SHRI RINKU KUMAR,MOGA vs. JOINT DIRECTOR OF INCOME TAX (APPEALS-3), LUDHIANA

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR

BEFORE SH. B.R. BASKARAN, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER

ITA No.265/Asr/2018 Assessment Year:2017-18

Sh. Rinku Kumar Vs. Jt. Director of H.No.190 Income Tax (Inv.) Ramuwala Kalan, Moga Ludhiana [PAN:AWHPK J3207E] (Appellant) (Respondent)

Appellant by : Sh. Rupender Kansal (Ld. Adv.) Respondent by: Sh. Amar Pal Meena (Ld. DR)

Date of hearing: 28.08.2019 Date of pronouncement: 09.10.2019

ORDER PER N.K.CHOUDHRY, JM:

The instant appeal has been preferred by the Assessee against the order dated 05.03.2018 impugned herein passed by the Ld. CIT(A)-3, Ludhiana u/s 250(6) of Income Tax Act, 1961 (hereinafter called as the ‘Act’).

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the assessee is working as a small electrician in village Ramuwala Kalan, Distt. Moga and earns money by doing electrical work in houses and shops. In the year 2012, the assessee worked in the house of Sh. Vishakha Singh S/o Sh. Suddha Singh who at that time was residing in the middle east county Bahrain and sent Rs.5,000/- from that country through money exchanger M/s Ganpati Money Changer. The assessee submitted the photocopy of ID proof to M/s Ganpati Money Changer and got the money which was sent for the work done by the assessee. Though, the assessee has received two notices, however did not appear before the DDIT (Inv.) (Hq.) because the summons were addressed as Rinku Kumar Prop. Sethi Enterprises, Ramuwal, Disst. Moga by which Department sought information qua Bank deposits and therefore, the assessee did not realize to appear because he was never been the proprietor of firm Sethi Enterprises. Later on 3rd occasion, the assessee appeared before the DDIT(Inv.) and from him only came to know about the facts that somebody else has opened fake account in the assessee’s name and even submitted wrong photographs in the account opening form which were not of the assessee. It was further realized that money exchanger in connivance with bank officials misused the assessee's ID proofs and the name of the mother and address has also been mentioned wrongly in the account opening form. Later on it came to the assessee’s knowledge that the money exchanger had opened fake bank accounts in the name of other persons as well who have also submitted their ID proofs for getting money for the work done from persons residing out of India. However the Ld. CIT(A) dismissed the appeal of the assessee and affirmed the penalty order.

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“1. That the Hon’ble Commissioner of Income (Appeals-3) Ludhiana has erred both on facts and law while upholding the penalty order of Joint Director of (Inv.), Ludhiana on the basis of conjectures and surmises. 2. That the Hon’ble Commissioner of Income Tax (Appelas-3) Ludhiana has erred in upholding the penalty amounting to Rs. 20,000/- imposed u/s 272A(1)(c) of the Income Tax Act, 1961. 3. That the Hon’ble Commissioner of Income Tax (Appelas-3) Ludhiana has erred on the facts, as the appellant has appeared on third notice and he himself was ignorant of the fraud played on him by the money exchanger and bank manager. The first two notices were ignored as the same were served on him as Rinku Kumar Prop. M/S Sethi Enterprises, Ramuwala Kalan and he was having no idea that notices belong to him as he was not proprietor of any firm in the name of M/S Sethi Enterprises. He explained to the Joint Director of Income Tax (Inv.) Ludhiana on receiving the third notice that he is not proprietor of any firm under name Sethi Enterprises. He narrated that he worked for some person in his house at Ramuwala Kalan as electrician. The person who was working in Behrain sent about Rs.5,000/- through money exchanger. The said money exchanger on getting ID proof of appellant gave Rs.5,000/-. The money exchanger in connivance with bank manager opened 14 fake bank accounts including in the name of appellant and made huge transactions. The appellant is illiterate and does not understand the complexities of law, the fact which was ignored by the Hon’ble CIT(Appeals-3) Ludhiana. The non-appearance was under bonafide belief that the notices does not belongs to him.”

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committing fraud, forgery and criminal conspiracy. Further the Ld. AR also drawn our attention to the News Paper dated 19th November, 2016 in Nava Sabera Times, wherein the news appearing reflects unearthing of offences committed by money exchanger and three bank officials while opening fake bank accounts and making transactions from forged bank accounts. In the News Paper the assessee has been shown a complainant by the SSP, Moga. Hence considering the peculiar facts to the effect that summons have been issued in the name of the appellant as proprietor of M/s Sethi Enterprises and therefore, the appellant may have misunderstood and did not appear before the DDIT(Inv.) (Hq.), however, it is a fact that FIR has already been registered by the Assessee against the culprits while realizing the fraud committed by them, therefore, in our considered opinion, there appears be inadvertent and bonafide mistake and reasonable and justifiable cause in non-compliance of the summons issued by the DDIT(Inv.)(Hq.) Ludhiana and therefore, no penalty is warranted hence, the same is liable to be deleted, consequently the penalty stands deleted.

Sd/- Sd/- (B.R.BASKARAN) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 09/10/2019. /PK/ Ps. Copy forwarded to: 1. The Appellant 2. The Respondent 3. The CIT 4. Then CIT(Appeals) 5. SR DR, I.T.A.T. Amritsar 6. Guard File True Copy By Order