THE ITO 25(3)(4), MUMBAI v. SMT. LALITA VINOD AVIANI, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI J. SUDHAKAR REDDY (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) ITA NO. 3939/MUM/2007 ASSESSMENT YEAR-2002-03 THE ITO 25(3)(4) PRATYAKSHAKAR BHAVAN BKC BANDRA (E) MUMBAI-400 051 VS. LALITA VINOD AVIANI 402 CHALLANGER NO.1 THAKUR VILLAGE KANDIVALI(E) MUMBAI-400 101 PAN - ACZPA9002H (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI KESHAVE SAXENA RESPONDENT BY: NONE O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED A GAINST THE ORDER DT. 14.3.20078 PASSED BY THE LD. CIT(A)-XXIV MUMBA I FOR THE ASSESSMENT YEAR 2002-03. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE THEREFOR E WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND SHALL DISPOSE OF TH IS MATTER EX PARTE ON MERIT. 3. THE ASSESSEE IS A LABOUR CONTRACTOR. SHE FILED RETURN OF INCOME ON 31.10.2002 SHOWING TOTAL INCOME OF RS. 2 08 850/-. SHE HAD TAKEN UNSECURED LOANS OF RS. 9 09 150/- DURING THE YEAR. THE ASSESSEE FILED AFFIDAVIT CUM DECLARATION ON 23.2.2005 AND ACCEPTED THAT THE SAID SUM OF RS. 9 09 150/- WAS HER INCOME FROM UNDISCLOSED SOUR CES. THE AO THEREFORE ADDED IT U/S. 68 IN THE ASSESSMENT ORDER U/S. 143(3) DT. 28.2.2005. ITA NO. 3939/M/07 2 4. THE ASSESSEE DID NOT RESPOND TO THE LETTER DT. 1 4.6.2005 VIDE WHICH SHE WAS ASKED TO PRESENT HER CASE ON 27.6.2005. WI TH RESPECT TO IMPOSITION OF PENALTY THE ASSESSEE DID NOT FURNISH ANY EXPLANATION THE AO IMPOSED PENALTY OF RS. 2 72 745/-. 5. BEFORE THE LD. CIT(A) THE LD. COUNSEL FOR THE AS SESSEE SUBMITTED AS FOLLOWS: THE APPELLANT COULD NOT CLARIFY THE NATURE AND SOU RCE OF DEPOSITS AS SHE WAS SEVERELY SICK DURING THAT PERIO D. SHE WAS UNDERGOING THE TREATMENT OF BLOOD CANCER. UNDE R SUCH PHYSICAL AND MENTAL CONDITION SHE WAS UNABLE TO CL ARIFY THE NATURE AND SOURCE OF DEPOSITS. THE LD. AR HAS FILE D DOCUMENTS OF ABHIJIT HOSPITAL NANAVATI HOSPITAL AN D HINDUJA HOSPITAL REGARDING HER TREATMENT OF CANCER. HE FUR THER SUBMITTED THAT RELEVANT RECORDS WERE LOST/MISPLACED DURING THE COURSE OF SHIFTING OF RESIDENCE. THE APPELLANT HAD AGREED TO OFFER THE AFORESAID CREDITS OF RS. 9 09 150/- FO R TAXATION TO BUY PEACE ON THE BELIEF THAT NO PENALTY WOULD BE LE VIED BY THE AO. SHE FILED AFFIDAVIT ALSO BEFORE THE AO IN THIS REGARD. HE THEREFORE PLEADED THAT THE PENALTY ORDER SHOULD BE CANCELLED. HE RELIED ON THE JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF SIR SHADILAL SUGAR MILLS VS CIT (1987) 168 ITR 705 AND SOME OTHER JUDGEMENTS. 6. THE LD. CIT(A) HELD AS FOLLOWS: I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF LD. AR. I AGREE WITH HIM THAT THIS WAS NOT A PROPER CASE FOR IMPOSITION OF PENALTY. A PERSON CO MPLETELY BREAKS WHEN DEADLY DISEASE LIKE LEUKEMIA IS DIAGNOS ED. THE APPELLANT AND HER FAMILY MUST HAVE UNDERGONE UNDER VERY DIFFICULT PHASED OF TIME. THE OFFER OF DEPOSITS FO R TAXATION UNDER SUCH SITUATION FOR BUYING PEACE SHOULD NOT BE EQUATED WITH CONCEALMENT OF INCOME. THE JUDGEMENT OF HONB LE SUPREME COURT IN THE CASE OF SIR SHADILAL SUGAR MIL LS VS CIT (1987) 168 ITR 705 IS FULLY APPLICABLE TO THE FACTS OF THE CASE. THERE CAN BE ANY NUMBER OF REASONS FOR OFFER OF SOM E AMOUNT AS INCOME. EVERY SUCH OFFER CANNOT AMOUNT TO CONCE ALMENT. CONSIDERING THE FACTS OF THE CASE I CANCEL THE PEN ALTY ORDER. 7. WE ARE IN AGREEMENT WITH THE ORDER OF THE LD. CI T(A). CONSIDERING THE FACTS OF THE CASE THAT THE ASSESSEE HAD BEEN DI AGNOSED FOR LEUKEMIA ITA NO. 3939/M/07 3 AND HAD AGREED TO OFFER CREDIT OF RS. 9 09 150/- FO R TAXATION TO BUY PEACE WITH THE DEPARTMENT. THE ASSESSEE HAD SUBMITTED BE FORE THE LD. CIT(A) THAT OFFER FOR TAXATION WAS MADE ON THE BELIEF THAT NO PENALTY WOULD BE LEVIED BY THE AO. IN THESE CIRCUMSTANCES CONSIDERI NG THE FACT THAT THE ASSESSEE WAS SUFFERING FROM A TERMINAL DISEASE AND HAD PLEADED THAT SHE HAD ACCEPTED THE SUM OF RS. 9 09150 AS INCOME FROM UNDISCLOSED SOURCES BEFORE THE LOWER AUTHORITIES IN DESPERATION WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE REVENUES APPEAL. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON THIS 28 TH DAY OF JANUARY 2010. SD/- SD/- (J. SUDHAKAR REDDY) (ASHA VIJA YARAGHAVAN) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI DATED 28 TH JANUARY 2010 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR H BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR I.T.A.T MUMBAI ITA NO. 3939/M/07 4 DATE INITIALS 1 DRAFT DICTATED ON: 27.1.2010 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 27.1.2010 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/ PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: _________ ______ 9. DATE OF DISPATCH OF ORDER: _________ ______