M/S. JILA SAHKARI KENDRIYA BANK MYDT., Shajapur V. THE ADDL. CIT RANGE-2, Ujjain

ITA 753/IND/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4429 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 28-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: Y K BHARGAV
• Section: 143(3)

Judgement Text

1 JILA SAHAKARI KENDRIYA BANK ITA NO.753/IND/2015 A.Y . 2009 - 10 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER ITA NO. 753/IND/2015 A.Y. 2009-10 M/S. JILA SAHKARI KENDRIYA BANK MYDT., SHAJAPUR PAN AAAAJ 0112 B :: APPELLANT VS ADDL. CIT, RANGE-2, UJJAIN :: RESPONDENT ASSESSEE BY SHRI Y.K. BHARGAV RESPONDENT BY SHRI MOHD. JAVED DATE OF HEARING 24 .8.2016 DATE OF PRONOUNCEMENT 03 . 10 .2016 O R D E R PER SHRI D.T. GARASIA, JM THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING T HE ORDER DATED 01.9.2015 OF LD. CIT(A)-UJJAIN, REGARDING THE ISSUE OF IMPOSITION OF PENALTY U/S 271(1)(C) OF THE I.T. ACT . 2. SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DISTRICT CO-OPERATIVE BANK. THE RETURN OF INCOME DECLARING T OTAL INCOME OF RS.9,38,29,300/- WAS FILED ON 30.9.2009. THE ASS ESSING OFFICER 2 JILA SAHAKARI KENDRIYA BANK ITA NO.753/IND/2015 A.Y . 2009 - 10 MADE ADDITION OF RS.12,92,691/- ON ACCOUNT OF ENTRI ES IN THE SUSPENSE ACCOUNT AND RS.20 LACS ON ACCOUNT OF GRATU ITY FUND. THE ADDITION ON ACCOUNT OF ENTRIES IN SUSPENSE ACCO UNT AMOUNTING TO RS.12,92,691/- WAS CONFIRMED BY THE LD . CIT(A)- UJJAIN AND ITAT, INDORE. THE ASSESSING OFFICER IMPOS ED THE PENALTY AT RS.4 LACS U/S 271(1)(C) OF THE I.T. ACT ON THE CONFIRMED ADDITION OF RS.12,92,691/-. 3. MATTER CARRIED TO LD. CIT(A) WHO UPHELD THE ACTI ON OF THE ASSESSING OFFICER. THE LD. CIT(A) NOTED THAT THE QU ANTUM ADDITION HAS BEEN CONFIRMED BY THE LD. CIT(A) AS WELL AS ITA T, INDORE. HAD THE CASE HAS NOT BEEN SCRUTINISED U/S 143(3) AND TH E SAME HAS NOT BEEN POINTED OUT BY THE ASSESSING OFFICER DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, AN AMOUNT OF RS.12,92,26 9/- WOULD HAVE BEEN ESCAPED FROM TAXATION. UNLESS AND UNTIL T HE ASSESSEE SUBSTANTIATES THE EXPLANATION AND PROVES THAT SUCH AN EXPLANATION WAS BONA FIDE, THE ADDITION MADE TO INC OME SHALL BE DEEMED TO REPRESENT THE CONCEALED INCOME AND AS SUC H, THE ASSESSEE WOULD BE LIABLE FOR PENALTY U/S 271(1)(C) OF THE I.T. ACT. IT IS NOW ESTABLISHED LAW THAT THE PRESUMPTION WOUL D NOT STAND REBUTTED MERELY BY FURNISHING ANY GENERAL OR UNREAS ONABLE EXPLANATION BY THE ASSESSEE. THE EXPLANATION SHOULD BE BASED ON 3 JILA SAHAKARI KENDRIYA BANK ITA NO.753/IND/2015 A.Y . 2009 - 10 COGENT AND RELEVANT MATERIAL AND SHOULD BE ACCEPTED TO THE AUTHORITIES. THE FULL AND TRUE DISCLOSURE OF INCOME IS PRIMARY OBLIGATION OF THE ASSESSEE. LD. CIT(A) ALSO PLACED RELIANCE ON THE DECISIONS NAMELY, CIT VS. GURBACHAN LAL, 250 ITR 15 7 (DEL); VISWARAMMA INDUSTRIES VS. CIT, 135 ITR 652 (P & H); CIT VS. K.P. MADHUSUDAN, 246 ITR 218 (KER); SUSHIL KUMAR SHARAD KUMAR, 232 ITR 588 (ALL) ETC. IN VIEW OF THESE FACTS, THE LD. CIT(A) HELD THAT IT IS EVIDENT THAT THE ASSESSEE HAD DELIBERATE LY AND INTENTIONALLY NOT DISCLOSED THE TRUE AND CORRECT IN COME AND HAD CONCEALED THE PARTICULARS OF INCOME WITH THE INTENT ION TO EVADE TAX. HENCE, THE ASSESSING OFFICER HAS RIGHTLY IMPOS ED THE PENALTY U/S 271(1)(C) OF THE I.T. ACT. BEING AGGRIEVED, THE ASSESSEE IS BEFORE US. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REI TERATED THE SUBMISSIONS MADE BEFORE REVENUE AUTHORITIES AND SUB MITTED THAT THE MAJOR PORTION OF CONTROVERSIAL ENTRIES IN T HE SUSPENSE ACCOUNT PERTAIN TO ASSESSMENT YEAR 2006-07 AND DEDU CTION U/S 80P WAS AVAILABLE TO COOPERATIVE BANKS TILL ASSESSM ENT YEAR 2006-07. HENCE, THERE IS NO REASON WHY MENS REA WOU LD EXIST AS THE INCOME OF THE BANK WAS PRACTICALLY NON-TAXABLE. THEREFORE, THE PENALTY SHOULD HAVE NOT BEEN IMPOSED/CONFIRMED BY THE 4 JILA SAHAKARI KENDRIYA BANK ITA NO.753/IND/2015 A.Y . 2009 - 10 ASSESSING OFFICER/LD. CIT(A). ON THE OTHER HAND, LD . DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED MATERIAL AVAILABLE ON RECORD. SO FAR AS THE CONTENTION OF THE LD. CIT(A) THAT THE EXPLANATION SHOULD BE BONA FIDE BASED ON COGENT AND RELEVANT MATERIAL AND THE FULL AND TRUE DISCLOSURE OF INCOME IS PRIMARY OBLIGATION OF THE ASSESSEE AND TH E PRESUMPTION WOULD NOT STAND REBUTTED MERELY BY FURNISHING ANY G ENERAL OR UNREASONABLE EXPLANATION BY THE ASSESSEE IS CONCERN ED, WE FIND THAT IN THE PRESENT CASE, THE CONTROVERSIAL ENTRIES ARE OF THE NATURE THAT OUT OF PRUDENCE WITH REGARD TO DOUBTFUL RECEIPTS, THE ASSESSEE CREDITED THE SAME TO SUSPENSE ACCOUNT AND MAJOR PORTION OF THE SAME RELATE TO ASSESSMENT YEAR 2006- 07 OR BEFORE, WHEN THE DEDUCTION U/S 80P WAS AVAILABLE TO THE ASS ESSEE. AMENDMENT WAS MADE W.E.F. 1.4.2007 I.E. ASSESSMENT YEAR 2007- 08. THEREFORE, THERE IS NO REASON WHY MENS REA OR G UILTY MIND WOULD EXIST AS THE INCOME OF THE BANK WAS PRACTICAL LY NON- TAXABLE. FURTHER, WE FIND THAT THE CONTROVERSIAL EN TRIES HAVE BEEN DISCLOSED BY THE ASSESSEE IN ITS OWN BOOKS OF ACCOU NTS AND THE FINAL ACCOUNTS, PARTICULARLY IN THE BALANCE-SHEET. THIS IS NOT THE CASE THAT THE ASSESSEE HAS HIDDEN THE ENTRIES AND H AS NOT 5 JILA SAHAKARI KENDRIYA BANK ITA NO.753/IND/2015 A.Y . 2009 - 10 RECORDED IN THE BOOKS OF ACCOUNTS. THEREFORE, THE A SSESSEE HAD BEEN ABLE TO MEET OUT THE CONTENTION OF THE LD. CIT (A). THE CASES RELIED UPON BY THE LD. CIT(A) ARE NOT APPLICABLE TO THE PRESENT FACTS NARRATED HEREINABOVE AS THE SAME ARE CLEARLY DISTINGUISHABLE ON FACTS. THE ASSESSING OFFICER ALS O LEVIED THE PENALTY JUST FOR THE PURPOSE OF LEVYING THE PENALTY AS THE ASSESSING OFFICER IMPOSED PENALTY MERELY CONFIRMATI ON OF THE QUANTUM ADDITION AND NO SPEAKING DISCUSSION HAS BEE N MADE IN THE PENALTY ORDER. THUS, THE REVENUE AUTHORITIES FA ILED TO APPRECIATE THESE FACTS AND LEVIED/SUSTAINED THE PEN ALTY. THUS, LOOKING TO THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT FOR THE BONA FIDE MISTAKE AND THAT THERE WAS NO MOT IVE FOR THE ASSESSEE FOR DELIBERATELY CONCEALING OR FURNISHING INACCURATE PARTICULARS OF INCOME IN THE PRESENT CASE, THE PENA LTY DOES NOT DESERVE TO BE CONFIRMED. ACCORDINGLY, WE DELETE THE PENALTY. 6. FINALLY, THE APPEAL FILED BY THE ASSESSEE IS ALL OWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 03.10.201 6. SD/- SD/- (O.P. MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03.10.2016