SUJATHA A. SHETTY, MUMBAI V. ITO 25(1)(2), MUMBAI

ITA 5191/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8600 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 20-05-2015
• Assessment Year: 1998-1999
• Appeal Filed On: 19-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Principle of natural justice
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E , MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5191/MUM/2013 FOR (ASSESSMENT YEAR : 1998-99 ) MRS. SUJATHA A. SHETTY L/H OF LATE ANNAPPA SHETTY, 501/506, NEHA APARTMENT, SV CROSS ROAD, DAHISAR (E), MUMBAI-400068. PAN: AAPPS4195P VS. ITO-25(1)(2), PRATYAKSHAKAR BHAVAN, C-11 BUILDING, 2 ND FLOOR, ROOM NO. 204, BKC, BANDRA (E), MUMBAI-400051. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HARIDHAS BHA T (AR) REVENUE BY : SHRI GOLI SRINIVAS RAO (CIT- DR) DATE OF HEARING : 16.01.2017 DATE OF PRONOUNCEMENT : 08.02.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JM: 1. THIS APPEAL U/S 253 OF THE INCOME TAX ACT (THE ACT) IS FILED BY LEGAL HEIR OF ASSESSEE (LATE ANNAPPA SHETTI) AGAINST THE ORDER OF LD. CIT(A)-11, MUMBAI DATED 22.05.2013 FOR ASSESSMENT YEAR (AY) 1998-99. THE AS SESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) 11, MUMBAI, (CIT)A ERRED IN CO NFIRMING THE LEVY OF PENALTY OF RS. 3,03,550/- U/S 271(1)(C) OF THE ACT. 2. THE CIT(A) FAILED TO APPRECIATE THAT THE SOURCE OF THE GIFT OF RS. 5,00,000/-, CAPITAL INTRODUCTION OF RS. 1,90,000/-, AND CASH DE POSIT OF RS. 3,24,500/- WAS PROPERLY EXPLAINED BY THE ASSESSEE. 3. THE APPELLANT PRAYS THAT THE PENALTY LEVIED RS. 3,0 3,550/- MAY PLEASE BE DELETED. 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT FILE D RETURN OF INCOME FOR RELEVANT AY ON 01.01.1998 DECLARING TOTAL INCOME OF RS. 1,97,26 0/-. THE RETURN OF INCOME WAS 2 ITA NO. 5191/M/2013 MRS. SUJATHA A. SHETTY PROCESSED U/S 143(1) OF THE ACT ON 01.11.1999 RESUL TING REFUND OF RS. 11,860/-. SUBSEQUENTLY, THE RETURN OF INCOME WAS RE-OPENED U/ S 147 AND THE ASSESSMENT ORDER WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE AC T DETERMINING THE TOTAL INCOME AT RS. 28,31,760/-. IN THE RE-ASSESSMENT PROCEEDING , THE ASSESSING OFFICER (AO) MADE THE DISALLOWANCE OF GIFT OF RS. 5,00,000/- FRO M NARAYAN D. SHETTI, ADDITION U/S 68 OF RS. 11,50,000/-, ON ACCOUNT OF CASH DEPO SIT AND FURTHER ADDITION OF RS. 6,60,000/- ON ACCOUNT OF CAPITAL INTRODUCTION. ON A PPEAL BEFORE THE LD. CIT(A), THE DISALLOWANCE OF GIFT OF RS.5.00 LAKH WAS SUSTAINED. HOWEVER, OUT ADDITION OF RS. 11,50,000/- ON ACCOUNT OF CASH DEPOSIT RS. 3,24,000 / WAS SUSTAINED. OUT OF ADDITION OF RS. 6,60,000/- OF ADDITION OF CAPITAL A CCOUNT RS. 1,90,000/- WAS SUSTAINED. ACCORDINGLY, THE AO INITIATED PENALTY P ROCEEDING U/S 271(1)(C) OF THE ACT. NOTICE U/S 274 R.W.S. 271(1)(C) WAS ISSUED ON 26.03.2003. THE LEGAL HEIR OF THE ASSESSEE CONTESTED THE PENALTY PROCEEDING AND C ONTENDED THAT THE ADDITIONS WERE MADE IN THE RE-ASSESSMENT PROCEEDING AND THE S UBSTANTIAL ADDITION OF QUANTUM IN ADDITION HAVE BEEN REDUCED. THE CONTENTION OF AS SESSEE WAS NOT ACCEPTED BY THE AO AND THE AO LEVIED THE PENALTY @ 100% OF THE TAX WHICH WAS SOUGHT TO BE EVADED. THE AO CALCULATED PENALTY OF RS. 3,03,350/- IN ITS ORDER DATED 31.03.2005. ON APPEAL BEFORE THE LD. CIT(A), NO RELIEF WAS GRAN TED. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE PRESENT APPEAL IS FILE D BEFORE US. 3. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDER OF AUTHORITIES BELOW. THE LD. AR OF THE ASSESSEE AR GUED THAT THE LD. CIT(A) CONCLUDED IN THE IMPUGNED ORDER THAT NO EXPLANATION WAS OFFERED, THOUGH ASSESSEE HAS FILED WRITTEN SUBMISSION BEFORE HIM, THAT MAY B E CONSIDERED AS EXPLANATION ON BEHALF OF ASSESSEE. THE LD. AR OF THE ASSESSEE FURT HER ARGUED THAT THE PRESENT APPEAL IS BEING PURSUED BY LEGAL HEIR OF ASSESSEE A ND THE MATTER IS VERY OLD AND ALL THE DOCUMENTS RELATING TO THE RELEVANT AY ARE NOT I N POWER AND POSSESSION OF THE LRS OF ASSESSEE. THE LD. AR OF THE ASSESSEE FILED ON RECORD THE COPY OF WRITTEN SUBMISSION FILED BEFORE THE LD. CIT(A). IT WAS ARG UED THAT LD CIT(A) PASSED THE ORDER EX-PARTY WITHOUT GIVING OPPORTUNITY TO FURTHE R EXPLAINING THE FACT OF THE CASE. IN SUPPORT OF SUBMISSION THE LD.AR OF THE ASSESSEE RELIED UPON THE DECISION OF ACIT VS. SMT. VIMLA MALI (109 ITR 0555 (ALL) , LATE N. R. PALANIVEL VS. CIT (2015) 273 CTR 0224(MAD), NAVINBHAI M. PATEL VS. IT O (27 ITD 0411) AND 3 ITA NO. 5191/M/2013 MRS. SUJATHA A. SHETTY BHAGWAN SINGH L/H DINESH BHAGWAN SINGH VS. ITO (200 6) 9 SOT 73 (MUM). ON THE OTHER HAND, LD. DR FOR THE REVENUE SUPPORTED TH E ORDER OF AUTHORITIES BELOW AND WOULD ARGUE THAT THE APPELLANT HAS NO CASE ON M ERIT AS THE PENALTY WAS LEVIED ONLY ON THE ADDITION/DISALLOWANCE CONFIRMED UP TO T HE TRIBUNAL. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND GONE THROUGH THE ORDER OF AUTHORITIES BELOW. WE HAVE SEEN THAT THE APPELLA NT HAS FILED WRITTEN SUBMISSION BEFORE THE LD. CIT(A) DURING THE FIRST APPELLATE PR OCEEDING. THE FIRST APPELLATE AUTHORITY HAS NOT CONSIDERED THE WRITTEN SUBMISSION FILED ON RECORD. THE LD CIT(A) PASSES THE ORDER EX-PARTY. THUS, KEEPING IN VIEW T HE PRINCIPAL OF NATURAL JUSTICE, WE DEEM IT APPROPRIATE TO RESTORE THE APPEAL TO THE FILE OF LD CIT (A) TO CONSIDER THE WRITTEN SUBMISSION FILED ON RECORD AND PASS ORDER I N ACCORDANCE WITH LAW. NEEDLESS TO SAY THE LD CIT (A) SHALL GIVE OPPORTUNITY OF HEA RING BEFORE DECIDING THE APPEAL. THE APPELLANT IS ALSO DIRECTED TO FULLY COOPERATE W ITH THE LD CIT(A) AND TO PROVIDE NECESSARY INFORMATION AND NOT TO SEEK ADJOURNMENT W ITHOUT ANY VALID REASONS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THI S 8 TH DAY OF FEBRUARY, 2017. SD/- SD/- (B.R. BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 08/02/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/