SH. ARUN KUMAR SONI, AMRITSAR V. INCOME TAX OFFICER, WARD - 5(1), AMRITSAR

ITA 600/ASR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3273 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-02-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 20-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKAR
• Assessee Lawyers: PADAM BAHL
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AM RITSAR BEFORE SH. N.S.SAINI, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NOS.600 & 601(ASR)/2017 ASSESSMENT YEAR:200 7-08 SH. ARUN KUMAR SONI, 29, NEW GOVT. COLONY (YELLOW) GHANPUR CHHEHARTA, AMRITSAR. [PAN:ACHPK 5528Q] VS. INCOME TAX OFFICER, WARD-5(1), AMRITSAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PADAM BAHL (LD. CA) RESPONDENT BY: SH. BHAWAN I SHANKAR (LD. DR) DATE OF HEARING: 12.02.2019 DATE OF PRONOUNCEMENT: 13.02.201 9 ORDER PER N.K.CHOUDHRY, JM: THESE APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINS T THE ORDERS DATED 20.07.2017 PASSED BY THE LD. CIT(A)-2, AMRITSAR U/S 250(6) OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT), WHER EBY THE CIT(A) PARTIALLY AFFIRMED THE ADDITION AS WELL AS PENALTY IMPOSED BY T HE A.O. 2. BY WAY OF ITA NO. 600/ASR/2017, THE ASSESSEE HAS CHALLE NGED THE ADDITION OF RS. 2,2,5000/- AS AFFIRMED BY THE LD. CIT (A) BY ITS ORDER DATED 20.7.2017. THE RELEVANT PART OF THE ORDER IS REPRODU CED HEREIN BELOW:- DECISION :- THE COPY OF LOAN CONFIRMATION FROM SH. NARENDER PAL SHARMA OF LOAN AMOUNT OF RS.300,000/- RECEIVED BY T HE ASSESSEE ON 28-03-2006 WAS SUBMITTED WITH THE WRITTEN SUBMIS SIONS AND PERUSED. THE APPELLANT HAD ALSO FURNISHED THE COPY OF INCOME TAX RETURNS OF SH. NARENDER PAL SHARMA FOR A Y 2006-07 AND A Y 2007- ITA NOS.600 & 601 /ASR/2017 (A.Y.2007-08) SH. ARUN KUMAR SONI VS. ITO 2 08 DECLARING NET INCOME OF RS.138,610/- AND RS.112, 800/- RESPECTIVELY. THE SAID RETURNS OF INCOME OF SH. NAR ENDER PAL SHARMA REVEALS VERY LOW INCOME AND DOES NOT JUSTIFY THE SO URCE OF GIVING LOAN AMOUNT OF RS. 300,000/- TO THE APPELLANT ON 28-03-2006. MOREOVER THE SAID LOAN AMOUNT OF RS.300,000/- WAS C LAIMED TO HAVE BEEN GIVEN TO THE APPELLANT IN CASH ON 28-03-2 006. ACCORDINGLY I HOLD THAT SH. NARENDER PAL SHARMA WAS NOT CREDITWORTHY TO GIVE LOAN OF RS.300,000/- TO THE AP PELLANT AND THEREFORE NO BENEFIT OF ADVANCE CLAIMED TO HAVE BEE N TAKEN FROM SH. NARENDER PAL SHARMA IS ALLOWED TO THE APPELLANT. AS REGARDS THE ALTERNATIVE CLAIM OF THE ASSESSEE T HAT THE APPELLANT AND HIS WIFE HAD FILING THEIR INCOME TAX RETURNS FOR LAST SO MANY YEARS, THE APPELLANT HAD SUBMITTED THE COPIES OF INCOME TAX RETURNS OF THE APPELLANT AND HIS WIFE SINCE A Y 200 1-02 TO 2006-07 SHOWING THE NET INCOME AS UNDER:- AY SH. ARUN KUMAR SONI (RS.) MRS. GEETA SONI (RS. ) 2001 - 02 89472/ - 85,400/ - 2002 - 03 55138/ - 2003 - 04 71,736/ - 81,500/ - 2004 - 05 82,038/ - 86,000/ - 2005 - 06 88,341/ - 100,000/ - 2006 - 07 84050/ - 106,000/ - 2007 - 08 135,000/ - THE ABOVE INCOMES RETURNED BY SH. ARUN KUMAR SONI A ND HIS WIFE MRS. GEETA SONI WERE LOW. HOWEVER THE PEOP LE HAVE A PROPENSITY TO MAKE SMALL SAVINGS FROM THEIR INCOMES , AND THEN THE APPELLANT HAD TO GO ABROAD IN SUPPORT THE APPEL LANT HAD SUBMITTED THE COPY OF LETTER OF THE COUNSELLOR (IMM IGRATION) OF THE CANADIAN HIGH COMMISSION. THEREFORE, CONSIDERING THE LAW INCOME OF THE APPELL ANT AND HIS WIFE SMT. GEETA SONI AS DECLARED IN THEIR RETUR NS OF INCOME FROM AY 2001-02 TO 2006-07, IT IS HELD THAT THE APP ELLANT COULD HAVE AT BEST SAVED ABOUT RS.75000/- FROM HIS AND HI S WIVES RETURNED INCOMES AS ABOVE, WHICH WAS AVAILABLE WITH THE APPELLANT FOR MAKING DEPOSITS IN HIS BANK ACCOUNT A ND THE ITA NOS.600 & 601 /ASR/2017 (A.Y.2007-08) SH. ARUN KUMAR SONI VS. ITO 3 ADDITION OF RS.75,000/- IS DELETED. ACCORDINGLY THE BALANCE ADDITION OF RS.225,000/- IS CONFIRMED. 3. AT THE TIME OF HEARING OF THE APPEAL, THE LD. AR OF THE ASSESSEE HAD SUBMITTED THAT THE ASSESSEE AND HIS WIFE WERE PLANNING TO GO ABROAD AND THEREFORE, DEPOSITED THE AMOUNT UNDER CONSIDERATION FR OM THEIR OWN SOURCES AND IN SUPPORT OF THE SAME, SUBMITTED COPY OF THE LETT ER OF THE COUNSELLOR (IMMIGRATION) OF CANADIAN HIGH COMMISSION, HOWEVER, TH E AO ADDED AN AMOUNT OF RS. 3,00,000/- IN THE RETURNED INCOME OF TH E ASSEEEE, WHICH LATERON IN APPEAL, THE LD. CIT(A) REDUCED TO RS. 2,25 ,000/-. 4. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND REALIZED THAT THE LD. CIT(A) HAS ALREADY GIVEN A BENEFIT OF RS. 75, 000/- BY HOLDING AS BEST SAVED AMOUNT BY THE ASSESSEE AND HIS WIFE WHICH WAS AVAILAB LE FOR MAKING DEPOSITS IN THE ASSESSEES BANK ACCOUNT, HENCE, WE DO NOT FIN D ANY IMPROPRIETY, PERVERSITY AND ILLEGALITY IN THE ORDER PASSED BY THE LD. CIT(A), THEREFORE, WE ARE INCLINED TO AFFIRM THE SAME. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS DISMISSED . 6. NOW COMING TO ITA NO. 601/ASR/2017 , WHEREBY THE PENALTY OF RS. 71,397/- WAS IMPOSED BY THE AO ON THE AMOUNT OF RS. 3, 00,000/-. HOWEVER, ON APPEAL WAS REDUCED PROPORTIONALLY ON THE AMOUNT OF RS. 2,25,000/- AS PER THE ADDITION CONFIRMED BY THE LD. CIT(A). FROM T HE ASSESSMENT ORDER, IT REFLECTS THAT THE AO INITIATED PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME, HOWEVER, WHILE IMPOSING PENALTY, OBSERVED THAT IT IS E STABLISHED THAT THE ASSESSEE HAS DELIBERATELY CONCEALED TRUE PARTICULARS OF INCO ME AND HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME TO THE TUN E OF RS. 3 LACS WHICH ITA NOS.600 & 601 /ASR/2017 (A.Y.2007-08) SH. ARUN KUMAR SONI VS. ITO 4 GOES TO SHOW THAT AT THE TIME OF IMPOSING PENALTY, THE AO WAS NOT SURE AS TO UNDER WHICH LIMB THE IMPOSITION OF PENALTY IS ESTABLISH ED. 7. THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJ UNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR) OBSERVED THAT THE LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB UNDER WHICH IT IS BEING LEVIED. 8. THE AMRITSAR TRIBUNAL IN THE THIRD MEMBER'S CASE TIL ED AS HPCL MITTAL ENERGY LTD. VS THE ADDL. COMMISSIONER OF INCOME TAX, BATHINDA (ITA NOS. 554, 555, 510& 556/ASR/2014 DECIDED ON 07-05-2018, CON SEQUENTIAL ORDER PASSED ON 20-06-2018) HAS HELD THAT IN THE PENALTY PR OCEEDINGS THE ASSESSING OFFICER IS REQUIRED TO BE DECISIVE. FURTHER IF T HE PENALTY IS INITIATED WITH DOUBT AND ALSO CONCLUDED WITH A DOUBT AS TO THE CON CEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICU LARS OF SUCH INCOME ETC., THE PENALTY IS VITIATED. 9. THE PENALTY PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE ATTRACTED WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME O R FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS WELL SETTLED LA W THAT AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS AND IMPOSING THE PENALTY, THE AO IS REQUIRED TO BE SURE AND DECISIVE AND IF ANY DOUBT REFL ECTS FROM ORDER THEN CERTAINLY WILL CREATE SUSPICION AND THE PENALTY WOULD NO T BE IMPOSABLE. IN THE INSTANT CASE THE AO WHILE LEVYING PENALTY U/S 271(1 )(C) HAS OBSERVED THAT IT IS ESTABLISHED THAT THE ASSESSEE HAS DELIBERATELY CO NCEALED TRUE PARTICULARS OF INCOME AND HAS FURNISHED INACCURATE PARTICU LARS OF HIS INCOME. THUS, HE IS NOT SPECIFIC AS TO WHETHER THE PENALTY IS LEV IABLE FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. HENCE, RESPECTFULLY FOLLOWING THE QUOTED DECISIONS, WE CANCEL TH E ORDER OF THE PENALTY PASSED BY ASSESSING OFFICER DATED 22.09.2015 LEVYI NG PENALTY OF RS. 71,397/- AND PARTLY AFFIRMED BY THE CIT(A). ITA NOS.600 & 601 /ASR/2017 (A.Y.2007-08) SH. ARUN KUMAR SONI VS. ITO 5 10. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS ALL OWED AND THE PENALTY IS ORDERED TO BE DELETED . ORDER PRONOUNCED IN THE OPEN COURT ON 13.02.2019. SD/- SD/- (N.S.SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDI CIAL MEMBER DATED: 13.02.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SH. ARUN KUMAR SONI, 29, NEW GOVT. COLONY (YELLOW) GHANPUR CHHEHARTA, AMRITSAR. (2) THE INCOME TAX OFFICER, WARD-5(1), AMRITSAR (3) THE CIT(A)-2, AMRITSAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER FILENAME: ARUN KUMAR SONI, 600 & 601 - 2017 DIRECTORY: G: TEMPLATE: C:\USERS\ETC PARMOD\APPDATA\ROAMING\MICROSOFT\TEMPLATES\NORMAL.D OT TITLE: IN THE INCOME TAX APPELLATE TRIBU NAL SUBJECT: AUTHOR: RAHUL PRABHAKAR KEYWORDS: COMMENTS: CREATION DATE: 2/13/2019 10:33:00 AM CHANGE NUMBER: 39 LAST SAVED ON: 2/26/2019 11:35:00 AM LAST SAVED BY: ETC PARMOD TOTAL EDITING TIME: 92 MINUTES LAST PRINTED ON: 2/26/2019 11:36:00 AM AS OF LAST COMPLETE PRINTING NUMBER OF PAGES: 6 (APPROX.) 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