Smt B Surya Kumari, Berhampur V. ITO, Berhampur

ITA 72/CTK/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4498 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 18-02-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 02-03-2010
• Court: TRIBUNAL
• Department Lawyers: J KHANRA
• Assessee Lawyers: C R DASAR
• Keywords: Unexplained cash credit; Unexplained investment; Document seized; Principle of natural justice; Documents seized

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 72 AND 73/CTK/2010 / ASSESSMENT YEAR S 2001 - 02 AND 2002 - 03 SMT. B.SURYA KUMARI, PROPS. ANNAPURNA TEXTILES, HANUMAN BAZAR, BERHAMPUR. PAN:BAAPS 4396 A - - - VERSUS - INCOME - TAX OFFICER, WARD 1, BERHAMPUR. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI C.R.DAS,AR / FOR THE RESPONDENT: / SHRI J.KHANRA, DR / ORDER . . . , , SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER . THESE TWO APPEALS ARE PREFERRED BY THE ASSESSE HAVING BEEN AGGRIEVED BY THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) OF EVEN DATED THE 10 TH DECEMBER, 2009 IN THE CASE OF THE ASSESSEE. SINCE THESE TWO APPEALS PERTAIN TO LEVY OF PENALTY U/S.271(1)(C) OF THE INCOME - TAX ACT,1961 RELATING TO THE SAME ASSESSEE, THEY WERE HEARD TOGETHER AND ARE NOW DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED FOR THE ASSESSMEN T YEAR 2001 - 02 ARE AS UNDER : 1. THAT TH E ORDER PASSED BY THE LEARNED CI T (A) SO FAR AS MAKING THE PENALTY A MOUNT DOUBLED TO THE TUNE OF 90.896/ - IS ARBITRAIY, EXCESSIVE & BAD - IN - LAW. 2. THAT THE LEARNED CIT (A) BASING UPON THE ORDER PASSED BY THE A.O. HAS WRONGLY CONFIRMED THE PENALTY ON ADDITION MADE ON ACCOUNT OF CON CEALMENT OF INCOME TO THE TUNE OF 138721 ON ACCOUNT OF UNEXPLAINED CASH CREDIT AND FURTHER MADE IT TO 200% OF TAX AMOUNT MAKING THE TOTAL PENALTY AMOUNT TO 90,896 . 3. THAT THE OTHER GROUNDS IF ANY WILL HE URGED AT THE TIME OF HEARING. I.T.A.NO.72 AND 73/CTK/2010 2 3. THE GROUNDS RAISED FOR THE ASSESSMENT YEAR 2002 - 03 ARE AS UNDER : 1. THAT THE ORDER PASSED BY THE LEARNED CIT (A) SO FAR AS SUSTAINI NG THE PENALTY TO THE TUNE OF 94,432 IS ARBITRARY, EXCESSIVE & BAD - IN - LAW. 2. THAT THE LEARNED CIT (A) BASING UPON THE ORDER PASSED BY THE A.O. HAS WRONGLY CONFIRMED THE P ENALTY AMOUNTING TO 94,4 32 ON ADDITION MADE ON ACCOUNT OF PEAK INVESTMENT OF 1,00,000 AND BANK BALANCE OF 2,92,000 BELONGING TO OTHERS THAN THE APPELLANT. 3 . THAT THE OTHER GROUNDS IF ANY WILL BE URGED AT THE TIME OF HEARING. 4. BOTH THE PARTIES WERE HEARD REGARDING THE IS SUES RAISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATIONS. 5. ON CAREFUL CONSIDERATION OF THE MATERIAL AVAILABLE TO THE TRIBUNAL, THE UNDISPUTED FACTS RELATING TO THESE APPEALS ARE THAT THERE WAS A SEARCH IN THE CASE OF THE ASSESSEE RESULTING IN SEIZURE OF CERTAIN MATERIALS . AS PER THE SEIZED MATERIALS, THE DEPARTMENT HAS ESTIMATED THE PROFITS EARNED BY THE ASSESSEE ON UNACCOUNTED SALES AND UNEXPLAINED INVESTMENTS. THE ORIGINAL ASSESSMENTS WERE COMPLETED BUT AT THE STAGE OF THE TRIBUNAL, THE ASSESSMENT FOR T HE AY 20010 - 02 RELATING TO ONE ISSUE IS REMANDED TO THE AO FOR DE NOVO CONSIDERATION. AFTERWARDS THE ASSESSING OFFICER HAS CONSIDERED THE ISSUE REMANDED BY THE TRIBUNAL TO PASS THE ORDER DE NOVO AND CAME TO THE CONCLUSION THAT THE ASSESSEE HAS CONCEALED TH E INCOME AND HENCE, ISSUED SHOW CAUSE NOTICE REQUIRING THE ASSESSEE TO SHOW - CAUSE WHY PENALTY SHOULD NOT BE LEVIED AGAINST IT. THE ASSESSEE HAS NOT REPLIED TO THIS SHOW CAUSE NOTICE. BUT, HOWEVER, SHE HAS GIVEN WRITTEN SUBMISSIONS. CONSIDERING THE WRITTEN SUBMISSIONS AND THE MATERIAL ON RECORD, PENALTY ORDER DT.2.3.2007 WAS PASSED BY THE ASSESSING OFFICER LEVIED PENALTY AGAINST THE ASSESSEE. THE ASSESSEE IS UNSUCCESSFUL BEFORE THE LEARNED CIT(A) ALSO HENCE, THE PRESENT APPEALS BEFORE THE TRIBUNAL. I.T.A.NO.72 AND 73/CTK/2010 3 6. AS FAR AS THE APPEAL PERTAINING TO ASSESSMENT YEAR 2002 - 03, AFTER RECEIVING THE SHOW - CAUSE NOTICE ISSUED BY THE AO, THE ASSESSEE HAS PRAYED FOR TIME AS HER ADVOCATE WAS UNDERGOING TREATMENT DUE TO LEG INJURY. AFTER TWO ADJOURNMENTS AGAIN THE ASSESSING OFFICER HA S FIXED THE CASE FOR HEARING ON 12.10.2007 WHEN THE ASSESSEE HAS STATED THAT SHE PREFERRED SECOND APPEAL BEFORE THE TRIBUNAL AND WAS EXPECTING ORDER IN HER FAVOUR AND THEREBY REQUESTED FOR KEEPING THE PENALTY PROCEEDINGS IN ABEYANCE TILL 31.3.2008. BUT THE ASSESSING OFFICER HAS NOT GRANTED THE SAME TO THE ASSESSEE ON THE GROUND THAT THE PENALTY PROCEEDINGS ARE GOING TO BE BARRED BY LIMITATION VERY SOON AND PASSED THE IMPUGNED ORDER. THE ASSESSEE IS UNSUCCESSFUL BEFORE THE LEARNED CIT(A) ALSO AND HENCE, THE PRESENT APPEAL BEFORE THE TRIBUNAL. 7. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE HAS CONTENDED THAT THE LEVY OF PENALTY AGAINST THE ASSESSEE IS UNFOUNDED AS THE IMPUGNED ADDITIONS ARE ON ACCOUNT OF ONLY ESTIMATIONS MADE AS PER THE SEIZED DOCUMENTS FOUND DURING THE COURSE OF SEARCH OPERATION. THE LEARNED ASSESSING OFFICER HAS NOT GRANTED SUFFICIENT AND REASONABLE TIME TO THE ASSESSEE TO REPLY TO THE SHOW - CAUSE NOTICES AND ALSO HAS NOT GIVEN OPPORTUNITY OF HEARING TO THE ASSESSEE AFTER FILI NG THE WRITTEN SUBMISSIONS BY THE ASSESSEE. THEREFORE, BOTH THE ORDERS PASSED BY THE ASSESSING OFFICER ARE IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THEREFORE, ON THIS COUNT ITSELF BOTH THE PENALTY ORDERS ARE LIABLE TO BE QUASHED. APART FROM THAT IT W AS ALSO CONTENDED BY THE LEARNED AR OF THE ASSESSEE THAT AS THE ADDITIONS MADE ARE ON ESTIMATE BASIS, NO PENALTY IS LEVIABLE ON SUCH ADDITIONS. IN THAT VIEW OF THE MATTER ALSO THE IMPUGNED PENALTY ORDERS ARE NOT SUSTAINABLE FOR LEGAL SCRUTINY. ACCORDINGLY, HE PRAYED FOR CANCELLING THE PENALTY BY SETTING ASIDE THE ORDERS PASSED BY THE LOWER AUTHORITIES. I.T.A.NO.72 AND 73/CTK/2010 4 8. CONTRARY TO THIS, THE LEARNED DR HAS CONTENDED THAT THE ASSESSEE HAS NOT AT ALL GIVEN REPLY TO THE SHOW CAUSE NOTICES ISSUED BY THE ITO AS FAR AS IT RELAT ES TO ASSESSMENT YEAR 2001 - 02 AND SHE PRAYED FOR TIME ON ONE PLEA OR OTHER SO FAR AS IT RELATES TO THE ASSESSMENT YEAR 2002 - 03. THEREFORE, THE AO IS RIGHT IN PROCEEDING AGAINST THE ASSESSEE EXPARTE AND CONSIDERING THE MATERIAL AVAILABLE IN THE ASSESSMENT F OLDERS HAS PASSED THE IMPUGNED ORDERS. THEREFORE, THERE IS NO VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE COMMITTED BY THE ASSESSING OFFICER WHILE PASSING THE IMPUGNED PENALTY ORDERS AND THE PLEA NOW TAKEN BY THE ASSESSEE IS NOT SUSTAINABLE UNDER LAW. A PART FROM THAT THE LEARNED DR HAS VEHEMENTLY ARGUED SUPPORTING THE IMPUGNED ORDERS AND ASSAILING THE ISSUES RAISED BY THE ASSESSEE IN THESE TWO APPEALS AND ACCORDINGLY, SOUGHT FOR DISMISSAL OF THE APPEALS OF THE ASSESSEE BY UPHOLDING THE ORDERS PASSED BY T HE LOWER AUTHORITIES. 9. ON CAREFUL ANALYSIS OF THE IMPUGNED ORDERS IN THE LIGHT OF THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AS WELL AS THE LAW APPLICABLE THERETO, IT IS FOUND THAT IN THE CASE OF PENALTY ORDER FOR THE AY 2001 - 02, THE AO AFTER RECEIVING TH E WRITTEN SUBMISSIONS BY THE ASSESSEE HAS NOT FIXED THE CASE FOR HEARING AND HE PROCEEDED TO CONSIDER THE MATTER AS PER THE RECORDS AND PASSED THE IMPUGNED ORDER. THIS ACTION OF THE ASSESSING OFFICER EXPRESSLY DISCLOSES THAT THERE IS NO OPPORTUNITY OF HEAR ING TO THE ASSESSEE AFTER RECEIVING THE WRITTEN SUBMISSIONS FROM THE ASSESSEE. IN THAT VIEW OF THE MATTER, THERE IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE COMMITTED BY THE AO AND HENCE, WE ARE OF THE CONSIDERED VIEW THAT THIS IS A FIT CASE TO BE SENT B ACK TO THE AO FOR DE NOVO CONSIDERATION AFTER STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE AND PASS THE CONSEQUENTIAL ORDER AS PER LAW. 10. NOW CONSIDERING THE APPEAL FOR THE ASSESSMENT YEAR 2002 - 03, IT IS CLEAR FROM THE ORDER IN PARAG RAPH 3 AT PAGE 1 THAT THE ASSESSEE HAS I.T.A.NO.72 AND 73/CTK/2010 5 REQUESTED FOR TIME TILL RECEIPT OF THE ORDER FROM THE TRIBUNAL, BUT SUCH REQUEST WAS NOT ACCEPTED BY THE ASSESSING OFFICER ON THE GROUND THAT THE PENALTY PROCEEDINGS WERE GOING TO BE BARRED BY LIMITATION VERY SOON, TH EREBY HE DISPOSED THE PENALTY PROCEEDINGS IN THE ABSENCE OF THE ASSESSEE. THEREFORE, HERE ALSO IT IS FOUND THAT THE AO HAS VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THIS IS ALSO A FIT CASE TO BE RESTORED TO THE F ILE OF THE AO FOR DE NOVO CONSIDERATION STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE AND PASS THE NECESSARY CONSEQUENTIAL ORDER AS PER LAW. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 4 TH APRIL, 2011 ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER. ( ) DATE: 4 TH APRIL 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : SMT. B.SURYA KUMARI, PROPS. ANNAPURNA TEXTILES, HANUMAN BAZAR, BERHA MPUR. 2 / THE RESPONDENT: INCOME - TAX OFFICER, WARD 1, BERHAMPUR. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY.