Smt. Nirmala S Tilavalli, Hubli V. ITO, Hubli

ITA 646/BANG/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9227 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-12-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 27-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMALADHAR
• Keywords: Gift
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIT KUMAR, JUDICIAL MEMBER ITA NO.646/BANG/2015 ASSESSMENT YEARS : 2005-06 SMT. NIRMALA S. TILAVALLI, L/H. LATE SHRI. S.H.TILAVALLI, HOSUR, II CROSS, HUBBALLI. PAN:AAXPT9540K VS. INCOME TAX OFFICER, WARD 1(3), HUBBALLI APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI KAMALADHAR, STANDING COUNSEL DATE OF HEARING : 20.12.2016 DATE OF PRONOUNCEMENT : 23 .12.2016 O R D E R PERLALIT KUMAR, JUDICIAL MEMBER THE PRESENT APPEAL IS ARISING OUT OF THE ORDER OF T HE CIT(A) PASSED ON 25.05.2010 CONFIRMING THE IMPOSITION OF PENALTY LEV IED BY AO UNDER SECTION 271(1)(C) OF THE ACT. 2. THE GROUNDS OF APPEAL ARE AS UNDER: 1. THE LEARNED CIT(A) ERRED IN PASSING THE ORDER IN THE MANNER WHICH HE D I D . ITA NO.646/BANG/2015 PAGE 2 OF 6 2. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE EXPLANATION OFFERED BY THE APPELLANT AND REFRAINED FROM CONFIRMING THE PENALTY U/S.271(1)(C) OF THE ACT. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THA T THE APPELLANT HAS NO INFORMATION ABOUT THE SB ACCOUNT O F HER HUSBANDSINCE THE SAID ACCOUNT WAS OPERATED BY HER H USBAND AND SON. THUS, TO BUY PIECE WITH DEPARTMENT THE APP ELLANT HAS OFFERED THE SAME AND PAID THE TAXES. ACCORDINGL Y, PENALTY CONFIRMED IS LIABLE TO BE CANCELLED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES, THE LEARN ED CIT(A) OUGHT TO HAVE APPRECIATED THE MERE ACCEPTANCE OF TH E ADDITION TO BUY PIECE WAS NOT ADEQUATE TO JUSTIFY T HE LEVY OF PENALTY. 5. WITHOUT PREJUDICE, THE PENALTY CONFIRMED BY CIT(A ) IS EXCESSIVE, ARBITRARY AND UNREASONABLE AND LIABLE TO BE CANCELLED. 6. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEA L MAY BE ALLOWED. 3. BRIEFLY, THE FACTS OF THE CASE ARE: THE ASSESSEE, SHRI. S. H. TILAVALLI, HAD AN ACCOUN T IN CANARA BANK, HUBBALLI, BEARING SB ACCOUNT NO.6788. IT WAS R EPORTED BY THE DR THAT THE ASSESSEE HAD DEPOSITED A SUM OF RS.13 ,00,000/- IN HIS ACCOUNT. ACCORDINGLY A NOTICE UNDER SECTION 148 WAS SERVED ON THE ASSESSEE. IN PURSUANCE TO THE NOTICE, THE WI FE OF LATE SHRI. S. H. TILAVALLI APPEARED AND OFFERED THE ENTIRE CASH DEPOSITED TO THE TAX. ON THE BASIS OF THIS, THE ASSESSMENT WAS CO MPLETED. THETOTAL INCOME ASSESSED WAS RS.14,34,789/-. 4. SIMULTANEOUSLY, THE AO HAD ALSO COMMENCED THE PEN ALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND GAVE A NOTICE TO THE WIFE OF ASSESSEE LATE SHRI. S. H. TILAVALLI. IT WAS ALSO THE CASE OF THE ASSESSEE BEFORE AO THAT SHE HAS NO KNOWL EDGE ABOUT ITA NO.646/BANG/2015 PAGE 3 OF 6 THE ACCOUNT OF HER HUSBAND IN CANARA BANK AND SHE OF FERED THE INCOME FOR THE ASSESSMENT ONLY WITH A VIEW TO BUY PEA CE. THE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED AND THE AO HAS IMPOSED A PENALTY OF RS.4,43,681/- ON THE WIFE OF THE DECEASED ASSESSEE. THE REASONING OF THE LEARNED AO GIVEN IN THE PENALTY ORDER IS AS UNDER: THE ASSESSEE LATE SHRI.SHARANAPPA H TILAVALLI DIED ON 14.6.2004 AS PER THE LETTER DATED 15.10.2009 ISSUED BY THE MANAGER, CANARA BANK, KOPPIKAR ROAD, HUBLI. IN THE LETTERS FILED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS IN CONNECTION WITH THE PENALTY PROCEEDINGS U/S. 271(1) (C)OF THE I.T.ACT, 1961, SHE HAS STATED THAT SHE WAS NOT AWARE OF THE SAVINGS BANK ACCOUNT HELD BY HER HUSBAND AT CANARA BANK, KOPPIKA R ROAD, HUBLI. HOWEVER, IT IS SEEN FROM THE STATEMENT OF ACCOUNT I N RESPECT OF THE SAVINGS BANK ACCOUNT NO.6788, THE SAVINGS BANK ACCO UNT HAS BEEN OPERATED DURING THE FINANCIAL YEAR 2004-05 ON SEVER AL OCCASIONS EVEN AFTER THE DEATH OF HER HUSBAND. HENCE, I CONCLUDE THAT SMT. N.S.TILAVALLI, LEGAL HEIR OF LATE SHRI. SHARAN APPA H TILAVALLI WAS AWARE OF THE SAVINGS BANK ACCOUNT NO. 6788 HELD AT CANARA BANK, KOPPIKAR ROAD, HUBLI. I, THEREFORE, CONCLUDE THAT THE ASSESSEES CASE IS A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271 (1)(C) OF THE I.T. ACT, 1961. I LEVY A MINIMUM PENALTY OF RS.4,43,681/- (R UPEES FOUR LAKH FORTY THREE THOUSAND SIX HUNDRED AND EIGHTY ONE) UN DER SECTION 271(1)(C) OF THE I.T. ACT, 1961. 5. AGAINST THE SAID ORDER, THE ASSESSEE BEFORE US FILED AN APPEAL AND THE LEARNED CIT HAD CONFIRMED THE ORDER PASSED BY THE AO FOR THE FOLLOWING REASONS: THE D EPARTMENT HAS INFORMATION THAT THE ASSESSEE SHRI SH ARNAPPA H TILAVAIII HAS DEPOSITED THE FOLLOWING AMOUNTS IN HIS SAVING B ANKS ACCOUNTS CA N ARA BANK . DURING THE PREVIOUS YEAR RELEVANT TO AY 2005-06 AND THE SAME W AS NOT DISCLOSED IN THE ROI : . SL. NO. DATE AMOUNT NAME OF THE BANK 1 2.9.2004 RS. 10,00,000/- CANARA BANK HUBLI (5B A/C) 2 7.3.2005 RS. 3,00,000/- CANARA BANK HUBLI (SB A /C) TOTAL RS. 13, OO,OOO /- ITA NO.646/BANG/2015 PAGE 4 OF 6 B U T THE ASSESSEES WIFE SMT. NIRMALA.S.TILAVALLI HAS COME OUT WITH THE A R GUMENT THAT SHE WAS NOT AWARE OF THE SAVING BANK AC COUNTS OF HER HU SBAND IN CANARA BANK AND SMT. NIRMALA.S.TILAVALLI O FFERED THE ENTIRE CASH D EPOSIT OF RS. 13,00,000 WHICH WAS DEPOSITED IN SAVI NG BANK ACCOUNTS IN CANARA BANK, HUBBALLI, ONLY AFTER THE A O HAS ISSUED THE NOTICE OTHERWISE THE DEPOSIT OF SAVING ACCOUNT SHOU LD NOT HAVE SURFACED AND MAY BE ESCAPED FROM THE TAX NET . IT MEANS THAT SHE HAS WILLFULLY CONCEALED THE FACT OF SAVING BANK ACCOUNT NO. 6788 IN CANARA BANK. HENCE, THE MENSREA WAS ESTABLISHED CLEARLY IN THIS CASE. HENCE, THE PENALTY LEVIED BY THE AO U/S 271(1)(C) IS UPHEL D AND ASSESSEES GROUND OF APPEAL IS DISMISSED. 6. NOW THE ASSESSEE IS BEFORE US. WE MAY RECORD TH AT THERE IS NO REPRESENTATIVE ON BEHALF OF THE ASSESSEE DURING THE COURSE OF THE PROCEEDINGS BEFORE US AND THEREFORE WE HAVE NO OTHER OPTION BUT TO DECIDE THE APPEAL ON THE BASIS OF THE INFORMATION AVAILABLE ON RECORD. THE LEARNED DR HAS SUBMITTED THAT THE PENALTY IS REQUIRED TO BE CONFIR MED AS AFTER THE DEATH OF THE ASSESSEE, THE FAMILY MEMBERS OF THE ASSESSEE WE RE OPERATING THE BANK ACCOUNT MAINTAINED BY LATE HUSBAND OF THE ASSESSEE AND WERE DEPOSITING THE AMOUNT IN THE ACCOUNT OF DECEASED . THE LEARNED DR HAS SUBMITTED THAT THE AMOUNT WAS DEPOSITED BY THE SON AFTER THE DEATH OF THE HUSBAND OF THE PRESENT APPELLANT. FURTHER LEARNED DR RELIES UPON T HE ORDERS PASSED BY AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTION OF THE PARTIE S AND PERUSED RECORD. IT IS THE CASE OF THE REVENUE THAT THE ASSESSEE I.E ., SHRI SHARNAPPA H TILAVALLI DIED ON 14.04.2004 AND THEREAFTER THE AMO UNT WAS DEPOSITED IN THE ACCOUNT OF THE SAID ASSESSEE ON 02.09.2004 AND 07.0 3.2005 TO THE TUNE OF RS.13,00,000/-. UNDOUBTEDLY, THE AMOUNT DEPOSITED IN THE ACCOUNT OF THE DECEASED CANNOT BE SAID TO BE AMOUNT BELONGING TO T HE DECEASED SHRI SHARNAPPA H TILAVALLI AND THEREFORE THE SAID A MOUNT CANNOT BE ASSESSED IN THE HANDS OF SHRI SHARNAPPA H TILAVALLI. FOR TH E SAID REASONS, EVEN THOUGH THE ASSESSMENT HAS BEEN FINALIZED ON THE ACC EPTANCE OF THE PRESENT ITA NO.646/BANG/2015 PAGE 5 OF 6 APPELLANT BEFORE US, THE SAME CANNOT BE FORMED BASI S OF IMPOSITION OF PENALTY. AS IN OUR VIEW THE DECEASED CANNOT BE SAI D TO BE DELIBERATELY CONCEALING THE INCOME OR FILING THE INACCURATE PART ICULARS OF THE INCOME. 8. MOREOVER IT IS THE CASE THAT THE ASSESSMENT PROC EEDINGS WERE INITIATED PURSUANT TO THE NOTICE ISSUED UNDER SECTION 148 TO SHRI. S. H. TILAVALLI. IT IS ALSO RECORDED IN THE ASSESSMENT ORDER ( WRONGLY ) T HAT THE ASSESSEE HAD DEPOSITED THE AMOUNT OF RS.13,00,000/- IN THE BANK ACCOUNT DURING THE YEAR 2005-06. IT IS ALSO MENTIONED IN THE ASSESSMENT OR DER THAT THE NOTICE UNDER SECTION 148 WAS ISSUED AND SERVED ON THE ASSESSEE ( LATE SHRI. S. H. TILAVALLI). NOW ON THE BASIS OF THE ABOVE SAID ASSESSMENT PROCE EDINGS,THE PENALTY PROCEEDINGS WERE CONCLUDED. 9. IN OUR VIEW NOTHING HAS BEEN BROUGHT ON RECORD T HAT DEPOSIT WAS MADE BY THE LEGAL HEIRS OF THE DECEASED AND MORE PA RTICULARLY THE ASSESSEE BEFORE US. BESIDES THE ABOVE, HAD THE ASSESSEE WAS ALIVE, THEN THE ASSESSEE (LATE HUSBAND) WOULD HAVE GIVEN DETAILS OF THE INCO ME OR THE STATUS OF THE AMOUNT DEPOSITED IN THE ACCOUNT I.E., WHETHER THE A MOUNT DEPOSITED WAS A LOAN, GIFT OR TAX EXEMPTED DEPOSITS, ETC. FURTHERM ORE, IF WE ACCEPT THE CASE OF THE LEARNED DR FOR THE REVENUE THAT THE AMOUNT W AS DEPOSITED BY THE SON OF THE APPELLANT BEFORE US, THEN IN OUR VIEW THE EX PLANATION SHOULD HAVE BEEN SOUGHT FROM THE SON AND IF THE INCOME BELONGS TO HI M, THEN THE INCOME SHOULD BE ASSESSED IN THE HANDS OF THE SON AND NOT IN THE HANDS OF HUSBAND OR THE WIFE OF THE DECEASED. SINCE THERE WAS NO WIL LFUL AND DELIBERATE CONCEALMENT OF THE INCOME BY THE ASSESSEE THEREFORE THE APPEAL IS REQUIRED TO BE ALLOWED. 10. THEREFORE IN OUR VIEW NO CASE OF IMPOSING OF PE NALTY WAS MADE OUT BY THE REVENUE AND IN THE RESULT THE APPEAL IS REQU IRED TO BE ALLOWED AND WE THEREFORE ALLOW THE APPEAL AND DIRECT THE DELETION OF PENALTY IMPOSED ON THE ASSESSEE. ITA NO.646/BANG/2015 PAGE 6 OF 6 11. IN THE RESULT, THE APPEAL FILED BY THE APPELLA NT IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF DECEMBER, 2016. SD/- SD/- (A. K. GARODIA) (LALIT KUMAR) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE. DATED: 23 RD DECEMBER, 2016. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.