S.Krishna Kumar, CHENNAI V. ITO, CHENNAI

ITA 418/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4882 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTHJCIT
• Assessee Lawyers: S SRIDHAR
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.418/MDS/2016 * +* / ASSESSMENT YEAR : 2009-10 SHRI S. KRISHNA KUMAR, C/O SHRI S. SRIDHAR, ADVOCATE, NEW NO.14, OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI - 600 020. PAN : AFDPK 4054 N V. THE INCOME TAX OFFICER, BUSINESS WARD - XV(4), CHENNAI. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE /0-. 1 2 / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT ' 1 3& / DATE OF HEARING : 16.03.2017 45+ 1 3& / DATE OF PRONOUNCEMENT : 20.04.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI , DATED 08.01.2016 AND PERTAINS TO ASSESSMENT YEAR 2009-10, CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER S ECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.418/MDS/16 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THERE WAS DEP OSIT OF ` 31,22,930/- IN KOTAK MAHINDRA BANK. THE ASSESSEE E XPLAINED DURING THE ASSESSMENT PROCEEDING THAT THE MONEY WAS WITHDRAWN FROM INDIAN OVERSEAS BANK, MUTHIALPET BRANCH AND SA ME WAS DEPOSITED IN KOTAK MAHINDRA BANK. THE ASSESSING O FFICER LEVIED PENALTY ON THE GROUND THAT THE ASSESSEE HAS NOT SUB MITTED ANY EXPLANATION WITH REGARD TO MERIT OF THE ISSUE UNDER CONSIDERATION. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS FURN ISHED ALL THE INFORMATION WITH REGARD TO THE DEPOSIT IN KOTAK MAH INDRA BANK AND IN THE INDIAN OVERSEAS BANK. THE DETAILS OF WITHDR AWALS WERE ALSO FURNISHED BEFORE THE ASSESSING OFFICER. HENCE, ACC ORDING TO THE LD. COUNSEL, THE ASSESSEE HAS FURNISHED ALL THE DETAILS , THEREFORE, THERE CANNOT BE ANY CONCEALMENT OF INCOME OR FURNISHING O F INACCURATE PARTICULARS OF SUCH INCOME. 3. REFERRING TO PENALTY ORDER, THE LD.COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT RECORD ED ANY REASON WHETHER THE ASSESSEE HAS FURNISHED INACCURATE PARTI CULARS OR CONCEALED ANY PART OF HIS INCOME. THE ASSESSING OF FICER SIMPLY LEVIED PENALTY AT 100% ON THE GROUND THAT THE ASSES SEE IS CHANGING 3 I.T.A. NO.418/MDS/16 HIS STAND OFTEN. ACCORDING TO THE LD. COUNSEL, THE PENALTY CAN BE LEVIED ONLY FOR FURNISHING INACCURATE PARTICULARS O F INCOME OR CONCEALING ANY PART OF THE ASSESSEES INCOME. MERE LY BECAUSE THE ASSESSEE IS CHANGING HIS STAND THAT MAY NOT BE A RE ASON FOR LEVYING PENALTY. HOWEVER, THE PENALTY CANNOT BE LEVIED UNL ESS THERE WAS CONCEALMENT OF INCOME. ACCORDING TO THE LD. COUNSE L, THE DETAILS OF CASH CREDIT WERE AVAILABLE BEFORE THE ASSESSING OFF ICER, THEREFORE, THE ASSESSING OFFICER CANNOT SAY THAT THERE WAS CON CEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF S UCH INCOME. MERELY BECAUSE THE EXPLANATION OFFERED BY THE ASSES SEE WAS REJECTED BY THE ASSESSING OFFICER THAT CANNOT BE A REASON FOR LEVY OF PENALTY. THE LD.COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE IS A SMALL TIME GARMENT EXPORTER AND HE DEPOSITED MONEY IN BANK WHENEVER HE RECEIVED FROM RESPECTIVE BUYERS. 4. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT INITIALLY THE ASSESS EE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE MONEY WITHDRAWN FROM INDIAN OVERSEAS BANK, MUTHIALPET BRANCH WAS DEPOSITED IN K OTAK MAHINDRA BANK. SUBSEQUENTLY, THE ASSESSEE CHANGED HIS STAND AND SUBMITTED BEFORE THE ASSESSING OFFICER THAT WHE NEVER THERE 4 I.T.A. NO.418/MDS/16 WAS FINANCIAL DIFFICULTY FOR MAKING PAYMENT TO THE SUPPLIERS, HE RECEIVED MONEY FROM BUYERS IN CASH AND THE SAME WAS DEPOSITED IN THE BANK ACCOUNT. THE ENTIRE AMOUNT RECEIVED BY TH E ASSESSEE FROM THE RESPECTIVE BUYERS WAS ALSO REPAID SUBSEQUE NTLY. THE ASSESSEE HAS FILED ALL THE DETAILS OF THE BANK ACCO UNT OF KOTAK MAHINDRA BANK, INDIAN OVERSEAS BANK, ETC. BEFORE TH E LOWER AUTHORITIES. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY CONFIRMED THE PENALTY LEVIED BY THE ASS ESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THERE WAS CASH DEPOSIT IN KOTAK MAHINDRA BANK. THEREFORE , IT IS FOR THE ASSESSEE TO EXPLAIN THE SOURCE FOR MAKING SUCH DEPO SITS. SINCE THE ASSESSEE HAS NOT SATISFACTORILY EXPLAINED THE SOURC E OF MONEY IN KOTAK MAHINDRA BANK, THE ASSESSING OFFICER MADE ADD ITION UNDER SECTION 68 OF THE ACT. THE ASSESSING OFFICER HAS A LSO LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 6. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 271(1)(C) WHICH READS AS FOLLOWS:- FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC 5 I.T.A. NO.418/MDS/16 271. (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE PRINCIPAL COMMISSIONER OR COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UND ER THIS ACT, IS SATISFIED THAT ANY PERSON (B) . . . . . . . OR (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME O R FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, 7. FOR THE PURPOSE OF LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT, THERE SHOULD BE A FINDING THAT THE ASSESSE E HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. IN THE CASE BEFORE US, THE ASSESSEE HAS FU RNISHED ALL THE DETAILS OF THE BANK ACCOUNTS BEFORE THE ASSESSING O FFICER. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE MONEY WITHDRAWN FROM INDIAN OVERSEAS BANK AND ALSO THE MO NEY RECEIVED FROM THE BUYERS WERE USED IN MAKING DEPOSITS SINCE THE ASSESSEE HAD TO REPAY THE SAME TO THE SUPPLIERS. THIS EXPLA NATION OF THE ASSESSEE WAS REJECTED BY THE ASSESSING OFFICER. 8. THE QUESTION ARISES FOR CONSIDERATION IS WHEN TH E ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER BY FURNISHIN G ALL THE DETAILS OF THE BANK ACCOUNTS AND DEPOSITS, MERELY BECAUSE T HE ASSESSING OFFICER REJECTED THE EXPLANATION OF THE ASSESSEE, W HETHER THERE CAN BE PENALTY UNDER SECTION 271(1)(C) OF THE ACT? THI S ISSUE WAS 6 I.T.A. NO.418/MDS/16 EXAMINED IN THE JUDGMENT OF APEX COURT IN CIT V. RE LIANCE PETROPRODUCTS (P.) LTD. (2010) 322 ITR 158 AND THE APEX COURT FOUND THAT WHEN ALL THE DETAILS WERE MADE AVAILABLE BEFORE THE ASSESSING OFFICER, MERELY BECAUSE THE EXPLANATION W AS NOT ACCEPTED, THERE CANNOT BE ANY CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. IN VIEW OF THE ABOVE JUDGMENT OF APEX COURT IN RELIANCE PETROPRODUCTS (P .) LTD., THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT LEVY OF PENALTY IS NOT CALLED FOR IN THE PRESENT CASE. ACCORDINGLY, THE O RDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE PENALTY LEV IED UNDER SECTION 271(1)(C) OF THE ACT IS DELETED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 20 TH APRIL, 2017 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 20 TH APRIL, 2017. KRI. 7 I.T.A. NO.418/MDS/16 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT-5, CHENNAI 5. 8; /3 /DR 6. * < /GF.