Veena vs Commissioner of Income Tax

Ajay Kumar Mittal, J.—Challenge in this petition filed under article 226/ 227 of the Constitution of India is for quashing the assessment order dated December 5, 2011, annexure P. 3 and order passed by the respondent-Commissioner of Income-tax-I, Jalandhar (CIT), dated March 28, 2013, annexure P. 6 in revision under section 264 of the Income-tax Act, 1961 (in short, "the Act"). A few facts relevant for the decision of the controversy involved as narrated in the petition may be noticed. The petitioner, an individual, was engaged in a small business of running a boutique and, thereafter, she was employed as a clerk with HDFC Bank, The Mall Road, Kapurthala branch. She filed her income-tax return for the assessment year 2009-10 on October 29, 2009, declaring the net taxable income of Rs. 1,32,000 which was processed as such under section 143(1) of the Act. On June 3, 2008, she opened a savings bank account in the said bank and the transactions started with effect from September 6, 2008, Shri Amit Kashyap was serving as manager in the said bank. He was under pressure to meet out the targets of sale of pure gold coins given to his branch. During the aforesaid period, a NRI customer of the said branch, Shri Tarlochan Singh, who was maintaining a NRE account with this bank, on his visit to India withdrew an amount of Rs. 25 lakhs in the month of September, 2008, for purchase of some property which, could not materialise. Tarlochan Singh could not redeposit the said amount in his NRE account as deposit of Indian rupees in the said account, was not permitted. He after being persuaded by the manager, Shri Amit Kashyap, agreed to invest for the purchase of pure gold coins from the bank. As the purchase of pure gold coins was not permitted in cash, the manager persuaded the petitioner to permit routing the said purchase transaction through her savings account and allow the cash belonging to Shri Tarlochan Singh to be deposited in her account and be routed for purchasing the pure gold coins for Shri Tarlochan Singh. The petitioner under the bona fide belief that there was nothing wrong in facilitating the said transaction, agreed to that arrangement and pursuant thereto an amount of Rs. 24,38,830 was deposited in her account on October 26, 2008, at the instance of Shri Amit Kashyap, manager which amount was, thereafter, utilised for purchase of the gold coins for and on behalf of Shri Tarlochan Singh. The petitioner was called upon by the Assessing Officer to explain the source of the amount in her account. The petitioner submitted the entire facts to the Assessing Officer. She also placed on record the affidavit of Shri Tarlochan Singh explaining the exact position. The Assessing Officer, after examining the record, treated the said amount as unexplained investment of the petitioner under section 69 of the Act and, vide his order dated December 5, 2011, annexure P. 3, assessed the income of the assessee at Rs. 25,71,000 and raised a consequential demand of Rs. 10,37,474 towards tax and interest in the hands of the petitioner. Aggrieved thereby, the petitioner filed an application under section 264 of the Act seeking revision of the order passed by the Assessing Officer. During the course of the revision proceedings, Shri Amit Kashyap, manager of the bank, in compliance with the summons issued under section 131 of the Act appeared before the respondent and furnished affidavit dated May 28, 2012, stating that in order to achieve the target of selling the gold coins from his branch, he persuaded the petitioner to permit to enroute the amount of Shri Tarlochan Singh through her account for purchase of the said coins as the purchase of coins was not permitted through the NRE account. The Commissioner of Income-tax, vide order dated March 28, 2013, annexure P. 6, dismissed the application for revision of the order passed by the Assessing Officer, making addition of Rs. 24,39,000. The petitioner submits that since no appeal lies against the said order, she is before this court through the present petition.

Learned counsel for the petitioner submitted that the affidavit dated August 2, 2011 (annexure P. 1), of Tarlochan Singh, son of Shri Gian Singh, from whom the amount had been received was filed before the Assessing authority and the affidavit of Shri Amit Kashyap, the bank manager with HDFC Bank, Kapurthala branch, dated May 28, 2012, annexure P. 2 was also filed. The source of cash deposit of Rs. 24,38,826 relating to purchase of gold coins by the petitioner on behalf of Tarlochan Singh was explained. The Assessing Officer, vide order dated December 5, 2011, annexure P. 3, and the Commissioner of Income-tax, while passing the order dated March 28, 2013, annexure P. 6, under section 264 of the Act, had completely ignored the same. Furthermore, the Commissioner of Income-tax had passed the order which is not a speaking one. Reliance was placed on the judgment of the apex court in Commissioner of Income Tax, Ernakulam Vs. P.K. Noorjahan (Smt), to submit that the addition under section 69 of the Act is within the discretion of the Assessing officer as, according to the words used in the said section, it was incumbent upon the Assessing Officer to consider the facts and circumstances of the case before making an addition of Rs. 24,39,000.

After hearing learned counsel for the petitioner, we do not find any merit in the writ petition.

It would be expedient to refer to section 264 of the Act which reads thus:

"264. Revision of other orders.--(1) In the case of any order other than an order to which section 263 applies passed by an authority subordinate to him, the Commissioner may, either of his own motion or on an application by the assessee for revision, call for the record of any proceeding under this Act in which any such order has been passed and may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit.

(2) The Commissioner shall not of his own motion revise any order under this section if the order has been made more than one year previously.

(3) In the case of an application for revision under this section by the assessee, the application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier:

Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period.

(4) The Commissioner shall not revise any order under this section in the following cases--

(a) where an appeal against the order lies to the Deputy Commissioner (Appeals) or to the Commissioner (Appeals) or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired or, in the case of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal, the assessee has not waived his right of appeal; or

(b) where the order is pending on an appeal before the Deputy Commissioner (Appeals); or

(c) where the order has been made the subject of an appeal to the Commissioner (Appeals) or to the Appellate Tribunal.

(5) Every application by an assessee for revision under this section shall be accompanied by a fee of five hundred rupees.

(6) On every application by an assessee for revision under this subsection, made on or after the 1st day of October, 1998, an order shall be passed within one year from the end of the financial year in which such application is made by the assessee for revision.

Explanation.--In computing the period of limitation for the purposes of this sub-section, the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.

(7) Notwithstanding anything contained in sub-section (6), an order in revision under sub-section (6) may be passed at any time in consequence of or to give effect to any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court.

Explanation 1.--An order by the Commissioner declining to interfere shall, for the purposes of this section, be deemed not to be an order prejudicial to the assessee.

Explanation 2.--For the purposes of this section, the Deputy Commissioner (Appeals) shall be deemed to be an authority subordinate to the Commissioner."

A reading of the above show that the assessee can move the Commissioner of Income-tax for revising the order passed by an authority within the period of one year from the date on which the order is communicated to him or when he comes to know of the order, whichever is earlier. If due to sufficient cause the assessee cannot file revision within the prescribed period, the Commissioner may condone the delay and admit the application even after expiry of that period.

The Assessing Officer, while making the addition of Rs. 24,39,000, vide order dated December 5, 2011, annexure P. 3, had noticed as under:

"To verify the facts, a letter was issued to the bank manager, HDFC Bank Ltd., Kapurthala, on September 13, 2011. In response to this letter, Shri Dinesh Sarna filed copies of two withdrawal vouchers filed in bank by S. Tarlochan Singh and a copy of deposit voucher of Miss Veena on October 4, 2011, the details of the withdrawal made by Shri Tarlochan Singh are as under:

The details of deposit made by Miss Veena on October 26, 2008.

From the above details, it is noticed that S. Tarlochan Singh withdrew Rs. 5 lakhs on September 4, 2008, and Rs. 20 lakhs on September 16, 2008, and gave the same amount to Miss Veena on September 16, 2008, for purchase of gold. Miss Veena deposited Rs. 24,39,000 only into her savings bank account on October 26, 2008. It is not clear why such huge amount was kept for one month and 10 days in her custody. As per the affidavit of S. Tarlochan Singh this amount was given to Miss Veena for purchase of gold. Instead of depositing she kept this amount in her house. The above explanation is not reliable. Secondly, deposited denomination of notes are not tallied with the denomination of notes withdrawn by S. Tarlochan Singh as mentioned above. To verify these facts, summon under section 131 was issued to Miss Veena, d/o Shri, Sham Lal, on October 10, 2011. The Inspector of this office has reported that she refused to accept this summon but she assured that she will visit the office at 2.30 p.m. on the same day but she did not attend this office till date.

Thirdly, she filed the return of income for the said year declaring income of Rs. 1,32,000 after claiming expenses of Rs. 18,000 from the job work of boutique. Her counsel filed a written reply on August 23, 2011, which stated that being a bank employee and to achieve the target of gold sale in Diwali period she received a sum of Rs. 25 lakhs from S. Tarlochan Singh, son of Shri Gian Singh, Village Thekriwal PO Nurpur District Kapurthala, but she did not declare any salary income received from the bank. A letter bearing No. 1636, dated September 13, 2011, issued to the manager, HDFC Bank Ltd., MGN Public School, Kapurthala, who was requested to intimate the exact date of her joining and relieving. In response to this query her counsel filed a written reply on October 4, 2011, stating therein that Miss Veena was never employee of the bank at that time now she is employee with that bank. Subsequently, a letter was issued to Miss Veena, d/o Shri Sham Lal, H. No. 59/4, Deol Nagar, Nakodar Road, Jalandhar, on November 25, 2011, in which she was requested to intimate the date of joining and relieving from the said branch, total salary drawn during the said year and a copy of the appointment letter of the bank fixing the case for hearing on November 30, 2011, but no reply has been received so far. It is clear that the assessee was not the bank employee in the said year and wants to say nothing in this matter.

From the above facts, it is clear that the written submissions filed by her counsel on different dates are totally baseless and after thought stories when onus lies on the assessee to prove its genuineness and creditworthiness of the person from whom the said amount was received but she has received but she has failed to discharge the onus of proving the genuineness and creditworthiness of the amount so received by her. Her counsel''s written submissions filed during the assessment proceedings are not satisfactory as the submission that she was a bank employee and received the cash in that capacity had itself been found to be untrue. So the total cash deposits of Rs. 24,39,000 in her savings bank account that has been used to purchase gold from the bank are unexplained, this amount is added in her returned income under section 69 of the Income-tax Act and penalty proceedings under section 271(1)(c) of the Income-tax Act have been initiated for furnishing inaccurate particulars of income."

Moreover, while rejecting the revision filed under section 264 of the Act, the Commissioner of Income-tax, vide order dated March 28, 2013, annexure P. 6, had observed as under:

"4. I have carefully considered the assessment order passed by the Assessing Officer, the explanation which was given by the assessee at that time, the submissions made by the assessee/assessee''s counsel during the proceedings under section 264 and even the submissions made by Shri Amit Kashyap. I may observe here that the assessee could not present herself during the proceedings before the undersigned. The reasons stated to be for the same were that the assessee is already married and not present at Kapurthala or Jalandhar.

Position being so, I find that practically there is not much difference in the situation which has been presented before me and that which existed before the Assessing Officer. Further, in the absence of the assessee herself, it was not possible to confront the assessee with Shri Amit Kashyap who has tried to own the responsibility for manoeuvring the entire transaction. I am, therefore, unable to consider the application of the assessee favourably and the same stands rejected."

It is clear from the orders passed by the Commissioner of Income-tax and the Assessing Officer that in spite of opportunity having been provided to the assessee to appear before them, she did not chose to appear and, therefore, Shri Amit Kashyap could not be confronted to the assessee who had tried to own the responsibility for manoeuvring the entire transaction. It may be noticed that on a query being put to the counsel for the petitioner as to why did the petitioner enter into transaction on behalf of Tarlochan Singh, who was stranger and had no relationship with the petitioner, learned counsel was unable to give any reply much less satisfactory reply. In such circumstances, no illegality or perversity could be pointed out in the orders passed by the Assessing Officer and the Commissioner of Income-tax. Moreover, as regards the judgment relied upon by the learned counsel for the appellant, in the facts and circumstances of that case, the provisions of section 69 were not attracted. Therefore, the argument and reliance on the said judgment does not come to the rescue of the petitioner. In view of the above, finding no merit in the petition, the same is hereby dismissed.