SWATANTRA MISHRA,ALLAHABAD vs. INCOME TAX OFFICER 1(5), ALLAHABAD

This appeal by the assessee is directed against the order dated 17.09.2019 of ld. CIT(A), Allahabad arising from penalty levied u/s. 271(1)(b) of the Income Tax Act, 1961 for the A.Y. 2011-12. The assessee has raised the following grounds: “

The ld. A.R. of the assessee has submitted that the assessee filed her return of income on 30.01.2012 declaring total income of Rs.4,27,350/-. The Assessing Officer after completion of the assessment u/s. 144 of Act has also levied penalty u/s. 271(1)(b) of the Act of Rs.10,000/- for non compliance of notice issued u/s. 142(1) of the Act. He has pointed out that the Assessing Officer has made the addition on account of cash deposit in the bank account of the assessee whereas those bank accounts are in the joint name of the assessee and her husband Shri Sushil Kumar Mishra and a similar notice u/s. 148 as well as 142(1) were received by her husband. The assessee was under the impression that her husband would explained source of the deposit in those bank accounts in response to the notice issued in his name. The ld. AR of the assessee has further submitted that assessee has filed reply to show cause notice issued u/s. 274 of the Act and pointed out that this fact that the parallel proceedings were initiated by the Assessing Officer in respect of the deposit made in the bank accounts in the joint name of the assessee and her husband in both the cases. He has further submitted that the CIT(A) has dismissed the appeal of the assessee by exparte order and therefore, this fact has not been examined whether the same income was assessed in the hand of the husband of the assessee by the Assessing Officer or not. The quantum appeal filed against the assessment order is still pending before the ld. CIT(A).

On the other hand, ld. DR has submitted that there are several bank accounts in the joint name of the assessee and her husband. The Assessing Officer has assessed the income on account of cash deposit in the bank account in the hands of assessee as well as her husband by considering the fact of the first bank account holder. The deposit made in the bank account where the assessee is first account holder is assessed in the hand of the assessee whereas the deposit made in the bank account where the husband of the assessee is a first account holder was assessed in the hand of the assessee. The ld. DR has further submitted that there is no dispute that the assessee has not complied with the notice issued u/s. 142(1) and therefore, the penalty u/s. 271(1)(b) of the Act is justified.

I have considered the rival submissions as well as relevant material on record. The Assessing Officer issued notice u/s. 148 of the Act on 23.03.2018 on the basis of the AIR information received regarding cash deposits in four bank accounts, out of which, the assessee is the first account holder in two banks and another two bank accounts, the first account holder is assessee’s husband Shri Sushil Kumar Mishra. The Assessing Officer has made the addition on account of cash deposits in two bank accounts where the assessee is the first account holder while passing the assessment u/s. 144 of the Act. It is manifest on the record that in response to the notices issued u/s. 142(1), the representative of the assessee has appeared and filed reply and stated that the similar notice regarding cash deposit in case of her husband has also been issued. In the said reply, the assessee sought time to file her return of income however there was no further response on the part of the assessee. Accordingly, the Assessing Officer issued another notice dated 10.12.2018 giving final opportunity to assessee to explain the cash deposit in the bank account but there was no compliance, consequently Assessing Officer framed the assessment u/s. 144 and also initiated the penalty proceedings u/s. 271(1)(b) of the Act. All the bank accounts are in the joint name of the assessee and her husband. The explanation and addition made in the hand of the husband of the assessee would be relevant and shall have a bearing in the case of the assessee. The quantum appeals are still pending before the CIT(A) and the penalty appeals have been dismissed by the CIT(A) by exparte order. Therefore, in the facts and circumstances of the case, where all the bank accounts are in the joint name and the ld. CIT(A) has passed the impugned exparte order without deciding the quantum appeals the matter is set aside to the record of the CIT(A) for deciding the same afresh after adjudication of the quantum appeals and giving more opportunity of hearing to the assessee.

In the result, the appeal of the assessee is allowed for statistical purposes.