Shri Channabhai Amthabhai Patel, Ahmedabad V. The ITO, Ward--5,Patan, Mehsana

ITA 782/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6247 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 20-01-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 02-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N G GOYAL
• Section: 271(1)(c); 143(3); 271D; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER SHRI CHHANABHAI AMTHABHAI PATEL, 19, VRUNDAVAN SOCIETY PART - 3, OPP. AKSHARDHAM FLAT RANIP. AHMEDABAD - 382480 PAN: ABKPP0486C (APPELLANT) VS THE IT O , WARD - 5 , PATAN (RESPONDENT) REVENUE BY : S H RI N.G. GOYAL , SR. D . R. ASSESSEE BY: SHRI JIMIT SHAH , A.R. DATE OF HEARING : 20 - 01 - 2 020 DATE OF PRONOUNCEMENT : 28 - 01 - 2 020 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THESE TWO APPEALS FILED BY ASSESSEE FOR A.Y. 2008 - 09 , ARI SE FROM ORDER OF THE CIT(A), GANDHINAGAR, AHMEDABAD DATED 04 - 01 - 2 018 , IN PROCEEDINGS UNDER SECTION 271(1)(C) AND 271D OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO S . 782 & 783 / A HD/20 18 A SS ESSMENT YEAR 2008 - 09 I.T.A NO S . 782 & 783 /AHD/20 18 A.Y. 2008 - 09 PAGE NO SHRI CHANNABHAI AMTHABHAI PATEL VS. IT O 2 ITA NO. 783/AHD/2018 2. T HE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN LEVYING THE PENALTY AMOUNTING TO RS. 7 LACS U/S. 271D OF THE I.T. ACT, 1961. 3. THE FACT IN BRIEF IS THAT ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09. AS PER AIR INFORMATION, THE ASSESSING OFFICER HAS NOTICED THAT ASSE SSEE HAS DEPOSITED CASH OF R S. 28 , 27 , 630/ - IN HIS SAVING BANK ACCOUNT MAINTAINED WITH MEHSANA CO - OPERATIVE BANK LTD. THEREAFTER , THE ASSESSMENT WAS REOPENED U/S.147 OF THE ACT BY ISSUING OF NOTICE U/S. 148 OF THE ACT ON 27 TH MARCH, 2015. THE ASSESSEE HAS NOT MADE COMPLIANCE WITH THE NOTICE U/S. 148 OF THE ACT A ND NO RETURN OF INCOME WAS FILED. THEREFORE, THE ASSESSING OFFICER HA S SHOW CAUSED THE ASSESSEE TO EXPLAIN WHY NOT THE CASH DEPOSITED IN THE BANK ACCOUNT TO T HE AMOUNT OF RS. 28 , 27 , 630/ - SHOULD BE ADDED TO HIS TOTAL INCOME. IN RESPONSE, THE ASSESSEE HAS FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2 , 05 , 860/ - ON 25 T H JAN, 2016 ALONG WITH LETTER DATED 23 RD JAN, 2016 EXPLAINING THAT CASH DEPOSITED IN HIS BANK ACCOUNT WAS OBTAINED FROM HIS FARMER FRIENDS AND RELATIVES FROM TIME TO TIME AND DEPOSITED THE SAME IN TO THE BANK ACCOUNT. THE ASSESSEE HAS ALSO ATTACHED EXTRACT OF 7/12 OF THOSE PERSONS ALONG WITH CONFIRMATION S T O THE AMOUNT GIVEN BY THOSE PERSONS TO THE ASSESSEE. THE ASSES S EE ALSO ST A TED THAT HE WAS A FARMER AND WAS EARNING AN AGRICULTURAL INCO ME AMOUNTING TO R S. 15,000/ - FO R THE YEAR UNDER CONSIDERATION AND EA RLIER HE WAS WORKING WITH THE GUJ A RAT STATE ROAD CORPORATION LTD. IT IS ALSO S T ATED THAT HE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT AND HE WAS NOT DOING ANY BUSINESS. THE ASSESSING OFFICER HAS STATED THAT A SSESSEE HAS TAKEN CASH LOAN OF R S. 7 LACS FRO M THREE I.T.A NO S . 782 & 783 /AHD/20 18 A.Y. 2008 - 09 PAGE NO SHRI CHANNABHAI AMTHABHAI PATEL VS. IT O 3 PARTIES, NAMELY SHRI VISHNUBHAI PATEL, SHRI BALDEVBHAI PATEL AND SHRI CHETANBHAI PATEL DURING THE YEAR UNDER CONSIDERATION AND THESE LOANS WERE TAKEN IN VIOLATION OF SECTION 269SS OF THE ACT, T HER EFORE, THE ASSESSING OFFICER HAD REFERRED THE CASE TO THE JOINT CIT FOR LEVYING OF PENALTY U /S. 271D OF THE A CT. 4. DURING THE COURSE OF PENALTY PROCEEDINGS U/S. 271D OF T HE ACT, THE JCIT STA T ED THAT ASSESSEE HAS ACCEPTED THE FOLLOWING AMOUNT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE DRAFT. S. NO. NAME OF THE PERSON CLAIMED FROM WHOM THE AMOUNT IS RECEIVED AMOUNT 1 SHRI VISHNUBHAI RAMBHAI PATEL AT: LADOL, TAL. VIJAPUR , MEHSANA 2,75,000/ - 2 SHRI BALDEV SHIVABHAI PATEL AT :GOVINDPURA , TAL. KADI, MEHSANA 2,75,000/ - 3 SHRI CHETA NBHAI BABULAL PATEL SAT: SANTEJ, TAL. KALOL 1,50,000/ - TOTAL 7,00,000/ - THEREFORE A SHOW CAUSE NOTICE DATED 17 TH MARCH, 2016 WAS ISSUED TO THE ASSESSEE TO EXPLAIN WHY NOT PENALTY U/S. 271D SHOULD BE IMPOSED FOR CONTRAVENING THE PROVISION OF SECTIO N 269 SS OF THE ACT. THE ASSESSEE RESPONDED VIDE LETTER DATED 14 TH MARCH, 2014 BRIEFLY STATING THAT HE WAS A RETIRED PERSON AND WAS WORKING AS AN EMPLOYEE IN THE GUJARAT STATE ROAD TRANSPORT CORPORATION CO MPANY DURING THE YEAR UNDER CONSIDERATION . HE WA S A FARMER AND HE WAS ALSO DERIVING AGRICULTURAL INCOME . I T WAS ALSO STATED THAT HE HAD RECEIVED FUNDS FROM RELATIVES AS HIS RELATIVES WERE UNEDUCATED FARMERS L I VI NG IN REMOTE PLACES. THEY WERE FARMERS AND DERIVING INCOME FROM AGRICULTURAL ACTIVITIES A ND THE AFORESAID PERSONS WERE I.T.A NO S . 782 & 783 /AHD/20 18 A.Y. 2008 - 09 PAGE NO SHRI CHANNABHAI AMTHABHAI PATEL VS. IT O 4 NOT HAVING ANY TAX LIABILITY WHICH WAS CHARGEABLE TO TAX UNDER THE INCOME TAX ACT. THE MONEY WAS ADVANCED TO HIM ON TRU STEESHIP BASIS AND SUBMITTED THAT THE MONEY WOULD BE PROVIDED TO THEM WHENEVER DEMANDED. THE ASSESSE E HAS ALSO SUBMITTED COPIES OF EXTRACT S OF THE 7/12 OF THE ABOVE MENTIO NED PARTIES ALONG WITH IDENTITY PROOF AND CONFIRMATION S OF SUCH PARTIES THAT THEY HAD GIVEN FUNDS TO THE ASSESSEE AND THE ASSESSEE WAS LIABLE TO RETURN THE SAME TO THEM . THE JCIT WAS NOT SA TISFIED WITH THE SUBMISSION OF THE ASSESSEE AND LEVIED PENALTY OF RS. 7 LACS EQUIVALENT TO THE DEPOSIT AMOUNT U/S. 271D OF THE ACT. 5. THE ASSESSEE HAS PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE REIT ERATING THE FACTS REPORTED BY THE ASSESSING OFFICER. 6. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS SUBMITTED PAPER BOOK COMPRISING DETAIL OF SUBMISSION MADE BEFOR E THE LOWER AUTHORITIES. IT IS CONTENDED THAT ASSESS EE IS A RETIRED EMPLOYEE OF GUJARAT STATE ROAD TRANSPORT CORPORATION AND WAS NOT CARRYING OUT ANY BUSINESS ACTIVITY AND THE IMPUGNED AMOUNT WAS RECEIVED AMOUNT FROM THE FAMILY RELATIVES WHO WERE LIVING IN REMOTE AREA S AND THEY WERE NOT HAVING ANY ACCESS OF BANKING FACILITY IN THEIR AREAS. THEY HAD KEPT THE MONEY WITH THE ASSESSEE ON TRUSTEESHIP BASIS. HE HAS ALSO PLACED RELIANCE ON THE DECISION OF GAURNG CHANDRA NAYAK VS. JCIT VIDE ITA NO. 369/CTK/2018 DATED 23 - 09 - 2019. ON THE OTHER HAND, LD. DEPARTMENTA L REPRESENTATIVE HAS SUPPORTED THE ORDER OF LD. CIT(A). I.T.A NO S . 782 & 783 /AHD/20 18 A.Y. 2008 - 09 PAGE NO SHRI CHANNABHAI AMTHABHAI PATEL VS. IT O 5 7. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSMENT U/S. 143( 3) R.W.S. 147 OF THE ACT WAS COMPLETED ON 29 TH FEB, 2016 DETERMINING TOTAL INCOME AT RS. 2 , 05 , 860/ - AS SHOWN IN THE RETURN OF INCOME BY THE ASSESSEE. SINCE THE ASSESSEE HAD ACCEPTED THE CA S H LOAN EXCEEDING OF RS. 20,000/ - FROM THREE PERSONS DURING THE YEAR, THEREFORE, THE ASSESSING OFFICER HAD LEVIED PENALTY OF RS. 7 LACS EQUIVALENT TO THE AMOUNT OF DE POSIT RECEIVED. THE ASSE S SEE EXPLAINED THAT HE WAS A RETIRED EMPLOYEE OF THE GSRTC AND HAD RECEIVED TH E SE FUNDS FROM HIS RELATIVES WHO LIVED IN REMOTE AREAS AND WERE NOT AWAR E OF BANKING OPERATIONS. THE ASSESSEE WAS N OT CARRYING ANY BUSINESS ACTIVITY. D URING THE COUR S E O F ASSESSMENT, THE ASSESSEE HAS FILED THE EXTRACT OF 7/12 OF THE RELATIVES OF THE ASSESSEE, CONFIRMATION OF THE RELATIVES TOWARDS GENUINENESS OF THE TRANSACTION . IT WAS ALSO SUBMITTED THAT RELATIVES OF THE ASSESSEE WERE ENGAGED IN AGRICUL TURAL ACTIVITIES AND THEIR SOURCE OF INCOME WAS O NLY FROM AGRICULTURAL ACTIVITIES . THE INCOME OF THE RELATIVES OF THE ASSESSEE WERE BELOW THE BASIC EXEMPTION LIMIT WHICH WA S NOT CHARGEABLE TO TAX. THEY WERE L IVING IN A REMOTE AREA OF LU DOL GOVINDPURA OF MEHSANA DISTRICT AND BANKING FACILITIES WERE NOT AVAILABLE IN THAT AREA. THE GENUINENESS OF THE DEPOSIT WAS NOT DISPUTED BY THE ASSESSING OFFICER. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES , WE OBSERVE THAT ASSESSING OFFICER HA S NOT CONTROVERTED T HE CLAIM OF THE ASSESSEE BY NOT MAKING ANY VERIFICATION AND EXAMINATION OF THE PERSON S FROM WHOM THE ASSESSEE HAS OBTAINED THE ABOVE CASH DEPOSIT UNDER THE SPECIFIC CIRCUMSTANCES AS ELABORATED IN THIS ORDER. IN VIEW OF THE ABOVE , WE CONSIDER THAT THERE WA S BONA FIDE REASON FOR ACCEPTING SUCH DEPOSITS FROM THE THREE PERSONS UNDER THE CIRCUMSTANCES AS NARRATED ABOVE , THEREFORE , THE DECISION OF I.T.A NO S . 782 & 783 /AHD/20 18 A.Y. 2008 - 09 PAGE NO SHRI CHANNABHAI AMTHABHAI PATEL VS. IT O 6 THE LD. CIT(A) IS NOT JUSTIFIED. ACCORDINGLY, THE PENALTY LEVIED U/S. 271D IS DELETED . THIS APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 782/AHD/2018 8. THE SOLITARY GROUND OF APPEAL IS AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN LEVYING THE PENALTY AMOUNTING TO RS. 16,671/ - U/S. 271(1)(C). 9. THE FACT IN BRIEF IS TH AT ASSESSEE HAS NOT FILED HIS RETURN OF INCOME . T HEREFORE , ASSESSMENT HAS BEEN COMPLETED U/S. 143(3) R.W.S. 147 OF THE ACT ON 29 TH JAN, 2016 DETERMINING TOTAL INCOME AT RS. 2 , 05 , 680/ - . THE ASSESSING OFFICER HAS ALSO INITIATED PENALTY PROCEEDINGS U/S. 27 1(1)(C) FOR CONCEALMENT OF INCOME AND NOT FILING OF RETURN OF INCOME. DURING THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSEE HAS NOT MADE ANY COMPLIANCE TO THE SHOW CAUSE NOTICES THEREFORE THE ASSESSING OFFICER HAS LEVIED MINIMUM PENALTY OF RS. 16 , 671/ - A S PER PROVISION OF SECTION 271(1) (C) OF THE ACT @ 100% OF THE TAX SOUGHT TO BE EVADED 10. THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A) . THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PE RUSED THE MATERIAL ON RECORD. IN THIS CASE, T HE ASSESSMENT WAS COMPLETED U/S. 143(3) R.W.S. 147 OF THE A C T AS THE ASSESSEE HAD DEPOSITED CASH AMOUNTING TO RS. 28 , 27 , 630/ - INTO HIS BANK ACCOUNT BUT NOT FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERA TION . THE ASSESSING OFFICER NOTICED THAT ASSESSEE WAS HAVING I.T.A NO S . 782 & 783 /AHD/20 18 A.Y. 2008 - 09 PAGE NO SHRI CHANNABHAI AMTHABHAI PATEL VS. IT O 7 TAXABLE INCOME AND NOT FILED RETURN OF INCOME . THE ASSESSEE HAD INCORRECTLY SUBMITTED THAT HE WAS HAVING ONLY AGRICULTURAL INCOME WHICH WAS NOT TAXABLE , HOWEVER , THE ASSESSING OFF ICER NOTICED TH AT ASSESSEE HAD ALSO EARNED NON - AGRICU LTURAL INCOME IN THE FORM OF SALARY ON WHICH NO TAX WAS PAID BY FILI NG RETURN OF INCOME. CONSIDERING THE AFORESAID FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO INTERFERE IN T HE ACTION OF THE LD. CIT(A) IN SU STAINING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. T HEREFORE, THIS APPEAL OF THE ASSESSEE IS DISMISSED. 12. IN THE RESULT, APPEAL ITA 783/AHD/2018 IS ALLOWED AND APPEAL ITA 782/AHD/2018 IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 28 - 01 - 20 20 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 28 /01/2020 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,