Pankaj Sadashiv Bayani, Nashik V. Income-tax Officer,

ITA 165/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1569 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 11-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT HALDER
• Assessee Lawyers: SARANG SINGHAI
• Keywords: Income from undisclosed sources

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO.165/PN/2015 % % / ASSESSMENT YEAR : 2009-10 SHRI PANKAJ SADASHIV BAYANI, FLAT NO.6, CHAITRADHUN APARTMENT, MAGH SECTOR, CIDCO, NASHIK 422 009 PAN NO. AFCPB3865R . / APPELLANT V/S ITO, WARD-1(1), NASHIK . / RESPONDENT / APPELLANT BY : SHRI SARANG SINGHAI / RESPONDENT BY : SHRI ABHIJIT HALDER / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER DATED 31-12-2014 OF THE CIT(A)-I, NASHIK RELATING TO THE ASSESSMENT YEAR 2009-10. 2. LEVY OF PENALTY OF RS.2,25,879/- U/S.271(1)(C) BY THE AO A ND CONFIRMED BY THE CIT(A) IS THE ONLY ISSUE RAISED BY THE AS SESSEE IN THE GROUNDS OF APPEAL. / DATE OF HEARING :11.07.2016 / DATE OF PRONOUNCEMENT:14.07.2016 2 ITA NO.165/PN/2015 3. THIS APPEAL WAS FIXED FOR HEARING FOR THE FIRST TIME ON 1 6-06-2016. AT THE REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE THE CASE WAS ADJOURNED TO 11-07-2016. HOWEVER, WHEN THE NAME OF TH E ASSESSEE WAS CALLED AN ADJOURNMENT APPLICATION WAS FILED BY ONE CLERK OF T HE CONCERNED AUTHORIZED REPRESENTATIVE ON THE GROUND THA T HE IS NOT WELL AND A PAPER BOOK IS BEING FILED. THIS TYPE OF ATTITUDE ON T HE PART OF THE LD. COUNSEL FOR THE ASSESSEE BY DEPUTING A CLERK TO SEE K ADJOURNMENT BEFORE THE BENCH SHOWS SCANT REGARD FOR THE DECORUM O F THE BENCH, ACCORDINGLY, THE ADJOURNMENT APPLICATION WAS REJECTED AN D THE MATTER IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF CONTRACTOR AND BROKERAGE IN REAL ESTATE. HE FILED HIS RETURN OF INCOME ON 05-06-2009 DECLARING TOTA L INCOME AT RS.1,76,600/-. FROM THE VARIOUS BANK ACCOUNTS FURNISHED B Y THE ASSESSEE THE AO NOTED THAT THE ASSESSEE HAS NOT ACC OUNTED FOR THE AMOUNT DEPOSITED IN S.B. A/C.NO.465372 MAINTAINED WITH CITY UNION BANK LTD. AT RS.8,40,360/-. ON BEING QUESTIONED BY THE AO IT WAS EXPLAINED THAT ENTRIES OF THE SAID BANK ACCOUNT WERE REM AINED TO BE CONSIDERED DUE TO OVERSIGHT BY HIS ACCOUNTANT WHILE PREP ARING THE BOOKS OF ACCOUNT. 5. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND MADE ADDITION OF RS.8,40,360/- BEING UNEX PLAINED CASH DEPOSITS AS INCOME FROM UNDISCLOSED SOURCES. THE AO THEREAFTER INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE I.T. ACT. DU RING THE PENALTY PROCEEDINGS THE ASSESSEE MORE OR LESS REITERATE D THE SAME SUBMISSION. IT WAS SUBMITTED THAT WITH A VIEW TO BUY P EACE OF MIND AND TO AVOID LITIGATION WITH THE DEPARTMENT HE HAS REVISED THE BOOKS OF 3 ITA NO.165/PN/2015 ACCOUNT FOR A.Y. 2009-10 ON THE BASIS OF ENTRIES OF THE SA VINGS BANK ACCOUNT MAINTAINED WITH THE CITY UNION BANK LTD. AND ACC ORDINGLY REVISED THE COMPUTATION OF INCOME, VOLUNTARILY OFFERED ADDITIO NAL INCOME OF RS.8,40,360/- AND PAID THE TAXES THEREON. RELYING ON C ERTAIN DECISIONS IT WAS ARGUED THAT PENALTY PROCEEDINGS SHOULD B E DROPPED AS THERE WAS NO DELIBERATE INTENTION TO AVOID THE PAYMENT O F TAXES OR CONCEALMENT OF ANY INCOME. 6. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION G IVEN BY THE ASSESSEE. DISTINGUISHING THE VARIOUS DECISIONS AND OBS ERVING THAT THE BANK ACCOUNT CAME TO LIGHT ONLY AFTER THE CASE WAS SELECTED FOR SCRUTINY WHICH WOULD HAVE REMAINED UNNOTICED OTHERWISE, T HE AO HELD THAT IT IS A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF THE I .T. ACT. HE ACCORDINGLY LEVIED PENALTY OF RS.2,25,879/- BEING 100% OF TH E TAX SOUGHT TO BE EVADED. 7. IN APPEAL THE LD.CIT(A) IN A VERY DETAILED AND ELABORATE ORDER UPHELD THE PENALTY LEVIED BY THE AO BY OBSERVING AS UNDER: 7. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER, THE PENALTY ORDER, THE FACTS OF THE CASE, CASE RECORD AND THE SUBMI SSIONS OF THE APPELLANT. THE APPELLANT HAS FILED THIS APPEAL AGAINST THE LEVY O F PENALTY OF RS.2,25,879/- U/S.271(1)(C) VIDE ORDER DATED 26-06-20 12. THE AO HAS LEVIED THE SAID PENALTY ON RS.8,40,360/- THAT THE APP ELLANT HAD DEPOSITED IN CASH IN HIS SAVING ACCOUNT NO.465372 IN CITY UNION BAN K BUT FAILED TO EXPLAIN THE SOURCE OF THE SAID CASH DEPOSITS. A PERUSAL OF THE DETAILS AVAILABLE ON ASSESSMENT FOLDER REVEALED THAT THE APPELL ANT HAD NOT DISCLOSED, THE CASH BALANCE AS ON 31-03-2009 IN CITY UNION BANK LTD., NASHIK IN HIS RETURN OF INCOME FILED ON 05-06-2009. A PERUSAL OF THE RETURN REVEALS THAT THE APPELLANT HAD SHOWN RS.85,509/- AS BANK BALANCE I N COLUMN 3(A)(III)(B) [CURRENT ASSETS, LOANS AND ADVANCES] IN HIS RETURN OF INC OME. THE AO HAD ISSUED A DETAILED QUESTIONNAIRE VIDE NOTICE U/S.142(1) DATED 30-06-2011. THE AO HAD INTERALIA ASKED THE APPELLANT TO FURNISH B ANK RECONCILIATION STATEMENT DETAILS OF ALL BANK ACCOUNTS ALONG WITH EXTR ACTS IN HIS NAME AND IN THE NAME OF HIS FAMILY MEMBERS/BUSINESS CONCERNS. THE AP PELLANT WAS REQUIRED TO ATTEND THE AOS OFFICE ON 18-07-2011 ALON G WITH THE DETAILS AS PER THE ABOVE REFERRED QUESTIONNAIRE. THE APPELLANT , HOWEVER, REQUESTED FOR AN ADJOURNMENT OF THE CASE VIDE LETTER DATED 18- 07-2011. I FIND FROM THE CASE RECORD THAT THE APPELLANT VIDE LETTER DATED 01- 11-2011 INTERALIA FURNISHED THE DETAILS OF HIS BANK ACCOUNT. THE APPELL ANT HAD FURNISHED THE DETAILS OF HIS ACCOUNTS IN ICICI BANK LTD. (A/C.NO.00 2701556438), JALGAON, 4 ITA NO.165/PN/2015 JANATA SAHAKARI BANK (A.C.NO.400) AND VISHWAS COOPERA TIVE BANK CURRENT (ACCOUNT NO.689). THE APPELLANT HAD ALSO FURNISHED C LOSING BALANCES OF RS.24,101/-, RS.14,647/- AND RS.59,482/- IN ICICI BAN K LTD., JANATA SAHAKARI BANK LTD., AND VISHWAS CO-OPERATIVE BANK, RESPECTIVEL Y. A PERUSAL OF THE RETURN REVEALS THAT THE APPELLANT HAD SHOWN THE BALAN CE OF THESE THREE ACCOUNTS ONLY IN HIS RETURN OF INCOME. THE APPELLANT ALSO FILED A COPY OF THE BALANCE SHEET IN WHICH HE HAD SHOWN RS.85,500/- ONLY U NDER THE HEAD BANK ACCOUNTS. BESIDES, THE APPELLANT ALSO FILED THE LEDGER ACCOUNT OF HIS BANK ACCOUNTS SHOWIN THE ABOVE THREE BANK ACCOUNTS, I.E. IC ICI BANK LTD., JALGAON, JANATA SAHAKARI BANK AND VISHWAS CO-OPERATIVE BANK ON LY. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO CAME ACROSS WITH APPELLANTS BANK ACCOUNT WITH CITY UNION BANK, NASHIK (S.B. A/C. NO.465372). IT WAS OBSERVED BY THE AO THAT THE APPEL LANT HAD MADE CASH DEPOSITS AMOUNTING TO RS.15,62,500/-. THE APPELLANT, HOWEVER, COULD NOT EXPLAIN THE SOURCE OF CASH DEPOSITS AMOUNTING TO RS.8,40 ,360/-. HE, THEREFORE, VIDE LETTER DATED 29-11-2011 DECLARED RS. 8,40,360/- AS HIS UNEXPLAINED ADDITIONAL INCOME AND FILED REVISED FINA NCIAL STATEMENT, REVISED COMPUTATION OF INCOME AND COPY OF CHALLAN OF PAYMEN T OF TAX OF RS.2,74,900/- PAID ON THE SAID ADDITIONAL INCOME OF R S.8,40,360/-. THE AO THEREAFTER INITIATED PENALTY U/S.271(1)(C) AND LEVIE D PENALTY OF RS.2,25,879/- VIDE HIS ORDER DATED 26-06-2012. THE A PPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS HAS STATED THAT HIS ACCO UNTANT INADVERTENTLY DID NOT INCLUDE THE SAID BANK ACCOUNT IN THE RETURN OF INCOME AND HE VOLUNTARILY DECLARED THE ADDITIONAL INCOME ON WHICH HE HAS PAID THE DUE TAXES. THE APPELLANTS CONTENTION IS CONTRARY TO THE FACTS GIVEN ABOVE. IT IS CLEARLY ESTABLISHED THAT THE APPELLANT DID NOT INCLUD E HIS BANK ACCOUNT WITH CITY UNION BANK LTD., NASHIK IN THE RETURN OF INCOME . HE ALSO DID NOT SHOW THIS BANK ACCOUNT IN RESPONSE TO THE AOS NOTICE U/S.142 (1) ENCLOSING THEREWITH A DETAILED QUESTIONNAIRE ASKING SPECIFICALLY THE DETAILS OF BANK ACCOUNTS HELD BY THE APPELLANT. THE APPELLANT IN TH E ORIGINAL BALANCE SHEET ALSO DID NOT INCLUDE THE SAID BANK ACCOUNT. THE CASH IN HAND AND THE BANK BALANCE WERE INACCURATELY FURNISHED IN THE RETURN OF INCOME FILED ON 05-06- 2009. THE APPELLANT REVISED HIS COMPUTATION OF INCOM E AND CASH BOOK ONLY AFTER HE WAS CONFRONTED BY THE AO WITH REGARD TO NON -DISCLOSURE OF HIS BANK ACCOUNT IN CITY UNION BANK LTD. IT IS NOT ONLY THE NON DISCLOSURE OF THE BANK ACCOUNT WITH CITY UNION BANK LTD. IN THE RETURN OF INCOME BUT ALSO THE APPELLANTS FAILURE TO FURNISH THE SOURCE OF CASH DEP OSITS MADE BY HIM IN THE ABOVE REFERRED BANK ACCOUNT. THE APPELLANT WAS MAIN TAINING AS UNDISCLOSED BANK ACCOUNT IN WHICH HE HAD INTRODUCED HIS UNDISCLOSE D INCOME IN THE FORM OF CASH DEPOSITS. HE HAD CONCEALED THIS UNDISCLOSED BANK ACCOUNT FROM THE DEPARTMENT. HENCE, IT IS A CLEAR CASE OF NOT ONL Y CONCEALMENT OF INCOME BUT ALSO FURNISHING OF INACCURATE PARTICULARS OF INCOM E IN THE RETURN OF INCOME. THE CONDUCT OF THE APPELLANT CLEARLY ESTABL ISHED THAT HE HAD A MALAFIDE INTENTION IN NOT DISCLOSING THE TRUE PARTICU LARS OF HIS BANK ACCOUNT WITH CITY UNION UNION BANK LTD. FROM THE DEPARTMENT WHILE FURNISHING INITIAL REPLY VIDE LETTER DATED 01-11-2011 IN RESPON SE TO AOS QUESTIONNAIRE DATED 30-06-2011. THE APPELLANT IS A DIPLOMA HOLDER IN CIVIL ENGINEERING AND HIS AUTHORIZED REPRESENTATIVE IS ALSO B.COM AND DTI . APPELLANT CANNOT BE ALLOWED TO SHIFT HIS BURDEN OF DISCLOSING TRUE PART ICULARS OF HIS INCOME ON ACCOUNTANTS SHOULDER. EVEN IF IT IS ASSUMED FOR A MOME NT THAT ACCOUNTANT FAILED TO DISCLOSE THIS BANK ACCOUNT, ACCOUNTANT WAS CE RTAINLY NOT RESPONSIBLE FOR DEPOSITING UNEXPLAINED CASH IN THE SAID BANK ACCOUNT. IT IS THE APPELLANT WHO HAD DEPOSITED UNEXPLAINED CASH IN H IS BANK ACCOUNT AND EVADED TAX ON THE SAID INCOME. THE APPELLANT, THERE FORE, CANNOT ABSOLVE HIMSELF OF FURNISHING THE INACCURATE PARTICULARS OF HI S INCOME AND CONCEALING THE TRUE INCOME IN HIS RETURN OF INCOME. IT IS, TH EREFORE, ESTABLISHED BEYOND REASONABLE DOUBT THAT THE APPELLANT HAD DELIBERATELY CONCEALED HIS INCOME 5 ITA NO.165/PN/2015 AND FURNISHED INACCURATE PARTICULARS OF INCOME IN THE RETURN OF INCOME. HE HAD INTRODUCED HIS UNACCOUNTED CASH IN THE FORM OF CA SH DEPOSITS IN BANK ACCOUNT WITH CITY UNION BANK LTD. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE MENTIONED ABOVE, AO WAS JUSTIFIED IN LEVYING PEN ALTY OF RS.2,25,879/- U/S.271(1)(C). THE SAME IS CONFIRMED. 8. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 9. WE HAVE CONSIDERED THE ORDER OF THE AO AND THE CIT (A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE AND THE ARGUME NT OF THE LD. DEPARTMENTAL REPRESENTATIVE. AFTER PERUSAL OF THE ABOVE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). ADMITTEDLY, THE AS SESSEE HAS NOT DISCLOSED THE VARIOUS DEPOSITS IN THE SAVINGS BANK A CCOUNT MAINTAINED WITH CITY UNION BANK LTD., NASHIK VIDE ACCOUNT NO . 465372. THE SOURCE OF THE DEPOSIT OF THE ABOVE AMOUNT COULD NOT BE EXPLAINED BY THE ASSESSEE DURING THE ASSESSMENT PROCEE DINGS FOR WHICH HE HAS ADMITTED THE SAME AS HIS ADDITIONAL INCOME BY FILING REVISED FINANCIAL STATEMENTS AND REVISED COMPUTATION OF INCOME. HE HAS ALSO CREDITED THE SAME TO HIS CAPITAL ACCOUNT IN THE REVISED FINANCIAL STATEMENTS. THE LD.CIT(A) ALSO HAS GIVEN A CATEGORICAL FINDI NG THAT THE ASSESSEE DID NOT SHOW THIS BANK ACCOUNT IN RESPONSE TO NOTICE U/S.142(1) WHEREIN A DETAILED QUESTIONNAIRE WAS ISSUED ASKING THE ASSESSEE SPECIFICALLY THE DETAILS OF BANK ACCOUNT HELD BY H IM. THE REVISED COMPUTATION OF INCOME AND CASH BOOK WAS PREPARE D ONLY AFTER THE ASSESSEE WAS CONFRONTED BY THE AO WITH REGARD TO NON DISCLOSURE OF HIS BANK ACCOUNT MAINTAINED WITH CITY UNION BANK LTD. FUR THER, THE ASSESSEE IN THE INSTANT CASE IS ALSO AN EDUCATED PERSON BEING A DIPLOMA HOLDER IN CIVIL ENGINEERING. THE LD.CIT(A) HAS ALSO GIVEN A FIND ING THAT EVEN IF THE ACCOUNT IS NOT DISCLOSED BY THE ASSESSEE INAD VERTENTLY, HOWEVER, THE ASSESSEE WAS ALSO UNABLE TO EXPLAIN THE SOU RCE OF THE CASH AND VARIOUS OTHER DEPOSITS IN THE SAID BANK ACCOUNT. UN DER THESE 6 ITA NO.165/PN/2015 CIRCUMSTANCES, THE LD.CIT(A) HELD THAT THE ASSESSEE HAS D ELIBERATELY CONCEALED HIS INCOME AND FURNISHED INACCURATE PARTICULARS O F INCOME IN THE RETURN OF INCOME BY INTRODUCING HIS UNACCOUNTED CASH IN THE FORM OF CASH DEPOSITS IN THE SAID BANK ACCOUNT. HE ACCORDINGLY CONFIRMED THE PENALTY LEVIED BY THE AO U/S.271(1)(C) OF THE I.T. ACT WHICH IN OUR OPINION IS JUSTIFIED UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE. IN VIEW OF THE ABOVE AND IN VIEW OF THE DETAILED REASONING GIVE N BY THE CIT(A) CONFIRMING THE PENALTY LEVIED BY THE AO U/S.271(1)(C) OF THE I.T. ACT WE FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, THE SAME IS UPHELD AND THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14-07-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 14 TH JULY , 2016. LRH'K ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) - THE CIT(A)-I, NASHIK 4. % S / THE CIT-I, NASHIK 5. ( ++, , , , IQ.KS / DR, ITAT, A PUNE; 6. 0 / GUARD FILE. / BY ORDER , // ( + //TRUE COPY // 23 + , / SR. PRIVATE SECRETARY ,, IQ.KS / ITAT, PUNE