VIJAY KASHINATH JAGTAP, MUMBAI vs. DCIT CIRCLE-2 , MUMBAI

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IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F”,MUMBAI

BEFORE SHRI.NARENDER KUMAR CHOUDHRY (JUDICIAL MEMBER) AND MISS. PADMAVATHY S. (ACCOUNTANT MEMBER)

I.T.A. No.1440/Mum/2022 (Assessment year :2015-16)

Shri Vijay Kashinath Jagtap vs Deputy Commissioner of Income- tax, Circle-2, Kalyan, 2nd Floor, E-1/603, Mohan Puram, Sai Kansai Section, Mohan Plaza, Wayale Nagar, Ambernath (E), Khadakpada, Kalyan (W)-421 301 Thane-421 501 PAN : AANPJ9088L APPELLANT RESPONDENT

Present for the Assessee Shri. Ld.AjithaThampan., Ld. CA Present for the Department Ms. Usha Gaikwad, Ld. Sr.AR

Date of hearing 13/12/2023 Date of pronouncement 31/01/2024

O R D E R Per N.K. Choudhry (JM): This appeal has been preferred by the Assessee, against the order dated 31/10/2017 impugned herein passed by the Commissioner of Income- tax, Circle-2, Kalyan (in short ’Ld. Commissioner’) under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) for the A.Y.2015-16.

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1.2 Based on the facts and circumstances of the case and in law, the learned AO/ CIT(A) has erred in not considering the difference as Salary Income of the Appellant as already conceded during the AssessmentProceedings. Ground 2 :Leyy of interest under section 234B of the Act On the facts and circumstances of the case and in law, the learned AO has erred in levying interest amounting to INR 42,856 under section 234B of the Act.”

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and statutory notices dated 06/07/2017 and 26/07/2017 respectively under section 143(2) and 142(1) of the Act were issued and served on the Assessee. 4.1 In the course of scrutiny, the Assessing Officer, on perusal of copy of 26AS & Form 16 noticed that the Assessee has received salary of Rs.63,75,681/- during F.Y. 2014-15 relevant to A.Y. 2015-16; however, the Assessee has shown salary received at Rs.,29,00,854/- in revised return filed on 05/09/2016. To verify the claim of the Assessee, notices under section 133(6) were issued to M/s Pfizer Limited. The reply received from M/s Pfizer revealed that Assessee had received salary of Rs.63,75,681/- during the financial year relevant to the assessment year under consideration. The Assessee was accordingly show caused on 23/10/2017 to explain the difference by 27/10/2017 and as to why the difference of Rs.34,56,827/- should not be brought to tax as ‘salary income’.

4.2 The Assessee’s representative attended the office of the Deputy Commissioner of Income-tax, Circle-2, Kalyan and expressed his inability to explain the difference and voluntarily offered the difference amount of Rs.32,80,434/- for taxation. Accordingly, the Assessing Officer added a sum of Rs.32,80,434/- to the total income of the Assessee under section 68 of the Act. 5. Being aggrieved, the Assessee filed first appeal before the Ld. Commissioner and raised the issue of treating Rs.32,80,434/- under section 68 of the Act, instead as ‘Salary income’. 6. The Ld. Commissioner, however, after quoting the relevant portion of the assessment order, dismissed the appeal of the Assessee by observing as under: -

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“5.1 In this case, the appellant was working with M/s. Pfizer Limited and took Voluntary Retirement Service. As per Form No. 26AS, the gross total income of the appellant works out to Rs.63,58,458/-. In this case, the issue of refund fraud in connivance with the AR of the appellant has been established by the Department and accordingly, the appellant has filed the original return on 26.08,2015 declaring net income of Rs.45,31,698/-, first revised return was filedon 05.09.2016, declaring net income of Rs.23,26,687/- and second revised return was filed on 17.02.2016, declaring net salary income of Rs.24,26,682/-, In thisregard, in the assessment proceedings, the AO has discussed in para 5 of the order and has made addition of Rs.34,56,827/- u/s 68 of the Act as the appellant has fraudulently claimed refund, which is not eligible to the appellant as per the Act.

After considering the submission of the appellant and the observation of the AO in the assessment order, I am of the considered view that, the addition made by the AO is justified and also, all the more, since the appellant has fraudulently claimed refund by filing revised return twice, which is not permissible as per law, therefore, the addition made by the assessing officer, without allowing deduction under Chapter-VI-A is justified. The appeal of the appellant is dismissed.” 7. Still aggrieved, the Assessee is in appeal before the Tribunal. 8. Heard the parties and perused the materials available on record. In this case the Assessing Officer made the addition of Rs.34,56,827/- under section 68 of the Act on the ground that the Assessee has fraudulently claimed refund by filing revised return twice, which is not permissible as per law and for which the Assessee is also not eligible. Therefore, the addition

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made by the Assessing Officer without allowing deduction under Chapter VI- A is justified. 8.1 The Assessee’s main contention is that that the Ld. AR Mr. Rajesh Tiwari on whose premises a search and seizure action under section 132 of the Act was carried out, wherein it was found that Mr. Rajesh Tiwari has been indulging in claim of fraudulent refunds by fictitious claim of deductions, which was unearthed by the Income-tax Department. The Assessee was one such person for whom Mr. Rajesh Tiwari had filed return of income and made false claims of refund of tax. The Assessee further claimed that without the knowledge of Assessee, Mr. Rajesh Tiwari has filed revised return and requested passbook, etc. and kept with him. Therefore, there was no fault of the Assessee in filing the revised return, so as to claim the alleged fraudulent refund. Even otherwise said refund as claimed was never issued to the Assessee. The Assessee further claimed that the lodging of alleged fraudulent claim of refund was done by Mr. Rajesh Tiwari and Assessee was bonafide in its action and there was no fault on Assessee’s side. The Assessee in order to substantiate the said contention also filed the newspaper clipping as published in Economic Times on 09th November, 2022 wherein it is clearly published that Mr. Rajesh Tiwari has made evasion by fake certificate of CA. The Assessee also claimed that the Assessee has earned the income from services only and has no other source of income during the year under consideration and even otherwise, not maintaining any books of account, therefore, the addition under section 68 of the Act is at all, not warranted. 7.2 We have given thoughtful consideration to the peculiar facts and circumstances of the case. Since the allegations against the Assessee and its Counsel have been made by the authorities below for fraudulent claim of

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refund and the Assessee’s main contention is that the alleged fraudulent claim if any, has been lodged by Mr. Rajesh Tiwari, who was in fact had no degree of Chartered Accountant and even otherwise, not competent to file the relevant income-tax proceedings/compliances. The Assessee’s specifically claimed that he never availed such kind of fraudulent claim, as alleged by the revenue department. The Assessee also claimed that even otherwise addition under section 68 is not warranted sans books of account, as the Assessee has not maintained any books of account during the year under consideration. Since before the Assessing Officer, as recorded in para 6 of the order that the Assessee’s AR has expressed its inability to produce any documentary evidence qua deductions claimed under Chapter VIA as well as in order to substantiate the difference of Rs.34,56,827/- (Rs.63,75,681/- (-) Rs.29,00,854/-). Therefore, the Assessee’ s claim is that the Assessee’s tax consultant / AR has not demonstrated the facts in proper manner and in its right perspective, therefore, a reasonable opportunity may be provided to the Assessee to demonstrate the proper facts and circumstances and documents. Considering the said claim of the Assessee and allegation leveled by the Department qua lodging of fraudulent claim of deduction, we are inclined to remand the instant case/issue to the file of the Ld. Commissioner for decision afresh, suffice to say, by affording reasonable opportunity of being heard to the Assessee. We clarify that primary onus to substantiate its claim and by filling specific affidavit/documents to disprove the role of Assessee in lodging the fraudulent claim if any, by the Ld. AR, would be on the Assessee. Further, the Assessee is directed to file the relevant documents as would be essential for proper adjudication of the issue and should also appear in case necessitates by the revenue authorities and in case of default, shall not be entitled for any leniency.

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Order pronounced in the open court on 31/01/2024.

Sd/- sd/- (MISS. PADMAVATHY S.) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Pavanan प्रतितितिअग्रेतििCopy of the Order forwarded to : 1. अिीिार्थी/The Appellant , 2. प्रतिवादी/ The Respondent. 3. आयकरआयुक्त CIT 4. तवभागीयप्रतितिति, आय.अिी.अति., मुबंई/DR, ITAT, Mumbai 6. गार्डफाइि/Guard file. BY ORDER, //True Copy// Asstt.Registrar, ITAT, Mumbai