Sh. Atul Sharma, Panchkula V. ITO, Panchkula

ITA 680/CHANDI/2015

• Counselvise Citation: 68021514 RSA 2015
• Duration Of Justice: 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Gift; Income from undisclosed sources; Salary income; Opportunity of being heard
• Section: 142(1); 68; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT ITA NO. 680/CHD/2015 (ASSESSMENT YEAR: 2009-10) SH.ATUL SHARMA, VS. THE INCOME TAX OFFICER, H.NO.1010, SECTOR 16, WARD-1, PANCHKULA. PANCHKULA. PAN NO. AZEPS4234R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGARWAL RESPONDENT BY : SHRI S.K. MITTAL, D.R. DATE OF HEARING : 27.11.2015 DATE OF PRONOUNCEMENT : 08.12.2015 O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS), PANCHKULA 26.6.2015 RELATING TO ASSESSMENT YEAR 2009-10, CONFIRMING THE PENALTY OF RS.1,23,674/- LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE SUBMITTED HIS RETURN OF INCOME ON 28.7.200 9 DECLARING TOTAL INCOME AT RS.2,43,390/-. THE MAIN SOURCE OF THE ASSESSEES INCOME IS SALARY INCOME. THE ASS ESSEE WAS A MARKETING MANAGER AND SITE MANAGER OF M/S REL IANT INFRASTRUCTURE PVT. LTD. AT THE RELEVANT TIME. THI S 2 COMPANY IS COMING UP WITH A RESIDENTIAL HOUSING PRO JECT NEAR CHANDIGARH. ASSESSMENT IN THIS CASE WAS COMPL ETED ON 8.12.2011 AT TOTAL INCOME OF RS.7,47,850/- AS AG AINST THE RETURNED INCOME OF RS.2,43,390/-. THE ASSESSIN G OFFICER MADE AN ADDITION OF RS.5 LACS BEING CASH DE POSITS MADE IN BANK. THE ASSESSEE STATED THAT THE CASH DE POSIT SHOWN AT RS.5 LACS ON 29.4.2008 WAS RECEIVED FROM M /S RELIANT INFRASTRUCTURE PVT. LTD. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE FAILED TO EXPLAIN T HE SOURCE OF CASH DEPOSITS OF RS.5 LACS IN HIS BANK AC COUNT MAINTAINED WITH PUNJAB & SIND BANK. THE ASSESSING OFFICER TREATED THE AFORESAID DEPOSIT AS INCOME FRO M UNDISCLOSED SOURCES. THE ASSESSEE DID NOT CONTEST THIS ADDITION BY FILING AN APPEAL BEFORE THE CIT (APPEAL S). ACCORDINGLY, THE ASSESSEE PAID THE TAXES ON THE AMO UNT OF RS.5 LACS. THE ASSESSING OFFICER, WHILE FRAMING TH E ASSESSMENT PROCEEDINGS, ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AGAI NST THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS OF I NCOME AS WELL AS CONCEALMENT OF INCOME, BY ISSUING NOTICE UNDER SECTION 274 READ WITH SECTION 271 (1)(C) OF THE ACT . AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE, THE ASSESSING OFFICER LEVIED PENALTY OF RS.1,23,674 /- ON THE AMOUNT OF RS.5 LACS AND ALSO ON THE INTEREST IN COME OF RS.4459/- TREATING THE SAME AS ASSESSEES CONCEALED INCOME. 3. ON APPEAL, THE LEARNED CIT (APPEALS) CONFIRMED THE PENALTY AND THE ASSESSEE HAS COME UP IN APPEAL BEFORE 3 THE TRIBUNAL. 4. I HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AT LENGTH AND HAVE ALSO PERUSED THE MAT ERIALS AVAILABLE ON RECORD. IT IS APPARENT FROM THE RECO RD THAT THE ASSESSEE WAS A MARKETING MANAGER AND SITE MANAG ER OF M/S RELIANT INFRASTRUCTURE PVT. LTD. THE SAID C OMPANY IS COMING UP WITH A RESIDENTIAL HOUSING PROJECT NEA R CHANDIGARH. IN THE RETURN OF INCOME SUBMITTED BY T HE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, THE MAIN SOURCE OF INCOME SHOWN IS SALARY INCOME RECEIVED FR OM M/S RELIANT INFRASTRUCTURE PVT. LTD. THE MAIN CONT ENTION OF THE ASSESSEE IS THAT FOR MEETING VARIOUS EXPENSE S, THE AFORESAID COMPANY USED TO ISSUE IMPREST ADVANCE TO THE ASSESSEE, WHICH WAS SQUARED OFF SUBSEQUENTLY WITH PAYMENTS MADE BY ASSESSEE TO LABOURERS, CONTRACTORS AND VARIOUS MATERIAL PURCHASES. IN RESPECT OF THE TRAN SACTION IN QUESTION, IT IS STATED THAT THE ASSESSEE WAS ADV ANCED AN AMOUNT OF RS.5 LACS ON 29.4.2008 BY M/S RELIANT INFRASTRUCTURE PVT. LTD. FOR MEETING VARIOUS EXPENS ES AT THE PROJECT. THE AMOUNT IN QUESTION WAS DEPOSITED IN ASSESSEES ACCOUNT. LATER ON, DURING THE YEAR UNDE R CONSIDERATION ITSELF, THE ASSESSEE WITHDREW THIS AM OUNT AND MADE PAYMENT ON BEHALF OF THE EMPLOYER COMPANY. IT IS CLAIMED BY THE ASSESSEE THAT IT WAS NOT A CASE O F CASH CREDIT. IT IS ALSO CLAIMED BY THE ASSESSEE THAT A T THE TIME OF ASSESSMENT PROCEEDINGS, HE HAD ALREADY LEFT THE JOB OF THAT EMPLOYER WITH BITTER RELATIONS. HENCE, HE CO ULD NOT FILE CONFIRMATION FROM THE EMPLOYER IN RESPECT OF A BOVE 4 TRANSACTIONS IN QUESTION. SHRI PARIKSHIT AGGARWAL , THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NON -FILING OF CONFIRMATION FROM THE EMPLOYER IN RESPECT OF TRANSACTIONS IN QUESTION COULD BE A GOOD GROUND FOR ADDITION IN QUANTUM PROCEEDINGS BUT PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT AUTOMATICALLY L EVIABLE. IT IS OBSERVED THAT THE ASSESSING OFFICER ISSUED A QUESTIONNAIRE ALONGWITH NOTICE UNDER SECTION 142(1) OF THE ACT ON 19.5.2011 RELATING TO ASSESSMENT YEAR UNDER CONSIDERATION. THE SAID NOTICE IS REPRODUCED HERE -IN- BELOW : F. NO: ITO/W-L/PKL/2011-12/8 DATED: 19.05.2011 SHRI ATUL SHARMA, #1010, SECTOR-16, PANCHKULA. SIR, SUB:-ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2009-10-REGARDING. YOUR CASE FOR THE ASSESSMENT YEAR 2009-10 WAS FIXED FOR HEARING ON 26.04.2011 WHICH WAS ADJOURNS FOR 12.05.2011. ON W HICH DATE NEITHER ATTENDED NOR FOR ADJOURNS WAS SOUGHT. YOU ARE REQUE STED TO ATTEND ON 26.05.2011 AT 10:30 AM EITHER IN PERSON OR THROUGH AN AUTHORIZED REPRESENTATIVE ALONG WITH CASH BOOK, LEDGER, BILLS/ VOUCHERS, BANK STATEMENTS ETC. YOU ARE ALSO REQUESTED TO FURNISH T HE FOLLOWING INFORMATION IN ADDITION TO EARLIER CALLED FOR ON THE ABOVE DATE OF HEARING:- - 1. FROM THE PERUSAL OF BANK ACCOUNT MAINTAINED WITH PUNJAB & SIND BANK., SECTOR -17C, CHANDIGARH. PLEASE FURNISH TH E SOURCE OF EACH CASH DEPOSITS ON THE FOLLOWING DATES ALONGWITH SUFF ICIENT DOCUMENTARY EVIDENCE MADE IN THE BANK DURING THE YEAR UNDER CON SIDERATION IN VIEW OF PROVISION U/S 68 OF THE ACT:- S. NO. AMOUNT DATE OF CASH DEPOSIT S.NO. AMOUNT DATE OF CASH DEPOSIT 1. 29.04.2008 RS.5,00,000/- 2. 14.05.2008 RS.7,000/- 3. 15.05.2008 RS.5,100/- 4. 17.05.2008 RS.2,000/- 5. 19.05.2008 RS.17,000/- 6. 21. 05.2008 RS. 10,000/- 7. 23.05.2008 RS.2,000/- 8. 01.102008 RS. 5,00,000/- 5 9. 04.10.2008 RS. 1,000/- 10. 06/10.2008 RS. 10,000/- 11. 06.10.2008 RS.1,12,500/- 12. 10.10.2008 RS. 3,500/- 13. 13.10.2008 RS. 4,000/- 14. 13. 10.2008 RS. 10,00,000/- 15. 15.10.2008 RS. 5,500/- 16. 17.10.2008 RS. 2,800/- 17. 17.10.2008 RS. 4,000/- 18. 18.10.2008 RS.10,000/- 19. 20.10.2008 RS.42,000/- 20. ,27.11.2008 RS. 1,000/- 21. 28.11.2008 RS.2,00,000/- 22. 02.12.2008 RS.1,50,000/- 23. 02.12.2008 RS.L,50,000/- 24. 06.12.2008 RS.5,00,000/- 25. 31.12.2008 RS.L0,700/- 26. 16.01.2009 RS.5,00,000/- 27. 06.03.2009 RS.L,800/- PLEASE NOTE THAT IN CASE YOU FAILED TO EXPLAIN THE SOURCE OF ANY DEPOSITS MENTIONED ABOVE, THE SAME WOULD BE TREATED AS YOUR INCOME FROM UNDISCLOSED SOURCES U/S 68 OF THE INCOME TAX ACT, 1961 AND WOULD BE ADDED IN YOUR TAXABLE INCOME. 3. PLEASE STATE WHETHER THE ASSESSEE HAS MAINTAINED ANY OTHER BANK ACCOUNT APART FROM THE INDUS IND BANK LTD. AND PUNJAB & SIND BANK, CHANDIGARH. IF YES, PLEASE FURNISH BANK STATEM ENT FOR THE SAME. NOTICE U/S 142 (1) IS ALSO ENCLOSED FOR COMPLIANCE. YOURS FAITHFULLY, SD/- (S.S.MEENA) ENC : AS ABOVE. INCOME TAX OFFICER, WARD-1, PA NCHKULA. 5. FROM THE ABOVE QUESTIONNAIRE/NOTICE, IT IS CLEA R THAT IN THE BANK ACCOUNT MAINTAINED WITH THE PUNJAB & SINGH BANK, SECTOR 17C, CHANDIGARH, THE ASSESSEE MA DE DEPOSITS OF RS.5 LACS ON 1.10.2008, RS.10 LACS ON 13.10.2008, RS.1,50,000/- ON 2.12.2008, RS.5 LACS O N 6.12.2008 AND RS.5 LACS 16.1.2009. IT IS CLAIMED B Y THE ASSESSEE THAT THE ABOVE DEPOSITS MADE ON DIFFERENT DATES ARE THE AMOUNTS RECEIVED FROM M/S RELIANT INFRASTRU CTURE PVT. LTD. (EMPLOYER) AS IMPREST FOR SITE EXPENSES. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT T HE ASSESSING OFFICER ACCEPTED THE ABOVE DEPOSITS EXCEP T THE AMOUNT OF RS.5 LACS DEPOSITED ON 29.4.2008 IN THE B ANK ACCOUNT. IT IS OBSERVED THAT THE EXPLANATION GIVEN BY THE 6 ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AS WELL AS PENALTY PROCEEDINGS IN REGARD TO SOURCE OF CASH DEP OSITS OF RS.5 LACS ON 29.4.2008 IN THE BANK ACCOUNT APPEA RS TO BE BONAFIDE AND REASONABLE. THE ASSESSEE HAD PRO VIDED COMPLETE PARTICULARS OF THE EMPLOYER I.E. CASH CRED ITOR AND FURNISHED AN EXPLANATION THAT THE AMOUNT IN QUESTIO N HAS BEEN RECEIVED AS IMPREST MONEY FROM THE EMPLOYER. IT IS ALSO CLEAR THAT THE ASSESSING OFFICER HIMSELF HAS A CCEPTED THE DEPOSITS MORE THAT RS.25 LACS MADE BY THE ASSES SEE IN THE BANK ACCOUNT, WHICH WERE RECEIVED BY THE ASSESS EE AS IMPREST MONEY FROM HIS EMPLOYER. IT IS APPARENT FR OM RECORD THAT THE ASSESSING OFFICER HAD NOT MADE ANY ENQUIRY FROM THE EMPLOYER REGARDING THE AMOUNT IN QUESTION. IN MY CONSIDERED OPINION, THE NON-FILIN G OF CONFIRMATION ABOUT RECEIPT OF IMPREST MONEY COULD B E A GOOD GROUND FOR ADDITION IN QUANTUM PROCEEDINGS BUT PENALTY THEREON UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE. IT IS WELL SETTLED THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE QUITE DISTI NCT AND SEPARATE FROM EACH OTHER. THE ADDITION IN QUAN TUM PROCEEDINGS DOES NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. I MAY ADD HERE THAT AS REGARDS THE RECEIPT OF CASH CREDIT OF RS.5 LACS FRO M M/S RELIANT INFRASTRUCTURE PVT. LTD., THE ASSESSEE OFFE RED AN EXPLANATION DURING THE ASSESSMENT PROCEEDINGS AS WE LL AS PENALTY PROCEEDINGS AND THE SAID EXPENDITURE WAS NO T FOUND TO BE FALSE BY THE LOWER AUTHORITIES. IN TER MS OF EXPLANATION 1 TO SECTION 271(1), PENALTY UNDER SECT ION 7 271(1)(C) OF THE ACT CANNOT BE LEVIED CONSIDERING T HE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IT IS ALSO OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY FROM THE EMPLOYER OF THE ASSESSEE REGARDING THE TRANSACTION IN QUESTION. THE ASSESSING OFFICER HAS ALSO NOT BROUG HT ANY EVIDENCE ON RECORD TO CONTROVERT THE EXPLANATION OF THE ASSESSEE. FURTHERMORE, NO EVIDENCE HAS BEEN BROUGH T ON RECORD REGARDING THE CONCEALMENT OF INCOME OR FURNI SHING INACCURATE PARTICULARS OF INCOME. IN VIEW OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BALBIR SINGH (2008) 304 ITR 125 (P&H), I AM OF THE OPINION THAT NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE VALIDLY LEVIED IN THIS CASE. IN THAT CASES ALSO, NO EVIDENCE WITH REGARD TO CONCEALMENT WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER. THE HON'BLE HIGH COURT HAD OPINED THAT THE AMOUNT HAS NOT BEEN CONSIDERED AS GIFT IS A DIFFERENT MATTER. 6. THE ASSESSING OFFICER HAS ALSO LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT, ON THE ALLEGED CONCEALED INCOME OF RS.4459/-. IT IS AN ADMITITED POSITION THAT DURING THE YEAR IN QUESTION, THE ASSE SSEE WAS AN EMPLOYEE WORKING WITH M/S RELIANT INFRASTRUC TURE PVT. LTD AS A PROJECT MANAGER ON A SALARY OF APPROX IMATELY RS.30,000/- PER MONTH. IT IS STATED THAT THE ASSES SEE SUBMITTED HIS RETURN DECLARING SALARY INCOME BUT D UE TO OVERSIGHT, COULD NOT INCLUDE PETTY SAVING BANK INTE REST OF 8 RS.288 AND FDR INTEREST OF RS.4171/- IN HIS RETURN OF INCOME. THE AGGREGATE INTEREST OF RS.4459/- WAS A DDED TO THE TOTAL INCOME OF THE ASSESSEE IN THE ASSESSME NT ORDER. THE ASSESSEE HAD ACCEPTED THIS ADDITION AND PAID TAXES THEREON. I FULLY AGREE WITH THIS SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT NON-DECLARATI ON OF IMPUGNED INTEREST WAS ONLY DUE TO OVERSIGHT AS THE AMOUNTS WERE QUITE SMALL. IN MY OPINION, THE NON- DECLARATION OF INTEREST OF RS.4459/- WAS NEVER WITH AN INTENT TO DEFRAUD THE REVENUE AND THE CONDUCT OF TH E ASSESSEE WAS BONAFIDE. I AM SATISFIED THAT THE ASS ESSEE HAD COMMITTED AN INADVERTENT ERROR BUT HE HAD NOT COMMITTED ANY DEFAULT WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. THEREFORE, NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIABLE ON THE INTEREST AM OUNT OF RS.4459/-. 7. IN VIEW OF THE ABOVE DISCUSSION, THE IMPUGNED PENALTY IS CANCELLED AND THE APPEAL OF THE ASSESSEE STANDS ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF DECEMBER, 2015. SD/- (H.L.KARWA) VICE PRESIDENT DATED : 8 TH DECEMBER, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 9