Late Atul Kumar Gupta, Kanpur V. Dy. Commissioner of Income Tax-1, Kanpur

ITA 89/LKW/2014

• Counselvise Citation: 8923714 RSA 2014
• Duration Of Justice: 1 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-02-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 17-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PUNIT KUMAR
• Keywords: Unexplained cash credit; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.89/LKW/2014 ASSESSMENT YEAR:2001-02 LATE ATUL KUMAR GUPTA SON & L/H BHARAT KUMAR GUPTA 53/27, NAYAGANJ KANPUR V. DY. CIT-I KANPUR TAN/PAN:AHPPG8491H (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI. PUNIT KUMAR, D.R. DATE OF HEARING: 11 02 2015 DATE OF PRONOUNCEMENT: 11 03 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) CONFIRMING THE PENALTY OF RS.3.30 LAKHS UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). 2. THIS APPEAL IS FILED LATE BY 93 DAYS AND THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY STATING THEREIN THAT THE ORIGINAL ASSESSEE, SHRI. ATUL KUMAR GUPTA BREATHED HIS LAST ON 31.1.2013. IN HIS ABSENCE, NONE OF THE FAMILY MEMBERS WERE AWARE OF THE PROCEEDINGS CARRIED ON BEFORE THE INCOME-TAX AUTHORITIES. SMT. BEENU GUPTA, WIFE OF SHRI. ATUL KUMAR GUPTA WAS NOT CONVERSANT WITH THE TECHNICALITIES OF THE INCOME-TAX. MOREOVER, ON ACCOUNT OF SUDDEN DEATH OF HER HUSBAND ON 31.1.2013, SHE WAS MENTALLY DISTURBED AND WAS NOT KEEPING GOOD HEALTH. DUE TO ILL HEALTH, SHE COULD NOT CONCENTRATE ON THE INCOME-TAX PROCEEDINGS :- 2 -: AND THE APPEAL WAS NOT FILED IN TIME. THEREFORE, THE DELAY WAS NOT INTENTIONAL, BUT DUE TO THE AFORESAID REASONS. THE ASSESSEE HAS FURTHER REQUESTED FOR CONDONATION OF DELAY IN FILING OF THE APPEAL. BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 3. ON MERIT, IT IS NOTICED THAT THE ASSESSING OFFICER HAS LEVIED PENALTY OF RS.3.30 LAKHS UNDER SECTION 271(1)(C) OF THE ACT FOR THE ADDITIONS MADE ON ACCOUNT OF CASH CREDIT OF RS.1.50 LAKHS, DEPOSIT OF RS.70,000/- IN THE BANK ACCOUNT, WHICH WAS TREATED AS UNEXPLAINED DEPOSIT AND THE ADDITION ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWAL AT RS.42,000/-. 4. DURING THE COURSE OF HEARING, OUR ATTENTION WAS INVITED TO THE FACT THAT IN QUANTUM, THE MATTER HAS BEEN TRAVELLED UPTO THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 11.7.2008 HAS SET ASIDE THE ADDITION OF RS.1.50 LAKHS MADE ON ACCOUNT OF CASH CREDIT TO THE ASSESSING OFFICER FOR RE-ADJUDICATION AND ALSO REDUCED THE ADDITION MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS FROM RS.42,000/- TO RS.30,000/-. THOUGH IT WAS CONTENDED BEFORE THE ASSESSING OFFICER DURING THE PENALTY PROCEEDINGS THAT THE TRIBUNAL HAS SET ASIDE THE ORDER, BUT THE ASSESSING OFFICER DID NOT PAY ANY HEED TO THE REQUEST OF THE ASSESSEE. THE TRIBUNAL HAS PASSED AN ORDER ON 11.7.2008 AND THE PENALTY WAS IMPOSED BY THE ASSESSING OFFICER ON 27.8.2008 AFTER THE TRIBUNALS ORDER. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT THE PENALTY ON ACCOUNT OF UNEXPLAINED CASH CREDIT DESERVES TO BE SET ASIDE, AS THE ADDITION WAS SET ASIDE BY THE TRIBUNAL. 5. WITH REGARD TO LOW HOUSEHOLD WITHDRAWAL, THE ADDITION WAS REDUCED FROM RS.42,000/- TO RS.30,000/-. THEREFORE, THE VALIDITY OF PENALTY CAN ONLY BE EXAMINED WITH RESPECT TO THE ADDITION OF RS.70,000/- MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN BANK AND LOW HOUSEHOLD WITHDRAWAL OF RS.30,000/-. WITH REGARD TO THE DEPOSIT OF RS.70,000/- IN BANK, IT WAS CONTENDED THAT THE ASSESSEE HAS EXPLAINED THAT THIS AMOUNT WAS DEPOSITED :- 3 -: ON REALIZATION OF SUNDRY DEBTORS OF PRECEDING YEARS. SINCE THE AMOUNT OF SUNDRY DEBTORS IN THE IMMEDIATELY PRECEDING YEARS WAS NOT IN DISPUTE, IT WAS TOTALLY UNFAIR ON THE PART OF THE ASSESSING OFFICER TO DISBELIEVE THE CONTENTION OF THE ASSESSEE THAT THE DEPOSITS WERE MADE OUT OF REALIZATION OF SUNDRY DEBTORS OF PRECEDING YEARS. WITH REGARD TO THE ADDITION OF RS.30,000/-, IT WAS CONTENDED THAT THE ASSESSING OFFICER HAS MADE AD HOC ADDITION ON ACCOUNT OF LOW OF HOUSEHOLD WITHDRAWALS, THEREFORE, PENALTY ON ACCOUNT OF AD HOC ADDITIONS IS NOT SUSTAINABLE. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT IN THE LIGHT OF THESE FACTS, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT SUSTAINABLE. 6. THE LD. D.R. PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 7. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT UNDISPUTEDLY THE ADDITION OF RS.1.50 LAKHS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT WAS SET ASIDE BY THE TRIBUNAL TO THE ASSESSING OFFICER. THEREFORE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT SUSTAINABLE ON THIS ADDITION. 8. SO FAR AS THE ADDITION OF RS.70,000/- IS CONCERNED, IT WAS EXPLAINED THAT IT WAS DEPOSITED OUT OF REALIZATION OF SUNDRY DEBTORS OF EARLIER YEARS. THIS CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND THE ADDITION WAS CONFIRMED. IN THIS REGARD, WE ARE OF THE VIEW THAT THE ADDITION WAS MADE ON ACCOUNT OF NON-ACCEPTANCE OF THE EXPLANATIONS FURNISHED BY THE ASSESSEE. THEREFORE, WE ARE OF THE VIEW THAT THE ADDITION CAN BE MADE ON NON-ACCEPTANCE OF THE EXPLANATIONS OF THE ASSESSEE, BUT PENALTY UNDER SECTION 271(1)(C) OF THE ACT CANNOT BE LEVIED. THEREFORE, WE FIND NO MERIT IN THE PENALTY LEVIED ON ACCOUNT OF ADDITION OF RS.70,000/-. 9. WITH REGARD TO THE LOW HOUSEHOLD WITHDRAWALS, WE ARE OF THE VIEW THAT ON AD HOC ADDITION, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT :- 4 -: SUSTAINABLE. THEREFORE, WE ARE OF THE VIEW THAT UNDER THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT ON ACCOUNT OF AFORESAID ADDITIONS IS NOT SUSTAINABLE IN THE EYES OF LAW. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE PENALTY. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: MARCH, 2015 JJ:2402 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR