Jorawar Singh, Kurukshetra V. ITO, Kurukshetra

ITA 629/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9818 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Bonafide belief; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 629/CHD/2016 (ASSESSMENT YEAR : 2008-09) JORAWAR SINGH, VS. THE INCOME TAX OFFICER, S/O SH.JOGINDER SINGH, WARD-1, VILLAGE GALEDVA, KURUKSHETRA. TEHSIL PEHOWA, DISTRICT KURUKSHETRA. PAN: ACBPS3332E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI S.K. MITTAL, DR DATE OF HEARING : 20.07.2016 DATE OF PRONOUNCEMENT : 22.07.2016 O R D E R THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), KARNAL DATED 5.4.2016 FOR ASSESSMENT YEA R 2008-09, CHALLENGING THE LEVY OF PENALTY UNDER SECT ION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT TH E ACT). 2. DURING THE ASSESSMENT PROCEEDINGS, A DISALLOWAN CE OF RS.6,42,870/- WAS MADE OUT OF THE CLAIM OF COMMI SSION PAID BY THE ASSESSEE. THE CIT (APPEALS) AS WELL TH E I.T.A.T. CONFIRMED THE ADDITION. ON THESE FACTS, PENALTY WA S LEVIED, WHICH WAS ALSO CONFIRMED BY THE CIT (APPEALS). 2 3. I HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES. IT IS STATED THAT THE ASSESSEE IS A LIC A GENT AND CLAIMED DEDUCTION ON ACCOUNT OF COMMISSION PAID TO SEVERAL PERSONS, WHO HAVE PROCURED NEW LIC POLICIES FROM DI FFERENT PERSONS. THE ADDITION WAS MADE BECAUSE THE ASSESSE E COULD NOT ADDUCE COMPLETE DETAILS AND LIST OF THE PERSONS TO WHOM COMMISSION WAS PAID. THE ASSESSEE HAS NOW FILED AP PLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE, IN WHICH IT I S STATED THAT THE LIST OF SUB-AGENTS AND THEIR AFFIDAVITS ALONGWI TH NAMES OF THE PARTIES WHO HAD BEEN INTRODUCED BY EACH SUB-AGE NTS ALONGWITH LIST WAS FILED AS ADDITIONAL EVIDENCE. T HE ASSESSEE PRAYED THAT THE SAME MAY BE ADMITTED FOR HEARING, S INCE THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT SINCE THE E VIDENCES HAVE BEEN FILED BEFORE THE CIT (APPEALS), THEREFORE , THERE IS NO NEED TO FILE THE SAME IN THE PENALTY PROCEEDINGS. THE LEARNED D.R., HOWEVER, SUBMITTED THAT SAME POINT WAS RAISED BEFORE THE TRIBUNAL, IN WHICH THE ASSESSEE CHALLENGED THE ORDER OF CIT (APPEALS) IN NOT CONSIDERING THE AFFIDAVITS OF NINE PERSONS FILED AT THE APPELLATE STAGE. THE CIT (APPEALS) DI D NOT CONSIDER THESE NINE AFFIDAVITS OF THE PERSONS IN SU PPORT OF CLAIM OF PAYMENT OF COMMISSION BECAUSE NO REQUEST U NDER RULE 46A OF THE INCOME TAX RULES WAS MADE. THE LEA RNED D.R., THEREFORE, SUBMITTED THAT SINCE SAME AFFIDAVI TS WERE NOT CONSIDERED BY THE CIT (APPEALS), THEREFORE, THE SAM E MAY NOT BE ADMITTED FOR HEARING. 4. ON CONSIDERATION OF THE RIVAL CONTENTIONS AND MATERIAL AVAILABLE ON RECORD, I AM OF THE VIEW THAT THOUGH THE 3 FINDINGS GIVEN IN THE QUANTUM PROCEEDINGS ARE RELEV ANT AND HAVE PROBATIVE VALUE BUT THESE ARE NOT CONCLUSIVE F OR LEVY OF PENALTY AGAINST THE ASSESSEE UNDER SECTION 271(1)(C ) OF THE ACT. IT IS WELL SETTLED THAT THE QUANTUM AND PENAL TY PROCEEDINGS ARE DISTINCT AND INDEPENDENT PROCEEDING S. THE ASSESSEE IN THE PENALTY PROCEEDINGS STILL COULD HAV E EXPLAINED THAT IT IS NOT A CASE OF LEVY OF PENALTY BASED ON T HE EVIDENCE ON RECORD. THE HON'BLE SUPREME COURT IN THE CASE O F TEK RAM VS. CIT, 262 CTR 118 (SC) AND THE HON'BLE PUNJA B & HARYANA HIGH COURT IN THE CASE OF CIT VS. MUKTA ME TAL WORKS, 336 ITR 555 (P&H) ADMITTED THE ADDITIONAL EV IDENCE BEING RELEVANT AND REQUIRED TO BE LOOKED INTO. THE ADDITION WAS MADE BY THE AUTHORITIES BELOW BECAUSE THE ASSES SEE COULD NOT PRODUCE THE COMPLETE LIST OF THE PERSONS TO WHO M COMMISSION WAS PAID AND NO EVIDENCE WAS ADDUCED IN THIS REGARD. THE ASSESSEE HAS NOW FILED AFFIDAVITS OF N INE PERSONS TO WHOM THE ASSESSEE HAD PAID THE COMMISSION ALONGW ITH LIST OF THE PARTIES IN RESPECT OF WHOM LIC POLICIES WERE OBTAINED THROUGH THE COMMISSION AGENTS. THESE ADDITIONAL EV IDENCES ARE, THEREFORE, RELEVANT AND SHALL HAVE TO BE LOOKE D INTO IN ORDER TO DECIDE WHETHER THE ASSESSEE IS ABLE TO EXP LAIN THE ISSUE FOR THE PURPOSE OF LEVY OF PENALTY. IN THIS VIEW OF THE MATTER, I ADMIT THESE ADDITIONAL EVIDENCES FOR THE PURPOSE OF HEARING. THE CONTENTION OF THE LEARNED D.R. THAT S AME ADDITIONAL EVIDENCES WERE NOT ADMITTED BY THE CIT ( APPEALS), HAS NO MERIT BECAUSE THE ASSESSEE DID NOT MAKE ANY REQUEST UNDER RULE 46A OF THE INCOME TAX RULES FOR ADMISSIO N OF THE ADDITIONAL EVIDENCE. THESE ADDITIONAL EVIDENCES SO ADMITTED 4 WOULD HAVE BEARING ON THE ISSUE AND COULD EXPLAIN T HE MATTER IN ISSUE WITH REFERENCE TO THE PENALTY MATTER. FUR THER THESE ADDITIONAL EVIDENCES WERE NOT FILED BEFORE THE AUTH ORITIES BELOW AND ASSESSING OFFICER HAS NOT LOOKED INTO THE MATTER. THEREFORE, THE MATTER SHALL HAVE TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. 5. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORD ERS OF THE AUTHORITIES BELOW AND RESTORE THE ISSUE OF LEVY OF PENALTY TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO REDECIDE THE ISSUE IN THE LIGHT OF ADDITIONAL EVIDENCE SO AD MITTED ABOVE. THE ASSESSEE IS DIRECTED TO PRODUCE THESE E VIDENCES BEFORE THE ASSESSING OFFICER FOR CONSIDERATION. TH E ASSESSING OFFICER SHALL GIVE SUFFICIENT OPPORTUNITY FOR HEARI NG TO THE ASSESSEE. 6. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 22 ND JULY, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH