Shree Navjivan Kelavani Mandal, Banaskantha V. The Income Tax Officer (Exemptions), Palanpur

ITA 931/AHD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7196 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-04-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 17-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Assessee Lawyers: BIREN SHAH
• Keywords: Unexplained cash credit; Additional evidence; Set aside
• Section: 12AA; 143(2); 68; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD [THROUGH VIRTUAL COURT] BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI PRADIPKUMAR KEDIA, ACCOUNTANT MEMBER ITA.NO.931/AHD/2017 / ASSTT.YEAR : 2013-14 SHREE NAVJIVAN KELAVANI MANDAL PURSHOTTAM NAGAR AT: UNJHA 384 170 DIST. MEHSANA. VS. ITO (EXEMPTION) PALANPUR (B.K.) / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI BIREN SHAH REVENUE BY : SHRI L.P. JAIN, SR.DR / DATE OF HEARING : 20/08/2020 / DATE OF PRONOUNCEMENT: 03/09/2020 !'/ O R D E R PER RAJPAL YADAV, VICE-PRESIDENT ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-9, AHMEDABAD DATED 13.2.2017 PASSED FOR T HE ASSTT.YEAR 2013-14. 2. THE ASSESSEE HAS TAKEN SIX GROUNDS OF APPEAL, OU T OF THAT IN GROUND NO.1, 2 AND 3, IT HAS PLEADED THAT THE LD.CI T(A) HAS ERRED IN NOT GRANTING PROPER OPPORTUNITY OF HEARING AND NOT ADMI TTING ADDITIONAL EVIDENCE PLACED BEFORE HIM. IN GROUND NO.4 AND 5, IT HAS CHALLENGED CONFIRMATION OF ADDITION OF RS.27,15,600/- AND RS.1 9,44,000/- WHICH WERE ADDED BY THE AO WITH AID OF SECTION 68 OF THE INCOME TAX ACT, 1961. GROUND NO.6 IS GENERAL GROUND OF APPEAL, WHI CH DOES NOT CALL FOR RECORDING OF ANY FINDING. ITA NO.931/AHD/2017 2 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE REC ORD WOULD INDICATE THAT THE ASSESSEE IS AN EDUCATIONAL SOCIETY REGISTE RED UNDER SECTION 12AA OF THE INCOME TAX ACT. IT HAS FILED ITS RETUR N OF INCOME ON 2.10.2014 ELECTRONICALLY, DECLARING TOTAL INCOME AT NIL. IT HAS CLAIMED DEDUCTION FOR UTILIZATION OF FUND FOR THE OBJECTS O F THE TRUST UNDER SECTION 11 OF THE INCOME TAX ACT. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT, AND NOTICE UNDER SECTION 143(2) WAS ISSUED AND RECEIVED BY THE ASSESSEE. ACCORDING TO THE LD.AO, IN RESPONSE TO THE VARIOUS NOTICES ISSUED UNDER SECTIO N 143(2)/142(1) OF THE ACT, THE ASSESSEE DID NOT APPEAR BEFORE HIM. T HE LD.AO GOT CERTAIN INFORMATION FROM THE AIR WING EXHIBITING THE FACT T HAT THE ASSESSEE HAS DEPOSITED RS.27,15,600/- IN CASH IN UNJHA NAGARIK S AHAKARI BANK LTD. SIMILARLY, IT HAS DEPOSITED A SUM OF RS.19,44,000/- IN TWO BANKS WITH MARKET YARD COMMERCIAL CO-OP. BANK LTD. (RS.4,44,50 0/-) AND URBAN CO-OP. BANK LTD. (RS.15,00,000/-). APART FROM TH ESE TWO AMOUNTS OTHER ADDITIONS WERE MADE BY THE AO. HE DETERMINED TAXABLE INCOME OF THE ASSESSEE AT RS.89,74,530/- AS AGAINST NIL DE CLARED BY THE ASSESSEE. DISSATISFIED WITH THE EX PARTE ASSESSME NT ORDER, THE ASSESSEE WENT IN APPEAL BEFORE THE LD.FIRST APPELLA TE AUTHORITY. IT HAS FILED AN APPLICATION FOR PERMISSION TO LEAD ADDITIO NAL EVIDENCE. THOUGH THE LD.CIT(A) HAD A GLANCE OVER THE TOTAL MATERIAL, BUT DID NOT ADMIT EVIDENCE ON THE GROUND THAT THE CASE OF THE ASSESSE E DOES NOT FALL WITHIN THE CONDITION CONTEMPLATED IN RULE 46A OF TH E INCOME TAX RULES, 1962. THE LD.CIT(A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. HE CONFIRMED THE ADDITION OF RS.19,44,000/- AS WELL AS RS.27,15,600/-. THE ADDITION OF RS.27,15,600/- WAS CONFIRMED ON THE GROUND THAT THIS AMOUNT WAS STATED TO BE DEPOSITED OUT OF CORPUS FUN D, AND THE ASSESSEE FAILED TO SUBSTANTIATE THIS PLEA. THE FIN DING OF THE LD.CIT(A) QUA THIS ISSUE READS AS UNDER: ITA NO.931/AHD/2017 3 6.2 I HAVE CAREFULLY CONSIDERED RIVAL CONTENTIONS, CASE LAW RELIED UPON AND OBSERVATIONS MADE BY THE A.O. IN THE ASSESSMENT ORD ER. IT IS OBSERVED THAT A.O. HAS MADE AN ADDITION OF RS.27,15,600/- ON ACCO UNT OF CASH DEPOSITS MADE BY THE APPELLANT IN ITS BANK ACCOUNT WITH UNJH A NAGARIK SAHKARI BANK LTD. ON FAILURE OF THE APPELLANT TO EXPLAIN THESE C ASH DEPOSITS BEFORE THE A.O., A.O. HAS TREATED THEM AS UNEXPLAINED CASH DEP OSITS U/S.68 OF THE ACT AND ADDED BACK TO THE TOTAL INCOME OF THE APPELLANT . IT IS SEEN FROM THE SUBMISSION OF THE APPELLANT THAT APPELLANT HAD DECL ARED RS.27,15,600/- AS CORPUS RECEIPTS AND HAS CLAIMED DEDUCTION U/S.11(1) (D) OF THE ACT. APPELLANT HAS MAINTAINED SEPARATE BANK ACCOUNT WITH UNJHA NAGARIK SAHKARI BANK LTD. FOR THE PURPOSE OF ITS BUILDING F UND AS THE BANK ACCOUNT WITH SAID BANK WAS SPECIFICALLY FOR THE BUILDING FU ND. THE QUANTUM RECEIVED IN THE SAID BANK ACCOUNT HAS BEEN TREATED BY THE AP PELLANT AS THE CORPUS OF THE TRUST. I AGREE WITH THE CONTENTION OF THE APPE LLANT THAT IT HAS MAINTAINED SEPARATE BANK ACCOUNT FOE THE BUILDING FUND. THE Q UANTUM IT HAS DEPOSITED IN IT HAS BEEN TREATED AS CORPUS OF THE . TRUST. HOWEVER, A.O. HAS LEARNT ABOUT THESE CASH DEPOSITS AS PER AIR INF ORMATION GENERATED FROM ITD, EVEN THOUGH SEPARATE BANK ACCOUNT IS MAINTAINE D BY THE APPELLANT AND IT IS UNDERTAKING EDUCATIONAL ACTIVITIES. AS FAR AS CORPUS IS CONCERNED, ORE- INTENTION OF THE DONOR IS VITAL. IN ITS SUBMISSION GIVEN IN THE DAK IT IS NOT CLARIFIED WHETHER THE DONOR HAD INTENTION OF CONTRI BUTING FUNDS WITH A SPECIFIC DIRECTION AND TO THE CORPUS OF THE TRUST OR NOT. JUST BECAUSE OF THE AMOUNT IS DEPOSITED IN THE BUILDING FUND ACCOUNT WITH UNJH A NAGARIK SAHKARI BANK LTD., IT CANNOT BE SAID THAT QUANTUM OF RS.27,15,60 0/- WOULD BE CORPUS RECEIPT. THEREFORE, ON FAILURE OF THE APPELLANT TO PROVE THAT RS.27,15,600/- IS CORPUS RECEIPTS, I HEREBY CONFIRM THE ADDITION MADE BY THE A.O. THUS, GROUND NO.2 RAISED BY THE APPELLANT IS HEREBY DISMI SSED. 4. SIMILAR FINDING QUA THE CONFIRMATION OF ADDITION OF RS.19,44,000/- READS AS UNDER: 8.2 I HAVE CAREFULLY CONSIDERED RIVAL CONTENTIO NS AND OBSERVATIONS MADE BY THE A.O. IN THE ASSESSMENT ORD ER. IT IS OBSERVED THAT A.O. HAS MADE AN ADDITION OF RS. 19,4 4,000/- ON ACCOUNT OF CASH TRANSACTIONS IN BANK ACCOUNTS WITH MARKET YARD COMMERCIAL CO-OP.BANK LTD. AND MEHSANA URBAN CO-OP. BANK LTD. IN THE WRITTEN SUBMISSION FILED IN THE DAK BY THE A PPELLANT, APPELLANT HAS MENTIONED THAT AMOUNT RECEIVED IN MEH SANA URBAN CO-OP.BANK LTD. ACCOUNT (WITH REGARD TO F.D. OF RS. 15,00,000/- WITH MEHSANA URBAN CO-OP.BANK LTD.) IS THE AMOUNT T RANSFERRED FROM UNJHA NAGRIK SAHKARI.BANK LTD! WITH REGARD T O THE AMOUNT DEPOSITED IN MARKET YARD COMMERCIAL CO-OP.BANK LTD. , APPELLANT HAS MENTIONED THAT IT IS NOT ABLE TO ASCERTAIN ON W HAT BASIS A.O. HAS QUANTIFIED THE AMOUNT OF RS.4,44,500/- IN THE S AID BANK. IT IS ITA NO.931/AHD/2017 4 SEEN FROM THE ORDER OF ASSESSMENT THAT A.O. HAS VER IFIED FROM THE AIR INFORMATION GENERATED FROM HTD THAT THE APPELLA NT HAS MADE CASH TRANSACTIONS AND TIME DEPOSITS AGGREGATING TO RS. 19,44,000/- IN TWO BANKS NAMELY, MARKET YARD COMMER CIAL CO- OP.BANK LTD. (RS.4,44,500) AND MEHSANA URBAN CO-OP. BANK LTD. (RS.15,00,000 TIME DEPOSIT). IF THERE WOULD HAVE BEEN DEPOSIT OF CHEQUE FROM UNJHA NAGRIK SAHKARI BANK LTD. THEN NO CASH WOULD HAVE BEEN DEPOSITED. AS STATED EARLIER, APPEL LANT HAS FAILED TO APPEAR BEFORE A.O. AS WELL AS DURING THE APPELLA TE PROCEEDINGS, THE EXPLANATION GIVEN BY THE APPELLANT THROUGH SUBM ISSION OF BANK STATEMENTS AMOUNTS TO ADDITIONAL EVIDENCE. AS I HAVE ALREADY DECIDED NOT TO ADMIT ANY ADDITIONAL EVIDENC E ON THE FAILURE OF THE APPELLANT TO ATTEND ASSESSMENT AS WE LL AS APPELLATE PROCEEDINGS WITHOUT ANY COGENT EVIDENCE, I HEREBY C ONFIRM THE ADDITION MADE BY THE A.O. AMOUNTING TO RS.19,44,000 /- BASED ON THE AIR INFORMATION GENERATED FROM ITD. THUS, GROUN D OF APPEAL NO.4 RAISED BY THE APPELLANT IS HEREBY DISMISSED. 5. THE CASE OF THE ASSESSEE IS THAT ITS BOOKS OF AC COUNTS ARE AUDITED. BUT WHEN THE NOTICES UNDER SECTION 143(2)/142(1) WE RE SERVED UPON THE ASSESSEE, DURING THAT PERIOD, ITS ACCOUNTANT HA S LEFT ORGANIZATION FOR SETTLING IN AHMEDABAD. THE TRUSTEES OF THE ASSESSE E-TRUST WERE TOTALLY DEPENDED UPON THE SAID ACCOUNTANT, AND THEREFORE, C OULD NOT SUBMIT REQUISITE DETAILS. BEFORE THE LD.CIT(A), THEY HAVE SUBMITTED THE DETAILS, BUT NOT TAKEN ON RECORD. SIMILARLY, THE ASSESSEE H AS FILED AN APPLICATION FOR PERMISSION TO LEAD ADDITIONAL EVIDENCE BEFORE T HE TRIBUNAL, AND SOUGHT TO PLACE ON RECORD 143 PAGES CONTAINING VARI OUS VOUCHERS/RECEIPTS, BANK DETAILS ETC. THE ASSESSEE HAS FURTHER PLEADED THAT THIS ADDITIONAL EVIDENCE, IN THE INTEREST OF J USTICE, BE TAKEN ON RECORD, AND MATTER BE REMITTED TO THE AO FOR FURTHE R INVESTIGATION. 6. ON THE OTHER HAND, THE STAND OF THE REVENUE IS T HAT THE ASSESSEE HAS ALREADY BEEN GIVEN SUFFICIENT OPPORTUNITY. IT FAILED TO FILE THE DETAILS BEFORE THE AO. THE LD.CIT(A) HAS CONSIDERED THIS A SPECT, AND ONLY THEREAFTER DECLINED TO TAKE MATERIAL ON RECORD. ITA NO.931/AHD/2017 5 7. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES, WE ARE OF THE VIEW THAT THE LD.REVENUE AUTHORITIES HAV E NOT ANALYTICALLY EXAMINED THE MATERIAL EVEN AVAILABLE BEFORE THEM. FOR EXAMPLE, HAD THREE BANK ACCOUNTS VIZ. ACCOUNT WITH UNJHA NAGARIK SAHAKARI BANK LTD., MEHSANA URBANK CO-OP. BANK LTD. AND MARKET YA RD COMMERCIAL CO-OP. BANK BEEN RECONCILED ANALYTICALLY, THEN IT W OULD REVEAL THAT RS.15 LAKHS WAS NOT DEPOSITED IN RESPECTIVE COOPERA TIVE BANK IN CASH, RATHER, IT IS A BANK TRANSFER FROM THE ASSESSEES B ANK WITH UNJHA NAGARIK SAH. BANK LTD. EVEN IF IT IS AN EX PARTE OR DER, THEN IT HAS BEEN APPRECIATED THAT THE AO IS HARPING UPON AN AIR INFO RMATION. HE SHOULD HAVE ANALYTICALLY EXAMINED AIR INFORMATION AND SHOU LD HAVE CALLED FOR FURTHER INFORMATION FROM THE BANK, IF SOME NON-BANK TRANSACTION IS REFLECTED, WHICH IS TO BE CONSIDERED AS UNEXPLAINED CREDIT. 8. IT IS ALSO TO BE APPRECIATED THAT PUNISHMENT IN THE SHAPE OF TAX LIABILITY ON ADDITION OF RS.27,15,600/- AND RS.19,4 4,000/- IS QUITE DISPROPORTIONATE THAN THE NEGLIGENCE AT THE END OF THE ASSESSEE BEFORE THE AO. THE LD.CIT(A) OUGHT TO HAVE TAKEN ADDITION AL EVIDENCE ON RECORD FOR A JUST DECISION OF APPEAL. THE QUASI-JU DICIAL AUTHORITIES ARE BEING RESPECTED NOT ON ACCOUNT OF THEIR POWER TO LE GALIZE INJUSTICE ON TECHNICAL GROUND, BUT BECAUSE THEY ARE CAPABLE OF R EMOVING THE INJUSTICE, AND IS EXPECTED TO SO. ON THE OTHER HAN D, THE CONDUCT OF THE ASSESSEE IS NOT ABOVE BOARD. IT HAS PROSECUTED ITS INCOME-TAX LITIGATIONS NEGLIGENTLY AND WITHOUT ANY DILIGENCE. IT HAS UNNECESSARILY DRAGGED THE LITIGATION IN THE SECOND ROUND. THEREF ORE, CONSIDERING THIS ASPECT, WE ALLOW THE APPEAL OF THE ASSESSEE FOR STA TISTICAL PURPOSE, BUT SUBJECT TO PAYMENT OF COST. THIS COST IS QUANTIFI ED AT RS.10,000/- WHICH IS TO BE PAID BY THE ASSESSEE, AND CERTIFICAT E TO THIS EFFECT WOULD BE FURNISHED BEFORE THE AO AS WELL AS TO THE REGIST RY OF THE TRIBUNAL. BOTH THE ORDERS ARE SET ASIDE, AND ALL THE ISSUES A RE RESTORED TO THE FILE ITA NO.931/AHD/2017 6 OF THE AO WHO WILL ADJUDICATE THE CASE IN ACCORDANC E WITH LAW. THE ASSESSEE WILL BE AT LIBERTY TO SUBMIT ANY EVIDENCE/ EXPLANATION IN SUPPORT OF ITS CASE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE SUBJECT TO PAYMENT OF COST OF RS.10,000/- ( RUPEES TEN THOUSAND). ORDER PRONOUNCED IN THE COURT ON 3 RD SEPTEMBER, 2020 AT AHMEDABAD. SD/- SD/- (PRADIPKUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) VICE-PRESIDENT