MRS. SPUREET KAUR NAGI, Mumbai V. ACIT CC-20, Mumbai

ITA 5693/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3667 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 04-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR MENON
• Keywords: FORM 26AS
• Section: 271(1)(c); 143(3); 142(1); 143(1); 250; 143(2); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 5693/MUM/2019 (A.Y: 2011-12) MRS. SPUREET KAUR NAGI 602, B WING FORESHORE APARTMENTS, JUHU TARA ROAD, SANTACRUZ WEST, MUMBAI 400049 VS. ACIT CC - 20 RM NO. 402, 4 TH FLOOR AAYAKAR BHAVAN, MK ROAD, MUMBAI 400020. PAN/GIR NO. : ACFPN9986M APPELLANT .. RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI VIJAY KUMAR MENON, DR DATE OF HEARING 05 .0 5 .2021 DATE OF PRONOUNCEMENT 19 .0 5 .2021 / O R D E R PER PAVAN KUMAR GADALE, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -51 MUM BAI, PASSED U/S.271(1)(C) AND 250 OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS RAISED THE SOLE GROUND OF A PPEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ACTION OF AO LEVYING PENALTY OF RS. 5,51,500/- U/S 271(1)(C) OF THE ACT. THE ACTION IS UNJUSTIFIE D AND UNWARRANTED. ITA NO. 5693/MUM/2019 MRS. SPUREET KAUR NAGI, MUMBAI - 2 - 2.THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PAINTER AND ARTIST IN MURAL WORK AND HAS INCOME FRO M HOUSE PROPERTY, INCOME FROM BUSINESS/PROFESSION AND INCOME FROM OTHER SOURCES. THE ASSESSEE HAS FILED R ETURN OF INCOME ELECTRONICALLY FOR THE A.Y 2011-12 WITH A TOTAL INCOME OF RS.11,60,383/- ON 15.12.2011 AND THE RETU RN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AN D NOTICE U/S 143(2) AND 142(1) OF THE ACT ARE ISSUED. THE A.O FOUND AS PER THE AIR INFORMATION, THE ASSESSEE HAS MADE CASH DEPOSITS IN SAVINGS BANK ACCOUNT WITH CIT I BANK MUMBAI AGGREGATING TO RS.45,67,500/- AND EXPLANATIONS WERE CALLED.THE ASSESSEE EXPLAINED THA T OUT OF DEPOSITS OF RS45,67,500/- THE CASH SALES OF RS.17,10,614/- WAS IGNORED BY THE ACCOUNTANT WHILE COMPILING CASH BOOK AND BANK ACCOUNTS AND THE SAME WAS NOT DISCLOSED THE RETURN OF INCOME AND WAS OFFE RED FOR TAXATION IN A.Y.2011-12. WHEREAS THE A.O FOUND THAT THE ASSESSEE HAS NOT DISCHARGED THE BONAFIDE PROOF OF INCOME AND EXPLANATIONS ARE NOT SATISFACTORY HENCE MADE AN ADDITION U/S 68 OF THE ACT. SIMILARLY, THE AO MA DE ADDITION OF INTEREST ON DEPOSITS OF RS. 74,188/- WH ICH COULD NOT BE RECONCILED WITH THE FORM 26AS. FINALLY THE A.O HAS DETERMINED THE TOTAL INCOME OF RS.30,90,19 0/- AND PASSED ORDER U/S 143(3) OF THE ACT DATED 28.03. 2014. ITA NO. 5693/MUM/2019 MRS. SPUREET KAUR NAGI, MUMBAI - 3 - SUBSEQUENTLY, THE A.O. HAS INITIATED PENALTY PROC EEDINGS U/S 271(1)(C) OF THE ACT. THE A.O DEALT ON THE OBSERVATIONS OF THE A.O IN THE SCRUTINY PROCEEDINGS , THE FACTS AND EXPLANATIONS OF THE ASSESSEE THAT DUE TO MISTAKE OF THE ACCOUNTANT IN COMPILING WITH CASH DEPOSITS WITH BANK BOOK THE SAME COULD NOT BE OF FERED IN THE RETURN OF INCOME AND WAS OFFERED IN SCRUTIN Y PROCEEDINGS. BUT THE A.O. WAS NOT SATISFIED WITH TH E EXPLANATIONS AND OBSERVED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND LEVI ED PENALTY OF RS. 5,51,500/- AND PASSED THE ORDER U/S 271(1)(C) OF THE ACT DATED 20.09.2014. 3. AGGRIEVED BY THE PEANLTY ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A), WHEREAS, THE CIT(A) HAS CONFIRMED THE PENALTY AND DISMISSED THE ASSESSEE AP PEAL. AGGRIEVED BY THE CIT(A)ORDER, THE ASSESSEE HAS FIL ED AN APPEAL WITH THE HONBLE TRIBUNAL. 4. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE. THE LD.DR SUBMITTED THAT THE CIT(A) HAS CORRECTLY CONFIRMED THE PENALTY AND PRAYED FOR DISM ISSAL OF THE ASSESSEES APPEAL. 5. WE HEARD THE LD.DR AND PERUSED THE MATERIAL ON RECORD. THE SOLE CRUX OF THE DISPUTED ISSUE IS WITH REGARD ITA NO. 5693/MUM/2019 MRS. SPUREET KAUR NAGI, MUMBAI - 4 - TO PENALTY LEVIED U/S 271(1)(C) OF RS. 5,51,500/- B Y THE A.O. AS THE ASSESSEE HAS FAILED TO DISCLOSE THE INF ORMATION OF SALES IN THE CURRENT ASSESSMENT YEAR. WE ON THE PERUSAL OF THE ASSESSMENT ORDER AT PARA -3 FOUND TH AT, AS PER THE AIR INFORMATION THE ASSESSEE HAS MADE A CAS H DEPOSITS IN THE SAVINGS BANK ACCOUNTS AND THE ASSE SSEE WAS CALLED FOR THE EXPLANATIONS. THE ASSESSEE HAS SUBMITTED THE EXPLANATIONS IN DETAIL, WHEREAS OUT O F THE TOTAL CASH DEPOSITS, AN AMOUNT OF RS. 17,10,614/- C ASH SALES WAS IGNORED BY THE ACCOUNTANT OF THE ASSESSEE IN COMPILING THE CASH BOOK AND BANK ACCOUNT AND THEREF ORE COULD NOT BE DISCLOSED IN THE RETURN OF INCOME AND THE SAME WAS OFFERED AS INCOME IN THE ASSESSMENT PROCEEDINGS . THE ASSESSEE HAS SUBMITTED THAT IT IS THE MISTAKE OF THE ACCOUNTANT AND THE ASSESSEE IS ENGAG ED IN THE PROFESSION AS PAINTER AND ARTIST OF MURAL WORK AND CARRIES ON THE BUSINESS/PROFESSION AS PROPRIETARY CONCERN. THE AO HAS DISCUSSED THIS ISSUE AND MADE THE ADDITION WHICH THE ASSESSEE HAS ACCEPTED AND NOT PR EFERRED ANY APPEAL AND PAID THE TAXES. THE EXPLANATIONS OF THE ASSESSEE IN THE PENALTY PROCEEDINGS THAT SHE HAD DONE SO TO BU Y PEACE OF MIND WITH THE INCOME TAX DEPARTMENT AND TO AVOID L ITIGATION AND SHOULD BE TREATED AS BONA FIDE. CONSIDERING THE FACTS THAT THE ASSESSEE HAS OFFERED THE INCOME AND EXPLANATION S ARE FILED.THE ADDITION MADE IN THE ASSESSMENT ORDER BY THE ITA NO. 5693/MUM/2019 MRS. SPUREET KAUR NAGI, MUMBAI - 5 - A.O CANNOT BE A GATEWAY FOR AUTOMATIC LEVY OF PENAL TY. THE LD.CIT(A) HAS PASSED A ELABORATE ORDER CONFIRMI NG THE PENALTY, OVERLOOKING THE FACTS AND THE NATURE OF PROFESSION. WE ARE OF THE VIEW THAT PENALTY CANNOT BE AUTOMATIC AND RELY ON THE PRINCIPLES IN THE DECIS ION OF THE CIT VS. MANJUNATHA COTTON AND GINNING FACTORY, [2013] 359 ITR 564 (KAR) AND ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.05.2021 SD/- SD/- (SHAMIM YAHYA) (PAVAN KUMAR GAD ALE) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 19.05.2021 KRK, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 4. ( ) / CONCERNED CIT 5. !!' , $ % , / DR, ITAT, MUMBAI 6. () * + / GUARD FILE. / BY ORDER, ! //TRUE COPY// 1. ( ASST. REGISTRAR) ITAT, MUMBA I