Jasbir Singh, Patiala V. ITO, W-2, Patiala

ITA 354/CHANDI/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3946 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 20-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH SR DR
• Assessee Lawyers: PRIYANKA AHUJA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH , ! ' #, # $ % & ' ( , )* ' BEFORE: SMT. DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, AM ./ ITA NO. 354/CHD/2018 / ASSESSMENT YEAR : 2008-09 SHRI JASBIR SINGH , 49, NGM-II, PATIALA VS THE ITO , WARD-2, PATIALA. ./ PAN NO: AKBPS7985F / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : MS. PRIYANKA AHUJA # ! ' / REVENUE BY : SHRI MANJIT SINGH, SR.DR $ % ! &/ DATE OF HEARING : 06.09.2018 '()* ! &/ D ATE OF PRONOUNCEMENT : 04.10.2018 )+/ ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 26.12.2017 OF CIT(A)-3 LU DHIANA PERTAINING TO 2008-09 ASSESSMENT YEAR ON VARIOUS GROUNDS WHICH READ AS UN DER : 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE IMPOSITION OF PENALTY OF RS.1,31,200/ - UNDER SECTION 271(1)(C) OF THE ACT WHICH IS ILLEGAL, ARBITRARY & UNJUSTIFIED. 2. THAT THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT IS NOT IMPOSABLE IN AS MUCH AS THERE IS NEITHER ANY CONCEALMENT OF INCO ME NOR FURNISHING OF ANY INACCURATE PARTICULARS OF INCOME AND AS SUCH THE OR DER PASSED UNDER SECTION 271(1)(C) OF THE ACT IS ILLEGAL, ARBITRARY & UNJUST IFIED. 3. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X (APPEALS) PASSED UNDER SECTION 271(1) (C) OF THE ACT IS ERRONEOUS, ARBITRA RY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) WHILE ALLOWING THE ADDITIONS AND PENALTY THERETO, NEVER LOOKED INTO THE FACTS OF THE CASE. 5. 5. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ERRED IN CONCEDING TO THE FINDINGS OF THE LD. ASSESSING OFFICER AND REFUSED T HE CLAIM OF THE ASSESSEE IN A SUMMARY MANNER ONLY BECAUSE THE MAIN CONTENTION OF THE ASSE SSEE WAS DISMISSED BY THE LD. ASSESSING OFFICER IN HIS ORDER. 6. 6. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS ALLOWED THE PENALTY UNDER SECTION 271 (1) (C) SOLELY ON WHIMSICAL GROUNDS WIT HOUT APPLYING PROPER JUDICIAL MIND. ITA 354/CHD/2018 A.Y.2008-09 PAGE 2 OF 3 7. 7. THAT THE ORDER SO FRAMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW, AGAINST FACTS (TO THE EXTENT ELABORATED ABOVE) AND NEEDS TO BE QUASHED. 2. AT THE TIME OF HEARING, LD. AR MS. PRIYANKA AHUJA MADE AN ORAL REQUEST SEEKING TIME. HOWEVER, CONSIDERING THE MATERIAL AV AILABLE ON RECORD, IT WAS DEEMED APPROPRIATE TO PROCEED WITH THE P RESENT APPEAL AFTER HEARING THE LD. SR.DR. THE RECORD SHOWS THAT THE PENALTY U/S 271(1)(C) OF THE ACT WHICH IS SUBJECT MATTER FOR CONSIDERATION IN TH E PRESENT PROCEEDINGS IS THE DISALLOWANCE OF RS. 3,95,155/- WHICH WAS SUSTAINED IN APPEAL BY THE CIT(A) AS UNEXPLAINED CASH DEPOSITS. ON ACC OUNT OF THIS FACT, PENALTY U/S 271(1)(C) OF THE ACT WAS IMPOSED. THE CIT(A ) UPHELD THE PENALTY ORDER HOLDING THAT THE ASSESSEE HAS FAILED TO FUR NISH PLAUSIBLE EXPLANATION FOR THE UNEXPLAINED CASH DEPOSIT. THE LD. SR.DR RELIED ON THE SAME. 3. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE IN THE FACTS OF THE PRESENT CASE, AS PER THE ASSESSMENT ORDER WAS ENGAGED IN THE BUSINESS OF RESALE OF HUSK WHEREFROM INCOME OF RS. 1,08,600/- WAS RETURNED. THE RECORD SHOWS THAT THE ASSESSEE WAS RE QUIRED BY THE AO TO EXPLAIN CASH DEPOSITS IN ITS BANK ACCOUNT. IN RESPONSE T HERETO, THE RECORD SHOWS THAT THE ASSESSEE EXPLAINED THAT THE DEPOSITS WE RE MADE OUT OF PAYMENT RECEIVED FROM THE DEBTORS OF HIS OLD BUSINESS OF COMMISSION AGENT. IT IS SEEN THAT SUMMONS WERE ISSUED TO THE FOLLOW ING DEBTORS AT THE ADDRESS GIVEN BY THE ASSESSEE : I) SH. HARBANS SINGH S/O SH. MANOHAR SINGH, VPO FARIDP UR. II) SH, DHARAM SINGH S/O SH. KAKA SINGH, VPO PANDIA III) SH. INDERJIT SINGH S/O SH. KESHAR SINGH, VPO KALVA BARAN ROAD, PATIALA IV) SH. DIDAR SINGH S/O SH. SURJIT SINGH VPO KALVA BARAN ROAD, PATIALA V) SH. AVTAR SINGH S/O SH. SURJIT SINGH, VPO MOHAMED PUR. VI) SH. GURCHARAN SINGH S/O SH. MANOHAR SINGH, VPO BAKSHIWALA VII) SH. FOJA SINGH S/O SHRI MANCHAR SINGH, VPO UJJAL DEVI GARH ROAD,PA TIALA VIII) SH. PAL SINGH S/O SH. SUCNA SINGH VPO BAKSHIWALA IX) SH. RANBIR SINGH S/O SH. MANOHAR SINGH, VPO BAKSHIWALA X) SH. JASBIR SINGH S/O SH. BALKAR SINGH VP O KALVA BARAN ROAD, PATIALA XI) SH. SATNAM SINGH S/O SH. SURJIT SINGH VI LLAGE KALVA BARAN ,ROAD, PATIAIA XII) SH. JASBIR SINGHS/O SH. HARBANS SINGH, VPO BAKSHIWALA XIII) SH. JOGINDER SINGH S/O BALKAR SINGH, VPO KALVA BARAN ROAD,PATIALA 3.1 IT IS SEEN THAT SOME OF THESE RETURNED UNSERVE D. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCE : THE NOTICES SENT TO THE FOLLOWING DEBTORS HAVE BEEN RECEIVED UNSERVED:- I) SH. HARBANS SINGH S/O SH. MANOHAR SINGH VPO FARIDPUR II) SH. FOJA SINGH S/O SH. MANOHAR SINGH, VPO UJJ AL DEVI GARH ROAD, PATIALA III) SH. AVTAR SINGH S/O SH. SURJIT SINGH VPO MOH AMED PUR, PATIALA IV) SH. DHARAM SINGH S/O SH, KAKA SINGH, VP O PANODIA V) SH. JASBIR SINGH S/O SH. BALKAR SINGH VPO KAL VA ITA 354/CHD/2018 A.Y.2008-09 PAGE 3 OF 3 VI) SH. RANBIR SINGH S/O SH. MANOHAR SINGH VPO BAKSHIWALA 3.2 THE ADDITION IN VIEW OF THE FACT THAT THE PARTIES WERE NOT PRODUCED WAS MADE. IT IS SEEN THAT IN THE PENALTY PROCEEDINGS AL SO, THE ASSESSEE OFFERED A SIMILAR EXPLANATION. THE RECORD SHOWS THAT THE A SSESSEE AS PER THE REPLY EXTRACTED IN PAGE 4 OF THE ASSESSMENT ORDE R SUBMITTED THAT, THE ASSESSEE HAS SUBMITTED THAT ALL THE DEBTORS ARE FAR MERS AND THEY WERE DEALING WITH HIM WHEN HE WAS RUNNING COMMISSION BUSINES S. THE PAYMENTS WERE ACTUALLY RECEIVED FROM THEM WHICH WER E OUTSTANDING SINCE LONG. THEY HAVE DENIED TO HAVE MADE THESE PAYMENTS JUST TO AVOID ENQUIRIES BY THE INCOME TAX DEPARTMENT OF THE SOURC E OF THESE PAYMENTS. THE SAID EXPLANATION WAS FOUND TO BE NOT TENABLE LE ADING TO THE ADDITION OF RS. 3,95,155/- WHICH ADDITION WAS S USTAINED BY THE CIT(A) ALSO. WE FIND ON GOING THROUGH THE RECORD A ND CONSIDERING THE SUBMISSIONS ADVANCED IN THE ASSESSMENT PROCEEDINGS REITERATED IN THE PENALTY PROCEEDINGS THAT THE SUBMISSIONS MAY NOT BE SUFFICIENT FOR DELETING THE ADDITION ON MERIT, HOWEVER, AS FAR AS THE PENALTY PROCEEDINGS ARE CONCERNED WE FIND THAT IN THE PECUL IAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE ASSESSEE HAS EXPLAINED THAT THESE FARMERS HAVE AVOIDED BEING PRESENT BEING RELU CTANT TO COME BEFORE THE AO AND FACE QUESTIONS AND THUS, HE HAS N OT BEEN ABLE TO PERSUADE THEM. CONSIDERING THE PECULIAR FACTS AND C IRCUMSTANCES, WE FIND THAT THE SAID EXPLANATION DESERVES TO BE ACCEP TED. THE PENALTY IS DIRECTED TO BE DELETED AFTER HEARING THE LD. SR.DR. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 04.10. 2018. SD/- SD/- ( $ % & ' ( ) ( ) (ANNAPURNA GUPTA) (DIVA SINGH) )* '/ ACCOUNTANT MEMBER - '/ JUDICIAL MEMBER % $ (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ / / CIT 4. $ / ()/ THE CIT(A) 5. -23 4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE (+ $ / BY ORDER, ; #/ ASSISTANT REGISTRAR