Shri Baij Nath Garg (HUF), Chandigarh V. ITO, W-5(5), Chandigarh

ITA 242/CHANDI/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 7994 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 06-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M P DEWEDI
• Assessee Lawyers: PARISKHIT AGGARAWAL
• Section: 143(3); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NOS. 240 TO 242/CHD/2019 / ASSESSMENT YEAR : 2011-12 TO 2013-14 SHRI BAIJ NATH GARG ('HUF'), HOUSE NO.336, VILLAGE MALOYA, CHANDIGARH VS. THE ITO, WARD-5(5), CHANDIGARH ./PAN NO. AAIHB9264R / APPELLANT /RESPONDENT /ASSESSEE BY : SHRI PARISKHIT AGGARAWAL, CA ! / REVENUE BY : SH. M.P. DEWEDI, JCIT ' # $ /DATE OF HEARING : 07.11.2019 %&'( $ / DATE OF PRONOUNCEMENT : 30.12.2019 / ORDER THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE AS SESSEE AGAINST THE SEPARATE ORDERS DATED 28.12.2018 OF THE COMMISS IONER OF INCOME TAX (APPEALS)-2, CHANDIGARH [HEREINAFTER REFERRED T O AS CIT(A)] AGITATING THE ACTION OF THE LD. CIT(A) IN CONFIRMIN G THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271 (1)(C) OF THE INCO ME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SINCE THE FACTS AND ISSUE INVOLVED IN ALL THE AP PEALS ARE IDENTICAL, HENCE, THESE WERE HEARD TOGETHER AND ARE BEING DISP OSED OFF BY THIS COMMON ORDER. ITA NO. 240 TO 242-CHD-2019- SHRI BAIJ NATH GARG ('HUF'), CHANDIGARH 2 3. ITA NO. 242/CHD/2019 FOR ASSESSMENT YEAR 2013-14 IS TAKEN AS A LEAD CASE. 4. THE BRIEF FACTS LEADING TO THE IMPOSITION OF THE AFORESAID PENALTY U/S 271 (1)(C) OF THE ACT ARE THAT DURING THE COURS E OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD RECEIVED INTEREST INCOME FROM VARIOUS BANKS AMOUNTING TO RS . 8,35,871/-. OUT OF THE TOTAL INTEREST RECEIVED, ASSESSEE HAD ONLY DEC LARED INTEREST INCOME OF RS. 4,23,230/- AND REST OF THE INTEREST INCOME WAS ADDED BACK BY THE ASSESSING OFFICER TO THE RETURNED INCOME OF THE ASS ESSEE. THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE ACT AND IMPOSED THE IMPUGNED PENALTY. 5. BEING AGGRIEVED BY THE ABOVE SAID IMPOSITIO N OF THE ABOVE PENALTY, THE ASSESSEE PREFERRED APPEAL BEFORE THE L D. CIT(A), HOWEVER, REMAINED UNSUCCESSFUL. 6. BEFORE ME, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT IT IS NOT A CASE OF CONCEALMENT OF INCOME OF FURNISHIN G OF INACCURATE PARTICULARS OF INCOME. HE HAS MADE THE FOLLOWING WR ITTEN SUBMISSIONS:- 1. THE APPELLANT HUF WAS ASSESSED U/S 148 WHEREIN ADDI TION IN RESPECT OF INTEREST FROM VARIOUS BANK FDRS WAS MADE . ON THIS ADDITION, PENALTY U/S 271(L)(C) WAS IMPOSED WHERE-A GAINST APPEAL WAS FILED BEFORE HON'BLE ITAT. 2. THE FAMILY HAD VARIOUS FDRS AT THE RELEVANT TIME IN VARIOUS BANKS. THE SAME ARE DISCUSSED AS UNDER: ITA NO. 240 TO 242-CHD-2019- SHRI BAIJ NATH GARG ('HUF'), CHANDIGARH 3 A) THERE WERE SOME FDRS WHICH WERE IN THE NAME OF SH. BAIJ NATH GARG, (INDL.). THE INTEREST FROM THESE FDRS WA S DECLARED IN THE ITR OF SH. B.N GARG (INDL.) AND WAS ACCEPTED AS SUCH IN THE ASSESSMENT OF THAT (INDL.) FOR ALL THESE YEARS. B) THERE WERE CERTAIN OTHER FDRS IN THE NAME OF SH. B. N GARG (INDL.) BUT THESE WERE DECLARED IN THE ITR OF BAIJ NATH GARG, HUF AS THE ASSESSEE CLAIMED THAT THE SOURCE OF THES E FDRS IS ACQUISITION PROCEEDS OF ANCESTRAL LAND AND HENCE IT WAS HUF MONEY. THIS ISSUE WAS INVESTIGATED FIRSTLY IN ASSES SMENT OF SH. B.N GARG, (INDL.) AND NO ADDITION ON THIS ISSUE WAS MADE. THEN IN THE ASSESSMENT OF BAIJ NATH GARG, HUF, SINCE THE INTEREST INCOME FROM THESE FDRS HAD ALREADY BEEN DECLARED IN THE HUF ITR, NO ADDITION THEREIN WAS ALSO MADE IN RESPE CT OF THIS ISSUE. FURTHER, NO PENALTY IN RESPECT OF THIS ISSUE WAS INITIATED OR IMPOSED. HOWEVER, VERY MINOR ADDITION IN RESPECT OF SOME CALCULATION MISTAKE HAD BEEN MADE AND PENALTY THERE UPON HAD BEEN IMPOSED. C) THEN THERE WERE CERTAIN FDRS WHICH WERE IN THE N AME OF WIFE OF ASSESSEE SRNT. LAKSHMI DEVI. THE INTEREST O N THESE FDRS WAS NOT DECLARED EITHER IN THE ITR OF SH. B.N GARG, (INDL.) OR HUF. DURING ASSESSMENT OF HUF, INTEREST EARNED ON THESE FDRS WAS ADDED AND PENALTY THEREON U/S 271(L) (C) WAS ALSO IMPOSED. AGAINST THIS IMPOSITION OF PENALTY, W E ARE IN APPEAL BEFORE HONTDLE ITAT. EVEN THE ASSESSMENT OF WIFE OF THE ASSESSEE SRRT. LAKSHMI DEVI FOR AYS-2011-12 AND 2012-13 WAS INITIATED AND CONCLUDED U/S 148 R.W.S 147 WHERE IN THIS VERY INTEREST HAS BEEN ASSESSED IN THE HANDS OF SMT, LAK SHMI DEVI. D) THEN THERE WERE CERTAIN FDRS IN THE SAME NAME OF SONEOF THE ASSESSEE. THE INTEREST ON THE SAME HAD NEITHER BEEN DECLARED IN THE ITR OF SH. B.N GARG, (INDL.) NOR OF HUF. IN ASSESSMENT OF HUF, THIS INTEREST HAS BEEN ADDED AND PENALTY THEREON U/S 271(L)(C) WAS IMPOSED. AGAINST THIS IMP OSITION OF PENALTY, WE ARE IN APPEAL BEFORE HON*BLE ITAT. IT IS EVIDENT FROM ABOVE FACTS THAT THE IMPUGNED PE NALTY U/S 271(L)(C) HAD BEEN IMPOSED IN RESPECT OF ADDITION MADE IN ASS ESSMENT OF HUF WHICH ADDITION PRIMARILY PERTAINS TO INTEREST EARNE D ON BANK FDRS IN THE NAME OF SMT. LAKSHMI DEVI(WIFE) AND SH. ASHOK K UMAR (SON). THE HUF MONEY HAVING ALREADY BEEN PARTED TO THE WIFE AN D SON OF ASSESSEE, THEY HAVING MADE INVESTMENT IN FDRS IN TH EIR RESPECTIVE NAMES, THOUGH THE SOURCE OF THESE FDRS MAY BE THE H UF MONEY BUT ONCE PARTED FROM HUF CORPUS, THE INTEREST BELONGED TO THEM (INDL.) LY. THE ASSESSEE HUF HAD RIGHTLY NOT DECLARED THE INTER EST ON THESE FDRS IN ITS OWN ITR. BE THAT AS IT MAY, ONE THING IS ABS OLUTELY CLEAR THAT THE ADDITION MADE IS IN RESPECT OF INTEREST FROM FDRS W HICH WERE IN THE ITA NO. 240 TO 242-CHD-2019- SHRI BAIJ NATH GARG ('HUF'), CHANDIGARH 4 NAME OF WIFE AND SON. THE QUESTION AS TO IN WHOSE H ANDS THIS INTEREST WAS TO BE DISCLOSED I.E. WHETHER IN HUF'S ITR OR IN THE ITR OF WIFE/SON IS A HIGHLY DEBATABLE ISSUE. THE ASSESSEE HAS NEVER CONCEALED ANY PARTICULARS OF INCOME NOR FURNISHED INACCURATE PART ICULARS OF INCOME. THEREFORE, PENALTY U/S 271(L)(C) HAS BEEN WRONGLY I MPOSED. YEAR-WISE AND FDR-WISE BANK INTEREST DETAILS, IN WH OSE NAME THIS FDR EXISTED, IN WHOSE HANDS THIS INTEREST WAS DECLA RED AND IN WHOSE HANDS THIS INTEREST WAS ASSESSED, TABULATIONS FOR T HE SAME ARE ATTACHED. SD/- PARIKSHIT AGGARWAL CHARTERED ACCOUNTANT) (COUNSEL FOR THE APPELLANT ) APART FROM THE ABOVE WRITTEN SUBMISSIONS, THE ASSES SEE HAS PLACED ON RECORD THE FOLLOWING CHART:- BAIJ NATH GARG ('HUF') AY 2012-13 NAME OF BANK FDR NO. INTEREST AMOUNT (IN RS.) HOW IT IS IN SUCH NAME. HOW IT IS IN SUCH NAME? WHERE DECLARED IN ITR? WHERE ASSESSED ANY ADDITION MADE IN THIS RESPECT IN 'HUF' ASSESSMENT PNB, TIRA 44,494/- BAIJ NATH GARG (INDL.) REFER PARA 4 OF ASSESSME- NT ORDER OF HUF WHEREIN EXTRACT OF AFFIDAVIT OF ASSESSEE HAS BEEN EXTRACTED. BAIJ NATH GARG ('HUF') THIS IS EVIDENT FROM PAGE 1 OF ASSESSMENT ORDER. BAIJ NATH GARG (HUF') NIL PNB, TIRA SAVING 71/ - BAIJ NATH GARG (INDL.) REFER PARA 4 OF ASSESSME- NT ORDER OF HUF WHEREIN EXTRACT OF AFFIDAVIT OF ASSESSEE HAS BEEN EXTRACTED BAIJ NATH GARG ('HUF') THIS IS EVIDENT FROM PAGE 1 OF ASSESSMENT ORDER. BAIJ NATH GARG (HUF') 71/ - ITA NO. 240 TO 242-CHD-2019- SHRI BAIJ NATH GARG ('HUF'), CHANDIGARH 5 SBOP SEC 22 6511643 7811 2,39,870/ - SMT. LAXMI DEVI REFER PARA 4 OF ASSESSME- NT ORDER OF HUF WHEREIN EXTRACT OF AFFIDAVIT OF ASSESSEE HAS BEEN EXTRACTED. BAIJ NATH GARG ('HUF') THIS IS EVIDENT FROM PAGE 1 OF ASSESSMENT ORDER. BAIJ NATH GARG (HUF' 2,39,870 SBOP SEC 22 6511643 7753 2,39,870/- BAIJ NATH GARG (INDL.) REFER PARA 4 OF ASSESSME- NT ORDER OF HUF WHEREIN EXTRACT OF AFFIDAVIT OF ASSESSEE HAS BEEN EXTRACTED. BAIJ NATH GARG ('HUF') THIS IS EVIDENT FROM PAGE 1 OF ASSESSMENT ORDER. BAIJ NATH GARG (HUF' NIL SBOP SEC 22, 6511651 3259 1,72,700/- ASHOK KUMAR REFER PARA 4 OF ASSESSME- NT ORDER OF HUF AS THE AMOUNT WAS BELOW THE TAXABLE LIMIT, ASSESSEE WAS NOT MANDATORIL Y REQUIRED TO FILE ITR BAIJ NATH GARG (HUF' 1,72,700 SEC 22 5513985 2870 (SAVING) 14,085/ - BAIJ NATH GARG (INDL.) REFER PARA 4 OF ASSESSME- NT ORDER OF HUF WHEREIN EXTRACT OF AFFIDAVIT OF ASSESSEE HAS BEEN EXTRACTED. BAIJ NATH GARG ('HUF') THIS IS EVIDENT FROM PAGE 1 OF ASSESSMENT ORDER. BAIJ NATH GARG (HUF' NIL SBOP SEC 22 6507167 4644 (RD) 1,24,781/- BAIJ NATH GARG (INDL.) REFER PARA 4 OF ASSESSME- NT ORDER OF HUF WHEREIN EXTRACT OF AFFIDAVIT OF ASSESSEE HAS BEEN EXTRACTED. BAIJ NATH GARG ('HUF') THIS IS EVIDENT FROM PAGE 1 OF ASSESSMENT ORDER. BAIJ NATH GARG (HUF' NIL ITA NO. 240 TO 242-CHD-2019- SHRI BAIJ NATH GARG ('HUF'), CHANDIGARH 6 7. THE LD. COUNSEL FOR THE ASSESSEE RELYING UP ON THE AFORESAID CHART HAS SUBMITTED THAT, IN FACT, IN THIS CASE, THE ASSE SSEE 'HUF' HAS SUFFERED ADDITIONS IN RESPECT OF THE INCOME WHICH HAS ALREAD Y BEEN ADDED / DECLARED IN THE RETURN OF INCOME OF SMT. LAXMI DEVI W/O SHRI BAIJ NATH GARG WHO IS ALSO A MEMBER OF THE ASSESSEE 'HUF'. TH AT ANOTHER INTEREST INCOME OF RS. 1,72,700/-, IN FACT, VIDE FDR NO. 651 165133259 HAS BEEN ADDED IN THE QUANTUM PROCEEDINGS IN THE HANDS OF TH E ASSESSEE 'HUF', WHEREAS, THE SAID FDR AND INTEREST INCOME WAS EARNE D BY SHRI ASHOK KUMAR S/O SHRI BAJI NATH GARG. SINCE THE AFORESAID INCOME WAS THE ONLY INCOME OF SHRI ASHOK KUMAR AND THE SAME BEING LESS THAN THE TAXABLE LIMIT, WAS NOT OFFERED IN THE RETURN OF INC OME OF SHRI ASHOK KUMAR. HOWEVER, THE INTEREST INCOME OF RS. 2,39,870 /- EARNED BY SMT. LAXMI DEVI IN RESPECT OF FDR NO. 65116437811 HAS AL READY BEEN DECLARED IN THE RETURN OF INCOME OF SMT. LAXMI DEVI . THE LD. COUNSEL HAS ALSO PLACED RELIANCE UPON THE ASSESSMENT ORDER OF SMT. LAXMI DEVI PASSED U/S 147 READ WITH SECTION 143(3) OF THE ACT. THE LD. COUNSEL, THEREFORE, HAS SUBMITTED THAT THE ADDITIONS IN RELA TION TO WHICH THE IMPUGNED PENALTY HAS BEEN LEVIED, IN FACT, WERE NOT WARRANTED IN THE CASE OF THE ASSESSEE 'HUF'. THE LD. COUNSEL HAS SU BMITTED THAT THOUGH THE ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST T HE ADDITION OF INCOME WHICH HAS ALREADY BEEN DECLARED IN THE RETURN OF IN COME OF SMT. LAXMI DEVI, MEMBER OF THE 'HUF', YET IT IS NOT A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME, RATHER, DUE TO BAD TAX PLANNING, THE ASSESSEE HAS SUFFERED DOUBLE TAXATION. ITA NO. 240 TO 242-CHD-2019- SHRI BAIJ NATH GARG ('HUF'), CHANDIGARH 7 8. THE LD. DR, ON THE OTHER HAND, HAS RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES. 9. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE CHART GIVEN ABOVE REVEALS THAT THE INTEREST INCOME OF RS. 2,39,870/- HAS ALREADY BEEN OFFERED BY SMT. LAXMI DEVI IN HER HAND , THE SAME AMOUNT HOWEVER, HAS ALREADY BEEN ADDED IN THE HANDS OF TH E ASSESSEE ALSO. SO FAR AS THE REMAINING ADDITION OF RS. 1,72,700/- IS CONCERNED, THE FDR WAS IN THE NAME OF SHRI ASHOK KUMAR AND THIS WAS ON LY INCOME OF SHRI ASHOK KUMAR, HENCE, WAS NOT OFFERED FOR TAXATION BY SHRI ASHOK KUMAR BEING LESS THAN THE LIMIT PRESCRIBED OF TAXABLE INC OME. HOWEVER, THE SAME HAS BEEN ADDED INTO THE INCOME OF THE ASSESSE E 'HUF' ALSO. 10. CONSIDERING THE OVERALL FACTS OF THE CASE, I AGREE WITH THE LD. COUNSEL FOR THE ASSESSEE THAT IT SEEMS TO BE A CASE OF BAD TAX PLANNING AND NOT OF CONCEALMENT OF INCOME OR FURNISHING OF I NACCURATE PARTICULARS OF INCOME. IN VIEW OF THIS, I DO NOT FIND ANY JUST IFICATION ON THE PART OF THE LOWER AUTHORITIES IN IMPOSING THE IMPUGNED PENA LTY, THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. SINCE THE FACTS AND ISSUE INVOLVED IN OTHER TWO APP EALS ARE IDENTICAL, HENCE, THE OTHER TWO APPEALS FILED BY TH E ASSESSEE FOR ASSESSMENT YEARS 2010-11 & 2011-12 (ITA NOS.240 & 2 41/CHD/2019) ARE ALSO ALLOWED AND THE PENALTY IMPOSED VIDE IMPUG NED ORDERS IS ORDERED TO BE DELETED, ITA NO. 240 TO 242-CHD-2019- SHRI BAIJ NATH GARG ('HUF'), CHANDIGARH 8 IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.1.22019. SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 30.12.2019 .. &* +, -, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' . / CIT 4. ' . ( )/ THE CIT(A) 5. ,/0 1 , $ 1 , 23405 / DR, ITAT, CHANDIGARH 6. 04 6# / GUARD FILE &* ' / BY ORDER, 7 ! / ASSISTANT REGISTRAR