Barnali Banerjee, Kolkata V. Income Tax Officer, Ward-31(1), Kolkata, Kolkata

ITA 2654/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4734 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY JCIT SRDR
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained investment; Reasonable cause
• Section: 273B; 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.2654-2656/KOL/2013 ASSESSMENT YEAR:2005-06 BARNALI BANERJEE C/O D.J. SHAH & CO. KALYAN BHAVAN, 2N ELGIN ROAD, KOLKATA-20 [ PAN NO.AEFPB 4591 J ] / V/S . INCOME TAX OFFICER, WARD-31(1), 10B, MIDDLETON ROW, KOLKATA-71 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI MIRAJ D SHAH, AR /BY RESPONDENT SHRI P.K.CHAKRABORTY, JCIT-SR-DR /DATE OF HEARING 28-07-2016 /DATE OF PRONOUNCEMENT 12-08-2016 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AG AINST SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-XIX, BY DIFFER ENT DATED 22.10.2013 & 24.10.2013. ASSESSMENT WAS FRAMED BY ITO WARD-31(1) , KOLKATA U/S 144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 28.12.2007 FOR ASSESSMENT YEAR 2005-06. PENALTY LEV IED BY ASSESSING OFFICER U/S 271(1)(B) OF THE ACT VIDE HIS ORDER DATED 24.06.200 8 FIRST WE TAKE UP ITA NO. 2654/KOL/2013 (AY 05-06) 2. SOLITARY GROUND RAISED BY THE ASSESSEE PER ITS A PPEAL AS UNDER:- 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSMENT ORDER PASSED WAS IN VIOLATION OF PRINCIPAL OF NATURAL JUS TICE HENCE IS BAD IN LAW AND BE QUASHED. ITA NO.2654-56/KOL/2013 A .Y. 2005-06 BARNALI BANERJEE VS. ITO WD-31(1) KOL . PAGE 2 2. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LEARNED COMMISSIONER OF INCOME TAX APPEALS ERRED IN UPHOLDI NG THE ADDITION OF RS.8,00,000/-. THE ADDITION WAS UNCALLED FOR AND UN WARRANTED AND THUS THE SAME BE DELETED. 3. THE APPELLANT CRAVES LEAVE TO PRESS NEW, ADDITIO NAL GROUNDS OF APPEAL OR MODIFY, WITHDRAW ANY OF THE ABOVE GROUNDS AT THE TI ME OF HEARING OF THE APPEAL. SRI MIRAJ D SHAH LD. AUTHORIZED REPRESENTATIVE APPE ARED ON BEHALF OF ASSESSEE AND SHRI P.K.CHAKRABORTY, LD. DEPARTMENTAL REPRESEN TATIVE APPEARED ON BEHALF OF REVENUE. 3. ONLY ISSUE RAISED IN THIS APPEAL OF ASSESSEE IS THAT LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF ASSESSING OFFICER BY SUSTAI NING THE ADDITION OF 8 LAKH ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 4. THE FACTS IN BRIEF ARE THAT ASSESSEE IN THE PRES ENT CASE IS AN INDIVIDUAL AND HAS DECLARED HER INCOME FROM OTHER SOURCE FOR AN AM OUNT OF 99,500/-. THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS MODULE AND ACCORDINGLY NOTICES WERE ISSUED U/S 143(2) AND 142( 1) OF THE ACT. 5. THE ASSESSEE, DURING THE YEAR HAS MADE AN INVEST MENT OF 8 LAKH IN RBI BOND WHICH WAS NOT DISCLOSED IN HER INCOME TAX RETU RN. THE AO GATHERED THIS INFORMATION FOR THE ABOVE STATED INVESTMENT OF 8 LAKH FROM THE SOURCE OF AIR ( ANNUAL INFORMATION REPORT). THE AO DURING THE ASSES SMENT PROCEEDINGS, SOUGHT CLARIFICATION FROM ASSESSEE BY ISSUING SEVER AL NOTICES BUT NO DETAILS WAS SUBMITTED BY ASSESSEE. THEREFORE, AO TREATED THE SA ME AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT AND ADDED TO THE TOTAL INCOME OF ASSESSEE. 6. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A), WHEREAS ASSESSEE SUBMITTED THAT INVESTMENT IN RBI BOND WAS MADE OUT OF MONEY RECEIVED FROM HER HUSBAND ( WORKING IN USA) THROUGH BANKING CHANNEL AND IN ITA NO.2654-56/KOL/2013 A .Y. 2005-06 BARNALI BANERJEE VS. ITO WD-31(1) KOL . PAGE 3 SUPPORT OF HER CLAIM SHE SUBMITTED HER BANK STATEME NT OF BOTH THE ACCOUNTS BUT LD. CIT(A) REJECTED THE PLEA OF ASSESSEE AND UPHELD THE ACTION OF AO BY OBSERVING AS UNDER:- 7.5 HERE ALSO THE APPELLANT COULD NOT SATISFACTORI LY EXPLAIN THE SOURCE OF HER INVESTMENT AND MAKING AFTER THOUGHT STRATEGY TO AVOID THE LEGITIMATE TAX. EVEN SHE COULD NOT PRODUCE THE FINANCIAL STATE MENT IN THE SHAPE OF BALANCE SHEET, CASH FLOW STATEMENT WHATSOEVER IT JU STIFY HER DISCLOSED INVESTMENT AND THE SOURCE THEREOF. THEREFORE, THE A DDITION MADE BY AO AMOUNT TO 8,00,000/- IS HEREBY CONFIRMED . BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E CAME IN SECOND APPEAL BEFORE US. 7. BEFORE US LD. AR FILED PAPER BOOK COMPRISING PAG ES FROM 1 TO 27 AND STATED THAT ASSESSEE HAS BEEN FILING HER IT RETURN IN BANGALORE AS IT WAS HER JURISDICTIONAL INCOME TAX OFFICE FOR THE LAST THREE YEARS. THIS FACT WAS ALSO DULY COMMUNICATED TO DEPARTMENT. HOWEVER, FOR THE YEAR U NDER CONSIDERATION, THE RETURN WAS FILED AT KOLKATA ADDRESS BUT ALL THE REL EVANT DOCUMENTS WERE AT BANGALORE ADDRESS. THE ASSESSEE BEING LADY WAS ON T HE ADVANCED STAGE OF PREGNANCY AND STAYED IN HER PARENTAL HOUSE, KOLKATA TILL THE BIRTH OF SECOND CHILD WHICH HAPPENED ON DATED 12.12.2007. ALL THE SUPPORTING PAPERS REGARDING AFORESAID INVESTMENT WERE LYING IN HER BANGALORE. L D. AR IN SUPPORT OF ASSESSEES CLAIM HAS SUBMITTED THE DOCTORS PRESCRI PTION, BIRTH CERTIFICATE, WHICH ARE PLACED ON 4 AND 5 OF THE PAPER BOOK. HE ALSO SU BMITTED THAT ANNUAL INCOME OF ASSESSEES HUSBAND EARNED IN $ 1.25 LAKH AND SUB MITTED THE ANNUAL SALARY CERTIFICATE WHICH IS PLACED ON PAGES 6 AND 7 OF THE PAPER BOOK. LD. AR FURTHER SUBMITTED THAT THE CHEQUE ISSUED AND DEPOSITED IN T HE INDIAN BANK A/C WHICH ARE PLACED ON PAGES 8 TO 13 OF THE PAPER BOOK ALONG WIT H BANK STATEMENT. LD. AR IN THIS REGARD DREW OUR ATTENTION ON PAGE 16 OF THE PA PER BOOK WHERE THE COPY OF RBI BOND WAS PLACED FOR 8 LAKH WHICH IS IN THE NAME OF ASSESSEE AND HER HUSBAND. THE LD. AR PRAYED THAT ORDER OF AUTHORITIE S BELOW MAY BE QUASHED. ITA NO.2654-56/KOL/2013 A .Y. 2005-06 BARNALI BANERJEE VS. ITO WD-31(1) KOL . PAGE 4 ON THE OTHER HAND, LD. DR VEHEMENTLY RELIED ON THE ORDER OF AUTHORITIES BELOW. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF BOTH THE PARTIES AS WELL AS RELEVANT MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY PERUSED THE MATERIALS BROUGHT TO OUR NOTICE. FROM THE FOREGOING DISCUSSION, WE FIND THAT ASSESSEE FAILED TO PRODUCE HER DOCUMENTARY EVIDENCE IN SUPPORT OF INVESTMENT MADE IN RBI BOND AMOUNTING TO 8 LAKH. AS A RESULT THE ADDITION WAS MADE BY AO AND SUBSEQUENTLY CONFIRMED BY LD. CIT(A). FROM T HE SUBMISSION OF LD. AR WE FIND THAT ASSESSEE HAS RECEIVED A SUM OF 8.50 LAKH IN AN ACCOUNT MAINTAINED JOINTLY WITH HER HUSBAND. THE BANK STAT EMENT AND SALARY DETAILS OF ASSESSEES HUSBAND HAVE BEEN DULY FURNISHED. IN OUR CONSIDERED VIEW THE SOURCE OF INVESTMENT HAS BEEN DULY EXPLAINED BY SUBMITTING THE DOCUMENTS IN THE FORM OF PAPER BOOK. CONSIDERING THE DETAILS OF THE FACTS OF THE PRESENT CASE, WE FIND THAT SOURCE OF INVESTMENT HAS BEEN DULY EXPLAINED B Y ASSESSEE AT THE APPELLATE STAGE AND IN REBUTTAL LD. DR ALSO FAILED TO BRING A NYTHING CONTRARY TO THE ARGUMENT OF LD. AR. HENCE, WE ARE INCLINED TO REVE RSE THE ORDER OF AUTHORITIES BELOW AND ALLOW ASSESSEES GROUND. AO IS DIRECTED A CCORDINGLY. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. COMING TO ITA NO.2655/KOL/2013 10. SOLE ISSUE RAISED BY ASSESSEE IS THAT LD. CIT(A ) ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER BY SUSTAINING THE PENAL TY OF 10,000/- U/S 271(1)(B) OF THE ACT ON ACCOUNT OF FAILURE ON THE PART OF AS SESSEE TO COMPLIANCE THE NOTICE ISSUED BY AO. 11. AT THE OUTSET, IT WAS OBSERVED THAT IN THE PRES ENT CASE ASSESSEE WAS RESIDING IN BANGALORE BUT CAME TO KOLKATA (HER PARE NTAL HOUSE) DURING THE PERIOD OF HER PREGNANCY. AS A RESULT, ASSESSEE FAIL ED TO COMPLY THE NOTICE ISSUED BY AO. THE NECESSARY DETAILS HAS ALREADY BEEN DISCU SSED BY US IN PARA-7 & 8 OF THIS ORDER. IN VIEW OF ABOVE, WE ARE INCLINED TO QU ASH THE PENALTY IMPOSED BY ITA NO.2654-56/KOL/2013 A .Y. 2005-06 BARNALI BANERJEE VS. ITO WD-31(1) KOL . PAGE 5 AO U/S 271(1)(B) OF THE ACT IN TERMS OF PROVISION O F SEC. 273B, WHICH READS AS UNDER:- [ 273B. PENALTY NOT TO BE IMPOSED IN CERTAIN CASES NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISION S OF [CLAUSE (B) OF SUB- SECTION (1) OF] [SECTION 271, SECTION 271A, [SECTIO N 271AA] SECTION 271B, [SECTION 271BA] [SECTION 271F,] [SECTION 71FA,] [SE CTION 271FAB,] [SECTION 271FB,] [SECTION 271G,] [SECTION 271GA,] [SECTION 2 71GB,] [SECTION 271H,] [SECTION 271-I,] CLAUSE (C) OR CLAUSE (D) OF SUB-SE CTION (1) OR SUB-SECTION (2) OF SECTION 272A, SUB-SECTION (1) OF SECTION 272AA] OR [SECTION 272B, OR] [SUB- SECTION (1) [OR SUB-SECTION (1A) OF SECTION 272BB O R] [SUB-SECTION (11) OF SECTION 272BBB OR] CLAUSE (B) OF SUB-SECTION (1) OR CLAUSE (B) OR CLAUSE (C) OF SUB-SECTION (2) OF SECTION 273, NO PENALTY SHALL BE IMPOSABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE R EFERRED TO IN THE SAID PROVISIONS IF HE PROVES THAT THERE WAS REASONABLE C AUSE FOR THE SAID FAILURE.] FROM A PLAIN READING OF THE ABOVE SEC. 273B OF THE ACT, WE FIND THAT NO PENALTY SHALL BE LEVIED UPON ASSESSEE IF IT IS PROVED THAT THERE WAS A REASONABLE CAUSE FOR THE NON- COMPLIANCE OF NOTICE. IN THE FACTS OF CASE, AS ASSE SSEE, A FEMALE WAS ON THE ADVANCED STAGE OF PREGNANCY AND AT THAT TIME CAME TO KOLKATA , IN HER PARENTAL HOUSE FROM BANGALORE FOR THE PURPOSE OF GIVING BIRTH TO HER SE COND ISSUE. CONSIDERING THE TOTALITY OF THE FACT, WE FIND THAT THERE WAS SUFFICIENT REAS ONABLE CAUSE WHICH PREVENTED ASSESSEE TO COMPLIANCE SAID NOTICE AND IN THIS VIEW OF THE MATTER, WE QUASH THE PENALTY IMPOSED BY AO. THIS GROUND OF ASSESSEE IS ALLOWED. 12. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. COMING TO ITA NO.2656/KOL/2013 13. GROUNDS RAISED BY ASSESSEE ARE REPRODUCED HEREU NDER:- 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSMENT ORDER PASSED WAS IN VIOLATION OF PRINCIPALS OF NATURAL JU STICE HENCE IS BAD IN LAW AND BE QUASHED. 2. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LEARNED COMMISSIONER OF INCOME TAX APPEALS ERRED IN UPHOLDI NG THE PENALTY U/S. 271(1)(C) OF THE IT ACT 1961 ON THE ADDITION OF RS. 800,000. THE PENALTY U/S. 271(1)(C) OF THE IT ACT 1961 WAS UNCALLED FOR AN UN WARRANTED AND THUS THE SAME BE CANCELLED. 3. FOR THAT IN THE FACTS AND CIRCUMSTANCES THE PENA LTY ORDER U/S. 271(1)(C) OF THE IT ACT 1961 WAS BARRED BY LIMITATION AND HENCE BAD IN LAW AND BE QUASHED. 4. FOR THAT IN THE FACTS AND CIRCUMSTANCES THE PENA LTY ORDER U/S. 271(1)(C) OF THE IT ACT 1961 WAS WITHOUT JURISDICTION AND HENCE BAD IN LAW AND BE QUASHED. ITA NO.2654-56/KOL/2013 A .Y. 2005-06 BARNALI BANERJEE VS. ITO WD-31(1) KOL . PAGE 6 5. THE APPELLANT CRAVES LEAVE TO PRESS NEW, ADDITIO NAL GROUNDS OF APPEAL OR MODIFY, WITHDRAW ANY OF THE ABOVE GROUNDS AT THE TI ME OF HEARING OF THE APPEAL. 14. AT THE OUTSET, IT WAS OBSERVED THAT THE QUANTUM ADDITION MADE BY AUTHORITIES BELOW IN CONNECTION WITH UNDISCLOSED INVESTMENT MAD E UNDER SECTION 144 OF THE ACT HAS BEEN DELETED BY US IN THIS ORDER. ACCORDINGLY, GROUNDS RAISED BY ASSESSEE BECOMES INFRUCTUOUS. 15. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED A S INFRUCTUOUS. 16. IN COMBINED RESULT, ASSESSEES APPEAL IN ITA NO.265 4 & 2655/KOL/2013 STAND ALLOWED AND THAT OF ITA NO.2656/KOL/2013 DISM ISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON 12/08/2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP ! - 12/08/2016 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-BARNALI BANERJEE, C/O D J SHAH & CO, KAL YAN BHAVAN, 2 ENGIN ROA D, KOLKATA-700 020 2. /RESPONDENT- ITO WARD-31(1), 10B, MIDDLETON ROW, KO LKATA-71 3. '# % / CONCERNED CIT 4. % - / CIT (A) 5. &'( ))'# , '# / DR, ITAT, KOLKATA 6. (*+ / GUARD FILE. BY ORDER/ , /TRUE COPY/ / '#,