Satish Kumar, Hyderabad, Hyderabad V. ITO, Ward-4(1), Hyderabad, Hyderabad

ITA 231/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6087 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 29-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: B SHANTHI KUMAR
• Section: 143(3); 142(1)

Judgement Text

ITA NO 231 OF 2016 SATISH KUMAR HYDERABAD PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.231/HYD/2016 (ASSESSMENT YEAR: 2007-08) SHRI SATISH KUMAR HYDERABAD PAN: ACFPK 6602 B VS INCOME TAX OFFICER WARD 4(1) HYDERABAD FOR ASSESSEE: SHRI B SHANTHI KUMAR FOR REVENUE: SHRI K.J. RAO, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2007-08. IN TH IS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF T HE CIT (A) IN CONFIRMING THE PENALTY OF RS.3,00,245/- LEVIED BY T HE AO U/S 271(1)(C) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE A.Y 2 007-08 DECLARING TOTAL INCOME OF RS.86,630 AS DERIVED FROM HOUSE PROPERTY, CAPITAL GAIN AND INCOME FROM OTHER SOURCE S. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE A SSESSEE WAS ASKED TO PRODUCE THE COPY OF HIS BANK A/C IN HDFC BA NK AND ALSO RECONCILIATION OF THE CASH DEPOSITS WITH HIS G ROSS RECEIPTS. DATE OF HEARING : 22.09.2016 DATE OF PRONOUNCEMENT : 28.10.2016 ITA NO 231 OF 2016 SATISH KUMAR HYDERABAD PAGE 2 OF 5 THE ASSESSEE WAS ALSO ASKED TO PRODUCE CERTAIN OTHE R DOCUMENTS AS UNDER: I) RENTAL AGREEMENT II) EVIDENCE FOR CAPITAL GAINS ADMITTED III) CONFIRMATIONS FOR UNSECURED LOANS/ADVANCES IV) SALE DEEDS FOR PLOTS PURCHASED V) CAPITAL ACCOUNTS FINANCIAL YEAR 2006-07 VI) BANK STATEMENTS FOR THE PERIOD FROM 1.4.2006 TO 31.03.2007. VII) SOURCES FOR THE CASH DEPOSITS MADE OF RS.10.50 LAKHS IN HDFC BANK FOR FINANCIAL YEAR 2006-07 AND THE CASE POSTED FOR HEARING ON 12.10.09. 3. ON 13.10.2009, THE ASSESSEE PRODUCED THE CONFIRMATION LETTERS FROM LOAN CREDITORS AND THE ST ATEMENT OF HIS A/C FROM DENA BANK. THE ASSESSEE WAS ASKED TO PRODU CE THE REMAINING INFORMATION CALLED FOR BY 26.10.2009, BUT THE ASSESSEE FAILED TO PRODUCE THE SAME. THEREAFTER, VIDE NOTICE U/S 142(1) ISSUED ON 30.10.2009, THE ASSESSEE WAS ASKED TO PRO DUCE THE FOLLOWING: I) TO PROVE THE GENUINENESS OF THE TRANSACTIONS OF LOA N CREDITORS. II) SOURCES FOR THE CASH DEPOSITS MADE OF RS.10.50 LAKHS IN HDFC BANK. III) EXPLANATION FOR THE OPENING BALANCE DIFFERENCE OF CAPITAL ACCOUNT. 4. IN RESPONSE, THE ASSESSEE HAD PRODUCED ANNUAL RE TURN COPIES OF SOME OF THE LOAN CREDITORS TO PROVE THE C REDIT WORTHINESS OF THE PARTIES AND CLARIFICATION FOR THE OPENING BA LANCE DIFFERENCE OF CAPITAL ACCOUNT VIDE HIS LETTERS DATED 10.11.200 9 & 23.11.2009. THE ASSESSEE FILED SOME INFORMATION. ITA NO 231 OF 2016 SATISH KUMAR HYDERABAD PAGE 3 OF 5 5. AFTER CONSIDERING THE ASSESSEES CONTENTIONS, TH E AO ADDED THE UNSECURED LOANS OF RS.5.00 LAKHS AND CASH CREDITS OF RS.25,51,500 TO THE RETURNED INCOME OF THE ASSESSEE AND BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APP EAL BEFORE THE CIT (A) WHO CONFIRMED THE ORDER OF THE AO. THEREAFT ER THE ASSESSEE ACCEPTED THE ORDER OF THE CIT (A) BY NOT FILING APP EAL BEFORE THE ITAT. 6. MEANWHILE, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT BY ISSUING A NOTICE U/S 274 OF THE ACT. THE ASSESSEE DID NOT FILE ANY EXPLANATION BEFORE THE AO , DUE TO WHICH THE AO LEVIED THE MINIMUM PENALTY OF RS.3,00,245. A GGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) ALONG W ITH EXPLANATION AS TO WHY THE PENALTY IS NOT LEVIABLE. THE CIT (A), HOWEVER, DISMISSED THE ASSESSEES APPEAL AGAINST WHICH THE A SSESSEE IS IN APPEAL BEFORE US. THE ASSESSEE SUBMITS THAT THE CIT (A) HAS NOT CONSIDERED THE FACTS OF THE CASE AND ARGUMENTS PUT FORTH BY THE ASSESSEE DURING THE COURSE OF APPEAL. 7. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD EXPLAINED TO THE CIT (A) THAT THE SOURCES FOR DEPOSITS INTO THE HDFC BANK ARE OUT OF THE WITHDRAWALS MADE EARLIER FROM THE SAME A/C AND IN S UPPORT OF THE SAME, THE BANK STATEMENT WAS ALSO FURNISHED AND THE REFORE, THE PENALTY IS NOT LEVIABLE. IN SUPPORT OF HIS CONTENTI ON, HE PLACED RELIANCE UPON THE DECISION OF THE TRIBUNAL AT DELHI IN THE CASE OF SAKET AGARWAL VS. INCOME TAX OFFICER IN ITA NO.3194 /DEL/2012 DATED 20 TH JUNE, 2013. THE ASSESSEE HAS ALSO FILED DETAILED SUBMISSIONS BEFORE US AND ALSO THE COPIES OF THE BA NK STATEMENT ITA NO 231 OF 2016 SATISH KUMAR HYDERABAD PAGE 4 OF 5 TO DEMONSTRATE THAT THERE WERE WITHDRAWALS FROM TIM E TO TIME FROM THE SAID BANK A/C AND RE-DEPOSITS INTO THE SAM E A/C. THUS, HE SUBMITTED THAT THE PENALTY BEING INDEPENDENT PRO CEEDINGS, SHOULD BE CONSIDERED ON MERITS. THE LEARNED DR HOWE VER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCES OF T HE CASH DEPOSITS TO THE TUNE OF RS. 25,51,500 DURING THE YEAR EITHER BEFORE OR DURING THE ASSESSMENT PROCEEDINGS OR DURING THE PEN ALTY PROCEEDINGS. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDENCE IN SUPPORT OF HIS CONTENTION ABOUT THE SOU RCES OF THE CASH DEPOSITS EITHER DURING THE ASSESSMENT PROCEEDI NGS OR APPELLATE PROCEEDINGS. FURTHER, EVEN DURING THE PEN ALTY PROCEEDINGS, THE ASSESSEE FAILED TO PROVIDE ANY EXP LANATION. BUT BEFORE THE CIT (A), THE ASSESSEE HAS FILED AN EXPLA NATION STATING THAT THE SAID DEPOSITS ARE OUT OF THE CASH WITHDRAW AL MADE EARLIER. WE FIND THAT THE CIT(A) HAS NOT DISCUSSED ANYTHING ABOUT THE SUBMISSIONS OF THE ASSESSEE OR OF THE MATERIAL FILE D BEFORE HER BUT HAS SUMMARILY REJECTED THE ASSESSEES CONTENTION. W E AGREE WITH THE CONTENTION OF THE ASSESSEE THAT THE PENALTY PRO CEEDINGS ARE INDEPENDENT OF THE ASSESSMENT PROCEEDINGS. WHILE TH E ADDITION MADE DURING THE ASSESSMENT PROCEEDINGS MAY TRIGGER THE INITIATION OF THE PENALTY PROCEEDINGS, THE PENALTY IS NOT AUTOMATICALLY ATTRACTED WHENEVER AN ADDITION IS MAD E. THE AO AND THE APPELLATE AUTHORITIES ARE REQUIRED TO INDEP ENDENTLY CONSIDER THE EXPLANATION OF THE ASSESSEE, IF ANY, F ILED BEFORE THEM. IN THE CASE BEFORE US, SINCE THE ASSESSEE HAS FILED THE EXPLANATION ITA NO 231 OF 2016 SATISH KUMAR HYDERABAD PAGE 5 OF 5 ONLY BEFORE THE CIT (A) AND THE CIT (A) HAS FAILED TO CONSIDER THE SAME ON MERITS, WE DEEM IT FIT AND PROPER TO REMIT THE ISSUE TO THE FILE OF THE CIT (A) FOR DE NOVO CONSIDERATION IN AC CORDANCE WITH LAW. 9. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER, 2016. SD/- SD/- (B.RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 28 TH OCTOBER, 2016. VINODAN/SPS COPY TO: 1 SHRI B SHANTHI KUMAR, ADVOCATE, 111 TARAMANDAL CO MPLEX, 5-9- 13 SAIFABAD, HYDERABAD 500004 2 INCOME TAX OFFICER WARD 4(1) HYDERABAD 3 CIT (A)-1 HYDERABAD 4 PR. CIT 1 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER