Pawan Kumar Aggarwal, Delhi V. ITO, New Delhi

ITA 898/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7021 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 11-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 17-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Assessee Lawyers: KSHITIJ SHARDA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH F NEW DELHI BEFORE : SHRI I.C. SUDHIR , JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 898/DEL./2014 ASSTT. YEAR : 2005 - 06 PAWAN KUMAR AGGARWAL, VS. INCOME - TAX OFFICER, 4258/13, 3 RD FLOOR, WARD 39(2), NEW DELHI KATRA SUNDER LAL, PAHARI DHIRAJ, SADAR BAZAR, DELHI (PAN: AECPA 0482 L) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. KSHITIJ SHARDA, ADVOCATE RESPONDENT BY : S H. V.R. SONBHADRA, SR. DR DATE OF HEARING : 11.07.2016 DATE OF PRONOUNCEMENT : 12 .07.2016 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)XXVI I I, NEW DELHI DATED 09.12.2013 FOR THE ASSESSMENT YEAR 200 5 - 06 ON THE FOLLOWING GROUNDS : THE LEARNED CIT (A) HAS ERRED IN LAW AND IN FACTS IN UPHOLDING THE PENALTY IMPOSED IN THE INSTANT CASE U/S 271(L)(C) OF THE ACT. REASONABLE OPPORTUNITY HAS BEEN DENIED AND BIAS IS WRIT LARGE IN T HE IMPUGNED ORDER AS PASSED. THE FINDING THAT AIR INFORMATION WAS THAT . ..THE ASSESSEE HAD MADE CASH DEPOSITS...IN HIS BANK ACCOUNT...' AND .. ..THE APPELLANT WAS UNABLE TO EXPLAIN THE SOURCE FROM WHICH THE AMOUNT OF RS. 21,28,320/ - HAS BEEN DEPOSITED IN THE ACCOUNT.. IS PERVERSE SINCE NOT ONLY THAT THE AIR INFORMATION HAS NOT BEEN CORRECTLY READ BUT ALSO THE FACT THAT THE ASSESSEE HAD EXPLAINED THE SOURCE BUT THE AO FAILED TO CARRY IT TO THE LOGICAL ITA NO. 898 /DEL./201 4 2 CONCLUSION DESPITE GLARING NON - COMPLIANCE BY THE BANK W ITH THE TERM OF NOTICE ISSUED FOR FURNISHING COMPLETE DETAILS THAT SHOWED THE CORRECTNESS OF THE SUBMISSIONS OF THE APPELLANT HAS BEEN OVERLOOKED. THE APPELLANT CRAVES LEAVE TO ADD TO THE GROUNDS OF APPEAL AND PRAY THAT THE RECORDS OF THE AO BE ALSO CALLE D FOR AT THE TIME OF HEARING OF THE APPEAL. RELIEF CLAIMED A. THE IMPUGNED ORDER BE CANCELLED AND THE PENALTY OF RS. RS. 6,46,419/ IMPOSED BY THE LEARNED ITO WARD 39(2), NEW DELHI BE CANCELLED; B. SUCH OTHER OR FURTHER RELIEF AS DEEMED FIT JUST AND PROP ER BY THIS HON'BLE TRIBUNAL IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE BE ALLOWED IN FAVOUR OF THE APPELLANT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 26.05.2007 DECLARING TOTAL INCOME AT RS. 1,08,370 / - . THE RE TURN WAS SELECTED FOR SCRUTINY UNDER CASS. THE REVENUE RECEIVED INFORMATION THROUGH AIR THAT THE ASSESSEE HAD MADE CASH DEPOSIT OF RS.21,28,320/ - IN HIS SAVING BANK ACCOUNT NO. 529 - I - 014754 WITH STANDARD CHARTERED BANK, KAROL BAGH, NEW DELHI. STATUTORY NO TICE WAS ISSUED U/S. 143(2) WHICH WAS SERVED UPON THE ASSESSEE. IN RESPONSE THERETO, THE ASSESSEE SUBMITTED BEFORE THE AO THAT THIS MONEY WHICH WAS DEPOSITED IN HIS ACCOUNT WAS NOT BELONGING TO HIM. HE EXPLAINED THAT WHENEVER PERSONS COME FROM DIFFERENT PA RTS OF INDIA AND WANTED TO SHOP IN SADAR BAZAR, DELHI, THEY USED TO DEPOSIT THEIR MONEY IN HIS BANK ACCOUNT AND WHEN THEY WERE IN DELHI THEY CONTACT HIM, TAKE SELF CHEQUE S FOR THE AMOUNT THEY DEPOSITED IN HIS ACCOUNT AND USED TO WITHDRAW THEIR ITA NO. 898 /DEL./201 4 3 MONEY FROM H IS BANK ACCOUNT AND FOR THE SERVICE HE USED TO GET A SMALL COMMISSION FROM THEM. THE AO INSISTED THAT THE ASSESSEE SHOULD PRODUCE THE DEPOSITORS AND ASKED HIM TO FURNISH THEIR ADDRESSES ETC. SINCE THE ASSESSEE COULD NOT PRODUCE THEM N OR FURNISH ANY DETAILS ABOUT THEM, CASH DEPOSIT OF RS.21,28,320/ - WAS ADDED AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES AND ALSO MADE AN ADDITION OF ESTIMATED COMMISSION OF RS.21,283/ - ON THE SAID AMOUNT RS.21,28,320/ - @ 1%. THUS, TOTAL AMOUNT OF TAXABLE INCOME WAS DETER MINED BY THE AO AT RS.22,58,340/ - . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY, WHO UPHELD THE ORDER OF THE AO. THEREAFTER, PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT WERE INITIATED. THE AO IMPOSED 100% P ENALTY ON THE TAX SOUGHT TO BE EVADED. THE LD. CIT(A) IN APPEAL, CONFIRMED THE PENALTY IMPOSED BY THE AO. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMITTED THAT THE ASS ESSEE HAD FILED APPEAL AGAINST THE ORDER OF CIT(A) IN THE QUANTUM PROCEEDINGS, WHEREIN, THE ITAT SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETED THE ADDITION VIDE ORDER DATED 08.04.2015 IN ITA NO. 2454/DEL./2008. ONCE, THE ADDITIONS, ON THE BASIS OF WHIC H PENALTY WAS IMPOSED STANDS DELETED BY THE ITAT, THERE REMAINS NO REASON TO SUSTAIN THE PENALTY IMPOSED BY THE ASSESSING OFFICER. ITA NO. 898 /DEL./201 4 4 4. THE LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL AV AILABLE ON RECORD, WE FIND NO JUSTIFICATION TO SUSTAIN THE PENALTY IMPOSED AGAINST THE ASSESSEE. IT IS NOTABLE THAT ONCE THE ADDITIONS WHICH WERE MADE BASIS FOR IMPOSITION OF PENALTY U/S. 271(1)(C), STOOD DELETED BY ITAT VIDE ORDER DATED 08.04.2015 (SUPRA) , THE VERY BASIS FOR IMPOSITION OF PENALTY STANDS COLLAPSED. WE, THEREFORE, FIND NO JUSTIFICATION TO SUSTAIN THE ORDER OF THE LD. CIT(A). ACCORDINGLY, THE PENALTY IMPOSED IS LIABLE TO BE CANCELLED AND THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.07.2016 . SD / - SD/ - ( I.C. SUDHIR ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12.07.2016 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI