Gaurav Agarwal, New Delhi V. DCIT, Circle-1, Muzaffarnagar

ITA 5306/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2281 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: SMC: NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO.:- 5306/DEL/2018 (ASSESSMENT YEAR: 2010-11) GAURAV AGARWAL C/O D.K. GUPTA, ADVOCATE, 21-GHER KHATTI, NEW MANDI, MUZAFFARNAGAR, UTTAR PRADESH, PIN: 251001 VS. DCIT CIRCLE- 1 MUZAFFARNAGAR, UTTAR PRADESH PAN NO: ADAPA9829L APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : SH. S.L. ANURAGI, SR. DR DATE OF HEARING : 11.06.2019 DATE OF PRONOUNCEMENT : 25.06.2019 ORDER PER DIVA SINGH : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 28.05.2018 OF CIT(A) , MUZAFFARNAGAR, PERTAINING TO 2010-11 ASSESSMENT YEAR WHEREIN THE PENALTY IMPO SED U/S 271(1)(C) ON THE ADDITIONS MADE IN THE ASSESSMENT ORDER HAS BEEN UPH ELD IN APPEAL. 2. AT THE TIME OF HEARING NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE, THE APPEAL WAS PASSED OVER. IN THE SECOND ROUND ALSO TH E ASSESSEE REMAINED UNREPRESENTED. THE RECORD SHOWS THAT THE REGISTRY H AS POINTED OUT A DELAY OF ONE DAY IN THE FILING OF THE PRESENT APPEAL. THE RE CORD SHOWS THAT THE APPEAL HAS BEEN PRESENTED BY POST ON 07.08.2018. ACCORDING LY CONSIDERING THE DELAY OF ONE DAY ON ACCOUNT OF THE DOCUMENTS BEING IN TRA NSIT AND BEYOND THE CONTROL OF THE ASSESSEE SINCE 03/08/2018 (THE DATE OF SPEED POST STAMP) THE RECEIPT OF THE SAME ON 07/08/2018 LEADING TO THE DE LAY IS CONDONED. NO OBJECTION WAS POSED BY THE LD. SR. DR TO THE CONDON ATION OF THE DELAY. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT. THE LD. SR. DR WAS ACCORDINGLY DIRECTED TO ARGUE THE APPEAL. ITA NO.:- 5306/DEL/2018 GAURAV AGARWAL. PAGE 2 OF 4 3. THE RECORD SHOWS THAT THE ASSESSEE IN THE COURSE O F THE ASSESSMENT PROCEEDINGS WAS REQUIRED TO EXPLAIN THE DEPOSIT OF RS. 2,00,000/- IN HIS SAVINGS BANK ACCOUNT ON 28.09.2009. THE ASSESSEE AT TEMPTED TO EXPLAIN THE DEPOSITS HOWEVER ULTIMATELY HE GAVE UP THE ISSUE AC CEPTED THE ADDITION. THE RECORD SHOWS THAT NO APPEAL AGAINST THE ADDITION MA DE BY THE AO WAS FILED BEFORE THE CIT(A). AS A RESULT OF THIS ADDITION, PE NALTY PROCEEDINGS WERE INITIATED. 4. THE EXPLANATION OFFERED WAS DISCARDED BY THE A.O. A ND PENALTY OF RS. 61,800/- WAS IMPOSED. BEFORE THE CIT(A), THE ASSESS EE RELIED UPON A CASH FLOW STATEMENT. HOWEVER THE PENALTY WAS CONFIRMED. AGGRI EVED THE ASSESSEE IS IN APPEAL. THE ASSESSEE REMAINS UNREPRESENTED HOWEVER THE EXPLANATION OFFERED BEFORE THE CIT(A) EXTRACTED IN THE IMPUGNED ORDER I S EXTRACTED FOR THE SAKE OF COMPLETENESS: FROM THE FACTS OF THE CASE AND MATERIAL ON RECORD, IT IS NOTED THAT THE EXPLANATION ' OF THE AR FOR THE SOURCE OF CASH DEPO SITS OF RS.2,00,000/- IN HIS BANK ACCOUNT IS BASED UPON CASH FLOW STATEMENT WHIC H IS A SUMMARY OF PERIODIC CASH WITHDRAWALS MADE AND CASH DEPOSITS MADE IN THE BANK ACCOUNT BY THE APPELLANT. THE CASH FLOW STATEMENT IS REPRODUCED AS UNDER:- THE SUBMISSION OF THE APPELLANT THAT CASH DEPOSITS OF RS.2,00,000/- HAVE BEEN MADE OUT OF HIS INCOME AND OUT OF THE PAST SAV INGS HAS BEEN CONSIDERED ALONG WITH THE CASH FLOW STATEMENT. IT IS NOTED THA T THE APPELLANT HAS CLAIMED OPENING CASH IN HAND OF RS.314500/- AS ON 01-04-200 9. IN SPITE OF HAVING SUFFICIENT CASH IN HAND, THE APPELLANT HAS SHOWN TO HAVE MADE FREQUENT CASH WITHDRAWALS WHICH HAVE BEEN EXPLAINED TO HAVE BEEN USED TO MAKE CASH DEPOSITS OF RS.2,00,000/- ON 28-08-2009. HOWEVER, SUCH SUBMI SSION LACKS GENUINENESS AS NO PRUDENT PERSON WOULD WITHDRAW THE MONEY ITA NO.:- 5306/DEL/2018 GAURAV AGARWAL. PAGE 3 OF 4 5. THE LD. SR. DR RELIES UPON THE IMPUGNED ORDER. 6. IN THE LIGHT OF THE FACTS AVAILABLE ON RECORD AS RE FERRED TO HEREIN ABOVE I AM OF THE VIEW THAT THE LEVY OF PENALTY CANNOT BE C ONFIRMED. SIMPLY BECAUSE THE ADDITION HAS BEEN ACCEPTED BY THE ASSESSEE CANN OT LEAD TO THE CONCLUSION THAT LEVY OF PENALTY IS AUTOMATIC. IT IS WELL SETTL ED THAT PENALTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE SEPARATE AND DISTINCT. T HE EXPLANATION OFFERED IN THE PENALTY PROCEEDINGS NECESSARILY IS REQUIRED TO BE ADDRESSED IN THE CONTEXT OF THE PENAL PROVISIONS. IN THE FACTS OF THE PRESEN T CASE I FIND THAT THE EXPLANATION OF THE ASSESSEE HAS BEEN DISCARDED IN T HE PENALTY PROCEEDINGS ON THE REASONING THAT THE EXPLANATION THAT CASH WITHDR AWALS WERE THE SOURCES OF DEPOSITS WAS CONSIDERED TO BE NOT RELEVANT. A PERUS AL OF THE GROUNDS SPECIFICALLY GROUND NO. 2 SHOWS THAT IT HAD BEEN AR GUED THAT THE ADDITION WAS ACCEPTED FOR THE SAKE OF AVOIDING LITIGATION BUT TH ERE WAS ADEQUATE WITHDRAWALS AVAILABLE BOTH WITH THE ASSESSEE AND ALSO WITH HIS WIFE FROM HER ACCOUNTS. THE SAID CLAIM MADE WHEN CONSIDERED WITH THE EXPLANATIO N OFFERED BEFORE THE LD. CIT(A) LEADS TO THE CONCLUSION THAT IT HAS BEEN DIS CARDED BASED ON GENERALISTIC OPINIONS AS NOTHING IS AVAILABLE ON RECORD TO SHOW THAT THE SAID WITHDRAWALS WERE NOT AVAILABLE TO THE ASSESSEE. IN THE ABSENCE OF ANY DISCUSSION ON RECORD AS TO THE UTILIZATION OF THE FUNDS AVAILABLE THE CL AIM OF THE ASSESSEE THAT THE WITHDRAWALS MADE FROM THE BANK ACCOUNT WERE THE SOU RCE OF THE DEPOSITS DESERVES TO BE ACCEPTED DE HORSE THE FACT THAT THE ADDITION WAS ACCEPTED IN THE ASSESSMENT PROCEEDINGS. CONSIDERING THE FACTUAL MAT RIX AS AVAILABLE ON RECORD, I HOLD THAT THE EXPLANATION OFFERED BY THE ASSESSEE IN THE PENALTY PROCEEDINGS DESERVES TO BE ACCEPTED. THE IMPUGNED ORDER ACCORDI NGLY IS SET ASIDE AND THE PENALTY ORDER IS DIRECTED TO BE QUASHED. THE APPEAL OF THE ASSESSEE IS ALLOWED. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . SD/- SD/-SSSD/- (DIVA SINGH) JUDICIAL MEMBER DATED: 1 25.06.2019 ITA NO.:- 5306/DEL/2018 GAURAV AGARWAL. PAGE 4 OF 4 BIDHAN/AG(CHD)/POONAM(CHD) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 10.06.19 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.06.19 17.06.19,20.06.19 24.06.19 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER