Income Tax Appellate Tribunal - Jaipur
Smt. Leela Devi Bumb, Bijainagar vs Income Tax Officer, Ward-1, Beawar on 15 January, 2020
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,"A" JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA. No. 573/JP/2019
fu/kZkj.k o"kZ@Assessment Years : 2012-13
Smt. Leela Devi Bumb cuke The ITO,
117, Shital Mata Market, Vs. Ward-1,
Kumhar Mohalla, Bijainagar. Beawar.
ToLFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AIJPB 0894 L
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj l@
s Assessee by : None
jktLo dh vksj ls@ Revenue by : Shri K.C. Gupta (JCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 01/01/2020
mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 15/01/2020
vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Ajmer dated 27.02.2019 for the Assessment Year 2012-13 wherein the assessee has challenged the sustenance of levy of penalty U/s 271(1)(c) of the IT Act.
2. None has appeared on behalf of the assessee nor any adjournment application has been filed. Further, it has been noted that the matter has been fixed for hearing on couple of occasions earlier as 2 ITA No. 573/JP/2019 Smt. Leela Devi Bumb vs. ITO well. It was therefore decided to hear the matter ex-parte qua the assessee based on material available on record.
3. Briefly the facts of the case are that assessment in this case was completed U/s 143(3) on 13.03.2018 wherein the addition of Rs. 56,30,000/- was made U/s 69 of the Act as the said amount was found deposited in the assessee's bank and no satisfactory explanation was furnished by the assessee. On appeal, the addition has since been confirmed by the Coordinate Bench (vide its order dated 08.12.2017 in ITA No. 909/JP/2019) and the relevant finding reads as under:- "4. In view of these factual aspect and absence of any document in support of claimed of assessee that she was a sub-broker and cash deposited in bank belong to the clients, we find no fault in the order of Ld. CIT(A). In our considered view, the assessee has not able to file any documentary evidence with regard to the nature and source of the cash deposits in her bank account of Rs. 56,30,000/-. Therefore, the CIT(A) has rightly sustained the additions. As far as alternative plea of the assessee with regard to the set off of the loss to be allowed against the income of Rs. 56,30,000/- taxed u/s 69 is also against the legal provision of the Act. This loss was a 'speculation loss' and it could be set off only against 'speculation income'. Therefore, the CIT(A) has rightly denied the benefit of set off to the assessee The final plea of the Ld. A/R that the matter may be restored to the file of the AO also cannot be accepted for the reasons that the assessee has been provided sufficient opportunity before the authorities below to produce necessary documents in support of her claim. Any 3 ITA No. 573/JP/2019 Smt. Leela Devi Bumb vs. ITO remand of the issue to the file of the AO as this stage shall be against the basic tenants of law."
4. Separately, the Assessing Officer initiated penalty proceedings U/s 271(1)(c) of the Act and satisfaction has been recorded by the Assessing Officer stating that the assessee has concealed and also furnished inaccurate particulars of income. During the course of penalty proceedings, a fresh show cause notice was issued to the assessee dated 18.01.2018 and in response, the assessee submitted as under:-
"In the above context the assessee vide her letter 31.01.2018 has submitted that due to heavy losses sustained by all/maximum parties, details as per chart; the business was later closed. Thus the assessee was only doing the trade as "SUB -- BROKEERS"
and the operations/transactions as made with M/s Sisodiya Future, Ajmer was mainly of clients/persons. A sworn affidavit of assessee dated 20.01.2005 was also submitted to A.O. stating the aforesaid facts. The lady was also interrogated personally u/s 131 & she narrated the same to A.O. as confirmed by A.O. in his order. All the said persons were also summoned by A.O. u/s 131 of Income-tax Act, 1961 & all appeared before A.O. & accepted the facts that transactions of sale/purchase at MCX/NCDEX were through M/s Pankaj Traders Proprietor Smt. Leela Bumb & stated the quantum of losses suffered by them. They all admitted & accepted that Smt. Leela Devi was only providing the facility of NCDEX/MCX bolt on commission basis.
4 ITA No. 573/JP/2019Smt. Leela Devi Bumb vs. ITO Thus neither there is any concealment nor any inaccurate particulars because nothing specific defect or concealment proved or deducted."
5. The submissions of the assessee were not found acceptable to the Assessing officer and it was held that since the matter has been decided by the ld CIT(A) and Tribunal against the assessee in the quantum proceedings, the assessee has concealed and also furnished inaccurate particulars of her income and the relevant findings of the AO reads as under:-
"I have carefully gone through the above decisions cited by learned A/R of the assessee but these are no help to the assessee. Since the Ld CIT (A) Ajmer and the Hon'ble ITAT, Jaipur has already considered the submission of the assessee and the appeal of the assessee has been dismissed by both the appellate authorities.
In view of detailed facts discussed above, I find that the assessee has concealed and also furnished inaccurate particulars of her income, therefore, penalty proceedings u/s 271(1)(c) of the I.T. Act, 1961 have been initiated separately.
As per the provision of section 271(1)(c) r.w.s. 274 of the IT Act 1961 " if the assessing officer or the commissioner (Appeals) [or the [principal commissioner or] commissioner] in the course of any proceeding under this act, is satisfied that any person- has concealed the 5 ITA No. 573/JP/2019 Smt. Leela Devi Bumb vs. ITO particulars of his income or furnished inaccurate particulars of [of such income, or]."
As per the provision of section 271(1)(c) of the IT Act 1961, the penalty u/s 271(1)(c)of the 1.T. Act, 1961 "in the cases referred to in clause (c)[in addition to tax, if any, payable] by him, a sum which shall not be less than, but which shall not exceed [three times], the amount of tax sought to be evaded by reason of the concealment of particulars of his income [or fringe benefits] or the furnishing of inaccurate particulars of such income[or fringe benefits]."
(i) The income assessed after effect of Hon'ble ITAT order. Rs. 58,12,390/-
(ii) Tax & Cess determined on above income. Rs. 16,42,560/-
(iii) Tax on return income. Rs. Nil
(iv) Tax & cess on concealed income. Rs. 16,42,560/-
(v) Minimum penalty imposable @ 100% of tax Sought to be evaded. Rs. 16,42,560/-
(vi) Minimum penalty imposable @ 300% of tax Sought to be evaded. Rs. 49,27,680/-
(vii) Penalty levied 100% of tax sought to be evaded. Rs. 16,42,560/-
I hereby impose a penalty u/s 271(1)© of the act for the A.Y. 2012-13, of Rs. 16,42,560/- which is 100% of the tax sought to evaded."
6. We, therefore, find that right from the assessment proceedings till completion of the penalty proceedings, the AO stated that the assessee has concealed her particulars of income 6 ITA No. 573/JP/2019 Smt. Leela Devi Bumb vs. ITO as well as furnished inaccurate particulars of income. Therefore, both the charges for levy of penalty has been put on the assessee however, there doesn't seem to be any clear finding in the penalty order as to why the case of the assessee falls under both concealment of particulars of income as well as furnishing inaccurate particulars of income of her income. No doubt, the findings in the quantum proceedings are relevant, however, the same cannot ipso facto lead to levy of penalty as assessment and penalty proceedings are independent proceedings. The AO has to record a specific finding in the penalty order as to how the case of the assessee falls under concealment and/or furnishing inaccurate particulars of income. Further, even where charge is uncertain at the time of initiation of penalty proceedings, it must necessarily be substituted with a conclusive default at the time of passing the penalty order. In this regard, we refer to the decision of Hon'ble Rajasthan High Court in case of Sheveta Construction Co. Pvt. Ltd. vs. ITO (in DB No. 534/2008 vide order dated 06.12.2016) wherein it was held as under:-
"4. From the order of assessment, the Assessing Officer has used the language as under:-
"Penalty proceedings under section 271(1)(c) for concealment of income/furnishing of inaccurate particulars of income have been initiated separately.
5. Counsel for the appellant relied upon the decision of Andhra Pradesh High Court in case of Chennakesava Pharmaceuticals vs. Commissioner of Income Tax reported in (2012) 349 ITR 196, wherein it has been held as under:-7 ITA No. 573/JP/2019
Smt. Leela Devi Bumb vs. ITO "In Reliance Petro products Pvt.Ltd's case (1 supra), the Supreme Court also held that imposition of penalty is unwarranted when there is no finding in the assessment order that details supplied by the assessee were found to be false. This indicates that the view taken by the Delhi High Court in Ram Commercial Enterprises Ltd.'s case (6 supra ) which has been approved in Dilip N. Shroff's case (10 supra) continues to be valid and this part of the judgment in Diiip N. Shroff's case (10 supra) has not been over ruled and continues to be good law. Moreover the decision of the Delhi High Court in Ram Commercial Enterprises (6 supra)was also followed by the same High Court in Commissioner of Income Tax v. M.K.Sharma(9 supra) and SLP(c) No.17591 of 2008 filed against the said decision was dismissed by the Supreme Court on 18.7.2008.
Applying the above principle that the assessing officer should record in the assessment order his satisfaction that the assessee had either concealed the income or furnished inaccurate particulars of income in his return before imposing penalty, we noticed that in the assessment orders passed by the assessing officer for the assessment orders passed by the assessing officer for the assessment year 198283 (which is the subject matter of I.T.T.A No. 29 of 2000) and for the assessment year 198384 (which is subject matter of 8 ITA No. 573/JP/2019 Smt. Leela Devi Bumb vs. ITO I.T.T.A. No. 33 of 2000), no such satisfaction is recorded."
6. Another decision of Supreme Court in case of Dilip N. Shooff vs. Joint Commissioner of Income Tax & Anr. (2007) 291 ITR 519 (SC) it has been held as under:-
"It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on this basis that the assessee had concealed his income or he had furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing the order of assessment laid emphasis that he had dealt with both the situations.
The impugned order, therefore, suffers from non- application of mind. It was also bound to comply with the principles of natural justice.
The Income Tax Officer had merely held that the assessee is guilty of furnishing of inaccurate particulars and not of concealment of income; which finding was arrived at also by the Commissioner of Income Tax and the Income Tax Appellate Tribunal. In the facts and circumstances of the case, there are enough material to 9 ITA No. 573/JP/2019 Smt. Leela Devi Bumb vs. ITO show that the action on the part of the appellant may not be said to be such which would attract the penal provision under s. 271(1)(c). For the reasons aforementioned, the impugned judgment cannot be sustained."
7. He contended that while concluding the assessment order the officer must be clear whether it is the concealment of income or furnishing of inaccurate detail. He cannot have both the things.
7.1 However, Mr. Singhi appearing for the department submits that a perusal of the order of penalty makes it amply clear that both the things are fulfilled. In that view of the matter the view taken by the Tribunal is required to be accepted.
8. We have heard Mr. Prakul Khurana and Mr. Anuroop Singhi.
9. Taking into consideration the decision of the Andhra Pradesh High Court which virtually considered the subsequent law and the law which was prevailing on the date the decision was rendered on 27.08.2012. In view of the observations made in the said judgment, we are of the opinion that the contention raised by the appellant is required to be accepted and in the finding of Assessing Officer in the assessment order it is held that the AO has to give a notice as to whether he proposes to levy penalty for concealment of income or furnishing inaccurate particulars. He 10 ITA No. 573/JP/2019 Smt. Leela Devi Bumb vs. ITO cannot have both the conditions and if it is so he has to say so in the notice and record a finding in the penalty order.
10. In that view of the matter, the issue is answered in favour of the assessee and against the department.
The appeal is accordingly allowed."
We therefore find that the ld CIT(A) has not considered the above aspect of the matter and merely for the reason that assessment order has been confirmed in quantum proceedings by the Tribunal, he has confirmed the levy of penalty ex-parte qua the assessee. Given the peculiar facts and circumstances of the present case, we believe that the assessee deserve one more opportunity and we accordingly deem it appropriate to set-aside the matter to the file of the ld CIT(A) to decide the same afresh taking into consideration aforesaid discussion after providing reasonable opportunity to the assessee. Needless to say, the assessee should attend to the appellate proceedings before the ld CIT(A) and cooperate in timely completion of the appellate proceedings.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 15/01/2020.
Sd/- Sd/-
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(Vijay Pal Rao) (Vikram Singh Yadav)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur
fnukad@Dated:- 15/01/2020.
11 ITA No. 573/JP/2019
Smt. Leela Devi Bumb vs. ITO
*Santosh
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Smt. Leela Devi Bumb, Bijainagar.
2. izR;FkhZ@ The Respondent- ITO, Ward-1, Beawar.
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. 573/JP/2019} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar