SONALBEN SANJAYSINH VIHOL,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-1, PATAN

Being aggrieved of the said order of the AO, the assessee preferred appeal before the Ld.CIT(A).

Being aggrieved by the order of the Ld.CIT(A), the assessee has come in appeal before the Tribunal.

We have heard the rival submissions of the parties and gone through the record. Though, there was a failure on the part of the assessee, in this & 1828/Ahd/2024 Sonalben Sanjaysinh Vihol vs. ITO Asst.Year: 2014-15 & 2016-17 case, to come with clean hands before the AO and furnish the requisite details. Further, he did not participate in the assessment proceedings and under such circumstances, the AO was left with no alternative option other than to pass the best judgement assessment order u/s.143(3) of the Act on the basis of material available on record. However, during the appellate proceedings, the assessee had explained that the transactions in question did not belong to him. That, in fact, his account was used by certain other persons for financial transactions for which he was paid commission income. The assessee also furnished the names, addresses, including PANs, etc. of the persons, who had done financial transactions through his account. The Ld.CIT(A) considering the additional evidences furnished by the assessee, remanded the matter to the file of AO. Under these circumstances, the AO, in our view, was supposed to examine the contentions of the assessee on merits. However, the AO completely failed to verify the contentions made by the assessee. The assessee having furnished the names of 14 persons and furnished details PANs, etc., the AO was supposed to verity the said details, calling for information from the said persons and further to gather the details of transactions and nature of transactions, etc. from the concerned banks also. Though, in this case, there was a failure on the part of the assessee to fully and truly disclose the correct facts during the assessment proceedings, however, it has been held, time and again, by the various courts of law that the Income Tax Department should collect only legitimate taxes from the tax- papers. The Income Tax Department, is not supposed to punish the assessees for their mistakes and charge undue taxes rather, it is to charge tax on the real income of an assessee. Merely because there was a default on the part of the assessee to present true picture during the assessment proceedings, the assessee in our view, should not be burdened with heavy taxes if, in fact, the ITA Nos.1827 & 1828/Ahd/2024 Sonalben Sanjaysinh Vihol vs. ITO Asst.Year: 2014-15 & 2016-17 alleged transactions did not belong to him but to some other persons. The assessee, in this case, has not made a vague or general submissions that the amount/transactions belonged to other persons, rather he has furnished names, PANs of the concerned persons. So, under the circumstances, the bonafide on the part of the assessee stood established. As noted above, since the assessee has pleaded that he was a man of meagre resources and did not have any much income, therefore, as commonly observed, the assessee avoided income-tax proceeding being not aware of the consequences of the action that can be taken against him for offering his bank account to some other persons for financial transactions. The assessee may have committed violation of law, however, for the purpose of taxation of his income, only his real income is required to be taxed. Under these circumstances, we are of the view that the entire case is required to be re-examined at the hands of the AO. We, therefore, restore the issue to the file of the AO for de novo assessment. It is directed that the AO will verify the details furnished by the assessee and will also call for information from the bank authorities and also call for the details from the concerned persons, who allegedly made transactions through the bank account of the assessee. If it is found that the said transaction belonged to other persons, then the AO will pass the assessment order accordingly. It is also directed, in exercise of powers u/s.254 read with section 133(6) of the Act, that if the AO found that the transactions belonged to some other persons, whose income has escaped assessment, the AO will be at liberty to re-open the assessment of those persons or to pass the information to the concerned AO for re-opening the assessment of those concerned persons and the limitation period in those cases will be applicable as per the provisions u/s.153(6) of the Act. & 1828/Ahd/2024 Sonalben Sanjaysinh Vihol vs. ITO Asst.Year: 2014-15 & 2016-17

With the above observations, the appeal of the assessee in AY 2014-15 is treated as allowed for statistical purposes.

Since the facts and issue involved in this appeal is identical to that has been discussed as above in assessee’s appeal for AY 2014-15 in , our findings given above on the identical issue will mutatis mutandis apply herein, and this appeal of the assessee is, accordingly, allowed for statistical purposes.