TMI Blog2019 (9) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... icult to rope in the assessee for hold guilty of any kind of non-compliance. In this case we are quite persuaded by the plea that penalty in the case of the assessee should not be levied as assessee had a reasonable and bonafide belief in terms of section 273B, that there had been no violation of notice u/s 142(1) for non-compliance, as assessee kept on reiterating before the authorities below that the document does not contain her signature nor mentions any name of the bank, and for this reason, she was legally advised that she is not competent to sign the consent letter. We are in tandem with such a contention that if any person is acting upon a legal advice, then he/she believes in such advice that there is no violation of law. Such an act definitely falls in the realm of reasonable and bona fide belief, as any prudent or reasonable person gets persuaded by the legal advice, in a judicial or quasi judicial proceedings or any action which may have any civil consequence. If assessee had not signed the consent waiver form, based on legal advice then she did had a bonafide belief. Since, this aspect has not been seen by the Assessing Officer, therefore, we are of the opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice issued under section 142(1) of the Act. 3. That the Commissioner of Income Tax (Appeals) erred on facts and in law in holding that the appellant failed to co-operate in the investigation proceedings by refusing to sign the consent-form , without appreciating that the appellant was not at all competent to sign such form. 4. That the Commissioner of Income Tax (Appeals) erred on facts and in law in not appreciating that no addition had been made in the assessment order passed under section 153(C)/143(3) of the Act, wherein the assessing officer categorically acknowledged that no information was available with the department in respect of the alleged foreign bank account. 5. Without prejudice, that the Commissioner of Income Tax (Appeals) failed to appreciate that penalty under section 271(1)(b) r.w.s. 273B of the Act was even otherwise not leviable since there existed reasonable cause for not furnishing the consent-form sought by the assessing officer. Besides this, the assessee has also raised following as additional ground of appeals in all the appeals: - 1. That on the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sign the consent form, in case the assessee is not in possession of requisite details. Similar consent form was received from ADIT (Inv.) DDIT (Inv.), Unit-II (2), New Delhi, vide letter dated 15.04.2013 and 18.07.2013, respectively. In response to the said letter/notice dated 15.04.2013, the assessee vide letter dated 07.05.2013, submitted that, she did not maintain any foreign bank account with HSBC, Geneva, and therefore, information/documents required could not be furnished; and it was further stated that as per legal advice received by her, she was not at all competent to sign the consent/declaration form in respect of the same as bank account does not belong to her. Further, assessee vide letter dated 24.07.2013, filed a duly signed a consent form with respect of one foreign bank account, admitting that she had maintained with HSBC, London, bearing account no. 31628879. Thereafter, again similar notice was issued by the Assessing Officer dated 18.07.2013; and in response assessee again vide letter dated 11.09.2013 filed on 13.09.2013, clarified that she did not maintain any bank account with HSBC, Geneva, therefore, the information /document required to be furnished is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een incorporated from pages 3 to 6 of the assessment order. In nutshell, assessee reiterated that she has duly complied with all the notices and not only that, she has filed the reply and also given the reasons as to why consent letter could not be signed by her. 6. Ld. CIT(A) has confirmed the penalty based on certain general observations that such kind of cases are not simple cases, but all are suspected tax evasion cases where people have kept illicit funds in the overseas bank. The suspected persons were required to sign consent letter to verify the truth of the allegation against them and it is the duty of every citizen of India to co-operate and join the investigation to ascertain the truth. Refusal to sign the consent form tantamount to refusal to join investigation and therefore, the assessee has violated the said provision and it is immaterial whether she has opened any bank account or not. According to him, such refusal entails penal consequences. However, nowhere there is any finding by him that, there is any material indicating assessee has any such bank account in HSBC Geneva or that assessee has failed to comply with notice dated 05.08.2013. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, if assessee has duly complied with notice and had clearly given her clarification regarding not signing of consent form, then how the Department can allege that there has been non-compliance by the assessee. Not signing of consent form cannot be the ground for levy of penalty, especially when assessee, not only before the Investigation Wing but also before the Assessing Officer had stated that she is not competent to sign the consent form as she does not have any such bank account with the Switzerland. In respect of various contentions, he relied upon the catena of judgments; Firstly, on the point that no penalty u/.271(1)(b) in respect of foreign bank account can be made simply on the ground that consent waiver has not been signed and; Secondly, no penalty u/s.271(1)(b) can be levied when assessment year has been passed u/s.143(3) the list of such judgments are as under: Re: No Penalty' under section 271(1)(b) of the Income Tax Act, 1961 in In respect of foreign Bank account 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. Copy of decision of Ahmedabad Bench of the Tribunal in the case of Nemichand Arvindkumar (HUF) vs. ITO: ITA No. 2541 of 2011 14. Copy of decision of Chennai Bench of the Tribunal in the case of Sardarmal Kothari vs. ACIT: ITA No.2104 of 2012 15. Copy of decision of Allahabad Bench of the Tribunal in the case of Pawan Kumar Didwania and Ors. Vs. ACIT : ITA No.187 of 2014 16. Copy of decision of Jodhpur Bench of the Tribunal in the case of Parmeshwari Textiles vs. ITO: 146 Taxman 38 8. On the other hand, learned Department Representative strongly relied upon the order of the ld. CIT (A) and submitted that non-signing of consent form amounts to non-compliance, because assessee was specifically asked to sign the consent form so that proper inquiry investigation can be done. Even if assessee was not maintaining any bank account in HSBC Geneva, then also to ascertain the truth and to cooperate with investigation, assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no mention about HSBC Pvt. Bank (Suisse) of SA, Geneva, Switzerland; nor there is any information or annexure about any amount deposited in the said bank account. There is no whisper even in the assessment order that there was any amount which has been mentioned in the alleged bank account whose information was received to the Department. In the said form, the name of the assessee including date of birth, place of birth, nationality, gender, etc., date of creation is mentioned as 30.09.2006 and the postal address of the assessee has been mentioned. Once this information was confronted to the assessee during her statement recorded u/s. 132(4), she has stated that apart from certain bank account in India she is maintaining one bank account abroad which was with HSBC London. The exact question and answer are reproduced here under: Qn. 2. Please furnish the details of all bank accounts maintained by in India or abroad? Ans. The list of Indian bank account maintained by me has already been provided by my father. I have also maintained a bank account abroad the detail of which is as under: 10.2 Thereafter, Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was shown as being my account from LGT bank Geneva. I have no knowledge of this unsigned document which does not even have the bank name on it. Q5. As per the details shown to you the date of creation of this account mentioned is 20'h September, 2006. Were you in Switzerland in F.Y 2006-07? Ans. I was not in Switzerland in that F. Y 2006-07.1 have submitted the details of my foreign travel vide letter dated 17.11.2014. Q6. After coming to know that your name is appearing in a bank account. Have you visited Switzerland? Ans. I have submitted the details of my foreign travel vide letter 17.11.2014. I travel extensively for business but I have not visited in 2011-12 and 2012-13 after recording of my statement on 09.11.2011. Q7. Have you visited Switzerland in last 8 years? If yes give the details and the purpose of such visit (s)? Ans. I will verify and submit the details by 15.12.2014. Q8. Have you ever signed any document pertaining to opening of any account outside India especially HSBC bank Geneva? Ans. I have opened an accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account opened in LGT bank Geneva. In reply thereto I said that I haven t opened any account in LGT bank Geneva. I haven t made any communication thereafter with LGT bank Geneva, since, I have no account in LGT bank Geneva. Q16 I am giving you the copy of the document/information which was shown to you on 09.11.2011. Please acknowledge the same and give your comments. Ans. I have today received a copy of the unsigned document which was earlier shown to me on 09.11.2011. As stated above, this document does not contain name of any bank account. I am not aware how my name and address appear on this piece of paper. Q17 Have you made any communication with HSBC bank Geneva pertaining to this account after the date of search? Ans. No, I haven t made any communication with HSBC bank Geneva in relation to this document after the date of search. As stated earlier this document was shown to me as relating to LGT bank Geneva and not HSBC bank Geneva. Q18. Have you made any communication with LGT bank Geneva pertaining this account after the date of search? Ans. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .25 Your name and other particulars are appearing in a bank account which is located outside India. Don 7 you think as a responsible citizen of India you should have applied for the copy of the document? Ans. Since the paper was unsigned and didn t contain name of any bank and I denied having any account in LGT bank Geneva, I didn t ask for copy of the said paper. Q.26 On 15.04.2013 summons were issued to you along with a consent waiver form from HSBC bank Geneva wherein you were requested to help the government to get full details/particulars relating to the information which was shown to you on 09.11.2011. By this it was made categorically clear to you that the information pertained to a bank account for which the consent waiver forms were sent to you. Apparently vide letter 07.05.2013 you have submitted that you are not at all competent to verify/sign the declaration forms. Since, the particulars' in the document was matching with your particulars in India, don 7 you think as a responsible citizen you should have signed the consent waiver form and helped the Government of India to get a true and fair details of the account in which your ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Q30 When the government is willing to help you, to verify under what circumstances your name is appearing in a foreign bank account, don t you think as a responsible citizen you should sign the consent waiver form and let the government get full particulars. If there will be no account then information stating the same will be received from HSBC bank Geneva and no prejudice will be caused to you. In this regard it is incomprehensible what makes you not to sign the consent waiver form. Ans. I am advised that since I have no bank account with HSBC Geneva, I am not competent to sign any such consent waiver form. Q31 I am giving you final opportunity and I am giving you a consent waiver form. Please sign it and help the government. Ans. Please give me some time to seek legal advice and I will inform by next week. [Emphasis in bold is ours] 10.4 From the perusal of the above statement it is quite palpable that:- Firstly, the assessee was shown the copy of the same document by the search team to which she has stated that she was not shown any paper relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... every thing, then without any cogent material or specific information in the document about any undisclosed amount or the name of the bank, etc., how assessee can be held that she has thwarted the investigation. At least there has to be some kind of the document or material confronted to the assessee that indicate assessee s statement cannot be believed. As stated above the document does not even indicate whether this is a bank account in LGT bank or HSBC bank in Geneva. This itself shows that the information was incomplete and Department was not even sure that the alleged account belongs to which bank. From the perusal of the consent waiver form, it is seen same has been addressed to some counsel in Switzerland of HSBC Pvt. Bank (Suisse) of SA, Geneva, Switzerland. If the document itself does not indicate which bank it pertains to, then where is the question of assessee signing any consent letter form for any bank account with HSBC Geneva? The information of one foreign account maintained by the assessee, i.e., HSBC London has been duly provided for which she has already signed consent letter form. Thus, what is transpired from the assessment order, it cannot be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttend the office of the undersigned at 11:30 AM on 13.08.2013 along with the above mentioned information. No further adjournment will be granted. Statutory notices u/s.142(1) of the I.T. Act, 1961 is also enclosed. The above information is required u/s. 142(1) of the Income Tax Act, 1961. Please note that in case of non compliance, penal provision in terms of penalty/prosecution under the Income Tax Act, 1961 would be initiated. Yours faithfully, Enclosed : Blank Consent Letter (2 pages) (G.P. Singh) Asst. Commissioner of Income Tax, Central Circle-2, New Delhi. 12. The assessee as discussed above, in response has stated that she had duly responded to such a notice. The documents which was required to be furnished was first of all was not in possession of the assessee at all; and assessee has categorically stated that such bank account was never maintained by her nor she has any kind of connection, therefore, she has been legally advised that she has no authority to sign the consent letter. 13. In our humble opinion and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is any specific information that assessee has bank account with HSBC Geneva, then it is very difficult to rope in the assessee for hold guilty of any kind of non-compliance. As sated above, the document as is discernable from the assessment order does not mention any name of the bank and it is also not clear whether the information received was with respect to HSBC Geneva bank account or LGT bank account. In such a situation signing of consent letter form for HSBC Geneva bank account tantamount to rowing and fishing inquiry. In any case when no addition whatsoever, protective or substantive has been made by the Assessing Officer and the return of income of the assessee has been accepted on the assessed income, then where is the issue of assessee not complying with the notices for inquiry before assessment? Thus, in our opinion in such a situation it would be very difficult to justify the levy of penalty for non compliance, especially when inquiry by the Assessing Officer is circumscribed to the material found during the course of search and when there is no specific document or information that assessee was maintaining any kind of account with HSBC Geneva. There is no provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on assessment record or Assessing Officer had any document which mentions the bank name in the document or was there any annexure indicating that assessee had any bank account with HSBC, Geneva, Switzerland, then it must be placed before us. Accordingly, the matter was again listed for limited clarification on 1.03.2019. After giving two opportunities to the Department, Assessing Officer has filed a letter dated 6.03.2019, which was annexed with one document. This document is the same as has been scanned and taken into consideration in the assessment order by the Assessing Officer. From this also, it can be inferred that no bank details are available with the Assessing Officer, bearing bank name of HSBC, Geneva. 16. Be that as may be, here in this case we are quite persuaded by the plea of Mr. Vohra that the penalty in the case of the assessee should not be levied as assessee had a reasonable and bonafide belief in terms of section 273B, that there had been no violation of notice u/s 142(1) for non-compliance, as assessee kept on reiterating before the authorities below that the document does not contain her signature nor mentions any name of the bank, and for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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