SHRI ASHWANI KUMAR , BATHINDA V. PR. COMMISSIONER OF INCOME TAX, BATHINDA

ITA 63/ASR/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3116 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 06-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRABHJOT KAUR
• Keywords: Revision of order; Opportunity of being heard; Principle of natural justice
• Section: 27; 263; 271(1)(c); 69C; 274; 143(2); 153; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DB, BEN CH AMRITSAR BEFORE SHRI N.K. CHOUDHRY, JM &DR. A.L.SAINI, AM ./ITA NO.63/ASR/2018 ( / ASSESSMENT YEAR:2015-16) SHRI ASHWANI KUMAR C/O J.K. GUPTA, ADVOCATE, 4702, HOSPITAL BAZAR, BATHINDA, PUNJAB. VS. PR. CIT BATHINDA, PUNJAB. ./ ./PAN/GIR NO.: BJDPK 0671 G (APPELLANT) .. (RESPONDENT) APPELLANT BY :SH. J.K. GUPTA, ADV. & SMT. JYOTSNA, CA. RESPONDENT BY :SMT. PRABHJOT KAUR, CIT(DR). / DATE OF HEARING : 26/11/2019 /DATE OF PRONOUNCEMENT : 26/11/2019 / O R D E R PER DR. A.L. SAINI : THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAI NING TO ASSESSMENT YEAR 2015-16, IS DIRECTED AGAINST THE ORDER PASSED BY TH E PR. COMMISSIONER OF INCOME TAX, BATHINDA (PUNJAB) U/S 263 OF THE INCOME TAX ACT, 1 961 (IN SHORT THE ACT) DATED 14.12.2017. 2. BRIEF FACTS QUA THE ISSUE ARE THAT IN ASSESSEE`S CASE CASH AMOUNTING TO RS. 10,00,000/- WAS SEIZED ON 03.04.2014 BY A SURVEILLA NCE TEAM DURING THE GENERAL ELECTIONS OF THE LOK SABHA IN 2014 FROM THE ASSESSE E SHRI ASHWANI KUMAR. THE SAME WAS REQUISITIONED BY THE INCOME TAX DEPARTMENT U/S 132A OF THE INCOME TAX ACT, 1961. LATER ON, THE CASE WAS ASSIGNED TO ITO, WARD- 1(3), BATHINDA WHO VIDE HIS ITA NO.63/ASR/2018 ASSESSMENT YEAR: 2015-16 SHRI ASHWANI KUMAR P PP PA AA AG GG GE EE E | || | 2 22 2 ASSESSMENT ORDER DATED 21.12.2016 U/S 153 OF THE IN COME TAX ACT, 1961 COMPLETED THE ASSESSMENT AT RS. 16,11,550/- AS AGAINST THE RE TURNED INCOME OF RS.6,11,550/- AS THE ASSESSEE FAILED TO SATISFACTORILY EXPLAIN SOURC ES OF THE SEIZED AMOUNT OF RS. 10 LACS. PENALTY PROCEEDINGS U/S 271 (1)(C) WERE ALSO INITIATED BY THE AO WHICH WERE LATER ON DROPPED BY HIM VIDE HIS ORDER DATED 22.03. 2017. LATER ON, THE LD PCIT, EXERCISED THE JURISDICTION UNDER SECTION 263 OF THE ACT, OBSERVING THE FOLLOWING: ON PERUSAL OF RECORD, IT WAS NOTICED THAT PENALTY PROCEEDINGS HAD BEEN DROPPED BY THE AO WITHOUT BRINGING ANY COGENT MATERIAL ON RECORD. ADDITION OF RS. 10 LACS WAS MADE IN RESPECT OF THE AMOUNT SEIZED FROM THE ASSESSEE FOR WHICH HE FAILED TO SATISFACTORILY EXPLAIN ITS SOURCES, EXCEPT THAT HE SUBMITTED A LET TER TO THE AO SURRENDERING THIS AMOUNT. DURING PENALTY PROCEEDINGS ALSO NO CREDIBLE EXPLANA TION COULD BE GIVEN BY THE ASSESSEE. DESPITE THIS, THE AO DROPPED THE PENALTY PROCEEDING S. AS THIS ORDER APPEARED ERRONEOUS AND PREJUDICIAL TO THE INTEREST TO THE INTEREST OF REVENUE, NOTICE U/S 263 OF THE INCOME TAX ACT, 1961 WAS ISSUED FOR THE AY 2015-16 ON 24.08.20 17 DETAILING REASONS FOR THE SAME. 3. IN RESPONSE, THE ASSESSEE SUBMITTED THE REPLY TO THE LD. PR. CIT, HOWEVER THE LD. PR. CIT AFTER GOING THROUGH THE REPLY OF THE ASSESS EE REJECTED THE CONTENTION OF THE ASSESSEE AND HELD AS FOLLOWS: 9.2 THE EXPLANATION ADVANCED BY THE ASSESSEE DURIN G ASSESSMENT PROCEEDINGS THAT HE HAD RECEIVED THE MONEY FROM SHRI SANDEEP KUMAR AND IT WAS TO BE DISTRIBUTED TO VARIOUS TRUCK OWNERS WAS EXAMINED AND FOUND COMPLETELY WANT ING BY THE ASSESSING OFFICER. SHRI SANDEEP KUMAR WHEN EXAMINED FAILED TO EXPLAIN ABOUT THIS AMOUNT AND FOR WHAT IT MEANT. IT WAS WHEN CONFRONTED WITH THIS SITUATION T HAT ASSESSEE STATED THAT IT WAS NOT POSSIBLE FOR HIM TO EXPLAIN THE SOURCES AND HE WAS READY TO PAY TAX ON THIS AMOUNT. TO GET OUT OF THIS PREDICAMENT THE ASSESSEE HAS NOW CO ME UP WITH THE PLEA THAT HE WAS PRESSURIZED BY THE DEPARTMENT, ETC. ETC. AS HAS BEE N DISCUSSED IN PARA 8 ABOVE, THESE ARGUMENTS LACK THE FOUNDATION OF EVIDENCE THAT IS N ECESSARY FOR THESE TO BE TAKEN INTO ACCOUNT IN ANY STATUTORY PROCEEDINGS. THESE ARE MOR E OF AFTER THOUGHTS AND SELF SERVING STATEMENTS TO WHICH NO CREDENCE WHATSOEVER CAN BE A TTACHED. 10. IT HAS BEEN ALSO ARGUED ON BEHALF OF THE ASSESS EE THAT PROCEEDINGS UNDER S. 263 DO NOT LIE WHERE AN ASSESSEE HAS CO-OPERATED DURING PR OCEEDINGS. RELIANCE HAS BEEN PLACED ON THE JUDGMENT OF HONBLE ITAT, BANGALORE- A BEN CH IN THE CASE OF C. N. NARASIMHA REDDY VS. CIT, (2010) 4 ITR (TRIB.) 530 (BANGALORE) . THAT WAS A CASE WHERE THE ASSESSEE HAD OFFERED ADDITIONAL INCOME OF RS. 10 LACS DURING SURVEY PROCEEDINGS I.E. AT A TIME WHEN UNDISCLOSED INCOME HAD YET TO BE DETERMINED BY THE DEPARTMENT, WHEREAS IN THE PRESENT CASE A CERTAIN AMOUNT WAS FOUND FROM THE AS SESSEE WHICH WAS ACCEPTED BY HIM AS UNEXPLAINED AFTER A PERIOD OF ABOUT 2 YEARS AND 8 M ONTHS. THIS CANNOT BE TERMED AS CO- OPERATION OF ASSESSEE IN ANY WAY. AS SUCH, THE JUDG MENT CITED BY LD. COUNSEL DOES NOT SUPPORT HIS CASE. 11. IN THESE CIRCUMSTANCES, THE ASSESSEE WAS CLEAR LY LIABLE FOR PENALTY PROCEEDINGS. THESE WERE INITIATED BUT DROPPED. THE PENALTY ORDER IS BRIEF TO THE POINT OF BEING LACONIC ITA NO.63/ASR/2018 ASSESSMENT YEAR: 2015-16 SHRI ASHWANI KUMAR P PP PA AA AG GG GE EE E | || | 3 33 3 AND ONLY DEMONSTRATES THAT BREVITY IS NOT ALWAYS TH E SOUL OF WIT. THE ASSESSEES CONTENTION ABOUT NOT AGITATING THE MATTER TO AVOID LITIGATION AND FOR PEACE OF MIND ETC. HAVE BEEN NOTED BUT NO COGENT REASON FOR DROPPING P ENALTY PROCEEDINGS HAS BEEN GIVEN AS IT SHOULD HAVE BEEN. THE ORDER DROPPING PENALTY IS CLEARLY ERRONEOUS AND PREJUDICIAL TO REVENUE. 12. IN VIEW OF THE ABOVE DISCUSSION, THE PENALTY OR DER DATED 22.03.2017 IS CANCELLED WITH DIRECTIONS TO THE ASSESSING OFFICER TO DECIDE THE M ATTER AFRESH AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND EXAM INING ALL RELEVANT EVIDENCE. 4. AGGRIEVED BY THE ORDER OF THE LD. PR. CIT THE AS SESSEE IS IN APPEAL BEFORE US. 5. LD. COUNSEL FOR THE ASSESSEE RELIED ON THE SUBMI SSIONS MADE BEFORE THE AUTHORITIES BELOW WHEREAS LD. DR FOR THE REVENUE RE LIED ON THE ORDER PASSED BY THE LD. PR. CIT. 6. WE HAVE HARD BOTH THE PARTIES AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. WE NOTE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT VIDE H IS ORDER DATED 21.12.2016. IN RESPONSE TO THE NOTICE U/S 274 READ WITH SECTION 27 1(1)(C) OF THE ACT, THE ASSESSEE SUBMITTED THE REPLY BEFORE THE AO WHICH IS GIVEN BE LOW: IN REPLY TO ABOVE MENTIONED SUBJECT, IT IS SUBMITT ED THAT THE ABOVE SAID PENALTY NOTICE ISSUED IS LIABLE TO BE QUASHED ON THE BELOW MENTION ED GROUNDS:- 1. THAT THE ADDITION MADE U/S 69C OF THE INCOME-TAX ACT, 1961 DURING THE ASSESSMENT PROCEEDINGS U/S 153 R/W SEC. 143(2) OF THE INCOME-T AX ACT WAS UPON SURRENDER FROM ME FROM PREVENTION OF EXTENDING LITIGATION AND HARASSM ENT. 2. THAT I HAVE SATISFACTORILY PROVED THE SOURCE OF THE AMOUNT IN QUESTION I.E. RS. 10 LACS WHICH WERE SEIZED FROM ME DURING THE PARLIAMENTARY ELECTIONS ON 03/04/2014, THAT THE SAME WAS OBTAINED FROM M/S UNICON BUILDERS, BARNALA . M/S UNICON BUILDERS, BARNALA HAS ALSO TESTIFIED THE TRANSACTION DURING THE ASSES SMENT PROCEEDINGS. 3. THAT I HAVE ALSO PROVED THE PURPOSE OF THE AMOUN T IN FORM OF DETAIL OF TRUCK OPERATORS AND THE G.R.S/ BILTIES ON BEHALF OF WHOM THE AMOUNT IS RECEIVED FROM THE UNICON BUILDERS, BARNALA. THAT AS THE AMOUNT OF RS. 10 LACS WAS SURRENDERED F ROM PREVENTION OF EXTENDING LITIGATION AND DAY TO DAY HARASSMENT AND ON PROMISE OF NO PENALTY PROCEEDINGS ONLY, THEREFORE PENALTY PROCEEDINGS INITIATED U/S 271 (1) (C) MAY KINDLY BE QUASHED. 7. THEREAFTER, THE AO, HAVING GONE THROUGH THE REPL Y OF THE ASSESSEE TOOK THE VIEW THAT ASSESSEE HAD EXPLAINED THE TRANSACTION SA TISFACTORILY THEREFORE, HE DROPPED THE PENALTY PROCEEDINGS U/S 271(1) ( C ) OF THE ACT , OBSERVING THE FOLLOWING: ITA NO.63/ASR/2018 ASSESSMENT YEAR: 2015-16 SHRI ASHWANI KUMAR P PP PA AA AG GG GE EE E | || | 4 44 4 WHILE PASSING ORDER U/S 153 PENALTY PROCEEDINGS U/ S 271(1)(C) WERE INITIATED. LATER ON SHOW CAUSE NOTICE WAS ISSUED ON 10.02.2017. IN COMP LIANCE TO THE SAID NOTICE THE ASSESSEE STATED THAT THE AMOUNT OF RS. 10 LACS SEIZ ED AT THE TIME OF ELECTION HAS ALREADY BEEN EXPLAINED DURING THE ASSESSMENT PROCEEDINGS. E VEN THEN TO PURCHASE PEACE OF MIND AND TO AVOID FURTHER DISPUTE OF LITIGATION THE AMOU NT WAS DISCLOSED. AFTER CONSIDERING ALL THE FACT OF THE CASE THE REPLY OF THE ASSESSEE THE PENALTY PROCEEDINGS INITIATED ON 21.12.2016 ARE HEREBY DROP. 8. HAVING GONE THROUGH THE FACTUAL POSITION NARRATE D ABOVE, FIRST OF ALL, WE HAVE TO SEE WHETHER THE REQUISITE JURISDICTION NECESSARY TO ASS UME REVISIONAL JURISDICTION IS THERE EXISTING BEFORE THE PR. CIT TO EXERCISE HIS POWER. FOR THAT, WE HAVE TO EXAMINE AS TO WHETHER IN THE FIRST PLACE THE ORDER OF THE ASSESSI NG OFFICER FOUND FAULT BY THE PRINCIPAL CIT IS ERRONEOUS AS WELL AS PREJUDICIAL T O THE INTEREST OF THE REVENUE. FOR THAT, LET US TAKE THE GUIDANCE OF JUDICIAL PRECEDEN CE LAID DOWN BY THE HONBLE APEX COURT IN MALABAR INDUSTRIES LTD. VS. CIT [2000] 243 ITR 83(SC) WHEREIN THEIR LORDSHIP HAVE HELD THAT TWIN CONDITIONS NEEDS TO BE SATISFIED BEFORE EXERCISING REVISIONAL JURISDICTION U/S 263 OF THE ACT BY THE C IT. THE TWIN CONDITIONS ARE THAT THE ORDER OF THE ASSESSING OFFICER MUST BE ERRONEOUS AN D SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THE FOLLOWING CIRCUMSTA NCES, THE ORDER OF THE AO CAN BE HELD TO BE ERRONEOUS ORDER, THAT IS (I) IF THE ASSE SSING OFFICERS ORDER WAS PASSED ON INCORRECT ASSUMPTION OF FACT; OR (II) INCORRECT APP LICATION OF LAW; OR (III)ASSESSING OFFICERS ORDER IS IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE; OR (IV) IF THE ORDER IS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND; (V) IF THE AO HAS NOT INVESTIGATED THE ISSUE BEFORE HIM; THEN THE ORDER P ASSED BY THE ASSESSING OFFICER CAN BE TERMED AS ERRONEOUS ORDER. COMING NEXT TO THE SE COND LIMB, WHICH IS REQUIRED TO BE EXAMINED AS TO WHETHER THE ACTIONS OF THE AO CAN BE TERMED AS PREJUDICIAL TO THE INTEREST OF REVENUE. WHEN THIS ASPECT IS EXAMINED O NE HAS TO UNDERSTAND WHAT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE HON BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES (SUPRA) HELD THAT THIS PHRASE I. E. PREJUDICIAL TO THE INTEREST OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERR ONEOUS ORDER PASSED BY THE ASSESSING OFFICER. THEIR LORDSHIP HELD THAT IT HAS TO BE REMEMBERED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF ASSESSING O FFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. WHEN TH E ASSESSING OFFICER ADOPTED ONE OF ITA NO.63/ASR/2018 ASSESSMENT YEAR: 2015-16 SHRI ASHWANI KUMAR P PP PA AA AG GG GE EE E | || | 5 55 5 THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS TO THE REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TA KEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOU S ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. 9.TAKING NOTE OF THE AFORESAID DICTUM OF LAW LAID D OWN BY THE HONBLE APEX COURT, LET US EXAMINE WHETHER ORDER PASSED BY THE ASSESSIN G OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. WE NOTE THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE DIFFERENT. DURING THE ASSES SMENT STAGE, THE AO HAD EXAMINED THAT THE AMOUNT OF RS. 10 LAKHS WAS OBTAINED FROM M /S UNICON BUILDERS, BARNALA.M/S UNICON BUILDERS, BARNALA HAS ALSO SUBMI TTED HIS BANK STATEMENT AND VERIFIED THE TRANSACTION DURING THE ASSESSMENT PROC EEDINGS. THEREFORE, THE ASSESSEE HAS EXPLAINED THE SOURCE OF RS. 10 LAKHS, HENCE IT CANNOT BE A CASE OF CONCEALMENT OF INCOME.BESIDES, THE ASSESSEE HAS PROVED THE PURPOSE OF THE AMOUNT IN FORM OF DETAIL OF TRUCK OPERATORS AND THE G.R.S/ BILTIES ON BEHALF OF WHOM THE AMOUNT IS RECEIVED FROM THE UNICON BUILDERS, BARNALA. TAKING INTO ACCO UNT ALL THESE FACTORS, THE AO DROPPED THE PENALTY PROCEEDINGS INITIATED U/S 271 ( 1) (C) OF THE ACT, THEREFORE, ORDER PASSED BY THE AO IS NOT ERRONEOUS. WE ALSO NOTE THA T DURING THE ASSESSMENT STAGE THE AO HAS APPLIED HIS MIND, SINCE HE HAS ISSUED THE NO TICE U/S 271(1)(C) OF THE ACT AND IN RESPONSE TO THE NOTICE, THE ASSESSEE SUBMITTED T HE REPLY AND HAVING GONE THROUGH THE REPLY, THE AO TOOK THE VIEW THAT THE PENALTY IN THE ASSESSEE'S CASE SHOULD NOT BE IMPOSED. THEREFORE, CONSIDERING THE FACTS NARRATED ABOVE AND CASE LAW RELIED, WE ARE OF THE VIEW THAT ORDER PASSED BY THE AO IS NOT ERRO NEOUS, HENCE WE QUASH THE ORDER U/S 263 OF THE ACT. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 26.11.2019 SD/- SD/- ( N.K. CHOUDHRY ) (A.L.SAINI) ' / JUDICIAL MEMBER / ACCOUNTANT MEMBER AMRITSAR AMRITSAR * / DATE: 26/11/2019 ( BCG, PS ) ITA NO.63/ASR/2018 ASSESSMENT YEAR: 2015-16 SHRI ASHWANI KUMAR P PP PA AA AG GG GE EE E | || | 6 66 6 COPY OF THE ORDER FORWARDED TO: 1. SHRI ASHWANI KUMAR, C/O J.K. GUPTA, ADVOCATE, 47 02, HOSPITAL BAZAR, BATHINDA,PUNJAB. 2. PR. CIT, BATHINDA,PUNJAB. 3. C.I.T(A) 4. C.I.T.- CONCERNED. 5. THE SR. DR, I.T.A.T., AMRITSAR. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, AMRIT SAR BENCH