SHRI SURINDER PAL GANDHI, NAWANSHAHAR V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -II, JALANDHAR

ITA 744/ASR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7127 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-01-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY GOYAL
• Assessee Lawyers: BHAGAT
• Keywords: Difference of opinion
• Section: 271(1)(c); 153A; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SH. N. K. SAINI, HONBLE VICE PRESIDENT AND SH. RAVISH SOOD, JUDICIAL MEMBER ITA NO.744/ASR./2017 : ASSTT. YEAR : 2008-09 SURINDER PAL GANDHI, BHATTI COLONY, CHANDIGARH ROAD, NAWANSHAHAR VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, JALANDHAR (APPELLANT) (RESPONDENT) PAN NO. AFBPK5235K ASSESSEE BY : SH. M. R. BHAGAT, ADV. REVENUE BY : SH. AJAY G OYAL, CIT DR DATE OF HEARING : 09.01.2019 DATE OF PRONOUNCEMENT : 09.01.2019 ORDER PER N. K. SAINI, VICE PRESIDENT: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 04.09.2017 OF LD. CIT(A)-5, LUDHIANA. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEA L RELATES TO THE CONFIRMATION OF PENALTY OF RS.32,000/- U/S 271(1)(C ) OF THE INCOME TAX ACT, 1961 (HEREINAFER REFERRED TO AS THE ACT) L EVIED BY THE AO ON THE ADDITION OF RS.1,00,000/-. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE AO OBSER VED THAT THE ASSESSEE DID NOT FILE RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153A OF THE ACT. HE ALSO OBSERVED THAT AS PER THE S TATEMENT ON LOAN ACCOUNT OF CENTRAL BANK OF INDIA, NAWANSHAHAR, THE ASSESSEE HAD ITA NO. 744/ASR./2017 SURINDER PAL GANDHI 2 MADE REPAYMENT OF RS.1,85,000/- FOR WHICH NO EVIDEN CE REGARDING THE SOURCE OF PAYMENT WAS GIVEN. ACCORDINGLY, ADDIT ION OF THE SAID AMOUNT WAS MADE. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND CLAIMED THAT THE WITHDRAWALS FROM THE BA NK AND THE BUSINESS, WERE UTILIZED FOR REPAYMENT OF LOAN. THE LD. CIT(A) RESTRICTED THE ADDITION TO RS.1,00,000/-, ON WHICH THE PENALTY OF RS.32,000/- U/S 271(1)(C) OF THE ACT WAS LEVIED BY THE AO. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ADDITION OF RS.1,00,000/- WAS ON LY ON ESTIMATE BASIS AND NO PENALTY COULD HAVE BEEN IMPOSED, SINCE THE ADDITION WAS DUE TO DIFFERENCE OF OPINION. THE LD. CIT(A), HOWEVER, DID NOT FIND MERI T IN THE SUBMISSION OF THE ASSESSEE AND SUSTAINED THE PENALTY LEVIED BY THE AO . 6. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL F OR THE ASSESSEE SUBMITTED THAT ALTHOUGH THE WITHDRAWALS OF THE ASSESSEE AT RS .2,94,173/- WERE MORE THAN THE DEPOSIT OF RS.1,85,000/- IN THE BANK ACCOUNT ST ILL THE LD. CIT(A) SUSTAINED THE ADDITION OF RS.1,00,000/- ON ESTIMATE BASIS AND NO REASON HAS BEEN GIVEN FOR RESTRICTING THE SAID ADDITION, HE SIMPLY STATED THAT THE ASSESSEE HAD ALSO WITHDRAWN THE AMOUNT FOR HOUSEHOLD EXPENSES. THEREF ORE, THE AMOUNT AVAILABLE FOR REPAYMENT OF LOAN WAS RESTRICTED ON ESTIMATE BA SIS TO RS.1,00,000/-. IT WAS FURTHER STATED THAT WHEN THE ADDITION SUSTAINED WAS ONLY ON ESTIMATE BASIS, THE PENALTY U/S 271(1)(C) OF THE ACT WAS NOT JUSTIFIED. THE RELIANCE WAS PLACED ON THE DECISION DATED 04.11.2015 OF THE ITAT DELHI BEN CH SMC-2, NEW DELHI IN THE CASE OF MANMOHAN JAIN VS ITO IN ITA NO. 315/ DEL/2014 FOR THE ASSESSMENT YEAR 2009-10. ITA NO. 744/ASR./2017 SURINDER PAL GANDHI 3 7. IN HIS RIVAL SUBMISSIONS, THE LD. CIT DR STRONGL Y SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND SUBMITT ED THAT THE ADDITION WAS NOT ON ESTIMATE BASIS, THEREFORE, THE PENALTY WAS R IGHTLY LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT(A). 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE, IT IS AN ADMITTED FACT THAT THE ASSESSEE HAD WITHDRAWN A SUM OF RS.2,94,173 FRO M THE BANK ACCOUNT OUT OF WHICH RS.1,85,000/- WAS CLAIMED TO BE DEPOSITED IN THE BANK. HOWEVER, THE LD. CIT(A) GAVE THE BENEFIT OF RS.85,000/- ONLY OUT OF THE SAID WITHDRAWALS AND SUSTAINED THE ADDITION OF RS.1,00,000/- BUT NO BASI S WAS GIVEN FOR CONSIDERING THE AVAILABILITY OF RS.85,000/- ONLY FROM THE TOTAL WITHDRAWALS OF RS.2,94,173/-. THEREFORE, IT CAN BE SAID THAT THE LD. CIT(A), ONLY ON ESTIMATE BASIS WAS OF THE VIEW THAT THE ASSESSEE COULD NOT HAVE DEPOSITED RS. 1,00,000/- OUT OF THE TOTAL WITHDRWALS OF RS.2,94,173/-. IT IS WELL SETTLED THA T THE ASSESSMENT PROCEEDINGS AND THE PENALTY PROCEEDINGS ARE TWO SEPARATE AND DI FFERENT PROCEEDINGS AND EVEN WHEN SOME ADDITION HAS BEEN MADE, IT CANNOT BE SAID THAT THE ASSESSEE CONCEALED THE INCOME OR FURNISHED THE INACCURATE PA RTICULARS OF INCOME. 9. ON A SIMILAR ISSUE, THE ITAT BENCH SMC-2, NEW DELHI IN THE AFORESAID REFERRED TO CASE OF MANMOHAN JAIN VS ITO HELD AS UN DER: IT IS A SETTLED LEGAL POSITION THAT WHEN INCOME IS ESTIMATED, THEN, THERE CAN BE NO QUESTION OF IMPOSING PENALTY U/S 27 1(1)(C) OF THE ACT. THE HONBLE DELHI HIGH COURT IN CIT VS AERO TR ADERS PVT. LTD. (2010) 322 ITR 316 (DEL), HAS HELD THAT NO PEN ALTY U/S 271(1)(C) CAN BE IMPOSED WHEN INCOME IS DETERMINED ON ESTIMATE BASIS. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE P &H HIGH COURT IN HARIGOPAL SINGH VS CIT (2002) 258 ITR 85 (P&H) A ND THE HONBLE GUJARAT HIGH COURT IN CIT VS SUBHASH TRADIN G COMPANY 221 ITR 110 (GUJ.). I ALSO FIND THAT SIMILAR VIEW W AS TAKEN BY THE ITAT SMC BENCH, NEW DELHI IN ITA NO. 519/DEL/2014 ( AY 2009- ITA NO. 744/ASR./2017 SURINDER PAL GANDHI 4 10) IN THE CASE OF RAJIV KUMAR GARG VS ITO VIDE ORD ER DATED 15.06.2015. IN VIEW O THE FOREGOING PRECEDENTS INCL UDING THE ONE FROM THE HONBLE JURISDICTIONAL HIGH COURT, IT IS A PPARENT THAT WHEN THE BEDROCK OF INSTANT PENALTY IS THE ESTIMATE OF STOCK, THE SAME CANNOT BE SUSTAINED. 10. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERR ED TO ORDER, THE IMPUGNED PENALTY LEVIED BY THE AO AND SUSTAINED BY THE LD. C IT(A) IS DELETED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. (ORDER PRONOUNCED IN THE COURT ON 09/01/2019) SD/- SD/- (RAVISH SOOD) (N. K. SAINI) JUDICIAL MEMBER V ICE PRESIDENT DATED: 09/01/2019 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR