Shri Chiragkumar Kantilal Patel, Surat V. The Income tax Officer,Ward-6(1), Surat

ITA 2890/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1731 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 26-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Keywords: Period of limitation; Additional evidence; Time period of passing order
• Section: 143(3)

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA .NO.2890/AHD/2012 [ASSTT.YEAR 2008-09] SHRI CHIRAGKUMAR KANTILAL PATEL 3, SANDHYA SADAN GANGAPUR, NAVA FALIA GANAGDHARA, PALSANA 394 315 DIST : SURAT. VS ITO, WARD - 6(1) SURAT. )* / (APPELLANT) +, )* / (RESPONDENT) ASSESSEE BY : MS.URVASHI SHODHAN, AR REVENUE BY : SHRI NARENDRA SINGH, SR.DR / DATE OF HEARING : 03/03/2016 / DATE OF PRONOUNCEMENT: 02/05/2016 -./ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: AGGRIEVED WITH THE CONFIRMATION OF PENALTY OF RS.2, 39,259/- UNDER SECTION 271(1)(C) OF THE ACT, THE ASSESSEE IS IN APPEAL BEF ORE US AGAINST THE ORDER OF THE LD.CIT(A)-I, SURAT DATED 24.10.2012 PASSED IN THE A SSTT.YEAR 2008-09. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HIS RETURN OF INCOME ON 25.3.2009 DECLARING TOTAL INCOME AT RS.1,23,910/-. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE WAS MAINTAININ G A SAVING BANK ACCOUNT WITH KOTAK MAHINDRA BANK LTD. HE HAD DEPOSITED A CASH O F RS.9,78,290/- DURING THE F.Y.2007-08 RELEVANT TO THE PRESENT ASSESSMENT YEAR . WHEN THE AO CONFRONTED THE ASSESSEE WITH REGARD TO SOURCE OF THE DEPOSITS IN T HE ACCOUNTS, ASSESSEE SURRENDERED THE UNEXPLAINED DEPOSITS IN THE ACCOUNT. ACCORDING LY, AN ASSESSMENT ORDER WAS PASSED ON 29.11.2010 UNDER SECTION 143(3) OF THE AC T. IN THIS WAY, THE INCOME OF ITA NO.2890/AHD/2012 2 THE ASSESSEE WAS DETERMINED AT RS.9,49,300/-. THE ASSESSEE DID NOT CHALLENGE THIS ORDER IN APPEAL BEFORE THE LD.CIT(A) FOR MORE THAN A PERIOD OF 18 MONTHS. WHEN THE PENALTY PROCEEDINGS WERE INITIATED, HE FILED AN APPEAL ALONG WITH APPLICATION FOR CONDONATION OF DELAY. THIS APPEAL WAS DISMISSED BY THE LD.CIT(A) VIDE ORDER DATED 24.10.2012. THE LD.AO HAS INITIATED PENALTY PROCEE DINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. ACCORDING TO THE AO, THE ASSES SEE DID NOT GIVE ANY REPLY, HENCE, HE IMPOSED PENALTY OF RS.2,39,259/- UNDER SE CTION 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME, WHICH LEAD TO CONCEALMENT. 3. THE APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RE LIEF TO THE ASSESSEE. 4. BEFORE THE TRIBUNAL, IT WAS CONTENDED BY THE ASS ESSEE THAT HIS WIFE WAS RUNNING A BUSINESS IN THE NAME OF SAFAR HOLIDAYS. SOME OF THE AMOUNTS WERE DEPOSITED BY HER IN HIS ACCOUNT. SIMILARLY, ANOTHE R BUSINESS IN THE NAME OF DEV HOLIDAYS WAS ALSO UNDERTAKEN BY THE HUF AND THE AS SESSEE IS THE MEMBER OF THE HUF. SOME OF THE AMOUNTS HAD COME FROM THAT ACCOUN T. THE TRIBUNAL HAS ACCEPTED THIS CONTENTION OF THE ASSESSEE AND ALLOWE D THE APPEAL VIDE ORDER DATED 22.2.2013. THEREAFTER, THE REVENUE HAS FILED MA NO .181/AHD/2013. IN THE MA, IT WAS PLEADED THAT NO SUCH PLEA WAS TAKEN BY THE ASSE SSEE EITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR IN THE PENALTY PROCEEDING S. THEREFORE, THIS REASON CANNOT BE TAKEN IN FAVOUR OF THE ASSESSEE FOR DELETING THE PENALTY. THE TRIBUNAL FINDING AN APPARENT ERROR IN ITS ORDER, RECALLED THE ORDER ON 30.5.2014. THUS, THE APPEAL HAS COME UP BEFORE US FOR ADJUDICATION ON MERIT. 5. THE LD.COUNSEL FOR THE ASSESSEE HAS FILED AN APP LICATION FOR PERMISSION TO PLACE ON RECORD ADDITIONAL EVIDENCE. ALONG WITH AP PLICATION, SHE HAS PLACED ON RECORD COPY OF THE INCOME TAX RETURN OF MRS.MANISHA CHIRAG PATEL I.E. WIFE OF THE ASSESSEE. SHE HAS ALSO SOUGHT TO PLACE ON RECORD P ROFIT & LOSS ACCOUNT. ON THE STRENGTH OF THESE DOCUMENTS, SHE HAS DEMONSTRATED T HAT THE ASSESSEE HAS SURRENDERED THE INCOME IN ORDER TO BUY PEACE OF MIND, OTHERWISE , HE HAS AN EXPLANATION FOR THE AMOUNTS DEPOSITED IN THE SAVING BANK ACCOUNT. ITA NO.2890/AHD/2012 3 6. THE LD.DR ON THE OTHER HAND CONTENDED THAT AT TH IS STAGE HE SHOULD NOT BE PERMITTED TO PLACE ON RECORD ADDITIONAL EVIDENCE. 7. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE CASE OF THE ASSESSEE IS THAT HE HAS SURRENDERED THE AMOUNTS DEPOSITED IN CASH IN THE SAVING BANK ACCOUNT IN ORDER TO BUY PEACE AND AVOID LITIGATION. HE WAS NOT AWARE THAT THE DEPARTMENT WILL INITIATE PEN ALTY PROCEEDING ALSO. HIS COUNSEL, SHRI ASHISH MODI, CHARTERED ACCOUNTANT HAS KEPT HIM IN DARK. HE DID NOT CHALLENGE THE ORDER OF THE AO BEFORE THE CIT(A) IN THE QUANTUM PROCEEDINGS. AS FAR AS THE STAND OF THE LD.DR IS THAT THE ASSESSEE SHOULD NOT BE PERMITTED TO SUBMIT ADDITIONAL EVIDENCE AT THIS SECOND APPELLATE STAGE IS CONCERNED, WE HAVE MINUTELY PERUSED THE PENALTY ORDER. A PERUSAL OF THE PENALT Y ORDER WOULD INDICATE THAT IT IS RUNNING INTO TWO-AND-HALF PAGES. FIRST TWO PAGES A LMOST DEVOTED BY THE AO TO NARRATE THE BACKGROUND OF THE ADDITION. IT DOES NO T DISCLOSE WHEN A NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT WAS ISSUED TO THE ASSESSEE FOR THE FIRST TIME. IN PARAGRAPH-3, THE ORDER STATES THAT DUE TO CHANGE OF INCUMBENT A NOTICE UNDER SECTION 274 R.W.S 271 HAS BEEN ISSUED ON 10.5.2011, TILL PASSING OF THE IMPUGNED ORDER NO REPLY WAS RECEIVED FROM THE ASSESSEE. THE PENALTY ORDER WAS PASSED ON 30.5.2011. IT NOWHERE DEMONSTRATES WHEN THE NOTICE WAS ISSUED TO THE ASSESSEE, AND WHETHER THAT NOTICE WAS SERVED UPON THE ASSESSEE OR NOT. THE AO HAS MENTIONED THAT THE NOTICE WAS ISSUED ON 10.5.2011. WHAT WAS THE NEXT DATE FIXED IN THE NOTICE FOR REPLY OF THE ASSESSEE, IS NOT DISCERNIBLE. IF WE ASSUME THAT SOME DATE WAS GIVEN PRIOR TO THE DATE OF PASSING ORDER, THEN ALSO THERE WAS JUST 20 DAYS TIME FOR THE ASSESSEE TO EXPLAIN HIS POSITION. IN OUR OPINION, IT IS NOT A SUFFICIENT TIME. SIMILARLY ORDER OF THE LD.CIT(A) IS TOTALLY NON-SPEAKING. LE T US TAKE NOTE OF THE FINDING RECORDED BY THE LD.CIT(A). IT READS AS UNDER: 6.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, I T WAS NOTICED THAT THE APPELLANT WAS MAINTAINING UNDISCLOSED BANK A/C ( NO . 08170140002108) WITH KOTAK MAHINDRA BANK LTD, BARDOLI BRANCH, IN WH ICH THERE WERE CASH DEPOSITS. THE APPELLANT ADMITTED THAT IT WAS UNDISC LOSED BANK ACCOUNT AND OFFERED FOR TAX THE INCOME IN RESPECT OF UNDISCLOSE D TRANSACTIONS, I.E. CASH DEPOSITS MADE IN THE SAID BANK ACCOUNT, APART FROM INTEREST ON UNDISCLOSED F.DS ITA NO.2890/AHD/2012 4 6.2 THE CASH DEPOSITS WERE TO THE EXTENT OF RS.8,2 5,390/- AND THE UNDISCLOSED INTEREST WAS RS 3,5107- . NO APPEAL WAS FILED AGAINST THE ASSESSMENT ORDER WITHIN LIMITATION PERIOD U/S 249 ( 3) OF THE ACT. 6.3 DURING THE APPELLATE PROCEEDINGS, THE APPELLANT SUBMITTED THAT NO PENALTY CAN BE IMPOSED, AS THE APPELLANT HAD VOLUNT ARILY OFFERED THE ADDITIONAL INCOME, BEFORE THE ASSESSING OFFICER. 6.4 THE APPELLANTS CONTENTION IS NOT CORRECT AS TH E ASSESSING OFFICER HAD DETECTED THE UNDISCLOSED BANK ACCOUNT DURING ASSESS MENT PROCEEDINGS. ONLY AFTER AFTERWT THE APPELLANT OFFERED THE INCOME IN R ESPECT OF THE SAME. 6.5 THE PENALTY ORDER, WHICH . IS THE SUBJECT MATTER OF PRESENT APPEAL HAS BEEN PASSED IMPOSING PENALTY IN RESPECT OF TWO ADDITIONS OF RS 8,25,390/- AND RS. 3,510/. 6.6 CONSIDERING THE SAME, PENALTY IMPOSED BY THE ASSESSING OFFICER IS CONFIRMED. 8. WHERE IS THE APPLICATION OF MIND AT THE END OF T HE LD.CIT(A) ? WHEN AN OPPORTUNITY WAS GIVEN TO THE ASSESSEE ? KEEPING TH ESE FACTS IN MIND, WE ALLOW THE APPLICATION OF THE ASSESSEE FOR PERMISSION TO LEAD ADDITIONAL EVIDENCE. SINCE COMMENTS OF THE AO ON THE FRESH EVIDENCE ARE REQUIR ED, THEREFORE, WE SET ASIDE THE IMPUGNED ORDERS AND RESTORE PENALTY PROCEEDINGS TO THE FILE OF THE AO FOR RE- ADJUDICATION. THE ASSESSEE WILL BE GIVEN OPPORTUNI TY TO PRODUCE ANY EVIDENCE OR EXPLANATION IN SUPPORT OF HIS CLAIM. IT IS NEEDLES S TO SAY THAT THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJURE THE CASE OF THE AO AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE APPEAL OF THE A SSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 2 ND MAY, 2016 AT AHMEDABAD. SD/- SD/- ( MANISH BORAD ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 02/05/2016