PRAJAKTA VAIDYA,NAGPUR vs. ITO WARD 1(5), NAGPUR

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ITA 372/NAG/2024Status: DisposedITAT Nagpur20 December 2024AY 2013-14Bench: SHRI V. DURGA RAO (Judicial Member)3 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that reopening of assessment solely for verification is not permissible and the assessment order was fragile. The penalty was deemed unsupportable as the Revenue failed to demonstrate the source of investment or that it emanated from past savings.

What were the facts?

The assessee invested Rs. 3,00,000/- with Wasankar Group during FY 2012-13. The Assessing Officer reopened the assessment to verify the source of this investment, adding the amount under Section 69. A penalty was subsequently levied.

What were the issues?

Whether reopening of assessment for mere verification is valid and if penalty can be levied without establishing the source of investment.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR

Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER

For Respondent: Shri Abhay Y. Marathe

Date of Hearing – 09/12/2024 Date of Order – 20/12/2024

O R D E R PER K.M. ROY, A.M.

The present appeal has been filed by the assessee challenging the impugned order dated 25/04/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2013–14.

2.

In its appeal, the assessee has raised following grounds:–

“1. In the facts and circumstances of the case and in law, the CIT(A) NFAC has erred in law by upholding the penalty of Rs.93,000/- levied on the 2. In the facts and circumstances of the case and in law, the CIT(A) NFAC has erred in law by upholding the penalty when there was no concealment of income nor any inaccurate particulars were submitted by the assessee.”

2 Prajakta Prabhakar Vaidya

3.

There is no representation made by the assessee.

4.

The facts of the case lie in a narrow compass. We have carefully considered grounds of re–opening in assessment order, which is reproduced below:–

“Information has been received from The Pr. CIT-1, Nagpur through Sharing of information that the assessee had invested an amount of Rs.3,00,000/- with Wasankar Group during the FY 2012-13. On analysis of information available on the record, it is clear that the assessee invested an amount of Rs.3 lacs with Wasankar Group during the year under consideration needs to be verified/investigated its source of investment. In view of the above, I have a reason to believe that amount invested of Rs. 3,00,000/- with Wasankar Group has escaped assessment for the A.Y. 2013- 14 in this case.

5.

There can be no re–opening only for the purpose of verification. The assessment itself is fragile and is liable to be demolished. The assessee may not have challenged as she may not have been advised. However, the Assessing Officer also did not make any enquiry to establish the concealed income and had passed the order in a slipshod fashion and had added ` 3 lakh under section 69 of the Act without even co–relating the dates of investment. Penalty proceedings are distinct from assessment proceedings. Strict interpretation of penal provisions is required as it is a civil liability for imposing penalty. The imposition of penalty for ` 93,000 is unsupportable and directed to be deleted in the peculiarity of circumstances. It has not been demonstrated as to whether investment could have emanated from past savings. Accordingly, the grounds raised by the assessee are allowed.

6.

In the result, appeal filed by the assessee is allowed.

3 Prajakta Prabhakar Vaidya

Order pronounced in the open Court on 20/12/2024

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