THE ITO, Ward 1(3), Indore V. SHRI RAKESH SOOD, Indore

ITA 569/IND/2013

• Counselvise Citation: 56922714 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 29-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: ARPIT GAUR CAS
• Keywords: Principle of natural justice; Revised return
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 569/IND/2013 A.Y. : 2006-07 ITO SHRI RAKESH SOOD, WARD 1(3), INDORE. VS THROUGH LEGAL HEIR SMT. GEETANJALI SOOD, LG-68, DAVA BAZAR, INDORE. APPELLANT RESPONDENT P.A.N. NO AIRPS4135P APPELLANT BY SHRI R. A. V E RMA, SR. DR RESPONDENT BY SHRI ANIL KAMAL GARG & SHRI ARPIT GAUR, CAS DATE OF HEARING : 10 .0 9 .2015 DATE OF PRONOUNCEMENT : 30 .09.2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-7, MUMBAI, (CONCURRENT JURISDICTION OVER THE CHARGE OF CIT(A)-I, INDORE) DATED 11.03.2013 FOR THE ASSES SMENT YEAR 2006-07. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER. 3. IN THIS CASE, THE ASSESSEES DECEASED HUSBAND HAS F ILED THE RETURN OF INCOME AND DIED AT THE AGE OF 42 YEAR S DUE TO CARDIAC ARREST ON 03.07.2006. THE ASSESSEE WAS BROU GHT ON RECORD AS HEIR OF THE ASSESSEE. DURING THE COURSE O F HEARING, THE ASSESSEE HAD SOME RECEIPT IN THE BANK ACCOUNT. THE ASSESSEE COULD NOT PRODUCE THE SOURCE OF DEPOSIT OF RS. 25,83,738/-. THEREFORE, SHE HAS OFFERED THIS AMOUNT AS TAXATION TO AVOID PROTRACTED LITIGATION AND PENALTY . THE AO HAS LEVIED THE PENALTY AT RS. 8,85,000/- U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. -: 3: - 3 4. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER :- 8. I HAVE CONSIDERED THE AOS ORDER AS WELL AS THE APPELLANTS SUBMISSION. I ALSO TOOK NOTE OF THE JUDICIAL PRONOUNCEMENT CITED BY THE ASSESSING OFFICER, WHILE IMPOSING PENALTY, WHICH IN MY CONSIDERED VIEW IS COMPLETELY ON DIFFERENT FOOTING AND ALSO IN DIFFERENT CONTEXT, HENCE THE SAME CANNOT BE SAID TO BE APPLICABLE IN THE APPELLANTS CASE. HAVING TAKEN NOTE OF FACTUAL POSITION OF THE CASE OF THE APPELLANT AND AFTER TAKING NOTE OF THE APPELLANT'S ACT OF SUO MOTU OFFERING THE ENTIRE SUM DEPOSITED IN THE BANK ACCOUNT FOR TAX WITH A REQUEST TO DEPARTMENT FOR NOT INITIATING ANY PROCEEDINGS, I FIND MERITS IN THE ARGUMENTS OF THE APPELLANT THAT IN THE GIVEN SITUATION OF CASE OF APPELLANT, SHE WAS NOT AWARE ABOUT SUCH TRANSACTION OF HER HUSBAND. HAVING TAKEN NOTE OF THE -: 4: - 4 DECISIONS CITED BY THE APPELLANT IN HIS SUBMISSION AND SPECIALLY THE DECISION OF APEX COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITRAL (200T) 251 ITR 9 (SC), WHEREIN THE APEX COURT HAS CONFIRMED THE DECISION OF M.P. HIGH COURT, WHEREIN THE JURISDICTIONAL HIGH COURT HELD THAT 'WHEN AS ASSESSEE COME FORWARD TO SURRENDER ADDITIONAL INCOME WITH A VIEW TO BUY PEACE WITH THE DEPARTMENT AND TO COME OUT OF VEXED LITIGATION THAN NO PENALTY U/S 271 (1)(C) CAN BE IMPOSED UPON HIM.. . 9. FURTHER TO THAT, I ALSO FIND SEVERAL DECISION CITED ON SIMILAR SITUATION, WHICH HAS BEEN MENTIONED BY AIR OF THE APPELLANT IN HIS SUBMISSION, WHEREIN COURTS AND TRIBUNAL HAVE HELD THAT VOLUNTARILY DISCLOSURE, IF ANY, BY THE APPELLANT FOR BUYING PEACE AND AVOID LITIGATION, THEN NO PENALTY PROCEEDINGS SHOULD BE INITIATED. FURTHER ON PERUSAL OF DEFINITION WORD -: 5: - 5 'PERSON' USED IN THE SECTION 271 (1)(C) OF THE ACT AND ALSO SECTION 2(31) OF THE ACT, WHEREIN THE WORD 'PERSON' IS DEFINED IN THE ACT, IT IS EVIDENT THAT THE DEFINITION OF THE WORD IS EXCLUSIVE AND NOT INCLUSIVE. IT IS ALSO SEEN THAT IN SECTION 2(31)(I) TO (VII) AND ALSO IN THE EXPLANATION OF UNDER SECTION 2(31) OF THE ACT, NOWHERE THE LEGAL HEIR HAS BEEN INCLUDED THEREFORE IN MY CONSIDERED VIEW IF THE LEGISLATION COULD HAVE INTENDED TO PENALIZE THE LEGAL HEIR FOR ANY DEFAULT COMMITTED BY DECEASED PERSON THEN DEFINITELY, IT WOULD HAVE LEGISLATED EITHER IN SECTION 271(1)(C) OR SECTION 2(31) R.W.S 159 OF THE ACT. IN THIS BACKGROUND OF ARGUMENTS OF THE APPELLANT, THE IMPOSITION OF PENALTY IN THE CASE OF THE APPELLANT IS COMPLETELY AGAINST THE INTENT OF LAW AS WELL AS AGAINST NATURAL JUSTICE. BESIDES THE AFORESAID ARGUMENT MADE BEFORE ME, IT IS ALSO NOTICED THAT THE APPELLANT HAS SURRENDERED ALL ENTRIES -: 6: - 6 FOUND DEPOSITED IN THE BANK ACCOUNT OF DECEASED HUSBAND, WHEREIN SAID DEPOSITS WERE NOTICED AND THERETO AFTER HIS DEMISED. IN ADDITION TO THIS, IT IS ALSO SEEN THAT THE APPELLANT BEING LADY WIDOW AND NOT AT ALL AWARE OF BUSINESS TRANSACTION OF HER HUSBAND, SHE WAS UNABLE TO OFFER ANY COMMENT IN RESPECT OF SUCH DEPOSIT IN THE ACCOUNTS OF DECEASED I.E. KOTAK MAHINDRA BANK. TO THIS EFFECT, IT IS ALSO EVIDENT THAT DECEASED BROTHER ALSO MADE SUCH SUBMISSION BEFORE THE A.O., WHICH ALSO FIND PLACE OF MENTION IN THE PENALTY ORDER. IN THE GIVEN SITUATION OF APPELLANT'S CASE AND ALSO TAKING NOTE OF FACTS AVAILABLE ON RECORD AND THE ARGUMENTS OF THE APPELLANT AS WELL AS THE A.O. 'S ORDER, I AM OF THE CONSIDERED VIEW THAT THE A.O.'S ACTION OF IMPOSITION OF PENALTY U/S 271(I)(C) OF THE ACT WAS NOT JUSTIFIED AND CORRECT, HENCE THE PENALTY SO LEVIED BY THE A.O. IS CANCELLED. -: 7: - 7 ACCORDINGLY, THE PENALTY ORDER SO PASSED BY THE A.O. IS ANNULLED. 8. IN THE RESULT, THE APPEAL OF THE APPELLANT IS ALLOWED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE IT IS A SETTLED LAW THAT WHEN THE ASSESSEE VOLUNTARILY SURRENDERED THE INCOME TO COOPERATE THE DEPARTMENT, THE PENALTY HAS TO BE IMPOSED UPON THE ASSESSEE U/S 271(1)(C) OF THE ACT. IN THIS CASE, THE ASSESSE ES HUSBAND WAS DIED AND ASSESSEE COULD NOT PROVE THE SOURCES O F THE CASH DEPOSITED IN KOTAK MAHINDRA BANK, THEREFORE, SHE HA S TO SURRENDER THE INCOME AND SHE VOLUNTARILY OFFERED TH E INCOME. WE FIND THAT SIMILAR CASE HAD COME UP BEFORE THE HO N'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. TIKKA RAM THROUGH L/H SMT. MUNNI DEVI (2008) 174 TAXMAN 317, WHEREIN THE HON'BLE HIGH COURT HAS UPHELD THE DELET ION OF THE PENALTY. THE HON'BLE HIGH COURT AT PARA 6 OF THE OR DER HAS OBSERVED AS UNDER :- -: 8: - 8 'WE FIND THAT THE TRIBUNAL HAS FOUND AS A MATTER OF FACT THAT IN RESPONSE TO NOTICE ISSUED UNDER S. 148 OF THE ACT, THE LEGAL HEIR OF THE ASSESSEE (I.E., WIFE) HERSELF FILED THE REVISED RETURN OF INCOME AT RS.5,87,520 WHICH INCLUDES THE UNEXPLAINED INCOME OF THE ASSESSEE. AS THE ASSESSEE HAD DIED, THE LEGAL HEIR BEING UNAWARE OF THE SOURCES OF INVESTMENT FILED RETURN OF INCOME INCLUDING THE IMPUGNED AMOUNT ONLY TO DEMONSTRATE HER BONA FIDES AND WILLINGNESS NOT TO PROLONG ANY LITIGATION WITH THE REVENUE. WE FIND THAT IN THIS CASE OSTENSIBLY THE ASSESSEE HAD DIED AND HIS LEGAL HEIR, NAMELY, HIS WIFE, WAS NOT IN A POSITION TO EXPLAIN THE CIRCUMSTANCES LEADING TO THE IMPUGNED INVESTMENT AND IT WAS UNDER THESE CIRCUMSTANCES THAT SHE ACCEPTED THE CHARGE MADE OUT BY THE AO IN THE NOTICE UNDER S. 148 OF THE ACT. THEREFORE, IN THE INSTANT CASE, THE DISCLOSURE MADE BY THE LEGAL HEIR OF THE -: 9: - 9 ASSESSEE WAS BONA FIDE AND VOLUNTARY WITH A VIEW TO AVOID LITIGATION AND THEREFORE, DELETION PENALTY UNDER S. 271(1)(C) OF THE ACT, THE PRESENT CASE IS JUSTIFIED.' 6. WE, RESPECTFULLY, FOLLOWING THE DECISION OF THE HON 'BLE PUNJAB & HARYANA HIGH COURT, ( SUPRA ) DISMISS THE DEPARTMENTS APPEAL. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 30 TH SEPTEMBER, 2015. CPU* 10219