Smt. Indrani Sathe, Gurgaon V. ACIT, New Delhi

ITA 2775/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4089 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 16-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Keywords: Reasonable cause; Non compliance
• Section: 273B; 143(3); 142(1); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI A BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER, AND SHRI KULDIP SINGH , JUDICIAL MEMBER ITA NO S . 2765 TO 2771 /DEL/201 6 [ASSESSMENT YEAR S : 20 06 - 07 TO 2012 - 1 3 ] SHRI SUBHASH SATHE VS. THE A .C.I.T A 108, SUSHANT LOK CENTRAL CIRCLE - 6 GURGAON, HARYANA NEW DELHI PAN : AATPS 0704 L ITA NOS. 2775 TO 27 8 1/DEL/2016 [ASSESSMENT YEARS: 2006 - 07 TO 2012 - 13] SMT INDRANI SATHE VS. THE A.C.I.T A 108, SUSHANT LOK CENTRAL CIRCLE - 6 GURGAON, HARYANA NEW DELHI PAN : AATPS 0705 M [APPELLANT] [RESPONDENT] DATE OF HEARING : 0 4 . 0 1 .201 8 DATE OF PRONOUNCEMENT : 22 . 01 .201 8 ASSESSEE BY : SHRI SANJAY AGGARWAL, CA REVENUE BY : S HRI RAVI KANT GUPTA SR. DR ORDER PER B ENCH: - ALL THE ABOVE 14 APPEA L S FILED BY T WO DIFFERENT BUT CONNECTED ASSESSEE S ARE DIRECTED AGAINST THE TWO DIFFERENT ORDER S DATED 2 4 . 0 1 .201 4 OF COMMISSI ONER OF INCOME TAX (APPEALS) - 24 , NEW DELHI 2 AND RELATE TO ASSESSMENT YEAR S 20 06 - 07 TO 20 12 - 1 3 AGAINST THE CONFIRMATION OF PENALTY U/S 271(1)(B) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] . SINCE THE ISSUES IN ALL THE APPEA LS OF BOTH THE ASSESSEES WERE HEARD TOGETHER PERTAIN ING TO SAME GROUP OF ASSESSEE INVOLVING IDENTICAL ISSUES, THEREFORE, WE ARE DISPOSING THEM OFF TOGETHER BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. FIRST OF ALL, WE ARE TAKING UP THE MATTER OF SHRI SUBHASH SATHE IN ITA NO. 2767/DEL/2017 FOR ASSESSMENT YEAR 2007 - 08. OUR ORDER HEREIN BELOW SHALL BE IDENTICALLY APPLICABLE IN ALL THE OTHER YEARS IN THE CASE OF BOTH THE ASSESSEES. ITA NO. 2767/DEL/2017 [A.Y. 2007 - 08] 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW WHILE CONFIRMING THE LEVY OF PENALTY BY ID. AO U/S 271(L)(B) OF THE INCOME TAX ACT, 1961 OF RS.10,000/ - AND AS SUCH PENALTY OF RS.10,000/ - MAY PLEASE BE DELETED. 3 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY U/S 271(L)(B) OF THE INCOME TAX ACT, 1961 OF RS.10,000/ - LEVIED ON THE ASSESSEE WITHOUT CONSIDERING AND APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE REPLY DATED 30/12/2013 FILED BY THE ASSESSEE DURING THE PENALTY PROCEEDINGS. AND AS SUCH PENALTY OF RS.10,000/ - MAY PLEASE BE DELETED. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW WHILE CONFIRMING THE PENALTY U/S 271(L)(B) OF THE INCOME TAX ACT, 1961 DESPITE THE FACT THAT THE PROVISIONS OF SECTION 271(L)(B) OF THE INCOME TAX ACT, 1961 ARE NOT APPLICABLE TO THE PART - COMPLIANCE OF NOTICE U/S 142(1) OF THE INCOME TAX ACT, 1961 AND AS SUCH PENALTY OF RS.10,000/ - MAY PLEASE BE DELET ED. 4. WE CRAVE TO ADD, ALTER, DELETE & MODIFY ANY OF THE GROUND OF APPEAL AT THE TIME OF HEARING. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT HE ASSESSING OFFICER IN THE PRESENT CASE LEVIED PENALTY OF RS. 10,000/ - U/S 271(1)(B) OF THE ACT FOR NON F URNISHING OF INFORMATION AS REQUIRED U/S 142(1) OF THE ACT, WHICH ACTION OF THE ASSESSING OFFICER WAS CONFIRMED BY THE LD. CIT(A). 4 5. WE HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O AND THE LD. CIT(A) AND THE PAPE R BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS RELIED UPON BY BOTH THE SIDES. IT IS PERTINENT TO REPRODUCE THE ORDER O F THE ASSESSING OFFICER U/S 271(1)(B) OF THE ACT AS UNDER: NOTICES U/S 142(1) OF THE IT ACT WERE ISSUED TO THE ASSESSEE ON 10/12/2012 FOR COMPLIANCE BY 28/12/2012, 06/05/2013 FOR COMPLIANCE BY 15/05/2013 & 11/07/2013 FOR COMPLIANCE BY 18/07/2013. THE ASSESSEE HAS FILED REPLY VIDE LETTER DATED 15/05/2013 AND VIDE LETTER DATED 17/0772013. THE REPLY FURNISHED BY THE ASSESSEE IS NOT IN LINE WITH THE QUERIES RAISED IN THE ABOVE SAID NOTICES; HENCE THE REPLY OF THE ASSESSEE WILL NOT BE TREATED AS COMPLIANCE TO THE NOTICE ISSUED U/S 142(1) OF THE IT ACT 1961. ACCORDINGLY PENALTY NOTICE U/S 271(1) (B) OF THE IT ACT 1961 WAS ISSUED TO THE ASSESSEE ON 13/12/2013 REQUESTING HIM TO EXPLAIN AS TO WHY PENALTY UNDER SECTION 271(1 )(B) OF THE IT ACT MAY NOT BE IMPOSED UPON HIM FOR THE ALLEGED DEFAULT. THE ASSESSEE HAS FILED REPLY VIDE LETTER DATED 30/12/2013 AS UNDER: - 3. THAT THE ASSESSEE HAS DULY SUBMITTED THE INFORMATION IN RESPECT OF FOREIGN BANK ACCOUNT TO THE ASSESSEE'S KNOWLEDGE AND BELIEF WHILE DULY COMPLYING WITH THE NOTICES ISSUED U/S 142(1) OF THE ACT WITHIN THE SPECIFIED TIME. THE ASSESSEE DO NOT HAVE ANY 2 . 5 DOCUMENT/INFORMATION AVAILABLE OTHER THAN THE INFORMATION TUTORED TO THE ASSESSEE BY THE INCOME TAX OFFICIALS AND THE FACT HAS BEEN ALWAYS REITERATED BEFORE YOUR GOODSELF AND THE OTHER INCOME TAX OFFICIALS THROUGH VARIOUS LETTERS PLACED ON RECORD S. 5. EVEN THOUGH THE PROVISIONS OF SECTION 271(1)(B) OF THE ACT SHOULD NOT BE INVOKED IN THE CASE OF ASSESSEE IS COMPLETELY UNAWARE ABOUT THE EXISTENCE OF ALLEGED BANK ACCOUNT IN HSBC BANK OUTSIDE INDIA. THE FACT HAS BEEN UNVARYINGLY SUBMITTED DURING THE SEARCH AND POST - SEARCH PROCEEDINGS BEFORE THE ASSISTANT DIRECTOR OF INCOME TAX (LNV.) - VI(1) AND DURING THE ASSESSMENT PROCEEDINGS BEFORE YOUR GOODSELF ALSO THROUGH VARIOUS REPLIES AVAILABLE ON RECORD. 6. THAT THE ASSESSEE DESIRES TO BRING YOUR ATTENTION TOWARDS THE ANSWERS OF THE ASSESSEE, SH. SUBHASH SATHE TO THE QUESTIONS ASKED VIDE STATEMENT RECORDED U/S 132(4 ) OF THE ACT ON THE DATE OF SEARCH I.E. 09/11/2011 AT THE RESIDENCE OF THE ASSESSEE REGARDING THE ALLEGED FOREIGN BANK ACCOUNT. IT IS PERTINENT T O NOTE THAT EXCEPT ONCE THE ASSESSEE HAS CONTINUALLY NOT ACCEPTED THE FAD REGARDING HAVING THE ALLEGED FOREIGN BANK ACCOUNT. IN THIS REGARD, IT IS SUBMITTED THAT AT THE OUTSET, THE ASSESSEE HAD ONLY PROVIDED THE DETAILS OF INDIAN BANK ACCOUNTS WHICH ITSELF DEMONSTRATE THAT NO FOREIGN ACCOUNT WAS MAINTAINED BY THE ASSESSEE. SUBSEQUENTLY, AFTER RESUMING THE STATEMENT AFTER PHYSICAL SEARCH OF PREMISES, THE ASSESSEE WAS GIVEN ASKED THE QUESTION WHETHER ANY OTHER BANK ACCOUNTS ARE MAINTAINED BY THE ASSESSEE OR N OT. IN THE MEANTIME, ASSESSEE WAS PRESSURIZED TO 6 ACCEPT THAT THEY ARE MAINTAINING THE ALLEGED FOREIGN BANK ACCOUNT BY SHOWING THE ASSESSEE CERTAIN DOCUMENTS HAVING THE ALLEGED DETAILS. AS A RESULT, THE ASSESSEE WAS CARRIED AWAY BY THE DEPARTMENT AND RELIED ON THE DOCUMENTS SHOWN TO THE ASSESSEE HAVING CERTAIN INFORMATION THINKING THAT SOME WINDFALL HAS COME TO HIS KITTY AND SOMEBODY MIGHT HAVE MADE THE' ASSESSEE BENEFICIARY AS THE INFORMATION WAS BEING SHOWN BY A RESPONSIBLE OFFICE OF INCOME TAX DEPARTMENT AND THUS, ACCEPTED THE DETAILS OF DOCUMENTS AS HIS OWN AND GAVE SUCH STATEMENT ON BEING TUTORED TO THE ASS E SSE E THE ABOVE REPLY OF THE ASSESSEE HAS DULY BEEN CONSIDERED WHICH HAS NOT BEEN FOUNDED CONVINCING. 3. IT IS PERTINENT TO MENTION HERE THAT DURING THE COURSE OF SEARCH OPERATION WHILE RECORDING THE STATEMENT OF SH. SUBHASH VASANT SATHE ON 09/11/2011, SPECIFIC QUESTIONS WERE ASKED ON THE ISSUE. A COMPREHENSIVE STATEMENT OF SH. SUBHASH VASANT SATHE WAS RECORDED DURING THE SEARCH. THE RELEVANT PORTION OF THE STATEMENT OF SH. SUBHASH VASANT SATHE RECORDED ON 09/11/2011 IS REPRODUCED AS UNDER: - Q 36 IN REPLY TO Q NO 13, YOU HAVE REPLIED THAT YOUR FAMILY MEMBERS ARE HAVING THREE BANK ACCOUNTS IN THE JOINT NAMES OF YOURSELF AND YOUR WIFE AND ONE A/C IN THE NAME OF YOUR DAUGHTER IN GURGAON. PLEASE STATE WHE HER YOU OR YOUR FAMILY MEMBERS ARE OPERATING A/C IN ANY OTHER BAN < IN INDIA OR ABROAD? 7 ANS : BESIDES T H REE ACCOUNTS MENTIONED BY ME IN ANSWER TO Q NO 13, I AM NOW ABLE TO RECALL T HAT I HAVE ONE ACCOUN T AT HSBC, GENEVA WITH JOINT NAME OF MY WIFE SMT. INDRANI S. SATHE. Q. NO. 37. KINDLY FURNISH THE DETAILS OF ABOVE MENTIONED BANK ACCOUNT? ANS THE ABOVE MENTIONED BANK ACCOUNT AS I HAVE SAID AS IN THE JOIN N AME OF MINE AND MY WIFE SMT. INDRANI S. SATHE. IBAN IS CH 1608689050911000460 AND CH 8508689050911000479 AND CLIENT PROFILE CODE IS 5094492065 FOR MY NAME SUBHASH VASANT SATHE THE AND CLIENT PROFILE CODE FOR MY WIFE SMT. INDRANI SATHE IS ALSO THE SAME. BUP NUMBER 5090153908. Q 43 DO YOU WANT TO SAY ANYTHING? ANS : YES, I WANT TO STATE THAT THE RS. 56 LACS SEIZED FROM MY PREMISE TODAY MAY KINDLY BE ADJUSTED AGAINST TAX LIABILITY ARISING ON ME FOR THE MONEY DEPOSITED IN BANK ACCOUNTS ABROAD. THIS LIABILITY OF TAX MAY COME AROUND AS PER MY UNDERSTANDING RS. 1.5 TO 2 CRORES OR ANY OTHER AMOUNT OR ANY OTHER TAX LIABILITY OUTSTANDING OR ARISING AGAINST ME. THANK YOU 8 IT IS CLEAR FROM THE STATEMENT OF SH. SUBHASH VASANT SATHE THAT DURING THE COURSE OF THE SEARCH OPERATION IN HIS STATEMENT, HE H AS ACCEPTED THAT HE IS HAVING FOREIGN BAN K ACCOUNT ABROAD. IN THE STA TEMENT RECOR D ED ON 9/11/2011 SO MUCH SO THAT SHRI SUB BHASH VASANT SATHE EVEN CONFESSED TO PAY THE TAX LIABILITY OUTSTANDING OR A RISING AGAINST HIM ON THE AMOUNTS DEPOSITED IN HSBC ACCOUNTS. IN VIEW OF THE ABOVE IT IS CRYSTAL CLEAR THAT THE ASSESSEE HAS HIMSELF ADMITTED ON OATH THAT IT IS HAVING BANK ACCOUNT IN HSBC. HE HAS EVEN PROVIDED THE A/C NO., CLIENT PROFILE CODE & THE BUP NUMBER IN HIS STATEMENT ON OATH. THE ASSESSEE HAS NO GROUND TO SAY THAT IT WAS TUTORED BY DEPARTMENT TO GIVE THESE DETAILS. THE PLEA OF THE ASSESSEE CANNOT BE ACCEPTED IN VIEW OF HIS CATEGORICAL ACCEPTANCE OF THIS BANK A/C IN HSBC, GENEVA, DURING THE COURSE OF SEARCH PROCEEDINGS. ' 4. KEEPING IN VIEW THE ASSESSEE'S FAIL URE TO COMPLY WITH THE QUERIES RA I SED IN THE AFORESAID NOTICE PENALTY OF RS. 10,000/ - IS HEREBY IMPOSED UPON THE ASSESSEE FOR NON COMPLIANCE U/S 271(1)(B) OF THE ACT. 6. FROM THE PERUSAL OF THE ORDER AND ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE, WE FIND THAT THE ASSESSEE HAS COMPLIED WITH THE VARIOUS NOTICES ISSUED U/S 142(1) OF THE ACT AS UNDER: 9 SL. NO DATE OF NOTICE U/S 142(1) DATE FIXED FOR COMPLIANCE DATE OF COMPLIANCE BY THE ASSESSEE 1. 10.12.2012 [PB PG NO. 1 TO 35] 28.12.2012 28.12.2012 [PB PG. NO. 54] 2. 06.05.2013 [PB PG. NO. 36 TO 38] 15.05.2013 15.05.2013 [PB PG. NO. 69 TO 71] 3. 11.07.2013 [PB PG. NO. 40 TO 43] 18.07.2013 17.07.2013 PB NO. 72 - 73 7. AS A MATTER OF FACT, IN REPLY TO THE NOTICE, THE ASSESSING OFFICER REQUIRED COPY OF INCOME TAX RETURN, ANNEXURE OF RETURN OF INCOME WITH AUDIT REPORT, COMPUTATION CHART, ETC. THE ASSESSEE FILED ADJOURNMENT APPLICATION WITH A PLEADING THAT THE DETAILS AND DOCUMENTS ARE UNDER PREPARATION AND THE CASE WAS ADJOURNED FOR 3.1.2013, ON WHICH DATE THE RETURN OF INCOME WAS FILED. LETTER DATED 20.12.2012 AND 03.01.2013 ARE PLACED AT PAGES 54 TO 68. ACCORDINGLY, FIRST NOTICE U / S 142(1) OF THE ACT DATED 10.12.2012 HAS BEEN COMPLIED. 8. AS REGARDS SECOND NOTICE DATED 6.5.2013 WHICH WAS TO BE COMPLIED ON 15.5.2013, HAS, IN FACT, BEEN COMPLIED ON THE SAID D ATED WHERE THE ASSESSING OFFICER ASKED FOR DETAILS OF QUESTIONNAIRE, OWNERSHIP OF THE ACCOUNT, ETC. ON THE SAID DATED I.E. 15.05.2013, THE ASSESSEE SUBMITTED PART REPLY. THE SAID REPLY IS PLACED AT PAPER BOOK 10 PAGES 69 TO 71. ACCORDINGLY, THE SAID NOTICE U/S 142(1) ALSO STANDS COMPLIED WITH. 9. AS REGARDS THE THIRD NOTICE U/S 142(1) DATED 11.07.2013 WHICH WAS TO BE COMPLIED BY 18.07.2013 HAS BEEN COMPLIED ON 17.07.2013, WHERE INFORMATION ABOUT HSBC BANK OR ANY FOREIGN BANK WERE ASKED FOR. THE ASSESSEE COM PLIED WITH SAME PLEADING THAT IF ANY ALLEGED ACCOUNT EXISTS, THE INCOME TAX DEPARTMENT MAY CALL FOR INFORMATION AND THE SAID REPLY IS AVAILABLE AT PAPER BOOKS PAGES 72 & 73. 10. AS REGARDS THE STATEMENT RECORDED DURING SEARCH OPERATION ON 09.11.2011, WHER E THE ASSESSEE SHRI SUBHASH SATHE AGREE TO THE BANK ACCOUNT AND AS PER THE ANSWER TO QUESTION NO. 43, HE AGREED TO ADJUST RS. 56 LAKHS SEIZED FROM HIS BANK ACCOUNT. ACCORDING TO US, THE ASSESSEE HAVING COMPLIED WITH THE PROVISIONS OF SECTION 142(1) OF THE ACT , PENALTY U/S 271(1)(B) OF THE ACT CANNOT BE LEVIED. AS PER SECTION 271(1)(B) OF THE ACT, THE ASSESSING OFFICER OR THE LD. CIT, IF SATISFIED THAT ANY PERSON FAILS TO COMPLY WITH THE NOTICE U/S 142(1) OF THE ACT, THEN A SUM OF RS. 10,000/ - FOR EACH FA ILURE HAS TO BE LEVIED, IN THE PRESENT CASE, THE ASSESSEE HAVING COMPLIED WITH ALL THE NOTICES U/S 11 142(1) OF THE ACT AND THERE IS A REASONABLE CAUSE U/S 273B OF THE ACT, THEREFORE, NO PENALTY U/S 271(1)(B) OF HT ACT CAN BE LEVIED. 11. ASSESSMENT IN THE P RESENT CASE HAS ALREADY BEEN COMPLETED FOR THE IMPUGNED A.Y. U/S 152A R.W.S 143(3) OF THE ACT FOR ASSESSMENT YEAR 2006 - 07 TO 2011 - 12 AND U/S 143(3) OF THE ACT FOR ASSESSMENT YEAR 2012 - 13 VIDE ORDER DATED 27.02.2015 HAS BEEN COMPLETED WHERE THE ADDITIONS IN DIFFERENT YEARS HAVE BEEN MADE AS IS EVIDENT FROM THE ORDERS PLACED AT PAGES 171 TO 257 OF THE LD. CIT(A) AGAINST THE ORDER OF ASSESSMENT U/S 153A/143(3) DATED 28.03.2016. ACCORDINGLY, IN THE PRESENT CIRCUMSTANCES AND FACTS OF THE CASE AND THE ORDER HAVI NG BEEN PASSED U/S 153A/143(3) OF THE ACT WE SET ASIDE THE IMPUGNED PENALTY ORDER AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY. THUS, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 2767/DE/2016 IS ALLOWED. 13. NOW WE TAKE UP THE REMAINING APPEALS OF THE ASSESSEE SHRI SUBHASH SATHE IN ITA NO. 2565 & 2566, 2768 TO 2771/DEL/16 FOR THE DIFFERENT ASSESSMENT YEARS AS MENTIONED HEREINABOVE AND THE GROUNDS 12 OF APPEAL ARE ALSO IDENTICAL AS I N THE CASE OF 2767/DEL/2016 DECIDED BY US HEREINABOVE. ACCORDINGLY, OUR ORDER HEREINABOVE SHALL IDENTICALLY BE APPLICABLE IN THE SAID APPEALS AND ACCORDINGLY, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. 14. NOW WE TAKE UP THE APPEALS IN THE CASE OF THE OTHER ASSESSEE NAMELY, SMT. INDRANI SATHE WHERE GROUNDS OF APPEAL ARE IDENTICAL AND FACTS ARE ALSO IDENTICAL AS IN THE CASE OF SUBHASH SATHE IN ITA NO. 2765/DEL/2016 DECIDED BY US. ACCORDINGLY, OUR ORDER HEREI NABOVE IN THE CASE OF SUBHASH SATHE SHALL BE IDENTICALLY APPLICABLE IN THIS CASE AS WELL. THEREFORE, THE PENALTY SO LEVIED IN EACH YEAR IN THE CASE OF INDRANI SATHE IS DIRECTED TO BE DELETED. ALL THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 15 IN THE RES ULT, ALL THE APPEALS OF BOTH THE ASSESSEE ARE ALLOWED. THE ORDER IS PRONO UNCED IN THE OPEN COURT ON 2 2 . 01.2018 . SD/ - SD/ - [ KULDIP SINGH ] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 2 N D JANUARY, 2018 VL/ 13 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI