ACIT, CHENNAI vs. S.SUJATHA, CHENNAI

आदेश / O R D E R

PER CHANDRA POOJARI, ACCOUNTANT MEMBER These appeals by Revenue are directed against different orders of Commissioner of Income Tax (Appeals)-I, Chennai for the above assessment years.

I.T.A.Nos.956 to 959/Mds/2013. :- 2 -:

The facts of the case are that consequent to search action in the

case of Shri. K. Sundarraj notice u/s.153C was issued to the assessee.

In compliance, the assessee filed return of income for the assessment

year 2005-06 admitting a total income of �2,10,000/-. The Assessing

Officer made an addition of �7,39,800/- towards unexplained bank

deposits. Later penalty proceedings u/s.271(1)(c) towards these

additions were initiated. In the course of penalty proceedings, the

assessee has not offered any explanation regarding source of bank

deposits inspite of giving adequate opportunity of hearing to the

assessee. The penalty of �2,46,284/- was levied u/s.271(1)(c) of the

Act. Aggrieved, the assessee preferred an appeal before the

Commissioner of Income Tax (Appeals).

2.1 The Commissioner of Income Tax (Appeals) deleted the penalty

by placing reliance on the judgment of the Supreme Court in the case

of CIT vs. Suresh Chandra Mittal 251 ITR 9. Against this, the Revenue

is in appeal before us.

record. If any amount is deposited in bank account of the assessee,

the assessee has to explain the source from which it was deposited.

I.T.A.Nos.956 to 959/Mds/2013. :- 3 -:

In the present case, the assessee is not able to explain the deposits.

According to the assessee, the assessee is not educated and return

subsequent to the search was filed by a Chartered Accountant who

obviously has not made out a proper disclosure. The intention of the

assessee was to make a proper disclosure, come out clean and pay the

taxes. However, it was submitted that it was only the mistake of the

Chartered Accountant and not of the assessee in making proper

disclosure. Later the assessee accepted for the addition to purchase

peace and to avoid prolonged litigation. In our opinion, this contention

of the assessee is totally misconceived. It is the duty of the assessee

to disclose all income truly and fully while filing the return of income.

The assessee cannot shift his responsibility to his Chartered

Accountant. Further, the assessee stated it was ill advised by the

Chartered Accountant without mentioning the name of the Chartered

Accountant. It is not brought on record what advice was given by the

Chartered Accountant on this issue. In our opinion, the assessee has

concealed particulars of income and also not given any bonafide

explanation for this. This case is squarely covered by the judgment of

Supreme Court in the case of Mak Data (Pv) Ltd. vs. CIT 358 ITR 593

wherein it was held that

I.T.A.Nos.956 to 959/Mds/2013. :- 4 -:

‘’ the assessee had only stated that it had surrendered the additional sum of Rs. 40,74,000 to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the Income-tax Department. The statute did not recognize those types of defences under Explanation 1 to section 271(1)(c) of the Act. The surrender of income in this case was not voluntary in the sense that the offer of surrender was made in view of detection by the Assessing Officer in the search conducted in the sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it was clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The Assessing Officer had recorded a categorical finding that he was satisfied that the assessee had concealed the true particulars of income and was liable for penalty proceedings under section 271 read with section 274 of the Act. There was no illegality in the Department initiating penalty proceedings’’.

Hence, we are inclined to reverse the order of the Commissioner of

Income Tax (Appeals) and restore the order of the Assessing Officer in

levy of penalty u/s.271(1)(c) of the Act. In result, the appeal of the

Revenue in ITA No.956/Mds/2013 is allowed.

In this year, the facts of the case are that the assessee had

deposited �11,00,000/-, out of which �6,00,000/- deposited in cash

and �5,00,000/- deposited by Cheque in the ICICI bank account

I.T.A.Nos.956 to 959/Mds/2013. :- 5 -:

no.602601501262. The assessee failed to explain the source of

deposit. An addition made on this count and later penalty

u/s.271(1)(c) was levied at �3,69,947/-. Since facts in this year is

similar to assessment year 2005-06, as discussed in the earlier

assessment year 2005-2006, we are inclined to reverse the order of

the Commissioner of Income Tax (Appeals) and restore the order of

the Assessing Officer in levy of penalty u/s.271(1)(c) of the Act. In

result, the appeal of the Revenue in ITA No.957/Mds/2013 is allowed.

The facts of the case are that the assessee filed her return of

income on 31.03.2008 disclosing a total income of �6,89,650/-. The

assessment was completed u/s.143(3) on 07.12.2009 assessing the

total income at �47,89,652/-. The Assessing Officer made an addition

of �40,00,000/- relating to credits in ICICI bank account number

602601501262. The assessee was unable to account for these credits

other than to submit that this money belonged to her ex-husband Shri.

S. Sathyanarayana. Aggrieved, the assessee preferred an appeal

before the Commissioner of Income Tax (Appeals).

I.T.A.Nos.956 to 959/Mds/2013. :- 6 -:

5.1 The Commissioner of Income Tax (Appeals) observed that the

records relating to Shri. Sathyanarayana wase called for and examined.

As per Commissioner of Income Tax (Appeals) observation, on

17.08.2009, the Assessing Officer had called for profit and loss

account, balance sheet, details relating to capital gains, evidence for

agricultural income, payment of taxes from assessee. From the noting

on 27.11.2009 in assessment records, it was the Commissioner of

Income Tax (Appeals) observed that Shri. A. Balasubbramaniann was

the authorized representative for assessee and Shri. Subramanian no

longer represents the assessee. Further, the Commissioner of Income

Tax (Appeals) observed that the Assessing Officer on 22.12.2009, he

made a test check and the case was heard. The Chartered Accountant

filed LIC receipts, TDS certificates, bank statements of ICICI, IOB

bank, Municipal Tax receipts, statements of accounts and a note on

agricultural income. In the statement of affairs, the Commissioner of

Income Tax (Appeals) found that the last item on the asset side

narrates deposit in the account of the assessee at �40,00,000/-.

Accordingly, he deleted the addition. Against this, the Revenue is in

appeal before us.

I.T.A.Nos.956 to 959/Mds/2013. :- 7 -:

record. In our opinion, how the amount of �40,00,000/- has been

considered in the hands of ex-husband is not on record. In our

opinion, it is appropriate to remit the issue back to the Commissioner

of Income Tax (Appeals) to give reasons on what basis he came to

the conclusion that it was shown in the hands of ex-husband. Hence,

this issue is remitted back to the file of the Commissioner of Income

Tax (Appeals) for fresh consideration. In the result, the appeal of the

Revenue is partly allowed for statistical purposes.

ITA No.959/Mds/2013, assessment year 2007-2008.

respect of addition made towards �40,00,000/- as unexplained cash

and bank deposits. Since the issue of quantum addition for the

assessment year 2007-08 in ITA No.958/Mds/2013 is remitted back to

the file of the Commissioner of Income Tax (Appeals) for fresh

consideration, accordingly, levy of penalty issue is also remitted back

to the file of the Commissioner of Income Tax (Appeals) to consider

the same after adjudicating the quantum addition of the said amount.

The ITA No.959/Mds/2013 is partly allowed for statistical purposes.

I.T.A.Nos.956 to 959/Mds/2013. :- 8 -:

Order pronounced on Thursday, the 9th day of July, 2015, at Chennai.

Sd/- Sd/- (वी. दुगा� राव) (चं� पूजार� ) V. DURGA RAO (CHANDRA POOJARI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य/ ACCOUNTANT MEMBER

चे�नई/Chennai. �दनांक/Dated:09.07.2015. KV आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2.��यथ�/ Respondent 3. आयकर आयु�त (अपील)/CIT(A) 4. आयकर आयु�त/CIT 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.