Smt. Neeta Kishor Patel, Vapi V. The Income Tax Officer,Ward-2, Vapi

ITA 647/AHD/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2123 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 20-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K CHANDANANI
• Assessee Lawyers: S D CHHEDA
• Keywords: Business income; Income from undisclosed sources; Reasonable cause
• Section: 68; 27; 271(1)(c); 273B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.647/AHD/2015/SRT & . / ITA NO.1456/AHD/2014/SRT / ASSESSMENT YEAR: 2008-09 NEETA KISHOR PATEL, B/106, OMKAR SOCIETY, PLOT NO. H/408, MORARJI CIRCLE, VAPI. [PAN: AJEPP 3221D] VS. INCOME TAX OFFICER, WARD-2, VAPI. ( / APPELLANT) ( !' /RESPONDENT) / ASSESSEE BY : SHRI S.D. CHHEDA, C.A /REVENUE BY : SHRI J.K. CHANDANANI, SR. D.R /DATE OF HEARING : 25-04-2018 /DATE OF PRONOUNCEMENT : 26-04-2018 / ORDER PER C.M.GARG, JUDICIAL MEMBER: THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE A GAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS), VALSAD (C IT(A) FOR SHORT) DATED 09.01.2015 & 12.02.2014 RESPECTIVELY FOR THE ASSESS MENT YEAR (A.Y) 2008- 09. 2. THE GROUNDS RAISED BY THE ASSESSEE IN ITA NO.647 /AHD/2015/SRT READ AS FOLLOWS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND IN FACTS TO HOLD THAT THE APPELLANT HAS FAI LED TO GIVE COGENT REASON OF CASH DEPOSITS DURING THE ASSESSMENT PROCE EDINGS. 2 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND IN FACTS THAT WITHOUT FINDING OF FURNISHING INACCURATE PARTICULARS, THE PENALTY U/S 271(L)(C) CANNOT BE LE VIED. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND IN FACTS TO UPHELD THE PENALTY LEVIED U/S 2 71(L)(C). 3. THE SOLE GROUND RAISED BY THE ASSESSEE IN ITANO. 1456/AHD/2014/SRT READS AS FOLLOWS: THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND FACTS TO CONFIRM THE PENALTY LEVIED U/S. 27 1B. ITA NO.1456/AHD/2014/SRT: 4. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBU NAL. THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT THE ASSESSEE BEI NG A LADY HAS TO FACE FIRST TIME REQUIREMENT OF PROVISION OF S. 44AB OF T HE ACT, WHEREIN SHE WAS REQUIRED TO GET AUDITED HER ACCOUNTS. THE LD. AR S UBMITTED THAT BEFORE THIS ASSESSMENT YEAR THE ASSESSEE WAS NOT WITHIN AMBIT O F SUCH REQUIREMENT AND IT WAS AN OMISSION AND NEGLIGENCE ON THE PART OF TH E TAX CONSULTANT OF THE ASSESSEE, WHO DID NOT INFORM THE APPELLANT ABOUT RE QUIREMENT OF BOOKS OF ACCOUNTS AUDIT REPORT. THE LD. AR SUBMITTED THAT F ROM THE AFFIDAVIT OF ASSESSEE SWORN ON 06.01.2011, IT IS CLEAR THAT THE ASSESSEE STATED THAT DURING THE YEAR HER MOTHER-IN-LAW HAD EXPIRED AND S HE HAD TO DEVOTE MORE TIME TO HOUSEHOLD WORK AND THIS WAS THE FIRST YEAR IN HER LIFE THAT HER TURNOVER EXCEEDED TO RS. 40,00,000/- SO SHE ENGAGED AND TOOK SERVICES OF C.A, SHRI HITESH PATEL FOR AUDIT U/S. 44AB OF THE ACT. THE LD . AR SUBMITTED THAT THE ASSESSEE SENT ALL THE REQUIRED PAPERS TO THE TAX CO NSULTANT THROUGH HER ACCOUNTANT REQUESTING HIM TO FILE RETURN WITHIN TIM E ALONG WITH AUDIT REPORT, 3 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL BUT THE SAME WAS FILED BELATEDLY ON 31.03.2010. TH E LD. AR SUBMITTED THAT THE ASSESSEE CHANGED HER TAX CONSULTANT AND TOOK SE RVICES OF SHRI HITESH PATEL, CA AND THAT IS WHY PENALTY U/S. 271B OF THE ACT MAY KINDLY BE CANCELLED BY ACCEPTING EXPLANATION OF THE ASSESSEE. THE LD. AR LASTLY POINTED OUT THAT AS PER PROVISIONS OF S. 273B OF TH E ACT THE PENALTY NOT TO BE IMPOSED IN CERTAIN CASES INCLUDING S. 271B OF THE A CT FOR ANY FAILURE IF THE ASSESSEE PROVES THAT THERE WAS A REASONABLE CAUSE F OR SAID FAILURE. 5. REPLYING TO THE ABOVE, THE LD. DEPARTMENTAL REPR ESENTATIVE (DR) STRONGLY SUPPORTED THE PENALTY ORDER AND SUBMITTED THAT THE ASSESSEE DID NOT COMPLY WITH THE REQUIREMENT OF PROVISION OF S. 44AB OF THE ACT HAVING TURNOVER OF MORE THAN RS. 40,00,000/- DURING THE FI NANCIAL PERIOD. THUS, PENALTY WAS RIGHTLY IMPOSED BY THE ASSESSING OFFICE R (AO) AND THE SAME WAS CONFIRMED BY THE LD. CIT(A) AS PER REQUIREMENT OF T HE ACT. 6. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS, WE ARE OF THE VIEW THAT S. 44AB REQUIRES THAT WHERE THE TURNOVER OF THE ASSESSEE CROSSES THE LIMIT OF RS. 40,00,000/- DURING PARTICULAR FINA NCIAL PERIOD THEN, THE ASSESSEE IS REQUIRED TO GET AUDITED HIS BOOKS OF AC COUNTS FROM QUALIFIED AUDITOR AND FAILING IN SUCH COMPLIANCE ATTRACTS PEN ALTY U/S. 271B OF THE ACT. IN THE PRESENT CASE, THE ASSESSEE FILED RETURN OF INCO ME BELATEDLY AND DID NOT FILE AUDIT REPORT ALONG WITH RETURN OF INCOME. IN THIS SITUATION, PENALTY U/S. 271B OF THE ACT HAS TO BE IMPOSED AND AUTHORITIES B ELOW INVOKED SAID PROVISION FOR IMPOSING AND CONFIRMING THE PENALTY. HOWEVER, S. 273B OF THE ACT PROVIDES THAT PENALTY IN CERTAIN CASES SHALL NO T BE IMPOSED ON VARIOUS 4 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL SECTIONS OF THE ACT INCLUDING S. 271B OF THE ACT, W HEREIN THE ASSESSEE SATISFIES THE COURT AND PROVES THAT THERE WAS A REA SONABLE CAUSE FOR SAID FAILURE. 7. IN THE PRESENT CASE, THE ASSESSEE IN HER AFFIDAV IT AND SUBMISSIONS HAS SHOWN TWO CAUSES VIZ. DEATH OF HER MOTHER-IN-LAW AN D NEGLIGENCE AND OMISSION ON THE PART OF HER TAX CONSULTANT WHO WAS LATER CHANGED SHRI HITESH PATEL, C.A WAS APPOINTED AS TAX CONSULTANT. ADMITT EDLY, THE ASSESSEE IS A LADY AND IN ADDITION TO HER BUSINESS SHE HAS TO LOO K AFTER HER DOMESTIC AFFAIRS. FROM COPY OF DEATH CERTIFICATE OF MOTHER- IN-LAW OF ASSESSEE SMT. SHANTABEN PLACED AT PG. 4 OF PAPER BOOK, IT IS CLEA R THAT SHE DIED ON 14.05.2007 DURING RELEVANT FINANCIAL PERIOD OF 2007 -08. THUS, IT CANNOT BE DENIED THAT AFTER DEATH OF HER MOTHER-IN-LAW THE AS SESSEE LADY HAD TO DEVOTE MORE TIME FOR HER DOMESTIC AFFAIRS. FURTHER, THE U N-REBUTTED AFFIDAVIT OF ASSESSEE ALSO SUPPORTS THE FACT THAT DUE TO NEGLIGE NCE AND OMISSION ON THE PART OF TAX CONSULTANT THE ASSESSEE APPOINTED SHRI HITESH PATEL, C.A AS HER TAX CONSULTANT AND HER EARLIER TAX CONSULTANT DID N OT MAKE ANY EFFORTS DESPITE THE FACT THAT SHE SENT ALL THE REQUIRED PAPERS TO H IM THROUGH HER ACCOUNTANT AND EVEN THEN THE EARLIER TAX CONSULTANT DID NOT GE T AUDITED BOOKS OF ACCOUNTS AND DID NOT FILE RETURN WITHIN PRESCRIBED TIME LIMIT WHICH COMPELLED THE ASSESSEE TO TAKE SERVICES OF NEW TAX CONSULTANT SHRI HITESH PATEL, C.A. IN OUR HUMBLE UNDERSTANDING OF ABOVE NOTED FACTS, W E ARE SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE WE ACCEPT THE REA SONS DUE TO WHICH THE ASSESSEE COULD NOT GET AUDITED HER BOOKS OF ACCOUNT S AND COULD NOT FILE AUDIT 5 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL REPORT ALONG WITH RETURN OF INCOME WITHIN PRESCRIBE D TIME LIMIT. CONSEQUENTLY, WE HOLD THAT THE ASSESSEE IS ENTITLED FOR IMMUNITY FROM PENALTY U/S. 271B OF THE ACT AS PER PROVISION OF S. 273B OF THE ACT AS S HE SUCCESSFULLY PROVED THAT THERE WAS A REASONABLE CAUSE FOR SAID FAILURE. ACC ORDINGLY, THE SOLE GROUND OF ASSESSEE IN THIS APPEAL IS ALLOWED AND THE AO IS DIRECTED TO DELETE THE PENALTY. ITA NO.647/AHD/2015/SRT: 8. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBU NAL. THE LD. AR SUBMITTED THAT THE AO WAS NOT CORRECT IN IMPOSING PENALTY U/S . 271(1)(C) OF THE ACT ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT DURIN G THE YEAR ON NUMBER OF OCCASIONS. THE LD. AR SUBMITTED THAT THE CASH DEPO SIT WAS OUT OF AMOUNT OF WITHDRAWALS MADE BY THE ASSESSEE. THE LD. AR SUBMIT TED THAT THE ASSESSEE HAS PREPARED AND SUBMITTED HER CASH BOOK BEFORE THE AUTHORITIES BELOW WHICH SHOWS THAT THE CASH WITHDRAWAL FROM THE BANK WAS RE-DEPOSITED IN THE BANK. THE LD. AR FURTHER SUBMITTED THAT THE EXPLAN ATION OFFERED BY THE ASSESSEE DURING QUANTUM PROCEEDINGS WAS ALSO RELEVA NT TO THE PENALTY PROCEEDINGS, WHICH WAS IGNORED BY THE AUTHORITIES B ELOW. THE LD. AR ALSO SUBMITTED THAT AS PER DECISION OF HON'BLE SUPREME C OURT IN THE CASE OF CIT V. RELIANCE PETRO PRODUCT PVT. LTD. 322 ITR 158 (SC ) PENALTY IN THE PRESENT CASE CANNOT BE IMPOSED AS PENALTY HAS BEEN IMPOSED ON THE BASIS OF BASELESS PRESUMPTION AND HENCE, PENALTY IS NOT LEVI ABLE ON THE ASSESSEE. 6 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL 9. REPLYING TO THE ABOVE, THE LD. DEPARTMENTAL REPR ESENTATIVE (DR) SUBMITTED THAT FROM THE PENALTY ORDER PARA 3 & 4, I T IS CLEAR THAT ON THE REQUEST OF THE ASSESSEE PENALTY PROCEEDINGS WERE KE PT IN ABEYANCE TILL DISPOSAL OF APPEAL BEFORE LD. CIT(A). SUBSEQUENTLY , THE SUCCESSOR AO AGAIN ISSUED NOTICE SEEKING ASSESSEE TO FILE HIS REPLY ON 12.09.2012 AT 12.30 PM WHICH WAS DULY SERVED ON THE ASSESSEE AND THERE WAS NO REPLY. SUBSEQUENTLY, AGAIN NO FRESH NOTICE WAS ISSUED ON 1 7.12.2012 AND IN RESPONSE TO SAID NOTICE NEITHER ANYBODY ATTENDED NO R ANY WRITTEN SUBMISSION FILED BY THE ASSESSEE TILL 12.03.2013 I.E., TILL TH E DATE OF PASSING PENALTY ORDER. CONSEQUENTLY, THE AO HELD THAT THE ASSESSEE HAS NOT HING TO SAY IN THE MATTER AND THE ASSESSEE HAS COMPLETELY FAILED TO DI SCHARGE HIS ONUS COST ON IT TO JUSTIFY THE CASH CREDIT IN HER BANK ACCOUNT A ND THUS, LIABLE TO PENALTY U/S. 271(1)(C) OF THE ACT. 10. FURTHER, FROM PARA 5 OF ASSESSMENT ORDER, THE A O NOTED THAT WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DE POSIT IN THE BANK ACCOUNT THEN THE ASSESSEE EXPLAINED THAT THE CASH D EPOSIT IS OUT OF THE CASH WITHDRAWALS MADE BY HER. THE AO ALSO NOTED THAT THE ASSESSEE HAS PREPARED HER CASH BOOK IN SUCH A MANNER THAT APPARE NT IF ONE LOOKS AT THE SAME IT WILL APPEAR THAT THE CASH WITHDRAWN FROM TH E BANK IS BEING RE- DEPOSITED IN THE BANK. THEREAFTER, THE AO PROCEEDE D TO IMPOSE PENALTY BY HOLDING THAT THE ASSESSEE MUST HAVE UTILIZED THE CA SH WITHDRAWN FROM THE BANK FOR SOME OTHER PURPOSE, BUT THE AO HAS NOT BRO UGHT ANY FACT OR FINDING ON RECORD FOR WHICH OTHER PURPOSE THE ASSESSEE UTIL IZE THE CASH WITHDRAWAL 7 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL FROM THE BANK. FROM ASSESSMENT ORDER PARA 5 AND QU ANTUM ORDER OF THE TRIBUNAL DATED 13.10.2016 PARA 6(B), IT IS CLEAR TH AT THE AO NOTED THAT THE ASSESSEE STATED THE CASH DEPOSITED IN THE BANK ACCO UNT WAS OUT OF THE CASH WITHDRAWAL MADE FROM THE BANK AND THE ASSESSEE ALSO PREPARED HER CASH BOOK AND SUBMITTED BEFORE THE AO EXPLAINING THE CAS H WITHDRAWALS AND REDEPOSIT OF CASH TO THE SAME BANK ACCOUNT. HOWEVE R, THE AO REJECTED THE EXPLANATION AND CASH BOOK BY OBSERVING THAT THE ASS ESSEE HAS PREPARED HER CASH BOOK IN SUCH A MANNER THAT APPARENTLY IF ONE L OOKS AT THE SAME, IT WILL APPEAR THAT THE CASH WITHDRAWN FROM THE BANK IS BEI NG RE-DEPOSITED IN THE BANK, BUT IN FACT IT IS NOT A CASE. THEREAFTER, TH E AO ALLEGED THAT THE ASSESSEE MUST HAVE UTILIZED THE CASH WITHDRAWN FROM THE BANK FOR SOME OTHER PURPOSE, BUT THERE IS NO FINDING OF THE AO TO SUPPORT THIS ALLEGATION SHOWING THAT THE ASSESSEE USED CASH FOR THIS PARTIC ULAR PURPOSE. AT THIS JUNCTURE, WE ARE IN AGREEMENT WITH THE CONTENTION O F THE LD. AR THAT FROM THE COMPUTATION OF INCOME FOR A.Y 2008-09 PLACED AT ASS ESSEE PAPER BOOK PG. 21 THE ONLY SOURCE OF INCOME IS BUSINESS AND PROFES SION FROM WHICH THE ASSESSEE HAS SHOWN INCOME OF RS. 2,33,945/- AND INC OME FROM OTHER SOURCES BEING BANK INTEREST IS ONLY RS. 440/-, THEN HOW IT CAN BE ALLEGED THAT THE ASSESSEE HAS USED AMOUNT OF CASH WITHDRAWN FROM THE BANK FOR ANOTHER PURPOSE. WE CANNOT IGNORE THE FACT THAT THE AO HAS ONLY MADE ADDITION OF RS. 15,32,000/- U/S. 68 OF THE ACT ON ACCOUNT OF U NEXPLAINED CASH DEPOSIT IN THE BANK AND WHERE THE AO HAS NOT BROUGHT OUT ANY O THER ALLEGATION OR MATERIAL AGAINST THE ASSESSEE SHOWING THAT THE CASH WITHDRAWN FROM THE 8 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL BANK WAS USED FOR ANOTHER PURPOSE INSTEAD OF RE-DEP OSITING THE SAME TO THE SAME BANK ACCOUNT. THE REVENUE AUTHORITIES MADE AD DITION BY REJECTING EXPLANATION OF THE ASSESSEE THAT THE CASH DEPOSITED IN THE BANK ACCOUNT WAS OUT OF AMOUNT WITHDRAWAL FROM THE BANK AND THE SAME RE-DEPOSITED IN THE SAME BANK ACCOUNT DESPITE THE FACT THAT ASSESSEE SU BMITTED BANK ACCOUNT STATEMENT AND CASH BOOK WHICH WAS APPARENTLY SHOWIN G THAT THE AMOUNT WITHDRAWN WAS RE-DEPOSITED TO THE SAME BANK ACCOUNT . HOWEVER, THIS EXPLANATION WAS NOT ACCEPTED BY THE REVENUE AUTHORI TIES AND THEIR CONCLUSION WAS ALSO CONFIRMED BY THE TRIBUNAL ORDER DATED 13.10.2016, BUT ONLY BECAUSE ADDITION HAS BEEN CONFIRMED BY THE TRI BUNAL DOES NOT ENTITLE THE AO TO IMPOSE PENALTY BLINDLY. 11. THE LD. AR HAS PLACED RELIANCE ON THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. SMT. CHANCHAL KATYAL REPORTED AT 173 TAXMAN 71 (ALL) AND SUBMITTED THAT WHERE ASSESSEE HAD NOT OFFERED ANY EXPLANATION THEN PENALTY HAS TO BE CONFIRMED U/S. 2 71(1)(C) OF THE ACT. ON THE OTHER HAND, THE LD. AR HAS PLACED RELIANCE ON T HE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT V. JALARAM OIL MILLS REPORTED AS 253 ITR 192 (GUJ) , WHEREIN IT WAS HELD THAT ON THE BASIS OF THE ASSE SSEE AGREEING TO HAVE THE CREDIT ENTRIES IN ITS BOOKS OF ACCOUNTS TREATED AS ITS INCOME U/S. 68 OF THE ACT THEN ALSO IF THERE IS NO HISTORY OF ASSESSEE TO SHOW THAT THE ASSESSEE HAD BEEN EARNING BUSINESS INCOME OUTSIDE THE BOOKS NOR THERE IS IN THE BOOKS RELATING TO THE YEAR UNDER CO NSIDERATION ANY INSTANCE POINTED OUT INDICATING ANY TRANSACTION OUTSIDE THE BOOKS THEN PENALTY U/S. 9 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL 271(1)(C) OF THE ACT IS NOT SUSTAINABLE. IN THE PRE SENT CASE ALSO THE ADDITION U/S. 68 OF THE ACT HAS BEEN MADE, BUT THE AO HAVE B ROUGHT ON RECORD ANY INSTANCE POINTING OUT INDICATING ANY TRANSACTION OU TSIDE THE BOOKS OF ACCOUNTS AND THE AO HAS NOT BROUGHT ON RECORD ANY M ATERIAL OR EVIDENCE AGAINST THE ASSESSEE SHOWING THAT THE AMOUNT WITHDR AWN FROM BANK WAS USED FOR ANY OTHER PURPOSE INSTEAD OF RE-DEPOSITING THE SAME TO THE BANK ACCOUNT AND THE AMOUNT DEPOSITED BY THE ASSESSEE TO HER BANK ACCOUNT WAS HER INCOME FROM UNDISCLOSED SOURCES OR UNRECORDED T RANSACTIONS. WE CANNOT IGNORE THAT THERE IS NO OTHER ADDITION BY TH E AO EXCEPT ADDITION U/S. 68 OF THE ACT ON ACCOUNT OF CASH DEPOSITED TO THE B ANK. THEREFORE, BENEFIT OF THE RATIO OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF JALARAM OIL MILLS (SUPRA) IS AVAILABLE FOR THE ASSESSEE. 12. THE LD. AR HAS ALSO PLACED RELIANCE ON THE DECI SION OF ITAT, AHMEDABAD IN THE CASE OF GANDHI SERVICE STATION V. ACIT [2006] 100 TTJ 1143 (AHD.) , WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE HAD E XPLAINED CORRECTION AND INSERTION OF ENTRIES IN THE CASH BOO KS AS WELL AS CASH CREDITS THEN ONLY BY REFEREEING THE EXPLANATION OF THE ASSE SSEE ON PROBABILITIES AND ASSUMPTIONS WITHOUT ANY INDEPENDENT INVESTIGATION P ENALTY U/S. 158BFA(2) IS NOT SUSTAINABLE. THE LD. AR HAS ALSO PLACED RELIA NCE ON THE ORDER OF ITAT, AHMEDABAD IN THE CASE OF JAYENDRA G. SONI V. ITO REPORTED AS 2014 TAXPUB(DT) 4818 (AHD-TRIB) AND SUBMITTED THAT THE MERE REJECTION OF THE EXPLANATION OF THE ASSESSEE DID NOT RENDER THE EXPL ANATION FALSE WHEN TWO VIEWS ARE POSSIBLE NO PENALTY CAN BE IMPOSED U/S. 2 71(1)(C) OF THE ACT. IN 10 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL THIS CASE, CASH BOOK WAS SUBMITTED DURING THE QUANT UM PROCEEDINGS AND THE SAME WAS NOT SUBMITTED BEFORE THE AO DURING THE PEN ALTY PROCEEDINGS. IN THE PRESENT CASE ALSO THE ASSESSEE SUBMITTED EXPLAN ATION AND CASH BOOK DURING QUANTUM PROCEEDINGS BEFORE THE AUTHORITIES B ELOW EXPLAINING THE AMOUNT DEPOSITED IN CASH TO THE BANK ACCOUNT BUT TH E SAME WAS REJECTED WITHOUT BRINGING OUT ANY ADVERSE MATERIAL OR EVIDEN CE SHOWING THAT THE AMOUNT WITHDRAWN FROM BANK WAS USED FOR ANY OTHER P URPOSES AND THE AMOUNT DEPOSITED IN THE BANK WAS NOT THE SAME AMOUN T AND IT WAS INCOME OF THE ASSESSEE FROM UNEXPLAINED OR UNDISCLOSED SOU RCES. IN PENALTY ORDER PARA 5, THE AO HAS ALLEGED THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO FURNISH ALL MATERIAL FACTS DURING THE C OURSE ASSESSMENT PROCEEDINGS RESULTED IN DETECTING FURNISHING INACCU RATE PARTICULARS OF INCOME TO THE EXTENT OF RS. 15,32,000/- BEING CASH DEPOSIT ED TO THE BANK ACCOUNT OF THE ASSESSEE. ADMITTEDLY, THE BANK ACCOUNT WAS DIS CLOSED BY THE ASSESSEE THEN ALLEGATION OF FURNISHING INACCURATE PARTICULAR S CANNOT BE MADE AGAINST THE ASSESSEE. 13. ON THE BASIS OF FOREGOING DISCUSSION, WE REACH TO A CONCLUSION THAT THE ASSESSEE DURING ASSESSMENT PROCEEDINGS EXPLAINED TH E SOURCE OF CASH DEPOSIT TO HER BANK ACCOUNT WHICH WAS NOT ACCEPTED BY THE AUTHORITIES BELOW AND THE ADDITION WAS CONFIRMED UP TO THE LEVEL OF T RIBUNAL, IN THIS SITUATION, IT CANNOT ALLEGED THAT NO EXPLANATION HAS BEEN OFFERED BY THE ASSESSEE. THUS, WE RESPECTFULLY HOLD THAT THE BENEFIT OF THE RATIO OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SMT. CHANCHAL KATYAL (SUPRA) IS NOT AVAILABLE IN FAVOUR OF 11 ITA NOS.647/AHD/2015/SRT & 1456/AHD/2014/SRT (A.Y: 2008-09) NEETA KISHOR PATEL THE REVENUE. ON THE OTHER HAND, RATIO OF THE ORDER OF ITAT, AHMEDABAD IN THE CASE OF JAYENDRA G. SONI V. ITO (SUPRA) SUPPORTS THE CASE OF THE ASSESSEE, WHEREIN THE CASH BOOK WAS FILED DURING QU ANTUM PROCEEDINGS EXPLAINING THE QUARRIES OF THE AO BUT THE SAME COUL D NOT BE PRODUCED DURING PENALTY PROCEEDINGS AS THE EXPLANATION OF THE ASSES SEE. 14. ON THE BASIS OF FOREGOING DISCUSSION, WE REACH TO A CONCLUSION THAT THE PENALTY IMPOSED BY THE AO U/S. 271(1)(C) OF THE ACT WAS NOT SUSTAINABLE AND LD. CIT(A) WAS NOT CORRECT IN UPHOLDING THE SAME. FINALLY, WE ARE INCLINED TO HOLD THAT THE PENALTY IMPOSED BY THE AO WAS NOT VAL ID AND SUSTAINABLE IN VIEW OF VARIOUS DECISIONS/ORDERS INCLUDING DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) AND DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JALARAM OIL MILLS (SUPRA) THUS, WE DIRECT THE AO TO DELETE THE PENALTY. ACCO RDINGLY, GROUNDS OF ASSESSEE ARE ALLOWED AND PENALTY IS CANCELLED. 15. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 26 TH APRIL, 2018. / SURAT ; DATED : 26 TH APRIL, 2018 EDN ! $ / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. # ( ) / THE CIT(A)-3, SURAT; 4. PRL. CIT, SURAT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE. / BY ORDER, // TRUE COPY // ) / ASSISTANT REGISTRAR, ITAT, SURAT SD/ - SD/ - ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) /JUDICIAL MEMBER