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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
PER BENCH:
These 3 appeals by the assessee are directed against different orders of NFAC dated 5.1.2023, 9.2.2023 & 9.2.2023 for the assessment year 2017-18.
There was a delay of 9 days in filing these appeals The assessee explained the delay by way of petition accompanied with affidavit for filing the appeals belatedly which is reproduced below: to 181/Bang/2023 Smt. Varalakshmi, Bangalore to 181/Bang/2023 Smt. Varalakshmi, Bangalore to 181/Bang/2023 Smt. Varalakshmi, Bangalore
Page 4 of 10 2.1 We have heard both the parties on the issue of condonation of delay. In our opinion, the reasons explained by the assessee for delay in filing the appeals is found to be good and sufficient and accordingly we condone this short delay of 9 days and admit all the three appeals for adjudication. (AY 2017-18): 3. First, we will take up for the AY 2017- 18 for adjudication.
3.1 Facts of the case are that one Sri T. Chandra was an employee working in KSRTC as skilled worker. He was to take VRS on account of his illness and he became unable to walk, read or write. Smt. Varalakshmi, the assessee herein was required to handle his affairs which include the financial matters. Mr. T. Chandra suffered paralysis stroke and had multiple health problems. That's how the assessee herein became an assessee. Mr. T. Chandra had an account with Corporation Bank, K.H. Road, Bangalore. On 03.11.2016 a sum of Rs. 14,50,153/- the retirement benefits were credited to the account of Sri T. Chandra. Assessee enclosed a copy of the Corporation Bank Account. On 03.11.2016 a sum of Rs. 14,50,000/- was drawn. The assessee had a S.B. A/c with Veerashaiva Sahakari Bank Ltd., M.C. Road, Vijayanagar, Bangalore which is near to her house, wherein on 12.11.2016 she deposited Rs. 20,000/- and a sum of Rs. 9,00,000/-. On 16.11.2016 she made an investment in Cash Certificate with the said bank. The AO by virtue of data from Veerashaiva Sahakari Bank Ltd., which reported a sum of Rs. 9,20,000/- cash has been deposited issued notices to the assessee. Assessee has studied only up to 5th Standard and when she received the final notice, she sought assistance from her married daughter and she took initiative and in order to respond, to 181/Bang/2023 Smt. Varalakshmi, Bangalore
Page 5 of 10 she started the collection of data and in the meanwhile Mr. T. Chandra had health problems and hence did not respond. On merits, the assessee submitted the deposit of Rs. 9,20,000/- in S.B. A/c with Veerashaiva Sahakari Bank Ltd., on 12.10.2016 is out of withdrawal made 03.11.2016 from out of the Corporation Bank Account standing in the name of her husband Sri T. Chandra. The immediate credit in the account of Mr. T. Chandra is retirement benefits given by KSRTC directly deposited to the bank account of Sri T. Chandra. From out of the deposit of Rs. 9,20,000/- made on 12.10.2016, the assessee purchased cash certificate bearing No. PCC/3283/1 with Veerashaiva Sahakari Bank Ltd., Balance amounts are interests on S.B. A/c. The AO has considered the deposit of Rs. 9,20,000/- S.B. A/c interests of Rs. 4501- and further included the value of deposit of Rs. 9,00,000/- made out of the sum of Rs. 9,20,000/- and has brought to tax along with small interests on S.B. A/c.
3.2 The NFAC confirmed the addition holding that assessee has not given satisfactory explanation before the lower authorities regarding sources of above investment made by assessee. Against this assessee is in appeal before us.
We have heard the rival submissions and perused the materials available on record. In this case, assessee is having bank account with Corporation Bank, Shanti Nagar Branch, Bangalore bearing No.520101000991836. The assessee has deposited a sum of Rs.14,50,153/- on 3.11.2016. The assessee explained that this amount has been received from KSRTC Bangalore on her husband’s voluntary retirement due to sickness. The assessee has withdrawn a sum of Rs.50,000/- on 3.11.2016 to 181/Bang/2023 Smt. Varalakshmi, Bangalore
Page 6 of 10 from this account and deposited the sum in SB account No.4505 with Veerashaiva Sahakari Bank Ltd., MC Road, MC Layout, Bengalore at Rs.9 lakhs on 12.11.2016. From that account, assessee has made a fixed deposit of Rs.9 lakhs. The assessee has placed all the evidences and submissions before lower authorities. Even after producing all these details, the AO as well as NFAC were not ready to accept the same. In our opinion, the source of deposit into bank account with Corporation Bank was the benefit received by KSRTC on VRS of assessee’s husband T. Chandra and the source of deposit with Veerashaiva Sahakari Bank Ltd. was the earlier withdrawal from the said SB account with Corporation Bank. Being so, the entire investment is properly explained. The addition made by AO towards cash deposit into Veerashaiva Sahakari Bank Ltd. as well as fixed deposit made with Veerashaiva Sahakari Bank Ltd. is inappropriate. Accordingly, addition is deleted.
4.1 Further, other cash deposit of Rs.40,476/- is also from withdrawal from the Corporation Bank. The entire investment is explained by the assessee. Hence, addition is deleted and the appeal of the assessee is allowed. (AY 2017-18): 5. In this appeal assessee has challenged the levy of penalty of Rs.10,000/- u/s 272A(1)(d) of the Act. Facts of the case, in brief, are that in this case the assessee is an Individual. Notice under section 142(1) issued on 23.01.2018 calling the assessee to prepare a true and correct return of income in respect of which the assessee is assessable under the Income-tax Act, 1961 during the previous year relevant to the assessment year 2017-18. As per to 181/Bang/2023 Smt. Varalakshmi, Bangalore
Page 7 of 10 provisions of Section 142(1) of the Act, the assessee was required to furnish the said return of income as required to be furnished as per the conditions and manner prescribed in Rule 12 of the Income Tax Rules, 1962, on or before 31.08.2017. But the assessee has failed to furnish a return of income for A. Y 2017-18 either u/s 139 (on or before 31/03/2018) and failed to furnish an Income Tax Return (ITR) in response to a notice issued u/s 142(1) of the Act.
5.1 On the basis of data analytics and information gathered during the phase of online verification under 'Operation Clean Money', the Income Tax Department gathered a list of assessees who had deposited substantial Cash in bank account(s) during the demonetization period (9th November 2016 to 30th December 2016), but have not filed Income Tax Return for A. Y 2017-18. The data reveals that the assessee has deposited cash at Rs.18,40,476/- in his bank account bearing number SBA/4505 with Veerashaiva Cooperative Bank Ltd. during the demonetization period (9th November, 2016 to 30th December, 2016). The assessee has not filed Income Tax Return (ITR) for A. Y 2017-18 neither u/s 139 nor in response to a notice issued u/s 142(1) of the Act.
After hearing both the parties, we have already deleted the quantum addition and there is no taxable income in the hands of the assessee so as to file return of income for the assessment year under consideration. Accordingly, levy u/s 272A(1)(d) of the Act is inappropriate. The penalty is deleted. to 181/Bang/2023 Smt. Varalakshmi, Bangalore
Page 8 of 10 ITA 181/Bang/2023 (AY 2017-18):
This appeal is with regard to levy of penalty u/s 271F of the Act at Rs.5,000/- for the assessment year 2017-18. Facts of the case, in brief, are that in the case the assessee is an Individual. Notice under section 142(1) issued on 23.01.2018 calling the assessee to prepare a true and correct return of income in respect of which the assessee is assessable under the Income-tax Act, 1961 during the previous year relevant to the assessment year 2017-18. As per provisions of Section 142(1) of the Act, the assessee was required to furnish the said return of income as required to be furnished as per the conditions and manner prescribed in Rule 12 of the Income Tax Rules, 1962, on or before 31.08.2017. But the assessee has failed to furnish a return of income for A. Y 2017-18 either u/s 139 (on or before 31/03/2018) and failed to furnish an Income Tax Return (ITR) in response to a notice issued u/s 142( 1) of the Act. 7.1 On the basis of data analytics and information gathered during the phase of online verification under 'Operation Clean Money', the Income Tax Department gathered a list of assessees who had deposited substantial Cash in bank account(s) during the demonetization period (9th November 2016 to 30th December 2016), but have not filed Income Tax Return for A. Y 2017-18. The data reveals that the assessee has deposited cash at Rs.18,40,476/- in his bank account. bearing number SBA/4505 with Veerashaiva Cooperative Bank Ltd. during the demonetization period (9th November, 2016 to 30th December, 2016). As the assessee has not filed Income Tax Return (ITR) for A.Y 2017-18 neither u/s 139 nor in response to a notice issued u/s 142(1) of the Act. to 181/Bang/2023 Smt. Varalakshmi, Bangalore
Page 9 of 10 7.2 Penalty proceeding u/s 271F of the Act for non-filing the return of the income as contained u/s 139 of the Act, was also initiated and a notice to this effect was issued to the assessee on 24/10/2019 and the case of the assessee was fixed for 08/11/2019 requesting the assessee to file its response and also to show cause as to why penalty u/s 271F of the Act may not be imposed. On the fixed date, neither anybody attended nor was any written explanation filed by the assessee.
After hearing both the parties, we are of the opinion that as discussed earlier in there is no taxable income in the hands of the assessee and hence, there is no question of filing of return of income. Hence, levy of penalty is inappropriate, which is hereby deleted. Ordered accordingly.
In the result, all the appeals of the assessee in to 181/Bang/2023 are allowed.
Order pronounced in the open court on 25th May, 2023