SHALIN TANDON (LEGAL HEIR OF LATE SHRI SANDEEP TANDON), MUMBAI V. JT. CIT -19(2), MUMBAI

ITA 3284/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7216 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 16-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ARUN KUMAR LD DR
• Assessee Lawyers: JITENDRA JAIN LD
• Keywords: Peak credit; Reasonable cause; Reassessment proceedings
• Section: 271(1)(c); 273B; 143(3); 133(6); 131; 2

Judgement Text

1 ITA NO.3284/MUM/2018 ASSESSMENT YEAR-2007-08 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI SANDEEP GOSAIN, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.3284/MUM/2018 ( / ASSESSMENT YEAR: 2007-08) SHRI SHALIN TANDON (LEGAL HEIR OF LATE SHRI SANDEEP TANDON) 147, 4 TH FLOOR ATLANTA, NARIMAN POINT MUMBAI-400 021. / VS. JCIT - 19(2) MUMBAI 400 021 ./ ./PAN/GIR NO. AAAPT-1953-H ( /APPELLANT ) : ( ! / RESPONDENT ) '#$ / APPELLANT BY : SHRI JITENDRA JAIN- LD.AR ! '# $ / RESPONDENT BY : CHAUDHURY ARUN KUMAR, LD. DR % '#& / DATE OF HEARING : 08/07/2019 ''#& / DATE OF PRONOUNCEMENT : 30/07/2019 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. SECTION 272A(2)(C) OF THE INCOME TAX ACT, 1961 ( IN SHORT ACT) PROVIDES THAT IF ANY PERSON FAILS TO FURNISH IN DUE TIME ANY OF THE RETURNS, STATEMENTS OR PARTICULARS MENTIONED IN SECTION 133 OR SECTION 206 OR 2 ITA NO.3284/MUM/2018 ASSESSMENT YEAR-2007-08 SECTION 206C OR SECTION 285B THEN HE SHALL PAY, BY WAY OF PENALTY, A SUM OF RS.100/- FOR EVERY DAY DURING WHICH THE FAILURE CONTINUES. SIMILARLY, AS PER THE PROVISIONS OF SECTION 272A(1)(B), IF ANY PE RSON REFUSES TO SIGN ANY STATEMENT MADE BY HIM IN THE COURSE OF ANY PROCEEDI NGS UNDER THIS ACT, WHICH AN INCOME TAX AUTHORITY MAY LEGALLY REQUIRE H IM TO SIGN, HE SHALL PAY, BY WAY OF PENALTY, A SUM OF RS.10,000/- FOR EA CH SUCH DEFAULT OR FAILURE. SECTION 273B EXONERATE ASSESSEE FROM IMPOS ITION OF PENALTY U/S 272(A)(1) / (2), IF THE ASSESSEE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. AS PER CLAUSE(6) OF SECTION 133 O F THE ACT, THE AUTHORITIES MAY REQUIRE ANY PERSON TO FURNISH INFORMATION IN RE LATION TO SUCH POINTS OR MATTERS OR FURNISH STATEMENTS OF ACCOUNT AND AFFAIR S IN THE PRESCRIBED MANNER GIVING INFORMATION IN RELATION TO SUCH POINT S OR MATTERS AS IN THE OPINION OF AUTHORITIES WILL BE USEFUL OR RELEVANT T O ANY ENQUIRY OR PROCEEDINGS UNDER THE ACT. 2.1 INVOKING THE PROVISIONS OF SECTION 272A(2)(C) A GAINST THE LEGAL HEIR NAMELY MR. SHALIN TANDON, WHO HAPPENS TO BE A LEGAL HEIR OF HIS DECEASED FATHER NAMELY LATE SH. SANDEEP TANDON, LD. JOINT CO MMISSIONER OF INCOME TAX, RANGE-19(2), MUMBAI IMPOSED A PENALTY O F RS.36,400/- VIDE ORDER DATED 30/12/2014 ON ACCOUNT OF WILLFUL NON-CO MPLIANCE OF NOTICE DATED 19/12/2013 ISSUED U/S 133(6) OF THE ACT. WHILE DOIN G SO, THE REQUISITE SHOW- CAUSE NOTICE U/S 274 R.W.S. 272A(2)(C) WAS ISSUED T O THE ASSESSEE ON VARIOUS DATES. AS PER MATERIAL ON RECORD, THE DECEA SED ASSESSEE EXPIRED ON 17/03/2010. 3 ITA NO.3284/MUM/2018 ASSESSMENT YEAR-2007-08 2.2 THE FACTS LEADING TO THE IMPOSITION OF SAID PEN ALTY ARE THAT THE ASSESSEE, BEING LEGAL HEIR OF HIS FATHER, WAS ASSES SED IN RESPECT OF HIS FATHERS INCOME U/S 143(3) R.W.S. 147 ON 23/03/2015 WHEREIN THE INCOME WAS DETERMINED AT RS.28.09 CRORES. THE REASSESSMENT PROCEEDINGS WERE TRIGGERED PURSUANT TO RECEIPT OF CERTAIN DOCUMENT ( REFERRED TO AS A BASE NOTE) CONTAINING PERSONAL DETAILS OF THE DECEASED A SSESSEE AND DETAILS OF BANK ACCOUNT HELD BY THE DECEASED ASSESSEE IN HSBC BANK, GENEVA. THESE DETAILS WERE CONFRONTED TO THE LEGAL HEIR, WH O WHILE DENYING HAVING ANY KNOWLEDGE OF THE BANK ACCOUNT, VOLUNTARILY PAID TAXES ON THE PEAK BALANCE BASED ON THE QUANTUM PROVIDED BY THE DEPART MENT. THE SAID ADMISSION WAS STATED TO BE MADE TO BUY PEACE OF MIN D AND TO AVOID LONG DRAWN LITIGATION AND CONSEQUENT ADVERSE PUBLICITY T O THE DEPARTED SOUL. 2.3 DURING ASSESSMENT PROCEEDINGS, THE LEGAL HEIR W AS ASKED TO SUBMIT THE COMPLETE COPY OF THE STATEMENT OF BANK ACCOUNT IN HSBC, GENEVA RIGHT FROM ITS INCEPTION TILL DATE. IN THE ABSENCE OF NON -AVAILABILITY, HE WAS REQUESTED TO FILL UP CONSENT WAIVER FORM WHICH WAS NOTHING BUT CONSENT TO HSBC BANK, GENEVA TO FORWARD THE REQUISITE ACCOUNT DETAILS TO THE REVENUE AUTHORITIES. THE ASSESSEE DENIED HAVING OWNERSHIP O F ANY BANK ACCOUNT IN HSBC, GENEVA AND SUBMITTED THAT HE HAD NEVER BEEN A UTHORIZED SIGNATORY OR BENEFICIAL OWNER AT ANY TIME OF THE ALLEGED ACCO UNT. RESULTANTLY PEAK BALANCE OF RS.20.22 CRORES WAS ADDED U/S 69A OF THE ACT, WHILE FRAMING THE ASSESSMENT. AT THE SAME TIME, THE ASSESSEE WAS SADD LED WITH PENALTY OF RS.36,400/- U/S 272A(2)(C) FOR NON-COMPLIANCE OF NO TICE DATED 19/12/2013 ISSUED U/S 133(6) VIDE PENALTY ORDER DATED 30/12/20 14.THE SAME, UPON 4 ITA NO.3284/MUM/2018 ASSESSMENT YEAR-2007-08 CONFIRMATION BY LD. FIRST APPELLATE AUTHORITY, IS U NDER CHALLENGE BEFORE US. THE GROUNDS RAISED BEFORE US READ AS UNDER: - 1. THE COMMISSIONER OF INCOME TAX (APPEALS)-2, MUMB AI (HEREINAFTER 'CIT(A)') ERRED IN CONFIRMING THE ORDER PASSED BY THE AO U/S 272A (2)( C) OF THE I.T. ACT. THE APPELLANT SUBMITS THAT THE PENALTY ORDER PASSED BY THE AO IS BAD IN LAW, CONTRARY TO THE PROVISION OF THE ACT AND DESERVES TO BE QUASHED. 2. (A) THE CIT(A) ERRED IN CONFIRMING PENALTY OF RS . 36,400/- U/S 272A(2)(C) OF THE I.T. ACT BEING ONE HUNDRED RUPEES FOR EVERY DAY DURING WHICH THE ALLEGED FAILURE TO COMPLY WITH NOTICE ISSUED U/S 133(6) OF THE I.T. ACT CONTINUES (I.E. FROM 31.12.2013 TO 30.12.2014). (B) THE CIT(A) ERRED IN CONFIRMING THE ACTION OF AO IN STATING THAT THE APPELLANT HAS NOT COMPLIED WITH THE NOTICE ISSUED U/S 133(6) OF THE I .T. ACT. THE APPELLANT SUBMITS THAT IN THE FACT AND CIRCUMST ANCES OF THE CASE, HE HAS DULY COMPLIED WITH THE NOTICE ISSUED U/S 133(6) OF THE I.T. ACT A ND PROVIDED THE INFORMATION AVAILABLE WITH HIM; HENCE, PENALTY LEVIED U/S 272A(2)(C) OF THE I. T. ACT SHALL BE DELETED. (C) THE CIT(A) ERRED IN CONFIRMING THE ACTION OF AO IN INVOKING THE PROVISION OF SECTION 133(6) OF THE I.T. ACT REQUESTING THE APPELLANT TO SIGN AND SUBMIT THE CONSENT WAIVER FORM. THE APPELLANT SUBMITS THAT THE CONSENT WAIVER FORM NEITHER CONSTITUTE 'INFORMATION IN RELATION TO SUCH POINTS OR MATTERS' NOR 'STATEMENT OF ACCOUNTS AND AFFAIRS'; HENCE, THE SAME CANNOT BE CALLED FOR BY INVOKING SECTION 133(6) OF THE I.T. ACT. 2.4 THE LD. AUTHORIZED REPRESENTATIVE, ON THE STREN GTH OF DOCUMENTS PLACED IN THE PAPER-BOOK ASSAILED THE PENALTY AS CO NFIRMED BY LD. CIT(A). RELIANCE HAS BEEN PLACED ON THE DECISION OF HONBLE MADRAS HIGH COURT RENDERED IN CIT V/S LATE DR. K.C.G VERGHESE [TCA NO. 854 OF 201 7 DATED 20/02/2018] TO SUBMIT THE PENALTY WAS NEVER INVOKED AGAINST THE DECEASED ASSESSEE AND THEREFORE, THE IMPOSITION OF PENALTY ON LEGAL HEIR WAS NOT JUSTIFIED FOR MERE NON-SIGNING OF CONSENT W AIVER FORM. ON THE OTHER HAND, LD. DR SUPPORTED THE IMPOSITION OF PENALTY. 3.1 WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS, PERUSED RELEVANT MATERIAL ON RECORD & DELIBERATED ON JUDICIAL PRONOU NCEMENTS AS CITED BEFORE US. WE HAVE ALSO APPRECIATED THE STATUTORY PROVISIO NS AS ENUMERATED BY US IN THE OPENING PARAGRAPHS. 5 ITA NO.3284/MUM/2018 ASSESSMENT YEAR-2007-08 3.2 FROM THE PERUSAL OF DOCUMENTS, IT TRANSPIRES TH AT CERTAIN INFORMATION WAS SOUGHT BY THE REVENUE FROM LEGAL HEIR WITH RESP ECT TO ACCOUNT NO. 5090181079 VIDE NOTICE U/S 131 DATED 17/07/2013. TH E SAME WAS RESPONDED TO BY THE AUTHORIZED REPRESENTATIVE VIDE LETTER DATED 01/08/2013 WHEREIN THE LEGAL HEIR WHILE DENYING HAVING ANY KNO WLEDGE ABOUT THE BANK ACCOUNT, SUBMITTED THAT TO BUY PEACE OF MIND AND TO AVOID LITIGATION / ADVERSE PUBLICITY, AGREED TO PAY TAXES VOLUNTARILY ON PEAK BALANCE BASED ON QUANTUM PROVIDED BY THE DEPARTMENT. 3.3 SIMILAR INFORMATION WAS SOUGHT VIDE NOTICE U/S 133(6) DATED 19/12/2013 WITH RESPECT TO ANOTHER ACCOUNT NO. 5090 186352 WHEREIN THE ASSESSEE WAS DIRECTED TO SUBMIT THE COMPLETE COPY O F STATEMENT OF BANK ACCOUNT RIGHT FROM ITS INCEPTION TILL DATE. IN THE ALTERNATIVE, THE ASSESSEE WAS REQUESTED TO FILL UP THE CONSENT WAIVER FORM. THE S UBMISSION OF COPY OF THE BANK STATEMENT OR DULY FILLED CONSENT WAIVER FORM W AS STATED TO BE DUE COMPLIANCE OF THE NOTICE. HOWEVER, VIDE RESPONSE DA TED 31/12/2013, THE FOLLOWING SUBMISSIONS WERE MADE BY THE AUTHORIZED R EPRESENTATIVE OF LEGAL HEIR: - WE AGAIN REITERATE THAT WE DO NOT HOLD ANY ACCOUNT NO. 5090186352 AS ALLEGED IN YOUR LETTER. AS REGARDS THE REQUEST FOR SIGNING THE WAIV ER FORM, IT IS SUBMITTED THAT YOUR REQUEST IS NOT AS PER THE PROVISIONS OF THE ACT, AS OUR CLIENT IS NOT IN POSSESSION OF ANY SUCH ACCOUNTS OR DOCUMENTS, WHICH IS REQUIRED TO BE SUBMITTED AS PER LAW. THE AFORESAID RESPONSE LED LD. AO TO IMPOSE THE IMP UGNED PENALTY FOR NON-COMPLIANCE OF NOTICE DATED 19/12/2013 U/S 133(6 ). 3.4 WE ARE OF THE CONSIDERED OPINION THAT ALLEGED B ANK ACCOUNTS WERE STATED TO BE IN THE NAME OF THE DECEASED FATHER. TH EREFORE, THE EXPLANATION 6 ITA NO.3284/MUM/2018 ASSESSMENT YEAR-2007-08 OF THE LEGAL HEIR THAT HE HAD NO KNOWLEDGE ABOUT TH E ALLEGED BANK ACCOUNTS AND THE SUBMISSIONS THAT HE WAS NOT IN POSSESSION O F ANY SUCH BANK STATEMENT AS REQUIRED BY THE REVENUE AUTHORITIES, C OULD NOT BE HELD TO BE WITHOUT ANY BASIS. THE EXPLANATION FURNISHED BY THE LEGAL HEIR VIDE ITS EARLIER REPLY DATED 01/08/2013 WITH RESPECT TO BANK ACCOUNT NO.5090181079 WERE DULY ACCEPTED BY THE REVENUE AND NO PENALTY PROCEED INGS WERE INITIATED AGAINST THOSE SUBMISSIONS. HOWEVER, SIMILAR SUBMISS IONS ADVANCED WITH RESPECT TO ACCOUNT NO. 5090186352 WERE DISBELIEVED AND IT WAS ALLEGED THAT THE LEGAL HEIR FAILED TO COMPLY WITH NOTICE U/ S 133(6) AND HENCE, LIABLE FOR PENALTY U/S 272A(2)(C). IT IS OBSERVED THAT THE LEGAL HEIR HAD DULY REPLIED TO NOTICE U/S 133(6) AND EXPLAINED ITS POSITION WIT H RESPECT TO ALLEGATIONS MADE BY THE REVENUE. NOTHING ON RECORD WOULD ESTABL ISH THAT THE SAID INFORMATION WAS EVER IN THE POSSESSION OF LEGAL REP RESENTATIVE AND HE REFUSED TO PART WITH THE SAME. FURTHER, THE CONSENT WAIVER FORM, IN OUR OPINION, COULD NOT BE TERMED AS INFORMATION OR STATEMENTS OF ACCOUNT AND AFFAIRS WITHIN THE MEANING OF SECTION 133(6) OF THE ACT, TH E NON-COMPLIANCE OF WHICH IS THE PRIMARY INGREDIENT TO INVOKE THE PE NAL PROVISIONS U/S 272A(2)(C). THE CITED DECISION OF HONBLE MADRAS HIGH COURT WOU LD NOT HAVE MUCH RELEVANCE SINCE IT HAS BEEN RENDERED IN THE CONTEXT OF SECTION 271(1)(C) AND DO NOT THROW MUCH LIGHT ON THE ISSUE IN HAND. 3.5 NEVERTHELESS, ON THE FACTS AND CIRCUMSTANCES, W E ARE CONVINCED WITH OTHER ARGUMENTS ADVANCED BY LD. AR AND INCLINED TO DELETE THE IMPUGNED PENALTY. WE ORDER SO. 7 ITA NO.3284/MUM/2018 ASSESSMENT YEAR-2007-08 4. IN THE RESULT, THE APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JULY, 2019. SD/- SD/- (SANDEEP GOSAIN) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 30/07/2019 SR.PS:-JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. # ( ) / THE CIT(A) 4. # / CIT CONCERNED 5. $%!& ' , ' , / DR, ITAT, MUMBAI 6. %)*+ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.