SHRI RINKU KUMAR, MOGA V. JOINT DIRECTOR OF INCOME TAX (APPEALS-3), LUDHIANA

ITA 265/ASR/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8385 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-08-2019
• Assessment Year: 2017-2018
• Appeal Filed On: 08-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMAR PAL ME ENA LD
• Assessee Lawyers: RUPENDER K ANSAL LD
• Keywords: Bonafide belief; Reasonable cause
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL AMRITSAR BENCH, AMRITSA R BEFORE SH. B.R. BASKARAN, ACCOUNTANT MEMBER A ND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.265/ASR/2018 ASSESSMENT YEAR:2017-18 SH. RINKU KUMAR H.NO.190 RAMUWALA KALAN, MOGA [PAN:AWHPK J3207E] VS. JT. DIRECTOR OF INCOME TAX (INV.) LUDHIANA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RUPENDER K ANSAL (LD. ADV.) RESPONDENT BY: SH. AMAR PAL MEENA (LD. DR) DATE OF HEARING: 28.08.2019 DATE OF PRONOUNCEMENT: 09.10.2019 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER DATED 05.03.2018 IMPUGNED HEREIN PASSED BY THE LD. CIT(A)-3, LUDHIANA U/S 250(6) OF INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD RECEI VED TWO NOTICES/SUMMONS FOR HIS APPEARANCE U/S 131 OF THE ACT , HOWEVER DID NOT COMPLY WITH THE SAME WHICH RESULTED INTO IMPOSIT ION OF PENALTY OF RS.20,000/-(RS.10,000/- FOR EACH DEFAULT) U PON HIM FOR NON-COMPLIANCE TO SUMMONS U/S 131 OF THE ACT ISSUED BY THE DY. DIRECTOR OF INCOME TAX (INV.) (HQ.), LUDHIANA. THE ASSESSE E CHALLENGED THE PENALTY ORDER BEFORE THE LD. CIT(A) A ND CLAIMED THAT ITA N0.265/ASR/ 2018 (A. Y: 2017 -18 ) RINKU KUMAR VS. JDIT 2 THE ASSESSEE IS WORKING AS A SMALL ELECTRICIAN IN VILLAGE RA MUWALA KALAN, DISTT. MOGA AND EARNS MONEY BY DOING ELECTRICA L WORK IN HOUSES AND SHOPS. IN THE YEAR 2012, THE ASSESSEE WORKED IN THE HOUSE OF SH. VISHAKHA SINGH S/O SH. SUDDHA SINGH WHO AT THAT TIME WAS RESIDING IN THE MIDDLE EAST COUNTY BAHRAIN AND SENT RS.5,000/- FROM THAT COUNTRY THROUGH MONEY EXCHANGER M/S GANPATI MONEY CHANGER. THE ASSESSEE SUBMITTED THE PHOTOCOPY OF ID PROOF TO M/S GANPATI MONEY CHANGER AND GOT THE MONEY WHICH WAS SENT FOR THE WORK DONE BY THE ASSESSEE. THOUGH, THE ASSESSEE HAS RECEIVED TWO NOTICES, HOWEVER DID NOT APPEAR BEFORE THE DDIT (INV .) (HQ.) BECAUSE THE SUMMONS WERE ADDRESSED AS RINKU KUMAR PROP. SETHI ENTERPRISES, RAMUWAL, DISST. MOGA BY WHICH DEPARTMENT SOU GHT INFORMATION QUA BANK DEPOSITS AND THEREFORE, THE ASSESSEE DID NOT REALIZE TO APPEAR BECAUSE HE WAS NEVER BEEN THE PROPRI ETOR OF FIRM SETHI ENTERPRISES. LATER ON 3 RD OCCASION, THE ASSESSEE APPEARED BEFORE THE DDIT(INV.) AND FROM HIM ONLY CAME TO KNOW ABOUT THE FACTS THAT SOMEBODY ELSE HAS OPENED FAKE ACCOUNT IN THE ASSE SSEES NAME AND EVEN SUBMITTED WRONG PHOTOGRAPHS IN THE ACCOUN T OPENING FORM WHICH WERE NOT OF THE ASSESSEE. IT WAS FURTHER REAL IZED THAT MONEY EXCHANGER IN CONNIVANCE WITH BANK OFFICIALS MISUSED THE ASSESSEE'S ID PROOFS AND THE NAME OF THE MOTHER AND ADDRE SS HAS ALSO BEEN MENTIONED WRONGLY IN THE ACCOUNT OPENING FOR M. LATER ON IT CAME TO THE ASSESSEES KNOWLEDGE THAT THE MONEY EXCHANGER HAD OPENED FAKE BANK ACCOUNTS IN THE NAME OF OTHER PERSONS A S WELL WHO HAVE ALSO SUBMITTED THEIR ID PROOFS FOR GETTING MONEY FOR THE WORK DONE FROM PERSONS RESIDING OUT OF INDIA. HOWEVER THE L D. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AND AFFIRMED THE PENA LTY ORDER. 3. THE ASSEEEE BEING AGGRIEVED PREFERRED THE INSTANT AP PEAL ON FOLLOWING GROUNDS. ITA N0.265/ASR/ 2018 (A. Y: 2017 -18 ) RINKU KUMAR VS. JDIT 3 1. THAT THE HONBLE COMMISSIONER OF INCOME (APPEALS-3) LUDHIANA HAS ERRED BOTH ON FACTS AND LAW WHILE UPHOLDING THE PEN ALTY ORDER OF JOINT DIRECTOR OF (INV.), LUDHIANA ON THE BASIS OF CONJEC TURES AND SURMISES. 2. THAT THE HONBLE COMMISSIONER OF INCOME TAX (APPEL AS-3) LUDHIANA HAS ERRED IN UPHOLDING THE PENALTY AMOUNTI NG TO RS. 20,000/- IMPOSED U/S 272A(1)(C) OF THE INCOME TAX ACT, 1961. 3. THAT THE HONBLE COMMISSIONER OF INCOME TAX (APPEL AS-3) LUDHIANA HAS ERRED ON THE FACTS, AS THE APPELLANT H AS APPEARED ON THIRD NOTICE AND HE HIMSELF WAS IGNORANT OF THE FRAUD PLA YED ON HIM BY THE MONEY EXCHANGER AND BANK MANAGER. THE FIRST TWO NOT ICES WERE IGNORED AS THE SAME WERE SERVED ON HIM AS RINKU KUMAR PROP. M/S SETHI ENTERPRISES, RAMUWALA KALAN AND HE WAS HAVING NO ID EA THAT NOTICES BELONG TO HIM AS HE WAS NOT PROPRIETOR OF ANY FIRM IN THE NAME OF M/S SETHI ENTERPRISES. HE EXPLAINED TO THE JOINT DIRECTOR OF IN COME TAX (INV.) LUDHIANA ON RECEIVING THE THIRD NOTICE THAT HE IS NOT PROPRIETO R OF ANY FIRM UNDER NAME SETHI ENTERPRISES. HE NARRATED THAT HE WORKED FOR S OME PERSON IN HIS HOUSE AT RAMUWALA KALAN AS ELECTRICIAN. THE PERSON WHO WAS WORKING IN BEHRAIN SENT ABOUT RS.5,000/- THROUGH MONEY EXCHANGE R. THE SAID MONEY EXCHANGER ON GETTING ID PROOF OF APPELLANT GAVE RS.5 ,000/-. THE MONEY EXCHANGER IN CONNIVANCE WITH BANK MANAGER OPENED 14 FAKE BANK ACCOUNTS INCLUDING IN THE NAME OF APPELLANT AND MAD E HUGE TRANSACTIONS. THE APPELLANT IS ILLITERATE AND DOES NOT UNDERSTAND THE COMPLEXITIES OF LAW, THE FACT WHICH WAS IGNORED BY THE HONBLE CIT(APPEA LS-3) LUDHIANA. THE NON-APPEARANCE WAS UNDER BONAFIDE BELIEF THAT THE N OTICES DOES NOT BELONGS TO HIM. 4. HAVING HEARD THE PARTIES AND PERUSED THE PENALTY ORDE R AND THE IMPUGNED ORDER AND RELEVANT MATERIAL AVAILABLE ON R ECORD. IT IS OBSERVED BY THE LD. CIT(A) THAT IT IS APPARENT THAT A FTER AVAILING SERVICES OF TWO NOTICES, NEITHER THE APPELLANT NOR ANY R EPRESENTATIVE PRESENTED ON BEHALF OF THE APPELLANT NOR ANY WRITTEN REPLY WAS FURNISHED. IT IS EVIDENT BEFORE THE AO THAT THE APPE LLANT HAD REMAINED SILENT OVER THE NON-COMPLIANCE TO SUMMONS ISSUED BY THE DD IT(INV.) (HQ.), LUDHIANA NOR HE HAD GIVEN ANY REASONABLE CAUSE T O JUSTIFY HIS NON-ATTENDANCE ON THE SAID DATES. AT THE TIME OF HEARING OF THIS APPEAL, THE ASSESSEE HAS D RAWN OUR ATTENTION TO THE FIR DATED 17.11.2016 WHEREIN T HE ASSESSEE IS A COMPLAINANT AND THE SAME HAS BEEN REGISTERED UNDER SECTIO NS 420/465/467/468/471/120B OF THE INDIAN PENAL CODE, 1860 FOR ITA N0.265/ASR/ 2018 (A. Y: 2017 -18 ) RINKU KUMAR VS. JDIT 4 COMMITTING FRAUD, FORGERY AND CRIMINAL CONSPIRACY. FURTH ER THE LD. AR ALSO DRAWN OUR ATTENTION TO THE NEWS PAPER DATED 19 TH NOVEMBER, 2016 IN NAVA SABERA TIMES, WHEREIN THE NEWS APPEARING REFLECTS UNEARTHING OF OFFENCES COMMITTED BY MONEY EXCHANGER AND THREE BANK OFFICIALS WHILE OPENING FAKE BANK ACCOUNTS AND MAK ING TRANSACTIONS FROM FORGED BANK ACCOUNTS. IN THE NEWS PAPER THE ASSESSEE HAS BEEN SHOWN A COMPLAINANT BY THE SSP, MOGA. HEN CE CONSIDERING THE PECULIAR FACTS TO THE EFFECT THAT SUMMONS HAVE BEEN ISSUED IN THE NAME OF THE APPELLANT AS PROPRIETOR OF M /S SETHI ENTERPRISES AND THEREFORE, THE APPELLANT MAY HAVE MISU NDERSTOOD AND DID NOT APPEAR BEFORE THE DDIT(INV.) (HQ.), HOWEVER, IT IS A FACT THAT FIR HAS ALREADY BEEN REGISTERED BY THE ASSESSEE AGAINST TH E CULPRITS WHILE REALIZING THE FRAUD COMMITTED BY THEM, THEREFO RE, IN OUR CONSIDERED OPINION, THERE APPEARS BE INADVERTENT AND B ONAFIDE MISTAKE AND REASONABLE AND JUSTIFIABLE CAUSE IN NON-COMPL IANCE OF THE SUMMONS ISSUED BY THE DDIT(INV.)(HQ.) LUDHIANA AND THE REFORE, NO PENALTY IS WARRANTED HENCE, THE SAME IS LIABLE TO BE DE LETED, CONSEQUENTLY THE PENALTY STANDS DELETED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/1 0/2019. SD/- SD/- (B.R.BASKARAN) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 09/10/2019. /PK/ PS. COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THEN CIT(APPEALS) 5. SR DR, I.T.A.T. AMRITSAR 6. GUARD FILE TRUE COPY BY ORDER