S.Anandhivenu S.Bashyam, CHENNAI V. ITO, CHENNAI

ITA 1799/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68888 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2013
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2013
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: K BALASUBR AMANIAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NOS. 1799 & 1800/MDS/2013 ASSESSMENT YEAR : 2009-10 S.ANANDHIVENU S. BASHYAM, 166, VAIGAI ST., SANTOSH NAGAR, PORUR, CHENNAI-600 116 [PAN: AHNPA 9773 G] (APPELLANT) VS INCOME TAX OFFICER, SALARY WARD-I(1), TAMBARAM, CHENNAI (RESPONDENT) APPELLANT BY : SHRI K.BALASUBRAMANIAN RESPONDENT BY : SHRI GURU BHASHYAM DATE OF HEARING : 09-12-2013 DATE OF PRONOUNCEMENT : 09-12-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: ITA NO.1799/2013 HAS BEEN FILED BY THE ASSESSEE IM PUGNING THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-II , CHENNAI DATED 18-07-2013 FOR THE ASSESSMENT YEAR (AY) 2009- 10. ITA NO.1800/2013 IS ALSO FILED BY THE ASSESSEE, IMPUGN ING THE ORDER OF CIT(APPEALS) CONFIRMING PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) F OR THE SAME ASSESSMENT YEAR. I.T.A. NOS. 1799 & 1800/MDS/13 2 2. THE BRIEF FACTS OF THE CASE ARE; THE ASSESSEE IS A PRINCIPAL OF SHRI RAGHAVENDRA VIDYALAYA NURSERY & PRIMARY SCHOOL , CHENNAI. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASS ESSMENT YEAR (AY) 2009-10 ON 31-07-2009 DECLARING HER INCOME AS ` 1,39,576/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER VIDE ORDER DATED 27-12-2011, MADE ADDITION OF ` 19,53,150/- U/S.68 ON ACCOUNT OF UN-EXPLAINED INCOME AND ` 8,635/- ON ACCOUNT OF UN-DISCLOSED INTEREST INCOME. 3. THE ASSESSEE IS HAVING HER SAVINGS BANK A/C WITH BANK OF BARODA WHEREIN CASH DEPOSITS OF ` 19,53,150/- WERE MADE ON VARIOUS DATES IN THE AY UNDER CONSIDERATION. DURIN G THE ASSESSMENT PROCEEDING, WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSITS, THE AR OF THE ASSESSEE SUBMITTED THAT THE DEPOSITS ARE ON ACCOUNT OF SCHOOL FEE COLLECTIO N. HOWEVER, THE ASSESSEE COULD NOT FURNISH ANY EVIDENCE IN SUPPORT OF THE SUBMISSIONS SO MADE. THE ASSESSING OFFICER REJECTE D THE EXPLANATION OF THE ASSESSEE AND MADE ADDITION OF TH E SAID AMOUNT AS UN-EXPLAINED CASH CREDIT IN THE BANK ACCOUNT. O N APPEAL TO THE CIT(APPEALS), THE ASSESSEE PRODUCED BOOKS OF ACCOUN T. THE CIT(APPEALS) DID NOT CONSIDER THE SAME AND DOUBTED THE VERACITY I.T.A. NOS. 1799 & 1800/MDS/13 3 OF THE BOOKS, AS THE BOOKS OF ACCOUNT WERE NEITHER AUTHENTICATED NOR AUDITED BY A QUALIFIED CHARTERED ACCOUNTANT. T HE CIT(APPEALS) SUSTAINED ADDITION OF ` 8,14,600/- ON THE PRINCIPLE OF PEAK CASH CREDIT DEPOSITS. AGGRIEVED AGAINST THE ORDER OF THE CIT(APPEALS) DA TED 18-07-2013, THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL. 4. SHRI K.BALASUBRAMANIAN, APPEARING ON BEHALF OF T HE ASSESSEE SUBMITTED THAT THE SOURCE OF CASH DEPOSITS IN THE JOINT BANK ACCOUNT WAS EXPLAINED TO THE AUTHORITIES BELOW . THE ASSESSING OFFICER AS WELL AS THE CIT(APPEALS) HAVE NOT TAKEN INTO CONSIDERATION THE EXPLANATION FURNISHED BY THE AR O F THE ASSESSEE. THE DEPOSITS HAVE BEEN MADE ON VARIOUS DATES OUT OF FEE COLLECTED FROM STUDENTS OF SCHOOL JOINTLY OWNED BY THE ASSESSEE AND HER HUSBAND. AS REGARDS AUDIT OF ACCOUNTS, THE AR SUBMITTED THAT IT IS NOT MANDATORY TO GET THE SAME AUDITED UN DER THE PROVISIONS OF SECTION 44AB, AS THE ANNUAL RECEIPTS WERE FAR LESS THAN THE STATUTORY LIMIT PRESCRIBED UNDER THE ACT. 5. AU CONTRAIRE SHRI GURU BHASHYAM, APPEARING ON BEHALF OF THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE CIT (APPEALS) AND I.T.A. NOS. 1799 & 1800/MDS/13 4 PRAYED FOR DISMISSAL OF THE APPEAL OF THE ASSESSEE. THE LD.DR SUBMITTED THAT THE BANK IN WHICH THE ASSESSEE HAS H ER SAVINGS BANK ACCOUNT, THERE IS ANOTHER BANK A/C IN THE NAME OF THE SCHOOL, SHRI RAGHAVENDRA VIDYALAYA. THE SAID BANK ACCOUNT IS ALSO OPERATED BY THE ASSESSEE. NO REASON WHAT-SO-EVER I S GIVEN BY THE ASSESSEE AS TO WHY THE FEE AMOUNT COLLECTED WAS DEP OSITED IN HER PERSONAL SAVINGS BANK ACCOUNT AND NOT THE BANK ACCO UNT OF SCHOOL. THE LD.DR SUBMITTED THAT THE ORDER OF THE CIT(APPEALS) IS WELL REASONED AND THUS, REQUIRES NO MODIFICATION. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSING OFFICER HAD M ADE ADDITION OF ` 19,53,150/- ON ACCOUNT OF CASH DEPOSITS IN THE SAVI NGS BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE BEING THE PR INCIPAL AND OWNER OF THE SCHOOL WAS AUTHORIZED TO OPERATE THE B ANK ACCOUNT OF THE SCHOOL. NO PLAUSIBLE REASON HAS BEEN GIVEN BY THE ASSESSEE AS TO WHY THE FEE COLLECTED FROM THE SCHOOL WAS DEP OSITED IN HER PERSONAL SAVINGS BANK ACCOUNT INSTEAD OF BANK ACCOU NT OF THE SCHOOL MAINTAINED WITH THE SAME BANK AND BRANCH. FU RTHER, NO REASON WHAT-SO-EVER IS GIVEN FOR NOT DISCLOSING THE RECEIPTS IN THE RETURN OF INCOME FILED BY THE ASSESSEE. THE CIT(AP PEALS) HAS I.T.A. NOS. 1799 & 1800/MDS/13 5 TAKEN A FAIR AND REASONABLE VIEW BY SUSTAINING ADDI TION OF ` 8,14,600/- BY TAKING THE PEAK CASH CREDIT DEPOSITS. WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FIN DINGS OF THE CIT(APPEALS). HENCE, THE SAME ARE CONFIRMED. THE APPEAL OF THE ASSESSEE IS DISMISSED BEING DEVOID OF MERIT. ITA NO.1800/MDS/2013 (AY. 2009-10): 7. THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINS T THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT FOR THE AY. 200 9-10. THE ASSESSING OFFICER HAS LEVIED PENALTY FOR NOT DISCLO SING CASH DEPOSITS IN THE SAVINGS BANK ACCOUNT. THE ASSESSEE ASSAILED THE ORDER OF PENALTY BEFORE THE CIT(APPEALS)-II, CHENNA I. THE CIT(APPEALS) VIDE ORDER DATED 18-07-2013, CONFIRMED THE ORDER OF PENALTY BUT REDUCED THE AMOUNT OF PENALTY TO THE AD DITION SUSTAINED IN QUANTUM APPEAL OF THE ASSESSEE. NOW, THE ASSESSEE HAS COME IN SECOND APPEAL ASSAILING THE PENALTY ORD ER BEFORE THE TRIBUNAL. 8. IN QUANTUM APPEAL OF THE ASSESSEE, WE HAVE CONFI RMED THE ADDITION SUSTAINED BY THE CIT(APPEALS). THE CIT(AP PEALS) HAS OBSERVED THAT ASSESSEE HAS FAILED TO PRODUCE BOOKS OF ACCOUNT I.T.A. NOS. 1799 & 1800/MDS/13 6 BEFORE ASSESSING OFFICER AND THE BOOKS PRODUCED BEF ORE HIM ARE NOT AUTHENTIC AND AUDITED BY THE QUALIFIED CHARTERE D ACCOUNTANT, THEREFORE, NO RELIANCE CAN BE PLACED ON THE SAID BO OKS. THE PROVISIONS OF SECTION 44AB OF THE ACT HAS SPECIFIED A LIMIT OF TOTAL SALES, TURNOVER OR GROSS RECEIPTS OF BUSINESS OR PR OFESSION, AS THE CASE MAY BE, BEYOND WHICH ANY PERSON CARRYING ON BU SINESS OR PROFESSION HAS TO MANDATORILY GET HIS/ITS ACCOUNTS AUDITED. WE FIND, IN THE PRESENT CASE, THE RECEIPTS OF THE SCHO OL ARE FAR BELOW THAN THE MANDATORY LIMIT PRESCRIBED UNDER THE PROVI SIONS OF SECTION 44AB REQUIRING STATUTORY AUDIT OF THE BOOKS OF ACCO UNT. AS FAR AS EXPLANATION FURNISHED BY THE ASSESSEE WITH REGARD T O DEPOSITS IN HER SAVINGS BANK ACCOUNT IT IS NOT DISPUTED THAT TH E ASSESSEE IS THE OWNER AND PRINCIPAL OF A SCHOOL. THE REVENUE AUTH ORITIES OUGHT TO HAVE EXAMINED THE BOOKS OF ACCOUNT AND BANK ACCO UNT OF THE SCHOOL TO DETERMINE, WHETHER THE RECEIPTS REFLECTED IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE ARE ALSO REFLECTED IN THE BOOKS OF THE SCHOOL. 9. PENALTY PROCEEDINGS ARE DISTINCT FROM ASSESSMENT PROCEEDINGS AND INDEPENDENT THEREFROM. THE FACT TH AT CERTAIN ADDITIONS ARE MADE IN THE ASSESSMENT PROCEEDINGS WO ULD NOT AUTOMATICALLY JUSTIFY THE REVENUE TO IMPOSE PENALTY U/S.271(1)(C). I.T.A. NOS. 1799 & 1800/MDS/13 7 A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE CIT( APPEALS) HAS LAID ENTIRE EMPHASIS ON THE FINDINGS GIVEN IN HIS O RDER PASSED IN QUANTUM APPEAL OF THE ASSESSEE. IN PANLTY ORDER, T HE FIRST APPELLATE AUTHORITY HAS DISCUSSED THE REASONS FOR S USTAINING THE ADDITION RATHER THAN GIVING INDEPENDENT REASONS FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. IN OUR CONSIDERED OPINIO N, THIS IS NOT A CASE WHERE PENALTY SHOULD BE LEVIED UNDER THE PROVI SIONS OF SECTION 271(1)(C). THE APPEAL OF THE ASSESSEE IS A LLOWED. THE IMPUGNED ORDER OF THE CIT(APPEALS) DATED 18-07-2013 CONFIRMING LEVY OF PENALTY IS SET ASIDE. 10. TO CONCLUDE, ITA NO. 1799/MDS/2013 IS DISMISSED AND ITA NO. 1800/MDS/2013 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 9 TH DECEMBER, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VI KAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 9 TH DECEMBER, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR