Dr.S.Dhanalakshmi, Salem V. ITO, Erode

ITA 1894/CHNY/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68688 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 25-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN IRS
• Assessee Lawyers: T S LAKSHMIVENKATARAMAN
• Keywords: Unexplained cash credit; Peak credit; Non passing of speaking order

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER ITA NOS.1893 & 1894(MDS)/2012 ASSESSMENT YEAR : 2008-09 DR.S.DHANALAKSHMI, NO.33, DHANAM CLINIC, OPP.GOVT. HOSPITAL, PERUN- DURAI, ERODE DIST. - 638 052. PAN AHFPD2669G. VS. THE INCOME-TAX OFFICER, WARD II(2), ERODE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.S.LAKSHMI VENK ATARAMAN, FCA RESPONDENT BY : SHRI N.MADHAVAN, IRS, JCIT DATE OF HEARING : 12 TH SEPTEMBER, 2013 DATE OF PRONOUNCEMENT : 13 TH SEPTEMBER, 2013 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THESE TWO APPEALS ARE FILED BY THE A SSESSEE. ITA NO.1894(MDS)/2012 IS THE QUANTUM APPEAL AND ITA NO.1893(MDS)/2012 IS THE PENALTY APPEAL. THE RELEV ANT ASSESSMENT YEAR IS 2008-09. THE APPEALS ARE DIRECT ED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEAL S)-I AT - - ITA 1893 &N 1894 OF 2012 2 COIMBATORE, BOTH DATED 3-9-2012. THE QUANTUM APPEA L ARISES OUT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3 ) AND THE PENALTY APPEAL ARISES OUT OF THE PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. FIRST WE WILL CONSIDER THE QUANTUM APPEAL IN IT A NO.1894(MDS)/2012. 3. THE ASSESSEE IN THE PRESENT CASE IS A QUALIFIED MEDICAL DOCTOR AND CARRYING ON THE PRACTICE OF THAT PROFESSION. THE ASSESSEE HAS FILED HER RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON A TOTAL INCOME OF ` 3,66,170/- . IN THE COURSE OF SCRUTINY ASSESSMENT AND IN THE LIGHT OF T HE MATERIALS COLLECTED FROM THE AIR, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD OPERATED ACCOUNTS WITH KARUR VYSYA BAN K AND ICICI BANK AND A LOT OF CREDITS HAVE BEEN MADE IN H ER NAME IN THOSE TWO ACCOUNTS. ON EXAMINING THE DETAILS OF TH OSE BANK ACCOUNTS, THE ASSESSING OFFICER FOUND THAT THERE WE RE UNEXPLAINED CREDITS TO THE TOTAL OF ` 92,39,935/- WITH ICICI BANK AND ANOTHER SUM OF ` 55,86,121/- WITH KARUR VYSYA BANK. THE - - ITA 1893 &N 1894 OF 2012 3 ASSESSING OFFICER ALSO FOUND A DIFFERENCE OF ` 2 LAKHS IN THE LOAN ACCOUNT DISCLOSED BY THE ASSESSEE AS AVAILED FROM I CICI BANK. ACCORDING TO THE ASSESSING OFFICER, INSPITE OF A NU MBER OF OPPORTUNITIES GIVEN TO THE ASSESSEE, THE ASSESSEE D ID NOT EXPLAIN THE POSITION BEFORE HIM. AS SUCH, HE ADDED ALL THE ABOVE THREE AMOUNTS TO THE RETURNED INCOME OF THE ASSESSE E AND FINALLY DETERMINED THE TAXABLE INCOME AT ` 1,53,91,626/-. 4. IN FIRST APPEAL, THE COMMISSIONER OF INCOME- TAX(APPEALS) EXAMINED THE CASE AND AGREED WITH THE FINDINGS OF THE ASSESSING OFFICER THAT THE ADDITIONS WERE LEGIT IMATELY MADE. 5. IT IS AGAINST THE ABOVE THAT THE ASSESSEE HAS C OME IN APPEAL BEFORE US. THE RELEVANT GROUNDS RAISED B Y THE ASSESSEE IN THE QUANTUM APPEAL ARE EXTRACTED BELOW: - 1. THE PLEA OF THE APPELLANT THAT PEAK CREDIT IN THE BANK ACCOUNTS WITH ICICI BANK AND KARUR VYSYA BANK LTD. CAN ONLY BE BROUGHT TO ASSESSMENT SHOULD HAVE BEEN ACCEPTED BY CIT(A). - - ITA 1893 &N 1894 OF 2012 4 2. THE APPELLANT FILED WITH CIT(A) DETAILS OF DEBIT S AND CREDITS IN BOTH THE ABOVE BANK ACCOUNTS AND ALSO DEBITS WHICH ARE AVAILABLE FOR CASH DEPOSIT. AS PER THE DETAILS, CASH DEPOSITS REMAINING UNEXPLAINED IN KVB LTD. IS ONLY ` 2,33,082/- AND IN ICICI BANK THERE IS EXCESS WITHDRAWALS OF ` 7,60,524/-. 3. THE LEARNED CIT(A) WITHOUT CONSIDERING THE ABOVE DETAILS HAS PASSED A VERY SHORT, CRYPTIC AND NON SPEAKING ORDER WHERE THE DISPUTED ADDITION IS ` 1,50,25,456/- AND TOTAL DEMAND IS ` 69,69,620/-. 6. WE HEARD BOTH SIDES IN DETAIL. ON GOING THROUG H THE DETAILS AVAILABLE BEFORE US, WE FIND THAT THE ASSES SING OFFICER HAS ADDED THE ENTIRE CREDIT AMOUNTS REFLECTED IN TH E BANK STATEMENTS WITHOUT EXAMINING THE NATURE OF WITHDRAW ALS CONCURRENTLY MADE BY THE ASSESSEE. IN THAT WAY, THE ASSESSING OFFICER HAS NOT EXAMINED THE POSSIBILITY OF CIRCULA TION OF CASH THROUGH DEPOSITS AND WITHDRAWALS TO EXAMINE WHETHER ADDITION OF THE ENTIRE CREDIT AMOUNTS IS JUSTIFIED OR ADDITION OF THE PEAK CREDIT - - ITA 1893 &N 1894 OF 2012 5 IS JUSTIFIED. THIS ASPECT WAS NOT AT ALL CONSIDERE D BY THE ASSESSING OFFICER. 7. IN ADDITION TO THAT, THE ASSESSING OFFICER HAS ALSO NOT CONSIDERED THE VARIOUS ARGUMENTS ADVANCED BY TH E ASSESSEE. AS A MATTER OF FACT, IT IS TRUE THAT THE ASSESSING OFFICER HAD NO OCCASION TO CONSIDER THE EXPLANATION S OF THE ASSESSEE, IF ANY, BECAUSE THE ASSESSEE DID NOT APPE AR BEFORE THE ASSESSING OFFICER WITH RELEVANT DETAILS, EVEN T HOUGH A NUMBER OF OPPORTUNITIES WERE GIVEN BY THE ASSESSING OFFICER TO THE ASSESSEE. THEREFORE, WE CANNOT FIND FAULT WITH THE ASSESSING OFFICER. 8. BUT, AT THE SAME TIME, THE PURPOSE OF JUSTICE S HOULD NOT BE DEFEATED. EVEN THOUGH THE ASSESSEE HAS NOT APPEARED BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER SHOULD HAVE TAKEN LITTLE MORE CARE WHILE FRAMING SUCH AN EX-PAR TE ASSESSMENT. HE SHOULD ALSO APPLY THE COMMON PRACTI CE OF MAKING ASSESSMENTS IN SIMILAR CIRCUMSTANCES. IN TH E PRESENT CASE WHAT IS SEEN IS THAT THE ASSESSING OFFICER HAS MECHANICALLY - - ITA 1893 &N 1894 OF 2012 6 ADDED THE ENTIRE CREDITS REFLECTED IN THE BANK PASS BOOKS WITHOUT GOING FOR FURTHER EXAMINATION. THEREFORE, WE FIND THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE ONE SID ED. 9. REGARDING THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS), WE FIND THAT HE HAS JUST FOLLO WED THE ORDER OF THE ASSESSING OFFICER AND UPHELD THE ASSESSMENT WITHOUT GOING INTO THE DETAILS OF THE CASE. 10. IN THE FACTS AND CIRCUMSTANCES, WE FIND THAT I T IS NECESSARY IN THE INTEREST OF JUSTICE THAT THE ASSES SING OFFICER MAY BE DIRECTED TO REDO THE ASSESSMENT AFTER EXAMIN ING ALL THE ASPECTS OF THE CASE IN THE LIGHT OF THE PARTICULARS AND EVIDENCES AVAILABLE WITH THE ASSESSEE. THEREFORE, WE SET ASI DE THE ORDERS OF THE LOWER AUTHORITIES IN THIS QUANTUM FILE AND R EMIT BACK THE CASE TO THE ASSESSING OFFICER FOR DOING THE ASSESSM ENT AFRESH. THE ASSESSING OFFICER SHALL GIVE AN EFFECTIVE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESSEE SHALL UTILIZ E THE OPPORTUNITY SO GIVEN BY THE ASSESSING OFFICER WITHO UT ANY FAIL AND SHALL STATE HER CASE BEFORE THE ASSESSING OFFIC ER IN THE LIGHT - - ITA 1893 &N 1894 OF 2012 7 OF EVIDENCES AND EXPLANATIONS, IF ANY, AVAILABLE WI TH THE ASSESSEE. 11. THE ASSESSMENT CASE IS REMANDED BACK TO THE ASSESSING OFFICER. 12. NEXT WE WILL CONSIDER THE PENALTY APPEAL FILED BY THE ASSESSEE. 13. THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE COMMISSIONER OF INC OME- TAX(APPEALS), IS THE SUBSTRATUM OF THE PENALTY ORDE R PASSED BY THE ASSESSING OFFICER. THE SAID ASSESSMENT ORDER H AS BEEN SET ASIDE BY US AND THE CASE HAS BEEN REMITTED BACK TO THE ASSESSING OFFICER FOR DOING THE ASSESSMENT AFRESH. IN SUCH CIRCUMSTANCES, THE BASIS OF IMPOSING THE PENALTY UN DER SECTION 27(1)(C) DOES NOT EXIST IN PRAESENTI. AS THE ASSES SMENT ITSELF HAS BEEN SET ASIDE AND REMANDED BACK, PENALTY DOES NOT SURVIVE. ACCORDINGLY THE PENALTY ORDER PASSED UNDE R SECTION 271(1)(C) IS SET ASIDE AND THE PENALTY IS DELETED. - - ITA 1893 &N 1894 OF 2012 8 14. IN RESULT, THE QUANTUM APPEAL FILED BY THE ASS ESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE PENALTY APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 13 TH OF SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 13 TH SEPTEMBER, 2013. V.A.P. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.