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Income Tax Appellate Tribunal, CHANDIGARH
Before: SMT. DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, AM
आदेश/ORDER PER DIVA SINGH
The present appeal has been filed by the assessee assailing the correctness of the order dated 26.12.2017 of CIT(A)-3 Ludhiana pertaining to 2008-09 assessment year on various grounds which read as under : 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the imposition of penalty of Rs.1,31,200/- under section 271(1)(c) of the Act which is illegal, arbitrary & unjustified. 2. That the penalty imposed under section 271(1)(c) of the Act is not imposable in as much as there is neither any concealment of income nor furnishing of any inaccurate particulars of income and as such the order passed under section 271(1)(c) of the Act is illegal, arbitrary & unjustified. 3. That the order of the Ld. Commissioner of Income Tax (Appeals) passed under section 271(1) (c) of the Act is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable. 4. That the Ld. Commissioner of Income Tax (Appeals) while allowing the additions and penalty thereto, never looked into the facts of the case. 5. 5. That the Ld. Commissioner of Income Tax (Appeals) has erred in conceding to the findings of the Ld. Assessing Officer and refused the claim of the Assessee in a summary manner only because the main contention of the Assessee was dismissed by the Ld. Assessing Officer in his order. 6. 6. That the Ld. Commissioner of Income Tax (Appeals) has allowed the penalty under Section 271 (1) (c) solely on whimsical grounds without applying proper judicial mind.
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7. That the order so framed by the Ld. Commissioner of Income Tax (Appeals) is bad in law, against facts (to the extent elaborated above) and needs to be quashed. 2. At the time of hearing, ld. AR Ms. Priyanka Ahuja made an oral request seeking time. However, considering the material available on record, it was deemed appropriate to proceed with the present appeal after hearing the ld. Sr.DR. The record shows that the penalty u/s 271(1)(c) of the Act which is subject matter for consideration in the present proceedings is the disallowance of Rs. 3,95,155/- which was sustained in appeal by the CIT(A) as unexplained cash deposits. On account of this fact, penalty u/s 271(1)(c) of the Act was imposed. The CIT(A) upheld the penalty order holding that the assessee has failed to furnish plausible explanation for the unexplained cash deposit. The ld. Sr.DR relied on the same.
A perusal of the assessment order shows that the assessee in the facts of the present case, as per the assessment order was engaged in the business of resale of husk wherefrom income of Rs. 1,08,600/- was returned. The record shows that the assessee was required by the AO to explain cash deposits in its bank account. In response thereto, the record shows that the assessee explained that the deposits were made out of payment received from the debtors of his old business of commission agent. It is seen that summons were issued to the following debtors at the address given by the assessee : i) Sh. Harbans Singh S/o Sh. Manohar Singh, VPO Faridpur. ii) Sh, Dharam Singh S/o Sh. Kaka Singh, VPO Pandia iii) Sh. Inderjit Singh S/o Sh. Keshar Singh, VPO Kalva Baran Road, Patiala iv) Sh. Didar Singh S/o Sh. Surjit Singh VPO Kalva Baran Road, Patiala v) Sh. Avtar Singh S/o Sh. Surjit Singh, VPO Mohamed Pur. vi) Sh. Gurcharan Singh S/o Sh. Manohar Singh, VPO Bakshiwala vii) Sh. Foja Singh S/o Shri Manchar Singh, VPO Ujjal Devi Garh Road,Patiala viii) Sh. Pal Singh S/o Sh. Sucna Singh VPO Bakshiwala ix) Sh. Ranbir Singh S/o Sh. Manohar Singh, VPO Bakshiwala x) Sh. Jasbir Singh S/o Sh. Balkar Singh VPO Kalva Baran Road, Patiala xi) Sh. Satnam Singh S/o Sh. Surjit Singh Village Kalva Baran ,Road, Patiaia xii) Sh. Jasbir SinghS/o Sh. Harbans Singh, VPO Bakshiwala xiii) Sh. Joginder Singh S/o Balkar Singh, VPO Kalva Baran Road,Patiala 3.1 It is seen that some of these returned unserved. The relevant extract of the order is reproduce : The notices sent to the following debtors have been received unserved:- i) Sh. Harbans Singh S/o Sh. Manohar Singh VPO Faridpur ii) Sh. Foja Singh S/o Sh. Manohar Singh, VPO Ujjal Devi Garh Road, Patiala iii) Sh. Avtar Singh S/o Sh. Surjit Singh VPO Mohamed Pur, Patiala iv) Sh. Dharam Singh S/o Sh, Kaka Singh, VPO Panodia v) Sh. Jasbir Singh S/o Sh. Balkar Singh VPO Kalva
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vi) Sh. Ranbir Singh S/o Sh. Manohar Singh VPO Bakshiwala 3.2 The addition in view of the fact that the parties were not produced was made. It is seen that in the penalty proceedings also, the assessee offered a similar explanation. The record shows that the assessee as per the reply extracted in page 4 of the assessment order submitted that, “The assessee has submitted that all the debtors are farmers and they were dealing with him when he was running commission business. The payments were actually received from them which were outstanding since long. They have denied to have made these payments just to avoid enquiries by the Income Tax Department of the source of these payments.” The said explanation was found to be not tenable leading to the addition of Rs. 3,95,155/- which addition was sustained by the CIT(A) also. We find on going through the record and considering the submissions advanced in the assessment proceedings reiterated in the penalty proceedings that the submissions may not be sufficient for deleting the addition on merit, however, as far as the penalty proceedings are concerned we find that in the peculiar facts and circumstances of the present case, the assessee has explained that these farmers have avoided being present being reluctant to come before the AO and face questions and thus, he has not been able to persuade them. Considering the peculiar facts and circumstances, we find that the said explanation deserves to be accepted. The penalty is directed to be deleted after hearing the ld. Sr.DR. Said order was pronounced in the Open Court at the time of hearing itself. 4. In the result, appeal of the assessee is allowed. Order pronounced in the Open Court on 04.10. 2018.
Sd/- Sd/-
( अ�नपूणा� गु�ता ) ( �दवा �संह ) (ANNAPURNA GUPTA) (DIVA SINGH) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member “पूनम” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant - 1. ��यथ�/ The Respondent - 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6. आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar