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TMI Blog2019 (10) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment that the appellant was in possession of two properties there was no question of the appellant wilfully concealing the particulars of income in respect of these properties. 3. The learned deputy commissioner of income tax erred in concluding that the addition made on account of unexplained deposits in S.B account with Canara Bank, Kottayam amounted to concealment, overlooking the fact that it was appellant's late husband, who was handling the tax affairs and having lost him, there was no way by which the appellant could properly explain the source of deposit with evidence. 4. The learned deputy commissioner of income tax ought to have distinguished between an accidental omission and a wilful concealment, as also a failure to explain an item properly and the explanation having been made, the department not being satisfied with the explanation offered. 5. The learned deputy commissioner of income tax ought to have appreciated the circumstances under which the addition was agreed to, merely because the appellant had surrendered or agreed to an addition, it would not automatically go to conclude that the appellant had in fact concealed the particulars of her income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax matters. CIT (A) should have consider the human emotions behind the situation and treat the omissions as unintentional not as concealment. 11. Therefore the surrender of the amounts was not because they were income, but due to impossibility of proving the credits in view of the death of the appellant's husband. This admission can't be construed as concealment by any stretch of imagination 12. More over in the case of Late S Varadarajulu the Cochin bench of ITAT Cochin vide order dated 07.09.2012 held that : "It is well settled principle of law that all additions made in the assessment proceedings do not automatically result in levy of penalty, The assessing, authority is expected to reappreciate the evidence available on record independently in the penalty proceedings and thereafter if he comes to the conclusion that there was concealment of particulars of income or the tax payer has furnished inaccurate particulars with regard to that income penalty may be levied. In this case, admittedly, the tax payer expired in the month of September 2009. It is also not in dispute that the tax payer was expelled from the partnership firm on the allegation of misappropriatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he was not able to recollect the financial transactions in her bank account without the presence of her husband. The appellant took a lot of time to recover from that. If the CIT (A) had considered the situation from that point of view they did not conclude like that. 15. These and other grounds of appeal that may be raised during the course of appeal proceedings Your appellant prays that the penalty of Rs. 51,151/- levied u/s 271(1) (c) of the Income Tax Act 1961 be cancelled. 3. The facts of the case in the case of Smt. Thankamani Varadarajulu, ex partner of M/s. Parthas Textiles is the wife of Sri. S Varadarajulu, ex-partner of M/s Parthas Textiles, Kottayam, a related concern of M/s Parthas Textiles, Trivandrum, which was subjected to search u/s 132 of the Income Tax Act 1961 on 11.10.2007. In response to notice u/s 153C, the appellant filed a return admitting an income of Rs. 7,49,88/-. The assessment was completed on a total income of Rs. 9,20,385/-. Penalty proceedings u/s 271(1)( c) of the Income Tax Act 1961was initiated, in completing the assessment. According to the assessing officer, as per written submission filed by Sri. S Varadarajulu, it was mentioned that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 51,151/- u/s 271(1) (c) of the Income Tax Act 1961. 3.2 On appeal, the CIT(A) rejected the appeal of the assessee stating that stating that the assessee's husband's presence and ability to explain these items would have resulted in no addition at all, does not hold any ground in the cases of the assessee as she being an independent adult is responsible for her own action, particularly since she was and is the direct beneficiary of the investments. 3.3. Against this, the assessee is in appeal before us. 4. The grounds of appeals raised in the case of the assessee Smt. Anita Nagendran which are also common in nature except for change in figures read as follows: 1. The learned deputy commissioner of income tax erred in levying a penalty of Rs. 60,558/- u/s 271(1)(c)of the Income Tax Act 1961 in respect of certain deposits made in the bank account of the appellant, overlooking the explanations offered by the appellant. 2. The learned deputy commissioner of income tax overlooked the fact that these deposits were in the form of clearing cheques and the failure to explain the same with proper evidence was on account of the fact that the appellant's father, who was h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment asked the appellant to file the return and produce the supporting evidence. Hence the appellant filed a return based on her limited knowledge and produced the supporting evidences to the best of his knowledge. Since the return was filed at a time when the appellant was a shaken person, following the death of her father and differences in the family, she couldn't provide more attention to the tax matters. CIT (A) should have consider the human emotions behind the situation and treat the omissions as unintentional not as concealment. 9. Therefore the surrender of the amounts was not because they were income, but due to impossibility of proving the credits in view of the death of the appellant's father. This admission can't be construed as concealment, by any stretch of imagination 10. More over in the case of Late S Varadarajulu the Cochin bench of ITAT Cochin vide order dated 07.09.2012 held that: "It is well settled principle of law that all additions made in the assessment proceedings do not automatically result in levy of penalty. The assessing authority is expected to reappreciate the evidence available on record independently in the penalty proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of 10 years made an impression that the appellant got about 3 months to file the return after the death of her father and got enough time to produce evidences because she is an adult person. However the sudden demise of her father, the expulsion from the family and family business e.tc destroyed her financial and mental strength. In such a situation, even if she is an adult person, she was not able to recollect the financial transactions in her bank account without the presence of her father. The appellant took a lot of time to recover from that. If the CIT (A) had considered the situation from that point of view they did not conclude like that. 13. These and other grounds of appeal that may be raised during the course of appeal proceedings Your appellant prays that the penalty of Rs. 60,558/- levied u/s 271(1)(c) of the Income Tax Act 1961 be cancelled. 4.1 The facts of the case are that the assessee is the daughter of Sri. S Varadarajulu, ex-partner of M/s Parthas Textiles, Kottayam, a related concern of M/s Parthas Textiles, Trivandrum, which was subjected to search u/s 132 of the Income Tax Act 1961 on 11.10.2007. In response to notice u/s 153C, the assessee filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiles, Kottayam/Trivandrum, the files of the petitioner were also transferred from the assessing officer at Kottayam to Central Circle, Trivandrum. Apart from the fact that I am assessed to income tax for the last few years, my tax affairs were completely managed by my husband, S Varadarajulu. A search u/s 132 of the Income Tax Act 1961 took place on 11.10.2007. I lost my husband after a prolonged illness. Thereafter an assessment was completed on me and penalty u/s 271(1)(c) of the Income Tax Act 1961 was levied on me. I challenged the levy of penalty before Hon'ble CIT (A) III, Cochin and the Hon'ble CIT (A) III, Cochin confirmed the penalty vide order u/s 250 dated 20.02.2019. The order was communicated to me on 06.03.2019 and the appeal against the order was to be filed within 60 days (i.e. on 05.05.2019). There is a delay of 5 days in filing the appeal. It is submitted that I was abroad at that time and came back to India at the end of the March 2019. After coming back to India I had to give attention for few days to the business activities carried out by me. At the same time I had to appear before the Assessing Officer in Kottayam in relation to a summons received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. I was under the strong belief that "Form 36" is to be submitted electronically. Only on inquiry with your office on 03.05.2019 I came to know that the submission should be filed manually. Since the information was obtained afternoon it was not possible to submit the documents at Cochin on that date. Unfortunately the coming two days i.e., Saturday and Sunday the office of ITAT was not working. Due to the aforementioned reasons I could not submit the appeal within due date. It is submitted that the delay in filing the appeals is not deliberate and has happened due to the aforementioned circumstances. In these circumstances, I humbly pray that the Hon'ble ITAT may kindly condone the delay of 5 days in filing the appeal." 5.1 The Ld. AR has filed condonation petitions accompanied by an affidavit in the case of Smt. Anita Nagendran which reads as follows: "I am an assessee in the jurisdiction of the assessing officer at Kottayam. I am the daughter of late S Varadarajulu, Ex-partner of M/s Parthas Textiles, Kottayam. Following a search in the case of M/s Parthas Textiles, Kottayam/ Trivandrum, the files of the petitioner were also transferred from the assessing officer at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment orders. Thereafter the appeal documents were prepared and I had remitted the fee for appeal filing on 03.05.2019. I intended to file the same by 04.05.2019. I was under the strong belief that "Form 36" is to be submitted electronically. Only on inquiry with your office on 03.05.2019 I came to know that the submission should be filed manually. Since the information was obtained afternoon it was not possible to submit the documents at Cochin on that date. Unfortunately the coming two days i.e., Saturday and Sunday the office of ITAT was not working. Due to the aforementioned reasons I could not submit the appeal within due date. The assessment orders were not yet received and the time for filing the appeal also lapsed; now I am forced to file the appeal without submitting the assessment orders. It is submitted that the delay in filing the appeal is not deliberate and has happened due to the aforementioned circumstances. In these circumstances, I humbly pray that the Hon'ble ITAT may kindly condone the delay of 5 days in filing the appeal." 5.2 We have gone through both the condonation petitions. We find there is sufficient cause for filing the appeals in both the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculars of your income or furnished inaccurate particulars of such Income, You are hereby requested to appear before me at 03.30PM on 2I.0L2010 and show cause why an order imposing a penalty on you should not be made under section 71 of the Income-tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative you may show cause in writing on or before the said date which will be considered before any such order is made under section 271. Seal sd/- (S. MOHD. MmUSTAFA) Assistant Director of income-tax(lnv.), Tvm, Holding concurrent jurisdiction over Central Circle-2, Trivandrum 7.1 The Ld. AR submitted that the penalty initiated u/s 271(1)(c) was invalid for the reason that the default for which the penal action was taken has not been specified in the notice issued. The notice mentioned both the defaults viz. concealment of income and furnishing of inaccurate particulars of income. it was submitted that the Assessing Officer had not struck off the irrelevant portion of the penalty notice which was not applicable to the assessee and does not clearly mention whether he proposed to levy penalty for concealm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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