Bappaditya Chakraborty , Kolkata V. ACIT,Cir-24, Hooghly , Hooghly

ITA 898/KOL/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 4075 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-01-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 28-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Reasonable cause; TDS; FORM 26AS
• Section: 271(1)(c)

Judgement Text

आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘सी’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Įी संजय गग[, ÛयाǓयक सदèय एवं Įी ͬगरȣश अĒवाल, लेखा सदèय के सम¢ Before Shri Sanjay Garg, Judicial Member and Shri Girish Agrawal, Accountant Member I.T.A. Nos.898&899/Kol/2023 Assessment Year: 2013-14 Bappaditya Chakraborty...............................................................Appellant C/o Subash Agarwal & Associates, Advocates, Siddha Gibson, 1, Gibson Lane, Suite 213, 2 nd Floor, Kolkata – 700069. [PAN: AFUPC4296H] vs. ACIT, Circle-24, Hooghly........................................................... Respondent Appearances by: Shri Siddharth Agarwal, Advocate, appeared on behalf of the appellant. Shri Amuldeep Kaur, Addl. CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : January 24, 2024 Date of pronouncing the order : January 31, 2024 आदेश / ORDER संजय गग[, ÛयाǓयक सदèय ɮवारा / Per Sanjay Garg, Judicial Member: The captioned are the two appeals preferred by the assessee, one is pertaining to the quantum addition and the other is deleting to the levying of penalty u/s 271(1)(c) of the Income Tax Act (hereinafter referred to as the ‘Act’). 2. Both the appeals of the assessee are time-barred by 1395 days. As per the affidavit of the assessee namely Shri Bappaditya Chakrabotry, it has been deposed that the appeal orders of the CIT(A) were received by the assessee on 03.09.2019 and thereafter the assessee approached his advocate, Keshab Lal Mukherjee, for the I.T.A. Nos.898&899/Kol/2023 Assessment Year: 2013-14 Bappaditya Chakraborty 2 purpose of filing of appeal before the Tribunal. That the assessee was under bona fide belief that the appeals have been filed by the said counsel. Thereafter, there was an outbreak of Covid – 19 pandemic and during the said period, the counsel had expired in the month of June, 2020. That when the auditor of the assessee required the assessee to tell the status of the pending appeals, only then it transpired that the said counsel had expired in the month of June 2020 and he could not file the appeals resulting into the aforesaid delay. Considering the above submissions of the assessee, since most of period of delay is covered under the Covid-19 pandemic period and further the assessee was not aware that these appeals were not filed and the counsel who was engaged in the matter and who has expired during the Covid-19 pandemic, therefore, there was a reasonable cause for the assessee for delay in filing the appeals. The delay in filing the appeals is hereby condoned. Now, we take up firstly the appeal of the assessee relating to the quantum addition. 3. ITA No.898/Kol/2023 - The assessee in this appeal has taken the following grounds of appeal: “1. For that the Ld. CIT(A) was not justified in confirming the addition of Rs.19,67,900/- made by the A.O on account of undisclosed purchases based on alleged unreconciled value of TCS. 2. For that the Ld. CIT(A) was not justified in confirming the addition of made by the A.O on account of unexplained investment of Rs.11,00,000/- in shares. 3. The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.” 4. Ground No.1 – Vide Ground No.1, the assessee has agitated the confirmation of addition made by the Assessing Officer on account of mismatch of TCS credited of Rs.1,03,285/-. I.T.A. Nos.898&899/Kol/2023 Assessment Year: 2013-14 Bappaditya Chakraborty 3 5. During the assessment proceedings, the Assessing Officer noticed that the assessee in his return of income had claimed TCS of Rs.1,03,285/-, whereas, as per the Form 26AS, the value of the TCS was Rs.1,15,642/-. The Assessing Officer, therefore, held that the assessee has corresponding purchases relating to the TCS of Rs.12,357/-. He, therefore, made the addition of Rs.19,67,900/- on account of undisclosed purchases on account of the difference of TDS claimed in the return of income as compared to Form 26AS. During the appellate proceedings, the assessee duly explained the difference and reconciled the same. The ld. counsel for the assessee in this respect has invited our attention to page 26 of the paper-book which is a copy of Form 26AS, wherein, the tax collected of Rs.7323/- has been duly disclosed in respect of purchases of Rs.7.32 lakhs from Arati Shaw. Regarding the remaining purchase of Rs.12 lakh, the ld. counsel has submitted that the entire purchases have been duly recorded in the balance sheet and therefore, there was no undisclosed purchases. So far as, the difference in Form 26AS as compared to the claim of TCS by the assessee in the return of income was concerned, the ld. counsel in this respect has submitted that in fact there was some delay in uploading the relevant entries by the seller R G Shaw. That at the time of return of income that only TCS of Rs.1,03,285/- in respect of aforesaid purchases was shown and the assessee accordingly claimed the said amount. However, later on the seller uploaded 26AS Form and shown the TCS deducted of Rs.12,357/-. However, the assessee had duly accounted for entire purchases and there was no mismatch in the balance sheet as compared to 26AS form. 6. After considering the submissions of the assessee and after going through the documents, we find that the total purchases of the assessee of Rs.11,557,587.13 was duly shown by the assessee in its I.T.A. Nos.898&899/Kol/2023 Assessment Year: 2013-14 Bappaditya Chakraborty 4 books of account, whereupon, a TCS amount of Rs.115,642/- was deducted. However, the assessee had claimed TCS of Rs.1,03,285/- only due to reasons as noted above. In view of this, it cannot be said to be a case of undisclosed purchases, therefore, the impugned addition made by the lower authorities on this issue is ordered to be deleted. 7. Ground No.2 – Vide Ground No.2, the assessee has assailed the order of the CIT(A) in confirming the addition made by the Assessing Officer on account of undisclosed investment of Rs.11,00,000/- in shares. 8. The ld. counsel, in this respect, has submitted that the Assessing Officer made the impugned addition observing that there was a fresh investment in shares of Rs.11,00,000/- He submitted that the assessee had failed to explain source of such investment. The ld. counsel in this respect has submitted that the aforesaid investment was made through banking channel and that the said investment was duly recorded in the books of account and therefore, it was not a case of any undisclosed investment. He has further submitted that the funds which were invested, were duly available to the assessee as per the books of account, however, the authorised representative of the assessee without instruction or consent of the assessee did not press the aforesaid ground out of some misconception. The ld. counsel has submitted that the aforesaid investment was duly made and accounted for in the books of account and there was no reason for the lower authorities to make the impugned additions. So far as the non-pressing of the ground by the authorised representative against the instruction of the assessee is concerned, the ld. counsel has relied upon the following decisions to press upon the point that even when a ground was not pressed before the lower authorities, however the same has I.T.A. Nos.898&899/Kol/2023 Assessment Year: 2013-14 Bappaditya Chakraborty 5 been pressed before the Tribunal, the Tribunal may consider such ground: 1. Order of the Hon’ble Punjab and Haryana High Court in the case of Vijay Kr. Jain vs. CIT (99 ITR 349) 2. Order of the Hon’ble Allahabad High Court in the case of J.K. Mills Co. Ltd. vs. CIT (105 ITR 53) 3. Order of the Tribunal, Jodhpur Bench in the case of Hindustan Zinc Ltd. vs. DCIT (77 TTJ 315) 8.1 The ld. counsel has further relied upon the decision of the Calcutta High Court in the case of B.K. Gooyee vs. CIT (62 ITR 109), wherein, the Hon’ble Calcutta High Court has held that the authorised representative or the counsel cannot waive a right of the client without referring the matter to him or to say without his instructions. 9. In this case, we find that the investments made during the year by the assessee were out of his disclosed funds and the investments were also duly recorded in the books of account, therefore, there was no reason for the then authorized representative of the assessee to waive this ground. The addition on this issue is not warranted. Therefore, the addition made by the lower authorities on this issue is ordered to be deleted. 10. ITA No.899/Kol/2023 – In this appeal, the assessee has contested the levy of penalty u/s 271(1)(c) of the Act. 11. Since, in view of our order passed in assessee’s appeal vide ITA No.898/Kol/2023, the quantum additions made by the lower authorities have been ordered to be deleted, therefore, the impugned I.T.A. Nos.898&899/Kol/2023 Assessment Year: 2013-14 Bappaditya Chakraborty 6 penalty levied u/s 271(1)(c) of the Act has no legs to stand at this stage, and the same is accordingly ordered to be deleted. 12. In the result, both the appeals of the assessee is treated as allowed. Kolkata, the 31 st January, 2024. Sd/- Sd/- [ͬगरȣश अĒवाल /Girish Agrawal] [संजय गग[ /Sanjay Garg] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 31.01.2024. RS Copy of the order forwarded to: 1. Bappaditya Chakraborty 2. ACIT, Circle-24, Hooghly 3.CIT (A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches