Income Tax Appellate Tribunal - Ahmedabad
Varsha Punjabi L/H Of Late Bhagwandas ... vs Assessee on 15 July, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER आयकर अपील सं. (एसएस) एसएस) / IT(SS)A No.377/Ahd/2011 िनधा रण वष / Assessment Year : Block period 01.04.1990 to 07.03.2001 Late Shri Bhagwandas P. Punjabi, DCIT, Through L/h Varsha Punjabi, Vs Circle-6, 3-B, Surdhara Bungalows, Ahmedabad Opp. Goyal Intercity, Drive-in-
Road, Ahmedabad
PAN : AEHPP 2016 C
अपीलाथ /
अपीलाथ / (Appellant) यथ
यथ /
थ / (Respondent)
Assessee by : Shri A.L. Thakkar, AR
Revenue by : Shri K. Madhusudan, Sr DR
सुनवाई क तारीख/ Date of Hearing : 08/06/2016
घोषणा क तारीख / Date of Pronouncement: 15/07/2016
आदेश/O R D E R
This appeal by the assessee is directed against the order of the Learned Commissioner of Income-Tax (Appeals)-XI, Ahmedabad dated 08.03.2011 for the block assessment period 01.04.1990 to 07.03.2001.
2. The solitary ground raised is as under:-
The learned Commissioner of Income-tax (Appeals) has erred in confirming the penalty levied u/s 158BFA(2) of the Income-tax Act, 1961 on the amount of addition of Rs.4,00,000/- confirmed by the Hon'ble Income Tax Appellate Tribunal vide its order dated 07.05.2010 with respect to the alleged undisclosed income/investment in Tenement No.4A, Navendu Co. Op. Ho. So., Memnagar, Ahmedabad
3. The brief facts are - a search operation u/s 132 of the Act was carried out in the case of Shri Devendra Gajendranath Chaturvedi ("DGC" in short) and during the course whereof, keys of the property, i.e., tenement No.4A, Navendu Co-operative Housing Society, Memnagar, Ahmedabad were seized. On questioning, DGC stated that these premises were purchased by him from the assessee Shri Bhagwandas P. Punjabi for a consideration of Rs.12 lacs. During block assessment, DGC denied this statement. To cross SMC-IT(SS)A No. 377/Ahd/2011 Late Shri Bhagwandas P. Punjabi vs. DCIT Block Period 01.04.90 to 07.03.01 2 verify, assessee was summoned who accepted the ownership of the property. The assessee was asked to explain the source of investment which he could not produce. Consequently, proceedings u/s 158BD were initiated and the block assessment was completed and the addition was made as the assessee could not explain the source. The assessee agitated the addition in appeal. ITAT vide order dated 07.05.2010 restricted the addition in this behalf to Rs.4 lacs. Penalty proceedings were initiated u/s 158BFA(2) of the Act. According to AO, in penalty proceedings, assessee neither appeared nor made any submissions. Consequently, penalty @ 100% of the tax sought to be evaded was imposed.
4. Aggrieved, assessee preferred first appeal; by the time, ITAT order had come reducing the addition to Rs.4 lacs. Assessee made detailed written submissions which are mentioned in paragraph 2 to 5 of the ld. CIT(A)'s order. Ld. CIT(A), relying on ITAT's observations, imposed the impugned penalty.
5. Aggrieved, the assessee is in second appeal.
6. Ld. Counsel for the assessee contends that the assessee has expired and the present appeal against the confirmation of penalty has been filed by the legal heirs. The orders of the authorities below imposing penalty are assailed on following points:-
i) The observations of both the lower authorities that the assessee neither attended nor filed any submissions are not correct inasmuch as in reply to Assessing Officer's show-cause notice 11.03.2008, assessee filed written submissions dated 20.03.2008 explaining that the property in question was purchased has the source of Rs.4 lacs received from the WILL of one Smt.Sharadaben R. Shah (wife's aunt), who demised without any offspring. The SMC-IT(SS)A No. 377/Ahd/2011 Late Shri Bhagwandas P. Punjabi vs. DCIT Block Period 01.04.90 to 07.03.01 3 copy of the "WILL" alongwith affidavit certificate of the executor was filed.
ii) It was further contended that, alternatively, the penalty proceedings may be kept in abeyance till the quantum appeal was decided by the ld. CIT(A). Ld. Assessing Officer, however, did not care to appreciate this submission and erroneously held that assessee has neither attended nor filed any submissions. Thus, the imposition of penalty by the ld. AO is on misconception of facts, non-consideration of records and arbitrary.
iii) The ld. CIT(A) has also relied on the ld. AO's finding that the assessee did not appear before the ld. AO and ITAT in quantum proceedings has upheld the addition. It is vehemently argued that penalty proceedings are distinct and separate; and merely because the additions are confirmed in quantum, that by itself cannot be a ground to impose penalty.
iv) Ld. CIT(A) also failed to consider the merits of the assessee's reply and its reliance on the following judgments:-
a) Gandhi Service Station vs. ACIT (2006) 100 TTJ (Ahd Trib) 1143
b) DCIT vs. Koatex Infrastructure Ltd (2006) 286 ITR 40 (Mum Trib)
c) Dheeraj Soni v. ACIT, (2006) 96 ITD 187 (Del Trib.)
d) ITO vs. Premila Pratap Shah, (2006) 100 ITD 160 (Mum Trib)
e) Jaswant D. Parmar vs. ACIT (2007) 109 TTJ (Ahd Trib) 56
f) Dhiraj Suri vs. ACIT, (2006) 98 ITD 187 (Delhi Trib)
v) Further reliance is placed on following Gujarat High Court judgments:-
a) Kandoi Bhogilal Mulchand vs. DCIT, (2012) 341 ITR 271 (Guj.)
b) CIT vs. Becharbhai Parmar, (2012) 341 ITR 499 (Guj.)
c) CIT vs. Satyendara Kumar Dosi, (2009) 315 ITR 172
d) It is contended that non-consideration of assessee's reply and holding that assessee did not file any explanation are mistaken SMC-IT(SS)A No. 377/Ahd/2011 Late Shri Bhagwandas P. Punjabi vs. DCIT Block Period 01.04.90 to 07.03.01 4 finding of fact and any penalty imposed on consideration of such erroneous factual finding is untenable. On behalf of the legal heirs, it is contended that the penalty may be deleted.
7. On the other hand, ld. Sr. DR. supported the orders of the lower authorities.
8. I have heard the rival contentions, perused the material available on record and gone through the orders of the lower authorities. Both the authorities below have drawn adverse inference by observing that the assessee neither remained present nor filed submissions before the Assessing Officer. This observation is incorrect in view of above facts. Be that as it may, a detailed reply was filed before the ld. CIT(A) also. Ld. CIT(A) has confirmed the penalty holding that the assessee did not cooperate and ITAT has confirmed the addition; the ld. CIT(A) ought to have considered the merits of the assessee's contentions. The assessee has explained that the amount in question devolved on the assessee by way of inheritance, i.e., WILL of Smt. Sharadaben R. Shah. The copy of the WILL and affidavit of the executor have been furnished. The merits of these materials available on record have not been controverted. In consideration of all these facts and circumstances, I am of the view that this is not a fit case for imposition of penalty which is deleted. Assessee's appeal is allowed.
9. In the result, appeal filed by the assessee is allowed.
Order pronounced in the open Court on 15th July, 2016 at Ahmedabad.
Sd/-
R.P. TOLANI
(JUDICIAL MEMBER)
Ahmedabad; Dated /07/2016
*Biju T.
SMC-IT(SS)A No. 377/Ahd/2011
Late Shri Bhagwandas P. Punjabi vs. DCIT
Block Period 01.04.90 to 07.03.01
5
आदेश क ितिलिप अ ेिषत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबंिधत आयकर आयु / Concerned CIT
4. आयकर आयु (अपील) / The CIT(A)
5. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
आदेशानुसार/ BY ORDER, TRUE COPY उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad