Shri Pankaj Rathore, Bhopal V. THE ITO WARD 1(1), Bhopal

ITA 928/IND/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2346 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: NITIN KAUSICK
• Keywords: Reasonable cause; Condonation of delay
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NOS.928 & 929/IND/2016 ASSESSMENT YEAR: 2010-11 SHRI PANKAJ RATHORE P/O M/S GWALIOR GAJAK & SWEET HOUSE, NEW MARKET, BHOPAL / VS. ITO - 1 (1) BHOPAL ( APPELLANT ) ( REVENUE ) P.A. NO. AFLPR8040R APPELLANT BY SHRI NITIN KAUSICK , ADV. RESPONDENT BY SHRI K.G. GOYAL , SR. DR DATE OF HEARING: 16.01.2018 DATE OF PRONOUNCEMENT: 31 .01.2018 / O R D E R PER KUL BHARAT, J.M: THESE TWO APPEALS BY THE ASSESSEE PERTAINING TO THE A.Y. 2010- 11 ARISING OUT OF THE QUANTUM AND PENALTY ORDER RES PECTIVELY . BOTH WERE TAKEN UP TOGETHER FOR THE SAKE OF CONVENIENCE IS BEING DISPOSED OF BY WAY OF CONSOLIDATED ORDER. 2. APPEAL OF THE ASSESSEE IS BARED BY TIME FOR THRE E DAYS. AN APPLICATION SEEKING CONDONATION OF DELAY IS FILED A LONG WITH AFFIDAVIT IN SUPPORT. THE LD. COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE DELAY IN FILING IS NOT DELIBERATE BUT WAS CAUSED BY REASONABLE CAUSE. P ANKAJ RATHORE 2 THE LD. COUNSEL REITERATED THE SUBMISSIONS AS MADE IN THE APPLICATION SEEKING CONDONATION OF DELAY. LD. DR OP POSED THIS SUBMISSION OF THE ASSESSEE. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED MATERIAL ON RECORD. AFTER CONSIDERING THE SUBMISSIONS MADE IN T HE APPLICATION, WE ARE OF THE VIEW THAT THERE WAS A REASONABLE CAUS E FOR NOT FILING THE APPEAL, THEREFORE, CONDONE THE DELAY OF THREE D AYS AND ADMIT THE APPEAL FOR ADJUDICATION. FIRST, WE TAKE UP ITA NO.928/IND/2016 THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. THAT THE CIT(A) AND THE LD. AO BOTH HAVE ERRED IN NOT AFFORDING THE PROPER OPPORTUNITY TO THE ASSESSEE FO R PUTTING UP HIS DEFENCE ON THE FACTS AND CIRCUMSTANCES OF THE C ASE. 2. THAT THE CIT(A) AND THE LD. AO BOTH HAVE ERRED I N LAW AND FACTS. (A) BECAUSE NO PROPER OPPORTUNITY WAS AFFORDED TO T HE ASSESSEE FOR PUTTING UP HIS DEFENCE ON THE FACTS AND CIRCUMS TANCES OF THE CASE. (B) BECAUSE THE ORDER OF THE LD. O IS A BAD IN LAW AND UNJUST ON FACTS OF THE CASE. (C) BECAUSE DETERMINING THE INCOME AT RS.5,38,840/- AS AGAINST THE RETURNED INCOME OF RS.1,58,450/-. (D) BECAUSE IN MAKING ADDITION OF INTEREST OF RS.31 ,794/-. (E) BECAUSE IN NOT IMPARTING CREDENCE TO THE CASH R OTATION CHART PREPARED BY THE ASSESSEE OUT OF DISCLOSED INCOME TO EXPLAIN ROTATION OF FUNDS AND SOURCES OF INVESTMENTS/EXPEND ITURES. (F) BECAUSE THEY FAILED TO APPRECIATE THE VARIOUS W RITTEN SUBMISSIONS, DOCUMENTS, EVIDENCE, PERSONAL BOOKS OF ACCOUNTS AND ALSO ERRED IN DISBELIEVING THE CASH ACCOUNT. 4 . BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASS ESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT, ASSESSMENT U/S 143(3) O F THE INCOME P ANKAJ RATHORE 3 TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) WAS FRAMED VIDE ORDER DATED 17.01.2013. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER MADE TWO ADDITIONS ON ACCOUNT OF INTEREST O N FDR AND SAVING BANK ACCOUNT OF RS.31,794/- AND UNEXPLAINED CASH DEPOSIT IN SB A/C OF RS.3,48,592/-. AGAINST THIS THE ASSESS EE FILED AN APPEAL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS DISMISSED THE APPEAL. NOW THE ASSESSEE IS IN FURTHE R APPEAL BEFORE THIS TRIBUNAL. 5. GROUND NO.1 & 2(A) ARE AGAINST NOT GRANTING SUFF ICIENT OPPORTUNITY OF THE ASSESSEE. THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE ASSESSEE WAS NOT GRANTED SUFFICI ENT OPPORTUNITY BY THE AO ON THE CONTRARY LD. DR OPPOSED THIS SUBMI SSION. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND WE FIND THAT THE AO HAS NOTICED IN THE ASSESSMENT ORDER THAT IN RESPONSE TO NOTICES ISSUED BY THIS OFFICE, SHRI ARVIND KAUSHIK AND SHRI NITIN KAUSHIK, ATTENDED TIME TO TIME AND FILED WRITTEN REPLY. UNDER THESE F ACTS WE DO NOT SEE ANY REASON TO INTERFERE THE FINDING OF THE AO. MORE OVER THE ASSESSE HAS NOT DEMONSTRATED AS HE HAD REQUESTED THE AO FOR GRANT OF TIME AND HE WAS NOT GRANTED. HENCE GROUND NO.1 AND 2(A) ARE DISMISSED. 7. GROUND NO.2(B) IS WITH REGARD TO THE ASSESSMENT ORDER BEING IS BAD IN LAW. NO SUBMISSION WAS MADE ON THIS GROUND, HENCE THIS GROUND IS REJECTED. 8. GROUND NO. 2(C) & 2(D) RELATES TO THE UNEXPLAINE D DEPOSITS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE BEFORE THE LD. CIT(A). HE SUBMITTED THAT LD. C IT(A) FAILED TO P ANKAJ RATHORE 4 APPRECIATE THE FACTS IN RIGHT PROSPECTIVE. ON THE C ONTRARY LD. DR SUPPORTED THE ORDER OF THE LD. CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED MATERIAL ON RECORD. LD. CIT(A) HAS DECIDED THE ISSUE IN PARA 4. 5 & 4.6 AS UNDER: 4.5 I HAVE CONSIDERED THE FINDINGS RECORDED BY THE LD. AO AS PER THE ASSESSMENT ORDER, THE SUBMISSION OF THE APP ELLANT, THE POSITION OF THE LAW AND THE FACTS OF THE CASE ON RE CORD. FROM THE FACTS RECORDED BY THE LD. AO IN THE ASSESSMENT ORDE R ON THE BASIS OF THE CASH FLOW STATEMENT PREPARED BY HIM, I T IS SEEN THAT THE APPELLANT HAS A SHORTAGE OF CASH OF RS.3,48,595 /- FOR DEPOSIT IN THE BANK ACCOUNT. AS AGAINST THE TOTAL C ASH DEPOSITED OF RS.29,18,000/- IN THE BANK ACCOUNT, THE LD. AO H AS WORKED OUT THE AVAILABILITY OF AN AMOUNT OF RS.25,69,408/- ONLY DURING THE PERIOD I.E. FROM 01.04.2009 TO 24.02.2010. ACCO RDINGLY, THE AO MADE AN ADDITION OF THE BALANCE SUM OF RS.3,48,5 95/- BEING UNEXPLAINED CASH DEPOSITED IN THE BANK ACCOUNT. 4.6 DURING THE APPELLATE PROCEEDINGS, THE LD. AR CL AIMED THAT WHILE PREPARING THE CASH FLOW STATEMENT, THE LD. AO MADE A MISTAKE THAT HE DEDUCTED THE INVESTMENT OF RS.3,40, 000/- AS CAPITAL CONTRIBUTION IN PARTNERSHIP FIRM. HE CONTE NDED THAT THIS AMOUNT WAS NOT INVESTED DURING THE AFORESAID PERIOD I.E. FROM 14.2009 TO 24.2.2010, BUT WAS INVESTED AFTER 24.2.2 010 I.E. ON 15.3.2010. HE ARGUED THAT IF THE SAID AMOUNT OF RS. 3,40,000/- IS IGNORED, THE CASH BALANCE WILL INCREASE BY AN EQ UAL AMOUNT DURING THE ABOVE SAID PERIOD AND IT WOULD HAVE BEEN AVAILABLE FOR DEPOSIT IN THE BANK ON OR BEFORE 24.02.2010. IN ORDER TO VERIFY THE AFORESAID CLAIM, THE LD. AR WAS REQUESTE D TO ESTABLISH THAT THE AMOUNT OF RS.3,40,000/- WAS DEPO SITED WITH M/S. P.P. RATHORE & CO, ON 15.03.2010 AND NOT BEFOR E 24.2.10 AS CONTENDED, WITH DOCUMENTARY EVIDENCES. HOWEVER, NO SUCH EVIDENCE WAS FURNISHED BY THE APPELLANT. THE LD. AR , THROUGH SUBMITTED A REPLY FILING COPIES OF THE PARTNERSHIP DEED AND AUDITORS REPORT ETC. OF M/S. P.P. RATHORE & CO., B UT THE SAID DOCUMENTS NOWHERE REFLECT THAT THE CLAIMED AMOUNT O F RS.3,40,000/- WAS DEPOSITED ON 15.3.2010 AND NOT ON OR BEFORE 24.2.2010. UNDER THESE CIRCUMSTANCES, WHEN THE APPE LLANT HAS NOT BEEN ABLE TO FURNISH ANY EVIDENCE IN SUPPORTED OF HIS CLAIM P ANKAJ RATHORE 5 TO CONTROVERT THE FINDINGS OF THE LD. AO RECORDED B Y HIM ON THE BASIS OF THE CASH FLOW STATEMENT, I HOLD THAT THE A DDITION WAS RIGHTLY MADE BY THE AO. ACCORDINGLY, THIS GROUND IS DISMISSED BEING IN FRUCTUOUS. THESE FINDING ON FACT BY LD. CIT(A) IS NOT CONTROVE RTED BY THE ASSESSEE BY PLACING ANY CONTRARY MATERIAL ON RECORD . HENCE, THERE IS NO MERIT INTO GROUNDS RAISED BY ASSESSEE. GROUND NO S. 2(E) 7 2(F) GENERAL ASSERTIONS WITHOUT ANY EVIDENCE IN SUPPORT, HENCE SAME ARE DISMISSED. 10. THE APPEAL OF THE ASSESSEE IS DISMISSED. NOW COMING TO ITAT NO.929/IND/2016 THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE PENALTY ORDER WHEN THE LD. AO FAILED TO CONSIDE R THE DISCUSS THE FACTS NARRATED IN THE WRITTEN SUBMISSION AND AL SO THE VARIOUS CITATIONS OF THE HON'BLE APEX COURT AND THE HON'BLE HIGH COURTS MENTIONED THEREIN. 2. THAT THE PENALTY ORDER IS BAD AND UNJUST IN LAW AND ON FACTS ARE THE LD. AO COULD NOT CONCLUSIVE ESTABLISH THAT THE ASSESSEE WAS GUILTY WHEN THE ASSESSEE HAD EXPLAINED THE FACT S OF THE CASE AND ALSO SUBMITTED THE WRITTEN SUBMISSION OF C ASE SUPPORTED WITH THE REGULAR BOOKS OF ACCOUNTS AND VA RIOUS CITATIONS IN THE SUBJECT MATTER. 3. THAT THE PENALTY LEVIED U/S 271(1)(C) IS UNWARRA NTED AND UNJUST WHEN THE QUANTUM APPEAL OF THE ASSESSEE WAS PENDING IN APPEAL BEFORE THE HON'BLE CIT(A). APART FROM THESE GROUNDS THE ASSESSEE HAS TAKEN FOL LOWING ADDITIONAL GROUND: 1. THAT ON THE FACTS AND CIRCUMSTNCES OF THE CASE T HE INITIATION OF PROCEEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT IS NOT VALID AS THE AO DID NOT STRIKE OFF THE INAPPROPRIATE PORT ION OF THE P ANKAJ RATHORE 6 NOTICE. THE AO OUGHT TO HVE STRUCK OFF THE INAPPROP RIATE PORTION AND SHOULD HAVE SPECIFIED WHETHER APPELLANT HAS CON CEALED THE PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. 11. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT ADDITIONAL GROUND MAY BE DECIDED FIRST. THE AD DITIONAL GROUND OF THE ASSESSEE REITERATED AS UNDER: FACTS GIVING RISE TO THE APPEAL ARE THAT WHILE MAKI NG ASSESSMENT U/S 143(3) THE ASSESSING OFFICER MADE AD DITION IN RESPECT OF THE CASH DEPOSIT AND INTEREST ON FDR, TH E AO ALSO INITIATED PENALTY PROCEEDINGS. SUBSEQUENTLY, THE PE NALTY WAS IMPOSED VIDE ORDER DATED 17.07.2013. AGAINST THIS T HE ASSESSE PREFERRED AN APPEAL THAT WAS DISMISSED BY THE LD. C IT(A). THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE IN THE WRITTEN SUBMISSION. HE SUBMITTED THAT T HE AO WHILE INVOKING PROVISIONS OF SECTION 271(1)(C) FOR INITIA TING PENALTY PROCEEDINGS, HAS NOT SPECIFIED THE CHARGES WHICH IS CONTRARY TO THE SETTLED PRINCIPLES OF LAW.IN SUPPORT OF THIS CONTEN TIONS LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE JUDGMEN T OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SSAS EMROLD ME DHOWS 2016 73 TAXMAN.COM 248 (SC) AND ALSO JUDGMENT OF THE HON 'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNA THA COTTON & GINNING FACTORY, (2013) 359 ITR 565. ON THE CONTRAR Y LD. DR OPPOSED THE SUBMISSIONS OF THE ASSESSEE. P ANKAJ RATHORE 7 12. WE HAVE HEARD RIVAL CONTENTION AND PERUSED MATE RIAL ON RECORD. THE CONTENTION OF THE ASSESSEE IS THAT WHILE INITIA TING THE PENALTY THAT THE AO HAS NOT SPECIFIED THE CHARGE. WE FIND M ERIT INTO THESE CONTENTIONS OF THE ASSESSEE AS IN THE ASSESSMENT OR DER, THE AO WHILE RECORDING THE SATISFACTION HAS STATED AS UNDE R: I AM SATISFIED THAT ASSESSEE HAS FURNISHED INACCUR ATE PARTICULARS/CONCEALED INCOME AND PENALTY PROCEEDING S U/S 271(1)(C) IS SEPARATELY INITIATED. WHILE ISSUING NOTICE U/S 271(1)(C) ALSO THE AO FAIL ED TO STRIKE OFF OUT OF TWO I.E. CONCEALMENT OR FURNISHING OF I NACCURATE PARTICULARS OF INCOME FURTHER WHILE IMPOSING THE PE NALTY ALSO THE AO STATED AS UNDER: IN VIEW OF THE ABOVE DISCUSSION I AM SATISFIED THA T THE ASSESSE HAS FURNISHED INACCURATE PARTICULARS/CONCEALED PART ICULARS OF HIS INCOME S MENTIONED ABOVE AND IS LIABLE FOR PENA LTY U/S 271(1)(C) OF THE INCOME TAX ACT,1961. AMOUNT OF TAX SOUGHT TO BE EVADED WORKS OUT OF RS.67,622/-. QUANTUM OF MINIMUM AND MAXIMUM PENALTY LEVIABLE IN VIEW OF SECTION 271(1)( C) AMOUNTS TO RS.67,622/- AND RS.2,02,866/- RESPECTIVELY. I, T HEREFORE, LEVY A PENALTY OF RS.70,000/- (RS. SEVENTY THOUSAND ONLY ) U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. WE, THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNA THA COTTON & GINNING FACTORY(SUPRA) QUASH THE PENALTY ORDER BEIN G ILLEGAL. THUS, ADDITIONAL GROUND OF THE ASSESSEE IS ALLOWED. THE O THER GROUNDS OF THE ASSESSEE HAVE BECOME INFRUCTUOUS, AS THE PENALT Y ORDER IS QUASHED, BEING CONTRARY TO SETTLED LAW. P ANKAJ RATHORE 8 13. AS A RESULT APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. 14 . IN THE RESULT, APPELLANT OF ASSESSE IN ITANO.928/I ND/2016 IS DISMISSED AND ITANO.929/IND/2016 IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 31 .01. 2018. SD/- (MANISH BORAD) SD/- (KUL BHARAT) CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 31 / 01/2018 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE