Shri Nisarhusen Amadali Lakhani, Ahmedabad V. The Income Tax Officer, Ward-2(5), Bhavnagar

ITA 203/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8047 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 25-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: U S BHATI
• Section: 68

Judgement Text

, ,LK ,LK,LK ,LK- -- -,E ,E,E ,E- -- -LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD L LL LOZJH OZJH OZJH OZJH OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN] U;KF;D ] U;KF;D ] U;KF;D ] U;KF;D LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 203/AHD/2017 ( / ASSESSMENT YEAR : 2012-13) SHRI NISARHUSEN AMADALI LAKHANI, B/19, RADHESHYAM COMPLEX, NEAR RADHA MANDIR, WAGHAWADI ROAD, BHAVNAGAR - 364 001. / VS. THE ITO, WARD 2(5), AAYKAR BHAVAN, NR. JASHONATH CHOWK, NAKUBAUG, BHAVNAGAR 364 001 ./ ./ PAN/GIR NO. : AFCPL 8937 L ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI U. S. BHATI, A.R. / RESPONDENT BY : SHRI UMA SHANKAR PRASAD, SR. D.R. / DATE OF HEARING 08 /06/2018 !'# / DATE OF PRONOUNCEMENT 28 /06 /2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-6, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-6/240/15-16 DATED 21/11/2016 ARISING IN THE PENALTY ORDER PASSED UNDER S.271(1)(C) OF THE INCOME TAX AC T, 1961 (HERE-IN- AFTER REFERRED TO AS 'THE ACT') DATED 28/08/2015 R ELEVANT TO ASSESSMENT YEAR (AY) 2012-13. ITA NO.203/AHD/2017 SHRI NISARHUSEN AMADALI LAKHANI VS. ITO ASST.YEAR 2012-13 - 2 - 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) ERRED IN LAW AND ON FACTS IN FIRST ADJUDICATING THE APPEAL A GAINST PENALTY ORDER U/S 271(1)(C) RELEVANT TO THE A. YR. 2012-13 FILED ON 9 TH OCTOBER, 2015 THOUGH THE QUANTUM APPEAL AGAINST TH E ASSESSMENT ORDER FOR THE A. YR. 2012-13 WAS PENDING BEFORE HIM SINCE 29 TH APRIL, 2015. MOREOVER, THE IMPUGNED ORDER HAS BEEN PASSED IN HASTE AND WITHOUT PROVIDING PROPER A ND SUFFICIENT OPPORTUNITY OF HEARING TO THE APPELLANT. 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APP EALS) ERRED IN LAW AND ON FACTS IN DISMISSING THE APPEAL IN-LIMINE WITHOUT ASCERTAINING THE FACTS OF THE CASE. 3.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APP EALS) ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY AMOUNTIN G TO RS.8,55,200/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 4.0 THE APPELLANT MAY BE ALLOWED TO ADD, AMEND, A LTER OR RAISE ADDITIONAL GROUNDS OF APPEAL. 3. THE ASSESSEE IN ALL THE GROUNDS OF APPEAL HAS CH ALLENGED THE IMPOSITION OF THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF GROCER Y RETAIL TRADING AND COMMODITY MARKET. THE ASSESSEE IN THE YEAR UNDE R CONSIDERATION HAS DEPOSITED A SUM OF RS. 31,32,700/ - IN CASH IN AXIS BANK ACCOUNT. THE ASSESSEE DURING THE ASSESSMENT PR OCEEDINGS CLAIMED TO HAVE DEPOSITED SUCH CASH OUT OF THE MONE Y BORROWED FROM HIS FRIENDS AND RELATIVES. THE ASSESSEE IN SUP PORT OF HIS CLAIM HAS FURNISHED THE LIST OF PERSONS FROM WHOM THE MON EY WAS BORROWED. HOWEVER, THE ASSESSEE FAILED TO SUBSTANTI ATE BY DOCUMENTARY EVIDENCE THAT THE CASH DEPOSITED WITH T HE BANK REPRESENTS THE MONEY BORROWED FROM HIS RELATIVES AN D FRIENDS. THEREFORE, THE SAME WAS TREATED BY THE AO AS UNEXPL AINED CASH ITA NO.203/AHD/2017 SHRI NISARHUSEN AMADALI LAKHANI VS. ITO ASST.YEAR 2012-13 - 3 - CREDIT U/S 68 OF THE ACT AND ADDED TO THE TOTAL INC OME OF THE ASSESSEE. ACCORDINGLY, THE AO IN HIS ASSESSMENT ORDER VIDE DA TED 30.03.2015 INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. SUBSEQUENTLY, THE AO ISSUED A NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT FOR LEVYING THE PENALTY ON ACCOUNT OF UNEXPLAIN ED CASH CREDIT AS DISCUSSED ABOVE. HOWEVER, THE ASSESSEE FAILED TO RE PLY TO THE SHOW- CAUSE NOTICE ISSUED BY THE AO. THE AO IN THE ABSENC E OF ANY REPLY FROM THE ASSESSEE HAS LEVIED THE PENALTY OF RS.8,55 ,200/- BEING 100% OF TAX SOUGHT TO BE EVADED U/S 271(1)(C) OF THE ACT . 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LEARN ED CIT(A) WHO CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER: 7. I HAVE CAREFULLY CONSIDERED THE PENALTY ORDER AND THE STATEMENT OF FACTS SUBMITTED BY THE APPELLANT. THE BRIEF FACT OF THE CASE IS THAT THE APPELLANT HAS DEPOSITED CASH OF RS . 32,61,180/- DURING THE FINANCIAL YEAR IN AXIS BANK ACCOUNT. HOWEVER TH E GENUINENESS, IDENTITY AND CREDITWORTHINESS OF THE SO 'AILED LEND ERS HAVE NOT BEEN PROVED BEFORE THE AO. EVEN DURING THE APPELLATE PRO CEEDINGS THE APPELLANT COULD NOT SUBSTANTIATE ITS CLAIM THAT THE CASH DEPOSIT WAS OUT OF GENUINE CASH LOAN TAKEN FROM THE VARIOUS PER SONS. THE AO HAS SPECIFICALLY BROUGHT OUT ON THE RECORD THAT THE APP ELLANT HAS NOT SUBMITTED ANY EXPLANATION IN THIS REGARD THUS HAS F URNISHED INACCURATE PARTICULAR AND CONCEALED THE INCOME THER EFORE CLEARLY LIABLE FOR PENALTY U/S. 271(1)(C) OF THE ACT. IN VI EW OF THE ABOVE, THE AO IS JUSTIFIED IN LEVYING THE PENALTY OF RS. 8,55, 200/-. THE GROUND IS DISMISSED. BEING AGGRIEVED BY ORDER OF LEARNED CIT(A) ASSESSEE IS IN THE SECOND APPEAL BEFORE US. LEARNED AR BEFORE US SUBMITTED THAT THE AO HAS LEVI ED THE PENALTY U/S 271(1)(C) OF THE ACT WITHOUT MENTIONING ANY SPE CIFIC CHARGE. AS SUCH THE AO IN PARA NO.7 HAS DRAWN ITS CONCLUSION B Y LEVYING BOTH ITA NO.203/AHD/2017 SHRI NISARHUSEN AMADALI LAKHANI VS. ITO ASST.YEAR 2012-13 - 4 - THE CHARGES I.E. CONCEALMENT OF INCOME AND INACCURA TE PARTICULARS OF INCOME. ACCORDINGLY, THE LEARNED AR PRAYED THAT PEN ALTY WITHOUT MENTIONING THE SPECIFIC CHARGE CANNOT BE LEVIED TO THE ASSESSEE. ON THE OTHER HAND, LEARNED DR BEFORE US SUBMITTED T HAT THE ASSESSEE CANNOT BE ABSOLVED FROM THE PENALTY EVEN THE AO HAS SPECIFIED BOTH THE CHARGES IN HIS PENALTY ORDER. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF AU THORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE PENALTY HAS BEEN IMPOSED BY THE AO U/S 271 (1)(C) W ITHOUT MENTIONING THE SPECIFIC CHARGE IN ITS PENALTY ORDER DATED 28/8/2015, WHETHER, IT WAS LEVIED ON ACCOUNT OF CON CEALMENT OF INCOME OR ACCOUNT OF FURNISHING OF INACCURATE PARTI CULARS OF INCOME. THE RELEVANT EXTRACT OF THE PENALTY ORDER IS REPROD UCED AS UNDER: 7. I AM THEREFORE SATISFIED THAT THIS IS A FIT CAS E FOR LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, AS ASSESSEE HA S CONCEALED TRUE AND CORRECT PARTICULARS OF HIS INCOME & HAVE FURNIS HED INACCURATE PARTICULARS OF INCOME. I, THEREFORE LEVY MINIMUM PE NALTY OF RS.8,55,200/- WHICH IS 100%OF TAX SOUGHT TO BE EVAD ED A AGAINST MAXIMUM PENALTY OF RS.25,65,480/- WHICH IS WORKS O UT AT 300% OF TAX SOUGHT TO BE EVADED. ON PERUSAL OF ABOVE, IT IS CLEAR THAT THE AO HAS NO T LEVIED THE PENALTY ON THE SPECIFIC CHARGE AS MANDATED U/S 271 (1)(C) OF T HE ACT. IN SUCH FACTS AND CIRCUMSTANCE THE HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF SNITA TRANSPORT PVT. LTD. VS. ASSISTANT COMMISSION ER OF INCOME TAX REPORTED IN 42 TAXMANN.COM 54 HAS HELD THAT PENALTY CANNOT BE IMPOSED WITHOUT MENTIONING THE SPECIFIC CHARGE. THE RELEVAN T EXTRACT OF THE ORDER IS REPRODUCED BELOW: ITA NO.203/AHD/2017 SHRI NISARHUSEN AMADALI LAKHANI VS. ITO ASST.YEAR 2012-13 - 5 - 9. REGARDING THE CONTENTION THAT THE ASSESSING OFFICE R WAS AMBIVALENT REGARDING UNDER WHICH HEAD THE PENALTY W AS BEING IMPOSED NAMELY FOR CONCEALING THE PARTICULARS OF IN COME OR FURNISHING INACCURATE PARTICULARS, WE MAY RECORD TH AT THOUGH IN THE ASSESSMENT ORDER THE ASSESSING OFFICER DID ORDER IN ITIATION OF PENALTY ON BOTH COUNTS, IN THE ULTIMATE ORDER OF PENALTY TH AT HE PASSED, HE CLEARLY HELD THAT LEVY OF PENALTY IS SUSTAINED IN V IEW OF THE FACT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOM E. THUS INSOFAR AS FINAL ORDER OF PENALTY WAS CONCERNED, THE ASSESSING OFFICER WAS CLEAR AND PENALTY WAS IMPOSED FOR CONCEALING PARTICULARS OF INCOME. IN LIGHT OF THIS, WE MAY PERUSE THE DECISION OF THIS C OURT IN CASE OF MANU ENGINEERING WORKS (SUPRA). IN THE SAID DECISION, TH E DIVISION BENCH CAME TO THE CONCLUSION THAT LANGUAGE OF 'AND/OR' MA Y BE PROPER IN ISSUING A NOTICE FOR PENALTY, BUT IT WAS INCUMBENT UPON THE ASSESSING AUTHORITY TO COME TO A POSITIVE FINDING AS TO WHETH ER THERE WAS CONCEALMENT OF INCOME BY THE ASSESSEE OR WHETHER AN Y INACCURATE PARTICULARS OF SUCH INCOME HAD BEEN FURNISHED BY TH EM. IF NO SUCH CLEAR CUT FINDING IS REACHED BY THE AUTHORITY, PENA LTY CANNOT BE LEVIED. IT WAS A CASE IN WHICH IN FINAL CONCLUSION THE AUTH ORITY HAD RECORDED THAT 'I AM OF THE OPINION THAT IT WILL HAVE TO BE S AID THAT THE ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISH ED INACCURATE PARTICULARS OF SUCH INCOME.' IT WAS IN THIS RESPECT THE BENCH OBSERVED THAT 'NOW THE LANGUAGE OF 'AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMI NAL CASE OR A QUASI- CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDING AS TO WHETHER THERE WAS CONCEALMENT OF INCO ME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF S UCH INCOME HAD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR CUT F INDING WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IAC WAS LIABLE TO BE STRUCK DOWN.' THE PRINCIPLES LAID DOWN BY THE HONBLE JURISDICTIO NAL HIGH COURT IN THE ABOVE CASE ARE SQUARELY APPLICABLE TO THE FACTS OF THE CASE ON HAND. THE AO HAS NOT MENTIONED THE SPECIFIC CHARGE IN ITS PENALTY ORDERS WHETHER IT WAS LEVIED FOR CONCEALMENT OF INC OME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THERE FORE, IN OUR CONSIDERED VIEW, THE PENALTY LEVIED BY THE AO AND C ONFIRMED BY THE ITA NO.203/AHD/2017 SHRI NISARHUSEN AMADALI LAKHANI VS. ITO ASST.YEAR 2012-13 - 6 - LEARNED CIT (A) IS NOT SUSTAINABLE. HENCE, THE GROU ND OF APPEAL OF THE ASSESSEE IS ALLOWED. AS WE HAVE DELETED THE PENALTY IMPOSED BY THE AO & CONFIRMED BY THE LD. CIT-A ON THE TECHNICAL GROUND I.E. NO SPECI FIC CHARGE HAS BEEN INVOKED AS DISCUSSED ABOVE, THEREFORE, WE ARE INCLI NED TO REFRAIN OURSELVES FROM ADJUDICATING THE GROUNDS OF APPEAL O F ASSESSEE RAISED ON MERITS. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28/06/2018 SD/- SD/- EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; YKS [KK LNL; U;KF;D LNL; YKS [KK LNL; U;KF;D LNL; YKS [KK LNL; U;KF;D LNL; YKS [KK LNL; (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 28/06/2018 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-6, AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD