMSELF. HE HAS REITERATED THAT DUE TO ILL-HEALTH A ND BRAIN HEMORRHAGE THE ERROR WAS COMMITTED, BUT THE STATEMENT OF BANK ACCOUNT WAS TRULY AND HONESTLY PLACED BEFORE THE AO SO THAT CORRECT I NCOME COULD BE ASSESSED ON THE BASIS OF THE INFORMATION SUPPLIED. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE, THE LEARNED DR, MR. A . TIRKEY HAS PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BE LOW. 4. WE HAVE HEARD BOTH THE SIDES. ALTHOUGH, UNDISPUT EDLY, THE CONSULTANCY INCOME WAS NOT DISCLOSED BY THE ASSESSE E WHEN THE RETURN WAS FILED, BUT THIS FACT CAN ALSO NOT BE IGN ORED THAT THE ASSESSEE HAS SUO MOTO FURNISHED THE BANK STATEMENT BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE REUPON IT WAS EXPLAINED THAT ONLY DUE TO OVERSIGHT THE CONSULTANC Y INCOME WAS NOT ITA NO.1628/AHD/2012 (AY: 2006-07) RAMESHBHAI C. RAJPUT VS ITO, WARD- 10(1), AHMEDABAD 4 SHOWN IN THE RETURN OF INCOME. EVEN BEFORE COMPLETI ON OF THE ASSESSMENT, THE SAID AMOUNT OF RS.1,64,000/- WAS OF FERED BY THE ASSESSEE. LIKEWISE, IN RESPECT OF INVESTMENT IN SHA RES, MOST OF THEM WERE STATED TO BE OUT OF LOAN AND OTHER BORROWINGS. THERE WERE TWO LOANS WHICH WERE ACCEPTED BY THE LEARNED CIT(A). TH EREUPON, IT WAS FOUND BY THE LEARNED CIT(A) THAT OUT OF THE IMPUGNE D AMOUNT OF ADDITION OF RS.6,07,288/- ONLY AN AMOUNT OF RS.1,82 ,521/- REMAINED UNEXPLAINED. THE ASSESSEES SUBMISSION WAS THAT THE SOURCE WAS EXPLAINED, HOWEVER THAT WAS NOT CONSIDERED AS SATIS FACTORY BY THE AO. ON THE BASIS OF THESE FACTS, WE HAVE NOTED THAT THE ASSESSEE WAS UNDISPUTEDLY SUFFERING FROM BRAIN HEMORRHAGE, A S IS EVIDENT FROM MEDICAL RECORD AND OTHER MEDICAL CERTIFICATES ARE P LACED ON RECORD. THIS COULD BE THE REASON THAT THE ASSESSEE WAS NOT IN A HEALTHY MENTAL STATE TO DISCLOSE THE CONSULTANCY INCOME WHEN THE IT RETURN WAS FILED. IN THE LIGHT OF THIS MEDICAL BACKGROUND, WE HAVE ALSO NOTED THAT THE ASSESSEE HAD FURNISHED BANK STATEMENT OF HIS OW N AT THE TIME OF ASSESSMENT PROCEEDINGS. THIS IS NOT THE CASE OF THE REVENUE DEPARTMENT THAT THE SAID BANK ACCOUNT WAS UNEARTHED OR DETECTED BY THE REVENUE DEPARTMENT. THERE WAS NO DELIBERATE ATT EMPT ON THE PART OF THE ASSESSEE TO HIDE THE SAID BANK STATEMENT. TH E ASSESSEE HAD OFFERED THE SAID AMOUNT AS SOON AS HE CAME TO KNOW ABOUT THE CONSULTANCY INCOME EVEN BEFORE COMPLETION OF THE AS SESSMENT PROCEEDINGS. IN THE CASE OF K. C. BUILDERS, 265 ITR 562, THE HONBLE SUPREME COURT HAS OPINED THAT THE AMOUNT SHOULD BE ATTRIBUTABLE TO AN INTENTION TO HIDE THE INCOME. THE CASE OF THE AS SESSEE CAN BE LINKED WITH THE SITUATION WHERE THE ASSESSEE HAS FI LED A REVISED RETURN SHOWING HIGHER INCOME CONSEQUENT UPON A SEARCH AND ON THAT BASIS ITA NO.1628/AHD/2012 (AY: 2006-07) RAMESHBHAI C. RAJPUT VS ITO, WARD- 10(1), AHMEDABAD 5 AN ASSESSMENT WAS MADE, THEN IT WAS HELD THAT SUCH A VOLUNTARY ACTION WAS JUSTIFIABLE IN HOLDING THAT NO PENALTY C OULD BE LEVIED. SUPPORTING CASE LAW IS SURESHCHANDRA MITTAL, 251 IT R 9. LIKEWISE, IN RESPECT OF UNEXPLAINED INVESTMENT, WE HAVE NOTED TH AT MAJOR PORTION HAD ALREADY BEEN DELETED BY THE FIRST APPELLATE AUT HORITY, HOWEVER, IN RESPECT OF THE BALANCE AMOUNT, THE EXPLANATION IN T HE SHAPE OF CONFIRMATION WAS NOT FOUND SATISFACTORY BY THE REVE NUE DEPARTMENT. THE ASSESSEE HAD GIVEN EXPLANATION WHICH REMAINED P ARTLY UNPROVED BUT IT WAS NOT CONCLUSIVELY DISPROVED. THEREFORE, S UCH AN EXPLANATION MUST NOT BE TREATED AS A FALSE EXPLANATION AS HELD IN THE CASE OF NATIONAL TEXTILE CORPORATION, 249 ITR125 (GUJ.). WE , THEREFORE, FOLLOW THESE DECISIONS AND CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE ILL-HEALTH OF THE ASSESSEE, HEREBY HOLD THAT THE PENALTY IN QUESTION DESERVES T O BE DELETED. RESULTANTLY, THE GROUND RAISED BY THE ASSESSEE IS A LLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19-10-2012 SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (MUKUL KR. SHRAWAT) JUDICIAL MEMBER LAKSHMIKANTA DEKA/ LAKSHMIKANTA DEKA/ LAKSHMIKANTA DEKA/ LAKSHMIKANTA DEKA/ ITA NO.1628/AHD/2012 (AY: 2006-07) RAMESHBHAI C. RAJPUT VS ITO, WARD- 10(1), AHMEDABAD 6 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER A SSTT. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 12-10-2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 12-10-2012 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: