SHRI HEMRAJ,JAIPUR vs. ITO, JAIPUR

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ITA 49/JPR/2017Status: DisposedITAT Jaipur19 April 2017AY 2006-075 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that although the assessee was negligent in appearing before the authorities, the source of the deposit was well-explained by the cash received by his father from the sale of land. Therefore, the penalty was not leviable.

What were the facts?

The assessee deposited Rs. 13 lakhs in cash into his bank account, which was treated as unexplained investment. The assessee's father had received cash from the sale of agricultural land and instructed the assessee to deposit it in his (father's) bank account. The assessee failed to appear in assessment and appellate proceedings.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the source of income is explained but the assessee was negligent in appearing before the authorities.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC

Before: SHRI BHAGCHANDvk;dj vihy la-@ITA No. 49/JP/2017

For Appellant: Ms. Garima Khandelwal (CA) jktLo dh vksj ls@
Hearing: 19/04/2017Pronounced: 19/04/2017

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh Hkkxpan] ys[kk lnL;] ds le{k BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 49/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2006-07 cuke Shri Hemraj, Income Tax Officer, Vs. Village- Lalya Ka Bas, Post- Ward 7(2), Mahapura, Tehisl- Sanganer, Jaipur. district- Jaipur (Raj). LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AFRPV 1006 K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Ms. Garima Khandelwal (CA) jktLo dh vksj ls@ Revenue by : Smt. Poonam Rai (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 19/04/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 19/04/2017 vkns'k@ ORDER

PER: BHAGCHAND, A.M. This is an appeal filed by the assessee emanates from the order of the ld. CIT(A)-35, New Delhi, Camp office at Jaipur dated 05/10/2016 for the A.Y. 2006-07. The only issue involved in this appeal is against sustaining the penalty of Rs. 3,83,527/- made U/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred as the Act).

ITA 49/JP/2017_ 2 Shri Hemraj Vs ITO

2.

At the outset of the hearing, the ld AR of the assessee has

submitted that in this case the assessment was made U/s 144 of the Act

and addition of Rs. 13.00 lacs was made on the basis that the assessee

had deposited this amount in cash in the bank account held with Central

bank of India. The Assessing Officer treated the amount as unexplained

investment U/s 69 of the Act.

3.

The assessee filed appeal against the quantum order. The ld. CIT(A)

passed an ex parte order without giving an opportunity of being heard to

the assessee. The assessee has further filed appeal before the ITAT

against the ex parte order of CIT(A). This appeal was registered with ITA

No. 404/JP/2013, which was heard by a Single Member Bench on

12/1/2016. In this appeal, there was a delay of 472 days in filing the

appeal. The ITAT had not considered the prayer to condone the delay and

dismissed the appeal as barred by limitation. The Assessing Officer also

made an ex parte order for levying the penalty U/s 271(1)(c) of the Act for

Rs. 4.00 lacs.

4.

The ld AR submitted that the father of the appellant namely Shri

Chagan Lal was a State Government employee and during the relevant

period he was posted at Bikaner. He alongwith his three brothers owned

agricultural land at village Bhambhoria. All the brothers sold their land to

one Shri Ganpat Lal Mandolia vide sale deed dated 26/12/2015 for a sum

ITA 49/JP/2017_ 3 Shri Hemraj Vs ITO

of Rs. 1.99 crores. Out of this amount, Rs. 59,84,100/- was received in

cash, thus each brother got cash of Rs. 14,96,025/-. At the relevant time,

the father of the assessee was posted at Bikaner and he was not having

bank account at Jaipur. Father of the assessee instructed the appellant to

deposit the amount in his bank account. The father of the assessee was

also opened a bank account on 13/1/2006 and the cheques received on

the sale of the land were deposited in the bank account, which clearly

shows that the amount received in the share of the father was deposited

by the assessee in his account and due to ignorance of law, the assessee

could not attend in the assessment proceedings before the Assessing

Officer and further in appellate proceedings before the ld. CIT(A).

Therefore, even where the source was well explained and these facts are

not in dispute, then no penalty U/s 271(1)(c) of the Act should be imposed

upon the assessee.

5.

On the other hand, the ld DR has relied on the orders of the

authorities below and also submitted that the assessee was negligent. He

had not appeared before the Assessing Officer as well as CIT(A) in the

penalty proceedings also. Therefore, his explanation should not be

accepted.

6.

I have heard both the sides on this issue. The facts regarding the

sale of the land by the father and his brothers is undisputed. The facts

ITA 49/JP/2017_ 4 Shri Hemraj Vs ITO

regarding receipt of cash of more than Rs. 14.00 lacs is also undisputed.

The fact that the father of the assessee was not having bank account at

Jaipur during the relevant period is also undisputed. The father of the

assessee was in government service and posted at Bikaner during the

relevant period is also undisputed. The fact that the father of the assessee

sold the land and opened the bank account in Jaipur in the month of

January, 2006 and deposited the cheques received on the sale of the land

in that account is also undisputed. No cash was deposited in the bank

account of father is also undisputed, thus it is well established on the fact

that the father of the assessee was having sufficient cash to explain the

deposit of Rs. 13.00 lacs in assessee’s bank account. The father of the

assessee has clearly stated that he had directed his son (assessee) to

deposit the cash received on sale of land in his bank account. Only the

negligence on the part of the assessee has lended him in the levying the

tax on the deposit in his bank account. The ITAT in quantum appeal has

not condoned the delay and dismissed the assessee’s appeal. Considering

all these facts and circumstances, I am of the view that although the

assessee was having a reasonable and acceptable explanation for the

deposit of cash in his bank account but due to his negligence, the addition

was made and same was confirmed by the ld. CIT(A) and the ITAT has

dismissed the appeal of the assessee by not condoning the delay. In view

ITA 49/JP/2017_ 5 Shri Hemraj Vs ITO of these factual aspects, I hold that the assessee do not deserve to be

visited by the penalty U/s 271(1)(c) of the Act. Therefore, I direct to delete

the same.

7.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 19/04/2017.

Sd/- ¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 19th April, 2017 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Hemraj, Jaipur. 1. izR;FkhZ@ The Respondent- The ITO, Ward 7(2), Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 49/JP/2017) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत

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