SMT. SUMAN KATTA, Jaipur V. DCIT, CENTRAL CIRCLE-3, Jaipur

ITA 935/JPR/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5980 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 04-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHANWAR SINGH
• Keywords: Unexplained cash credit
• Section: 271(1)(c); 68; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC H A JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 935/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2011-12 SMT. SUMAN KATTA 18, SIYARAM STREET, DURGAPURA, JAIPUR CUKE VS. DCIT, CENTRAL CIRCLE-03, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACBPK4356L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ROHAN SOGANI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI BHANWAR SINGH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 23/09/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 25/09/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-4, JAIPUR DATED 26.04.2019 WHEREIN THE ASSESSEE HAS TA KEN THE FOLLOWING GROUNDS OF APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN, CONFIRMING THE ACTION OF THE L D. AO IN LEVYING PENALTY OF RS. 86,520/- U/S 271(1)(C) OF THE INCOME TAX ACT , 1961. THE ACTION OF LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE SAID PENALTY OF RS. 86,520/-. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. AO HAS ERRED IN IMPOSING PENALTY U/S 271(1)(C) WITHOUT SPECIFICALLY POINTING OUT WHETHER THE PENALTY WAS PROPOSED ON CONCEALMENT OF PARTICULARS OF ITA NO. 935/JP/2019 SMT . SUMAN KATTA, JAIPUR VS. DCIT, JAIPUR 2 INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ACTION OF THE LD. AO IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND A GAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE PENALTY IMPOSED U/S 271(1)(C). 2. AT THE OUTSET, GROUND NO. 2 WAS NOT PRESSED BY T HE LD. AR DURING THE COURSE OF HEARING, HENCE, THE SAME IS DISMISSED AS NOT PRESSED. 3. REGARDING GROUND NO. 1, BRIEFLY STATED, THE FAC TS OF THE CASE ARE THAT IN THE ASSESSMENT ORDER PASSED U/S 144 READ WITH SECTI ON 153A, AN ADDITION OF RS. 2,80,000/- WAS MADE IN RESPECT OF LOAN TRANSACT ION WITH MS SHWETA JAIN IN ABSENCE OF ANY CONFIRMATION AND IDENTITY AND CREDIT WORTHINESS OF THIS PARTY AND THE GENUINENESS OF THE TRANSACTIONS REMAINING U NPROVED. BEFORE THE LD. CIT(A), THE ASSESSEE FILED, BY WAY OF ADDITIONAL EV IDENCES, A COPY OF PAN, COMPLETE ADDRESS AS WELL AS CONFIRMATION OF THE PAR TY QUA LOAN GIVEN TO THE ASSESSEE. HOWEVER, THE ADDITION WAS CONFIRMED BY TH E LD. CIT(A) HOLDING THAT THE ASSESSEE HAS NOT PROVIDED COPY OF THE BANK STAT EMENT SHOWING RELEVANT CREDIT IN THE BANK ACCOUNT AND THEREFORE, THE GENUI NENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF MS SHWETA JAIN COULD NOT BE ESTABLISHED. THE SAID FINDING OF THE LD. CIT(A) HAVE SINCE ATTAINED FINAL ITY IN ABSENCE OF ANY FURTHER APPEAL BEFORE THE TRIBUNAL. 4. IN THE PENALTY PROCEEDINGS, THE ASSESSING OFFICE R, RELYING ON THE FINDINGS OF THE LD. CIT(A) IN THE QUANTUM PROCEEDINGS, STATE D THAT THE CLAIM OF LIABILITY IN THE FORM OF UNSECURED LOAN WAS MADE BY THE ASSESSEE IN HER BOOKS OF ACCOUNTS. SINCE THE CLAIM OF LIABILITY HAS BEEN MAD E BY THE ASSESSEE, THE ONUS LIES ON HER TO PROVE THE CREDITWORTHINESS OF THE CR EDITOR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER, THE ASSESSEE CLEAR LY FAILED TO DO SO AND FOR THE SAME REASON, ADDITION HAS BEEN SUSTAINED BY THE LD. CIT(A). IT WAS FURTHER ITA NO. 935/JP/2019 SMT . SUMAN KATTA, JAIPUR VS. DCIT, JAIPUR 3 STATED THAT THE ASSESSEE HAS FAILED TO PROVE THE SO URCE AND CREDITWORTHINESS IN TERMS OF SECTION 68 OF THE ACT AND ACCORDINGLY, THE SAME HAS BEEN CONSIDERED UNEXPLAINED CREDIT AND THEREFORE, THE ASSESSEE CONC EALED HER INCOME OF RS. 2,80,000/- WHICH WAS DETECTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HAD THERE BEEN NO ASSESSMENT PROCEEDIN GS U/S 144/153A, THE INCOME SO DISCLOSED WOULD HAVE REMAINED UNTAXED. TH EREFORE, IT IS CLEAR THAT THE INACCURATE PARTICULARS HAVE BEEN DETECTED BECAU SE OF THE ASSESSMENT PROCEEDINGS IN THIS CASE AND THE ASSESSEE CHOSE NOT TO DECLARE SUCH INCOME IN HER RETURN FILED U/S 139(1). THE PROVISION OF EXPLA NATION 1 TO SECTION 271(1)(C) OF THE ACT ARE HELD APPLICABLE IN THE INSTANT CASE. ACCORDINGLY, THE PENALTY OF RS. 86,520/- WAS LEVIED ON THE ASSESSEE. 5. ON APPEAL, THE LD. CIT(A) HAS CONFIRMED THE SAI D LEVY OF PENALTY HOLDING THAT AO WAS CORRECT IN IMPOSING THE PENALTY OF UNSE CURED LOAN TAKEN FROM MS. SHWETA JAIN AND REFERRING TO THE ORDER OF THE LD. C IT(A) IN THE QUANTUM PROCEEDINGS, IT WAS FURTHER STATED BY THE LD CIT(A) THAT IT IS CLEARLY INFERRED FROM THE LD. CIT(A)S ORDER THAT SUCH UNSECURED LOA N IS APPELLANTS OWN MONEY AND THIS FINDING IS NOT CONTESTED EVEN NOW. ACCORD INGLY, HE CONFIRMED THE PENALTY OF RS. 86,520/- AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 6. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS CAST ON HER IN TERMS OF FURNISHING OF PAN, COMPLETE ADDRESS OF MS SHWETA JAIN AS WELL AS CONFIRMATION B Y HER OF GIVING LOAN TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT MERELY BEC AUSE THE ADDITION HAS BEEN MADE IN THE QUANTUM PROCEEDINGS, THE SAME SHOULD NO T BE A BASIS FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. FURTHER, HE RELIE D ON THE DECISION OF THE CO-ORDINATE BENCH IN CASE OF SMT. SONU KHANDELWAL, JAIPUR VS. ITO, JAIPUR ( ITA NO. 01/JP/2015 DATED 27.09.2016) WHEREIN THE CO-ORDINATE BENCH HAS RELIED ITA NO. 935/JP/2019 SMT . SUMAN KATTA, JAIPUR VS. DCIT, JAIPUR 4 ON THE FINDINGS OF THE HONBLE GUJARAT HIGH COURT I N CASE OF BARODA TIN WORKS [1996] 221 ITR 661 (GUJARAT) WHEREIN IT WAS HELD AS UNDER:- .IT IS TO BE NOTICED THAT FALSITY OF EXPLANATION WAS EXPRESSLY PUT DIFFERENTLY FROM MERE UNSATISFACTORY NATURE OF EXPL ANATION OFFERED. SO ALSO A CLEAR DISTINCTION WAS DRAWN BETWEEN AN EXPLA NATION WHICH IS NOT SATISFACTORY AND WHICH IS NOT BONA FIDE. THE FORMER WAS SUFFICIENT TO INCLUDE THE DISPUTED SUM IN THE COMPUTATION OF INCO ME OF THE ASSESSEE AS FALSITY OF EXPLANATION, INHERES WILLFUL NONDISCL OSURE. IN THE LATTER CASE, THOUGH EXPLANATION OFFERED BY THE ASSESSEE IN RESPE CT OF SUCH ADDITIONS OR DISALLOWANCE MAY BE NOT SATISFACTORY IN THE OPIN ION OF THE INCOME TAX OFFICER, IT MAY BE SUFFICIENT TO INCLUDE IT IN INCO ME, BUT STILL IF THE ASSESSEE ESTABLISHES HIS BONA FIDES ABOUT THE EXPLA NATION SUBMITTED BY HIM, PENALTY COULD NOT BE IMPOSED BY INVOKING THE E XPLANATION. 7. PER CONTRA, THE LD. DR RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES. FURTHER, LD. DR SUBMITTED THAT THE DECISION OF THE CO-ORDINATE BENCH IN CASE OF SMT. SONU KHANDELWAL, JAIPUR VS. ITO, JAIPUR IS DIS TINGUISHABLE ON FACTS AS IN THAT CASE, THE FINDINGS RECORDED BY THE TRIBUNAL WA S THAT IN RESPECT OF MOST OF THE CREDITORS, THE TRANSACTION HAS BEEN EFFECTED TH ROUGH BANKING CHANNEL AND IN THAT CONTEXT, THE FINDINGS HAVE BEEN RECORDED BY THE TRIBUNAL FOR NON-LEVY OF PENALTY UNLIKE THE INSTANT CASE WHERE THE ASSESSEE HAS FAILED TO FURNISH THE BANK STATEMENT. HE ACCORDINGLY SUPPORTED THE ORDER OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE SAME MAY KINDLY BE CONFIRMED . 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LIMITED ISSUE UNDER CONSIDERATION RE LATES TO LEVY OF PENALTY IN RESPECT OF ADDITION CONFIRMED IN THE QUANTUM PROCEE DINGS U/S 68 OF THE ACT. IN SUPPORT OF ITS EXPLANATION AND BONAFIDE FOR NON- LE VY OF PENALTY, THE ASSESSEE HAS RELIED ON THE EVIDENCE FILED BEFORE THE LOWER A UTHORITIES IN TERMS OF ITA NO. 935/JP/2019 SMT . SUMAN KATTA, JAIPUR VS. DCIT, JAIPUR 5 SATISFYING THE INITIAL ONUS FACTS ON HER BY WAY OF A COPY OF PAN, COMPLETE ADDRESS OF MS. SHWETA JAIN AS WELL AS CONFIRMATION GIVEN BY HER IN SUPPORT OF THE LOAN TRANSACTION WITH THE ASSESSEE. WE FIND THA T THESE EVIDENCES AND THE BONAFIDE OF THE ASSESSEE HAVE NOT BEEN DISPUTED BY THE REVENUE. THE ONLY REASON, THE ADDITION HAS BEEN CONFIRMED IN THE QUAN TUM PROCEEDINGS IS NON- FURNISHING OF THE BANK STATEMENT OF MS SHWETA JAIN. IN OUR VIEW, THE ABSENCE OF BANK STATEMENT MAY BE SUFFICIENT TO HOLD THAT TH E ASSESSEE HAS NOT DISCHARGED FULLY THE INITIAL ONUS CAST ON HER IN TE RMS OF PROVING THE CREDITWORTHINESS OF MS. SHWETA JAIN, HOWEVER THE SA ME DOESNT NECESSARILY LEAD TO LEVY OF PENALTY IN ALL CASES. THE EXPLANATION A ND THE EVIDENCE FILED IN SUPPORT OF HER EXPLANATION HAVE TO BE TESTED ON THE TOUCHSTONE OF BONAFIDE AND IN THE INSTANT CASE, THERE IS NO FURTHER INVESTIGAT ION/EXAMINATION WHICH HAS BEEN CARRIED OUT BY THE REVENUE OR ANY POSITIVE EVI DENCE WHICH HAS BEEN BROUGHT ON RECORD BY THE REVENUE. THE ASSESSING OFF ICER HAS MERELY RELIED ON THE FINDINGS IN THE QUANTUM PROCEEDINGS AND HAS LEV IED THE PENALTY IN THE INSTANT CASE. IT IS SETTLED LEGAL PROPOSITION THAT THE ASSESSMENT AND PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND IF THE AO HAD ANY IOTA OF DOUBT REGARDING THE CONFIRMATION SO FILED BY THE ASSESSEE IN SUPPORT OF THE LOAN TRANSACTION, IT WAS INCUMBENT ON HIM TO CARRY OUT I NDEPENDENT INVESTIGATION AND BRING EVIDENCE REBUTTING THE EXPLANATION SO FURNISH ED BY THE ASSESSEE. THEREFORE, IN ABSENCE OF THE SAME, EVEN THOUGH THE ADDITION HAVE BEEN MADE IN THE QUANTUM PROCEEDINGS, THE BONA FIDE OF THE AS SESSEE IN SUPPORT OF THE TRANSACTION CANNOT BE DISPUTED AND THEREFORE IT IS NOT A FIT CASE FOR LEVY OF PENALTY AND THE SAME IS DIRECTED TO BE DELETED. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 935/JP/2019 SMT . SUMAN KATTA, JAIPUR VS. DCIT, JAIPUR 6 ORDER PRONOUNCED IN THE OPEN COURT ON 25/09/2019. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 25/09/2019 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. SUMAN KATTA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CENTRAL CIRCLE-03, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 935/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR