ACIT, CHENNAI V. S.Sujatha, CHENNAI

ITA 957/CHNY/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9927 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-05-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 10-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN IRS
• Assessee Lawyers: S SRIDHAR
• Keywords: Assessment record

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . ! , ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A. NOS.956, 957, 958 & 959/MDS/2013 ( / ASSESSMENT YEARS : 2005-06, 2006-07, 2007-08 & 2007-08) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I(5) CHENNAI 600 034 ( %& /APPELLANT) VS MS. S. SUJATHA, NO.19, GIRIAPPA ROAD, T. NAGAR, CHENNAI 600 017. [PAN: AUBPS 7536E] ( '(%& /RESPONDENT) / APPELLANT BY : SHRI. P. RADHAKRISHNAN, IRS, JCIT. / RESPONDENT BY : SHRI. S. SRIDHAR, ADVOCATE /DATE OF HEARING : 26.05.2015 ! /DATE OF PRONOUNCEMENT : 09.07.2015 ) / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS BY REVENUE ARE DIRECTED AGAINST DIFFE RENT ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-I, CHENNAI FOR THE ABOVE ASSESSMENT YEARS. I.T.A.NOS.956 TO 959/MDS/2013. :- 2 -: 2. ITA NO.956/MDS/2013, ASSESSMENT YEAR 2005-2006 . THE FACTS OF THE CASE ARE THAT CONSEQUENT TO SEARCH ACTION IN THE CASE OF SHRI. K. SUNDARRAJ NOTICE U/S.153C WAS ISSU ED TO THE ASSESSEE. IN COMPLIANCE, THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ADMITTING A TOTAL INCOME OF E2,10,000/ -. THE ASSESSING OFFICER MADE AN ADDITION OF E7,39,800/- TOWARDS UNE XPLAINED BANK DEPOSITS. LATER PENALTY PROCEEDINGS U/S.271(1)(C) TOWARDS THESE ADDITIONS WERE INITIATED. IN THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION REGARDING SOURCE OF BANK DEPOSITS INSPITE OF GIVING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE PENALTY OF E2,46,284/- WAS LEVIED U/S .271(1)(C) OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL B EFORE THE COMMISSIONER OF INCOME TAX (APPEALS). 2.1 THE COMMISSIONER OF INCOME TAX (APPEALS) DELE TED THE PENALTY BY PLACING RELIANCE ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL 251 ITR 9. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IF ANY AMOUNT IS DEPOSITED IN BANK ACCOUNT OF THE ASSESSEE, THE ASSESSEE HAS TO EXPLAIN THE SOURCE FROM WHICH I T WAS DEPOSITED. I.T.A.NOS.956 TO 959/MDS/2013. :- 3 -: IN THE PRESENT CASE, THE ASSESSEE IS NOT ABLE TO EX PLAIN THE DEPOSITS. ACCORDING TO THE ASSESSEE, THE ASSESSEE IS NOT EDUC ATED AND RETURN SUBSEQUENT TO THE SEARCH WAS FILED BY A CHARTERED A CCOUNTANT WHO OBVIOUSLY HAS NOT MADE OUT A PROPER DISCLOSURE. THE INTENTION OF THE ASSESSEE WAS TO MAKE A PROPER DISCLOSURE, COME OUT CLEAN AND PAY THE TAXES. HOWEVER, IT WAS SUBMITTED THAT IT WAS ONLY THE MISTAKE OF THE CHARTERED ACCOUNTANT AND NOT OF THE ASSESSEE IN MAK ING PROPER DISCLOSURE. LATER THE ASSESSEE ACCEPTED FOR THE AD DITION TO PURCHASE PEACE AND TO AVOID PROLONGED LITIGATION. IN OUR OPI NION, THIS CONTENTION OF THE ASSESSEE IS TOTALLY MISCONCEIVED. IT IS THE DUTY OF THE ASSESSEE TO DISCLOSE ALL INCOME TRULY AND FULLY WHILE FILING THE RETURN OF INCOME. THE ASSESSEE CANNOT SHIFT HIS RESPONSIBILITY TO HIS CHARTERED ACCOUNTANT. FURTHER, THE ASSESSEE STATED IT WAS IL L ADVISED BY THE CHARTERED ACCOUNTANT WITHOUT MENTIONING THE NAME OF THE CHARTERED ACCOUNTANT. IT IS NOT BROUGHT ON RECORD WHAT ADVI CE WAS GIVEN BY THE CHARTERED ACCOUNTANT ON THIS ISSUE. IN OUR OPINION , THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME AND ALSO NOT GIVEN ANY BONAFIDE EXPLANATION FOR THIS. THIS CASE IS SQUARELY COVERE D BY THE JUDGMENT OF SUPREME COURT IN THE CASE OF MAK DATA (PV) LTD. VS. CIT 358 ITR 593 WHEREIN IT WAS HELD THAT I.T.A.NOS.956 TO 959/MDS/2013. :- 4 -: THE ASSESSEE HAD ONLY STATED THAT IT HAD SURREND ERED THE ADDITIONAL SUM OF RS. 40,74,000 TO AVOID LITIGATION , BUY PEACE AND TO CHANNELIZE THE ENERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND TO MAKE AMICABLE SETTLEMENT WITH THE INCOM E-TAX DEPARTMENT. THE STATUTE DID NOT RECOGNIZE THOSE TYP ES OF DEFENCES UNDER EXPLANATION 1 TO SECTION 271(1)(C) O F THE ACT. THE SURRENDER OF INCOME IN THIS CASE WAS NOT VOLUNT ARY IN THE SENSE THAT THE OFFER OF SURRENDER WAS MADE IN VIEW OF DETECTION BY THE ASSESSING OFFICER IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED M ORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF I NCOME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOULD HAVE FILED THE R ETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH W AS SURRENDERED LATER DURING THE COURSE OF THE ASSESSME NT PROCEEDINGS. CONSEQUENTLY, IT WAS CLEAR THAT THE AS SESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FIL ED BY IT FROM YEAR TO YEAR. THE ASSESSING OFFICER HAD RECORDED A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED THE TRUE PARTICULARS OF INCOME AND WAS LIABLE FOR P ENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE ACT. THERE WAS NO ILLEGALITY IN THE DEPARTMENT INITIATIN G PENALTY PROCEEDINGS. HENCE, WE ARE INCLINED TO REVERSE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND RESTORE THE ORDER OF THE A SSESSING OFFICER IN LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. IN RESUL T, THE APPEAL OF THE REVENUE IN ITA NO.956/MDS/2013 IS ALLOWED. 4. ITA NO.957/MDS/2013, ASSESSMENT YEAR: 2006-2007 . IN THIS YEAR, THE FACTS OF THE CASE ARE THAT THE AS SESSEE HAD DEPOSITED E11,00,000/-, OUT OF WHICH E6,00,000/- DEPOSITED IN CASH AND E5,00,000/- DEPOSITED BY CHEQUE IN THE ICICI BA NK ACCOUNT I.T.A.NOS.956 TO 959/MDS/2013. :- 5 -: NO.602601501262. THE ASSESSEE FAILED TO EXPLAIN T HE SOURCE OF DEPOSIT. AN ADDITION MADE ON THIS COUNT AND LATER PENALTY U/S.271(1)(C) WAS LEVIED AT E3,69,947/-. SINCE FA CTS IN THIS YEAR IS SIMILAR TO ASSESSMENT YEAR 2005-06, AS DISCUSSED IN THE EARLIER ASSESSMENT YEAR 2005-2006, WE ARE INCLINED TO REVER SE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND RESTOR E THE ORDER OF THE ASSESSING OFFICER IN LEVY OF PENALTY U/S.271(1) (C) OF THE ACT. IN RESULT, THE APPEAL OF THE REVENUE IN ITA NO.957/MDS /2013 IS ALLOWED. 5. ITA NO.958/MDS/2008, ASSESSMENT YEAR: 2007-2008 . THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED H ER RETURN OF INCOME ON 31.03.2008 DISCLOSING A TOTAL INCOME OF E 6,89,650/-. THE ASSESSMENT WAS COMPLETED U/S.143(3) ON 07.12.2009 ASSESSING THE TOTAL INCOME AT E47,89,652/-. THE ASSESSING OFFICE R MADE AN ADDITION OF E40,00,000/- RELATING TO CREDITS IN ICICI BANK A CCOUNT NUMBER 602601501262. THE ASSESSEE WAS UNABLE TO ACCOUNT FO R THESE CREDITS OTHER THAN TO SUBMIT THAT THIS MONEY BELONGED TO HE R EX-HUSBAND SHRI. S. SATHYANARAYANA. AGGRIEVED, THE ASSESSEE PREFERR ED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). I.T.A.NOS.956 TO 959/MDS/2013. :- 6 -: 5.1 THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERV ED THAT THE RECORDS RELATING TO SHRI. SATHYANARAYANA WASE CALLE D FOR AND EXAMINED. AS PER COMMISSIONER OF INCOME TAX (APPEALS) OBSERVA TION, ON 17.08.2009, THE ASSESSING OFFICER HAD CALLED FOR PR OFIT AND LOSS ACCOUNT, BALANCE SHEET, DETAILS RELATING TO CAPITAL GAINS, EVIDENCE FOR AGRICULTURAL INCOME, PAYMENT OF TAXES FROM ASSESSE E. FROM THE NOTING ON 27.11.2009 IN ASSESSMENT RECORDS, IT WAS THE COM MISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT SHRI. A. BALASU BBRAMANIANN WAS THE AUTHORIZED REPRESENTATIVE FOR ASSESSEE AND SHRI . SUBRAMANIAN NO LONGER REPRESENTS THE ASSESSEE. FURTHER, THE COMMI SSIONER OF INCOME TAX (APPEALS) OBSERVED THAT THE ASSESSING OFFICER O N 22.12.2009, HE MADE A TEST CHECK AND THE CASE WAS HEARD. THE CHART ERED ACCOUNTANT FILED LIC RECEIPTS, TDS CERTIFICATES, BANK STATEMEN TS OF ICICI, IOB BANK, MUNICIPAL TAX RECEIPTS, STATEMENTS OF ACCOUNT S AND A NOTE ON AGRICULTURAL INCOME. IN THE STATEMENT OF AFFAIRS, T HE COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT THE LAST ITEM ON TH E ASSET SIDE NARRATES DEPOSIT IN THE ACCOUNT OF THE ASSESSEE AT E40,00,000/-. ACCORDINGLY, HE DELETED THE ADDITION. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. I.T.A.NOS.956 TO 959/MDS/2013. :- 7 -: 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL ON RECORD. IN OUR OPINION, HOW THE AMOUNT OF E40,00, 000/- HAS BEEN CONSIDERED IN THE HANDS OF EX-HUSBAND IS NOT ON REC ORD. IN OUR OPINION, IT IS APPROPRIATE TO REMIT THE ISSUE BACK TO THE COMMISSIONER OF INCOME TAX (APPEALS) TO GIVE REASONS ON WHAT BA SIS HE CAME TO THE CONCLUSION THAT IT WAS SHOWN IN THE HANDS OF EX -HUSBAND. HENCE, THIS ISSUE IS REMITTED BACK TO THE FILE OF THE COMM ISSIONER OF INCOME TAX (APPEALS) FOR FRESH CONSIDERATION. IN THE RESUL T, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.959/MDS/2013, ASSESSMENT YEAR 2007-2008. 7. THIS APPEAL BY THE REVENUE IS AGAINST THE DELETIO N OF PENALTY IN RESPECT OF ADDITION MADE TOWARDS E40,00,000/- AS U NEXPLAINED CASH AND BANK DEPOSITS. SINCE THE ISSUE OF QUANTUM ADDIT ION FOR THE ASSESSMENT YEAR 2007-08 IN ITA NO.958/MDS/2013 IS R EMITTED BACK TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPEALS ) FOR FRESH CONSIDERATION, ACCORDINGLY, LEVY OF PENALTY ISSUE I S ALSO REMITTED BACK TO THE FILE OF THE COMMISSIONER OF INCOME TAX (APPE ALS) TO CONSIDER THE SAME AFTER ADJUDICATING THE QUANTUM ADDITION OF THE SAID AMOUNT. THE ITA NO.959/MDS/2013 IS PARTLY ALLOWED FOR STATI STICAL PURPOSES. I.T.A.NOS.956 TO 959/MDS/2013. :- 8 -: 8. IN THE RESULT, THE APPEALS OF THE REVENUE IN ITA N OS.956 & 957/MDS/2013 ARE ALLOWED AND ITA NOS. 958 & 959/MDS /2013 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THURSDAY, THE 9TH DAY O F JULY, 2015, AT CHENNAI. SD/- SD/- ( . ! ) V. DURGA RAO ' / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER '# /CHENNAI. $% /DATED:09.07.2015. KV %& '( )( /COPY TO: 1. * APPELLANT 2. / RESPONDENT 3. + ( )/CIT(A) 4. + /CIT 5. (,- . /DR 6. -/ 0 /GF.