Zubair Ahmad, Faizabad V. Income Tax Officer-II, Faizabad

ITA 99/LKW/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1122 (ITAT-LUCKNOW)
• Duration Of Justice: 3 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 02-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YASHVENDRA SINGH
• Assessee Lawyers: V K MISHRA
• Keywords: Question of law; Commercial expediency
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 99/LKW/2015 ASSESSMENT YEAR: 2008 - 09 ZUBAIR AHMAD PROP. M/S EHTESHAM & SPRO TRADERS KOLA, SOHAWAL, FAIZABAD V. INCOME TAX OFFICER - II FAIZABAD T AN /PAN : AELPA6005N (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI V. K. MISHRA, ADVOCATE RESPONDENT BY: SHRI YASHVENDRA SINGH, D.R. DATE OF HEARING: 19 02 201 8 DATE OF PRONOUNCEMENT: 22 0 2 2 01 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE CONFIRMATION OF PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT OF RS.3.50 LAKHS AND CONFIRMED BY THE LD. CIT(A) - I, LUCKNOW VIDE ORDER DATED 15/10/ 2014. 2 . THE FACTS IN THIS CASE ARE THAT THE ASSESSMENT UNDER SECTION 144 OF THE ACT WAS COMPLETED IN THE CASE OF THE ASSESSEE AT A TOTAL INCOME OF RS.24,17,350/ - WHICH INCLUDED UNEXPLAINED CASH DEPOSITS OF RS.11.90 LAKHS IN HIS PNB ACCOUNT NO.35021 AN D RS.4.15 LAKHS IN HIS PNB ACCOUNT NO.17043. DURING THE ASSESSMENT PROCEEDINGS , ASSESSEE DID NOT FURNISH ANY EXPLANATION IN RESPECT OF THESE DEPOSITS. BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT CASH DEPOSITS IN BANK ACCOUNT NO.17043 WAS MADE OUT OF CAS H WITHDRAWALS FROM BANK ACCOUNT ITA NO.99/LKW/2015 PAGE 2 OF 4 NO.35021. RELATING TO CASH DEPOSIT OF RS.11.90 LAKHS IN THE BANK ACCOUNT NO.35021 , IT WAS SUBMITTED THAT ASSESSEE OWNS 20 BIGHAS OF AGRICULTURAL LAND AND HIS FATHER, NISAR AHMAD OWNS 5 BIGHAS OF AGRICULTURAL LAND AND THE DE POSITS WERE MADE FROM THE SALE PROCEEDS OF AGRICULTURAL PRODUCE. THE LD. CIT(A) ACCEPTED THE CONTENTIONS OF THE ASSESSEE AND DELETED THE ADDITION S OF RS.4.15 LAKHS AND RS.11.90 LAKHS MADE BY THE ASSESSING OFFICER. THE MATTER TRAVELLED UPTO THE TRIBUNAL A ND THE TRIBUNAL SET ASIDE THE ORDER OF THE LD. CIT(A) AND CONFIRMED THE ADDITIONS HOLD ING THAT AGRICULTURAL INCOME OF RS.75,000/ - IS NOT SUFFICIENT TO EXPLAIN THE SOURCE OF DEPOSITS OF RS.11,93,450/ - IN ONE ACCOUNT AND RS.4,40,537/ - IN ANOTHER ACCOUNT. TH E TRIBUNAL ALSO HELD THAT THERE WAS NO COMMERCIAL EXPEDIENCY FOR WITHDRAWING SUBSTANTIAL AMOUNT FROM ONE ACCOUNT AND DEPOSITING THE SAME IN OTHER ACCOUNT WITHIN A FEW DAYS. IN THE ABSENCE OF ANY COGENT MATERIAL PLACED ON RECORD IN RESPECT OF SOURCE OF CAS H DEPOSIT, THE TRIBUNAL FOUND MERIT IN THE ADDITIONS MADE BY THE ASSESSING OFFICER AND CONFIRMED THE ORDER OF THE LD. CIT(A) . THE MATTER WENT UPTO THE HON'BLE HIGH COURT AND THE HON'BLE HIGH COURT OF ALLAHABAD, LUCKNOW BENCH HELD THAT ASSESSEE HAS NOT SUB MITTED ANY PROOF REGARDING AGRICULTURAL ACTIVITIES AND SOURCE OF DEPOSITS IN THE BANK ACCOUNTS WAS NEVER EXPLAINED AND THEREFORE DID NOT ADMIT THE APPEAL AS NO SUBSTANTIAL QUESTION OF LAW EMERGED FROM THE IMPUGNED ORDER. IN RESPONSE TO SHOW CAUSE NOTICE I SSUED UNDER SECTION 271(1)(C), ASSESSEE FILED WRITTEN REPLY DATED 30/10/2013 BEFORE THE ASSESSING OFFICER WHICH WAS NOT FOUND CONVINCING AND TENABLE BY HIM. THE ASSESSING OFFICER ACCORDINGLY IMPOSED PENALTY OF RS.3.50 LAKHS UNDER SECTION 271(1)(C) OF THE ACT IN RESPECT OF UNEXPLAINED CASH DEPOSIT OF RS.11.90 LAKHS IN ONE BANK ACCOUNT ONLY. 3 . AGGRIEVED BY THE PENALTY ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS ITA NO.99/LKW/2015 PAGE 3 OF 4 OF THE ASSESSEE AND THE ORDER OF TH E ASSESSING OFFICER UPHELD THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. 4 . AT THE TIME OF HEARING BEFORE US, THE LD. A.R. OF THE ASSESSEE STATED THAT ON 6/2/2015 ASSESSEE DIED AND COPY OF DEATH CERTIFICATE IS PLACED ON RECORD. THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT A PETITION WAS MOVED BEFORE THE ASSESSING OFFICER BY THE WIFE OF DECEASED ASSESSEE , SMT. SHABANA PARVEEN WHEREIN IT IS STATED THA T SHE HAS DEPOSITED RS.3 LAKH S IN BANK WITH REGARD TO THE QUANTUM DEMAND AND DEPOSIT CHALLAN HAS BEEN SUBMITTED TO THE INCOME TAX OFFICER - II, FAIZABAD ON 19/2/2018, BUT SHE DO NOT HAVE THE COPY OF THE SAID CHALLAN. IN THE SAME PETITION, THE WIDOW OF DECEASED ASSESSEE HAS SUBMITTED THAT AFTER THE DEMISE OF HER HUSBAND THE BUSIN ESS OF THE ASSESSEE HAS STOP P ED , SHE IS AN OLD AGED WIDOW AND HAVING HEALTH AILMENTS AND SINCE THEY HAVE ALREADY STARTED DEPOSITING THE AMOUNT IN GOVERNMENT ACCOUNT RELATING TO QUANTUM DEMAND, ON HUMANITARIAN GROUNDS THE PENALTY IN THE CASE OF DECEASED ASS ESSEE MAY BE CANCELLED. 5 . THE LD. D.R., ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6 . WE HAVE PERUSED THE CASE RECORDS AND WE FIND THAT DEATH CERTIFICATE OF THE DECEASED ASSESSEE IS PLACED ON RECORD. THE REQUEST PETITION FILED BY THE W IDOW OF THE DECEASED ASSESSEE STATES THAT AN AMOUNT OF RS.3 LAKHS AGAINST THE QUANTUM DEMAND WA S ALREADY PAID TO THE DEPARTMENT. IN THE PRESENT SCENARIO THE ENTIRE BUSINESS ACTIVITIES OF THE DECEASED ASSESSEE IS CLOSED AND NONE OF HIS LEGAL HEIRS ARE CONV ERSANT WITH THE FACTS OF THE CASE AND MOREOVER WE FIND THAT THEY ARE DEPOSITING THE AMOUNT TOWARDS QUANTUM DEMAND INTO THE GOVERNMENT ACCOUNT. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT IN ITA NO.99/LKW/2015 PAGE 4 OF 4 THE INTEREST OF JUSTICE, PENALTY UNDER SECTION 271(1)(C) OF TH E ACT SHOULD BE CANCELLED AND WE ORDER ACCORDINGLY. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 / 0 2 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 N D FEBR UARY , 201 8 JJ: 2002 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR