Miss Veena V. Commissioner of Income Tax I, Jalandhar

CWP/1270/2014

AI Insights

Miss Veena, the petitioner, was involved in a legal dispute concerning the assessment of her income tax returns for the year 2009-10. The case arose when a substantial amount of cash, allegedly belonging to an NRI customer, was deposited in her account to facilitate the purchase of gold coins, which was not permissible directly from the NRE account. The Income Tax Department treated this deposit as unexplained investment and assessed additional income tax. The petitioner challenged the assessment and subsequent revision orders in the High Court, arguing that she had provided sufficient explanations and affidavits to substantiate her involvement in the transaction. However, both the Assessing Officer and the Commissioner of Income Tax rejected her explanations, leading to the dismissal of her writ petition by the High Court.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 675566 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 24-01-2014
• Assessment Year: misc
• Other Referred Cases: CIT vs. Smt.P.K.Noorjahan, (1999) 237 ITR 570
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: RAVISH SOOD
• Keywords: Assessment Order; Bank transaction; Gold Coins; Income Tax; Revision; Unexplained investment
• Section: 143(1); 271(1)(c); 131; 69; 264; 226; 227

Judgement Text

"CWP No.1270 of 2014 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No.1270 of 2014 Date of decision: 24.01.2014 Miss Veena ……Petitioner Vs. Commissioner of Income Tax I, Jalandhar …..Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MS. JUSTICE ANITA CHAUDHRY Present: Mr. Ravish Sood, Advocate for the petitioner. Ajay Kumar Mittal,J. 1. Challenge in this petition filed under Articles 226/227 of the Constitution of India is for quashing the assessment order dated 5.12.2011, Annexure P.3 and order passed by the respondent - Commissioner of Income Tax-I, Jalandhar (CIT) dated 28.3.2013, Annexure P.6 in revision under section 264 of the Income Tax Act, 1961 (in short, “the Act”). 2. A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. The petitioner, an individual was engaged in a small business of running a boutique and thereafter, she was employed as a clerk with HDFC Bank - The Mall Road, Kapurthala Branch. She filed her income tax return for the assessment year 2009-10 on 29.10.2009 declaring net taxable income of ` 1,32,000/- which was processed as such under section 143(1) of the Act. On 3.6.2008, she opened a Saving Bank account in the said bank and the transactions started Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.1270 of 2014 2 w.e.f 6.9.2008. Shri Amit Kashyap was serving as Manager in the said bank. He was under pressure to meet out the targets of sale of pure gold coins given to his branch. During the aforesaid period, a NRI customer of the said branch Shri Tarlochan Singh who was maintaining a NRE account with this bank, on his visit to India withdrew an amount of ` 25 lacs in the month of September 2008 for purchase of some property which could not materialise. Tarlochan Singh could not redeposit the said amount in his NRE account as deposit of Indian rupees in the said account, was not permitted. He after being persuaded by the manager Shri Amit Kashyap agreed to invest for the purchase of pure gold coins from the bank. As the purchase of pure gold coins was not permitted in cash, the manager persuaded the petitioner to permit routing the said purchase transaction through her saving account and allow the cash belonging to Shri Tarlochan Singh to be deposited in her account and be routed for purchasing the pure gold coins for Shri Tarlochan Singh. The petitioner under the bonafide belief that there was nothing wrong in facilitating the said transaction, agreed to that arrangement and pursuant thereto an amount of `24,38,830/- was deposited in her account on 26.10.2008 at the instance of Shri Amit Kashyap, Manager which amount was thereafter utilized for purchase of the gold coins for and on behalf of Shri Tarlochan Singh. The petitioner was called upon by the Assessing officer to explain the source of the amount in her account. The petitioner submitted the entire facts to the Assessing Officer. She also placed on record the affidavit of Shri Tarlochan Singh explaining the exact position. The Assessing officer after examining the record treated the said amount as unexplained investment of the petitioner under section Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.1270 of 2014 3 69 of the Act and vide his order dated 5.12.2011, Annexure P.3 assessed the income of the assessee at ` 25,71,000/- and raised a consequential demand of ` 10,37,474/- towards tax and interest in the hands of the petitioner. Aggrieved thereby, the petitioner filed an application under section 264 of the Act seeking revision of the order passed by the Assessing Officer. During the course of revision proceedings, Shri Amit Kashyap, Manager of the bank in compliance to the summons issued under section 131 of the Act appeared before the respondent and furnished affidavit dated 28.5.2012 stating that in order to achieve the target of selling the gold coins from his branch, he persuaded the petitioner to permit to enroute the amount of Shri Tarlochan Singh through her account for purchase of the said coins as the purchase of coins was not permitted through NRE account. The CIT vide order dated 28.3.2013, Annexure P.6 dismissed the application for revision of the order passed by the Assessing Officer, making addition of ` 24,39,000/-. The petitioner submits that since no appeal lies against the said order, she is before this court through the present petition. 3. Learned counsel for the petitioner submitted that affidavit dated 2.8.2011 (Annexure P.1) of Tarlochan Singh son of Shri Gian Singh from whom the amount had been received was filed before the Assessing authority and affidavit of Shri Amit Kashyap, the Bank Manager with HDFC Bank Kapurthala Branch dated 28.5.2012, Annexure P.2 was also filed. The source of cash deposit of ` 24,38,826/- relating to purchase of gold coins by the petitioner on behalf of Tarlochan Singh was explained. The Assessing Officer vide order dated 5.12.2011, Annexure P.3 and the CIT while passing order dated 28.3.2013, Annexure P.6 under section 264 of Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.1270 of 2014 4 the Act had completely ignored the same. Furthermore, the CIT had passed the order which is not a speaking one. Reliance was placed on judgment of the Apex Court in CIT vs. Smt.P.K.Noorjahan, (1999) 237 ITR 570 to submit that addition under section 69 of the Act is within the discretion of the Assessing officer as according to the words used in the said section, it was incumbent upon the Assessing Officer to consider the facts and circumstances of the case before making an addition of ` 24,39,000/-. 4. After hearing learned counsel for the petitioner, we do not find any merit in the writ petition. 5. It would be expedient to refer to Section 264 of the Act which reads thus:- “264. Revision of other orders (1) In the case of any order other than an order to which section 263 applies passed by an authority subordinate to him, the Commissioner may, either of his own motion or on an application by the assessee for revision, call for the record of any proceeding under this Act in which any such order has been passed and may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit. (2) The Commissioner shall not of his own motion revise any order under this section if the order has been made more than one year previously. (3) In the case of an application for revision under this section by the assessee, the application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier: Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.1270 of 2014 5 Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period. (4) The Commissioner shall not revise any order under this section in the following cases - (a) where an appeal against the order lies to the Deputy Commissioner (Appeals) or to the Commissioner (Appeals) or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired, or, in the case of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal; or (b) where the order is pending on an appeal before the Deputy Commissioner (Appeals); or (c) where the order has been made the subject of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal. (5) Every application by an assessee for revision under this section shall be accompanied by a fee of five hundred rupees. (6) On every application by an assessee for revision under this sub-section, made on or after the 1st day of October, 1998, an order shall be passed within one year from the end of the financial year in which such application is made by the assessee for revision. Explanation: In computing the period of limitation for the purposes of this sub-section, the time taken in giving an Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.1270 of 2014 6 opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. (7) Notwithstanding anything contained in sub-section (6), an order in revision under sub-section (6) may be passed at any time in consequence of or to give effect to any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation 1: An order by the Commissioner declining to interfere shall, for the purposes of this section, be deemed not to be an order prejudicial to the assessee. Explanation 2: For the purposes of this section, the Deputy Commissioner (Appeals) shall be deemed to be an authority subordinate to the Commissioner.” 6. A reading of the above show that the assessee can move Commissioner of Income Tax for revising the order passed by an authority within the period of one year from the date on which the order is communicated to him or when he comes to know of the order whichever is earlier. If due to sufficient cause the assessee cannot file revision within the prescribed period, the Commissioner may condone the delay and admit the application even after expiry of that period. 7. The Assessing Officer while making addition of ` 24,39,000/- vide order dated 5.12.2011, Annexure P.3 had noticed as under:- “To verify the facts, a letter was issued to the bank Manager, HDFC Bank Limited, Kapurthala on 13.9.2011. In response Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.1270 of 2014 7 to this letter Shri Dinesh Sarna filed copies of two withdrawal vouchers filed in bank by S.Tarlochan Singh and copy of deposit voucher of Miss Veena on 4.10.2011, the details of the withdrawal made by Shri Tarlochan Singh are as under:- Date of cash withdrawal Amount Denomination of notes 4.9.2008 5,00,000/- 1000x300 = 3 lacs 500x400=2 lacs 16.9.2008 20,00,000/- 1000x500=5 lacs 500x2000=10 lacs 100x5000=5 lacs The details of deposit made by Miss Veena on 26.10.2008. 26.10.2008 24,39,000/ - 1000x1500= 15 lacs 500x1800=9 lacs 100x390=39,000/- From the above details, it is noticed that S.Tarlochan Singh withdrew ` 5 lacs on 4.9.2008 and ` 20 lacs on 16.9.2008 and gave the same amount to Miss Veena on 16.9.2008 for purchase of gold. Miss Veena deposited ` 24,39,000/- only into her saving account on 26.10.2008. It is not clear why such huge amount was kept for one month and 10 days in her custody. As per affidavit of S.Tarlochan Singh this amount was given to Miss Veena for purchase of gold. Instead of depositing she kept this amount in her house. The above explanation is not reliable. Secondly deposited denomination of notes are not tallied with the denomination of notes withdrawn by S.Tarlochan Singh as mentioned above. To verify these facts, summon under Section 131 was issued to Miss Veena d/o Shri Sham Lal on 10.10.2011. Inspector of this office has reported that she refused to accept this summon but she assured that she will visit the office at 2.30 pm on the same day but she did not attend this office till date. Thirdly she filed return of income for the said year declaring income or ` 1,32,000/- after claiming expenses of ` 18,000/- from the job work of boutique. Her counsel filed written reply Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.1270 of 2014 8 on 23.8.2011 which stated that being bank employee and to achieve the target of gold sale in Diwali period she received a sum of ` 25 lacs from S.Tarlochan Singh son of Shri Gian Singh Village Thekriwal PO Nurpur District Kapruthala but she did not declare any salary income received from the bank. A letter bearing No.1636 dated 13.9.2011 issued to the Manager, HDFC bank Limited, MGN Public School, Kapurthala who was requested to intimate the exact date of her joining and relieving. In response to this query her counsel filed written reply on 4.10.2011 stating therein that Miss Veena was never employee of bank at that time now she is employee with that bank. Subsequently a letter was issued to Miss Veena d/o Shri Sham Lal, H.No.59/4, Deol Nagar, Nakodar Road, Jalandhar on 25.11.2011 in which she was requested to intimate the date of joining and relieving from the said branch, total salary drawn during the said year and a copy of the appointment letter of the bank fixing the case for hearing on 30.11.2011 but no reply has been received so far. It is clear that assessee was not bank employee in the said year and wants to say nothing in this matter. From the above facts, it is clear that written submissions filed by her counsel on different dates are totally baseless and after thought stories when onus lies on the assessee to prove its genuineness and creditworthiness of the person from whom said amount was received but she has received but she has failed to discharge the onus of proving the genuineness and creditworthiness of the amount so received by her. Her counsel’s written submissions filed during assessment proceedings are not satisfactory as the submission that she was bank employee and received the cash in that capacity had itself been found to be untrue. So total cash deposits of ` 24,39,000/- in her saving account that has been used to purchase gold from the bank are unexplained, this amount is added in her returned income under section 69 of the Income Tax Act and penalty Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.1270 of 2014 9 proceedings under Section 271(1) (c) of the Income Tax Act have been initiated for furnishing inaccurate particulars of income.” 8. Moreover, while rejecting the revision filed under section 264 of the Act, the CIT vide order dated 28.3.2013, Annexure P.6 had observed as under:- “4. I have carefully considered the assessment order passed by the AO, the explanation which was given by the assessee at that time, the submissions made by the assessee/assessee’s counsel during the proceedings under section 264 and even the submissions made by Shri Amit Kashyap. I may observe here that the assessee could not present herself during the proceedings before the undersigned. The reasons stated to be for the same were that the assessee is already married and not present at Kapurthala or Jalandhar. 5. Position being so, I find that practically there is not much difference in the situation which has been presented before me and that which existed before the AO. Further, in the absence of the assessee herself, it was not possible to confront the assessee with Shri Amit Kashyap who has tried to own the responsibility for maneuvering the entire transaction. I am therefore unable to consider the application of the assessee favourably and the same stands rejected.” 9. It is clear from the orders passed by CIT and the Assessing Officer that inspite of opportunity having been provided to the assessee to appear before them, she did not chose to appear and, therefore, Shri Amit Kashyap could not be confronted to the assessee who had tried to own the responsibility for maneuvering the entire transaction. It may be noticed that on a query being put to the counsel for the petitioner as to why did the petitioner enter into transaction on behalf of Tarlochan Singh who was Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.1270 of 2014 10 stranger and had no relationship with the petitioner, learned counsel was unable to give any reply much less satisfactory reply. In such circumstances, no illegality or perversity could be pointed out in the orders passed by the Assessing Officer and the CIT. Moreover, as regards the judgment relied upon by the learned counsel for the appellant, in the facts and circumstances of that case, the provisions of section 69 were not attracted. Therefore, the argument and reliance on the said judgment does not come to the rescue of the petitioner. 10. In view of the above, finding no merit in the petition, the same is hereby dismissed. (Ajay Kumar Mittal) Judge January 24, 2014 (Anita Chaudhry) ‘gs’ Judge Singh Gurbax 2014.03.18 17:07 I attest to the accuracy and integrity of this document High Court Chandigarh "