K.Periasamy, Tiruppur vs Assessee

Shri K. Periasamy, Karaikattu Thottam, The Income Tax Officer, Peruntholuvu Post, v. Ward - I(6), Goundempalayam, Tirupur. P.K. Palayam, Tirupur - 641 665.

PAN : AFSPP 9738 H (अपीलाथ+/Appellant) (,-यथ+/Respondent)

अपीलाथ+ क. ओर से/Appellant by : Sh. T. Banusekar, CA ,-यथ+ क. ओर से/Respondent by : Sh. P. Radhakrishnan, JCIT

सन ु वाई क. तार ख/Date of Hearing : 01.06.2015 घोषणा क. तार ख/Date of Pronouncement : 30.06.2015

आदे श /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

This appeal of the assessee is directed against the order of

the Commissioner of Income Tax (Appeals)-I, Coimbatore, dated

10.01.2014, confirming the penalty levied by the Assessing Officer

under Section 271(1)(c) of the Income-tax Act, 1961 (in short 'the

Act').

2 I.T.A. No.582/Mds/14

2. Sh. T. Banusekar, the Ld. representative for the assessee,

submitted that the Assessing Officer made an addition of

`5,73,890/- in respect of the fixed deposit made in the bank account

and the interest accrued on the deposits. According to the Ld.

representative, the assessee has offered `3,00,000/- towards

opening cash balance, therefore, the assessee has not furnished

any inaccurate particulars. According to the Ld. representative,

inadvertently the assessee omitted to include the interest income of

`2,24,744/- from the fixed deposits. However, the same was also

offered for taxation. The Ld. representative further submitted that a

cash deposit was made in the bank account out of the drawings

made by the assessee from the partnership firm in which the

assessee was a partner. According to the Ld. representative, the

CIT(Appeals) without independently appreciating the matter,

confirmed the penalty levied by the Assessing Officer.

3. On the contrary, Sh. P. Radhakrishnan, the Ld. Departmental

Representative, submitted that the Assessing Officer found that a

cash deposit in Savings Bank account maintained by the assessee.

When the Assessing Officer called for explanation with regard to

deposit made in Savings Bank account, the assessee could not

explain satisfactorily the source for making cash deposit. Therefore, 3 I.T.A. No.582/Mds/14

the Assessing Officer made addition to the extent of `3,00,000/- to

the total income. The Ld. D.R. further pointed out that the assessee

has also received interest from fixed deposits and KCC deposits.

The interest was not disclosed to the Department. Therefore,

according to the Ld. D.R., another addition of `2,53,890/- was made

by the Assessing Officer. In the absence of any explanation,

according to the Ld. D.R., the CIT(Appeals) confirmed the same.

4. We have considered the rival submissions on either side and

perused the relevant material on record. From the penalty order it

appears that the assessee has not disclosed the interest incomes of

`2,24,744/- from fixed deposits and also `29,146/- from Savings

Bank account, which were offered for taxation by the assessee.

The assessee has also made cash deposit to the extent of

`29,37,300/-. However, the Assessing Officer made an addition of

only `3,00,000/-. The claim of the assessee is that the money

drawn from partnership firm M/s Sri Chakra Colours was used for

deposit in the bank account. However, no material is available on

record to show that the cash withdrawn from the partnership firm

was deposited in the bank account. The CIT(Appeals) found that

the assessee offered `3,00,000/- towards opening cash balance.

The CIT(Appeals) has not discussed anything about the 4 I.T.A. No.582/Mds/14

concealment of income or furnishing of inaccurate particulars.

Unless and until the CIT(Appeals) came to a conclusion that the

assessee concealed any part of income or furnished inaccurate

particulars, penalty cannot be levied. The CIT(Appeals) without

much of discussion came to a conclusion that the Assessing Officer

brought out on record that the assessee did not intend to disclose

the fixed deposit account and KCC account at Corporation Bank.

This Tribunal is of the considered opinion that the CIT(Appeals)

being the first Appellate Authority, has to re-appreciate the material

available on record and is expected to record a specific finding, the

nature of income which was concealed by the assessee or the

particulars which were furnished by the assessee inaccurately. This

Tribunal is of the considered opinion that the CIT(Appeals) has to

apply his mind and pass a speaking order specifically bringing out

how the income was concealed or how the inaccurate particulars

were furnished by the assessee. Since the CIT(Appeals) has not

discussed anything in the impugned order, this Tribunal is of the

considered opinion that the matter is to be remitted back to the

CIT(Appeals) for reconsideration. Accordingly, the orders of the

lower authorities are set aside and the issue is remitted back to

CIT(Appeals). The CIT(Appeals) shall reconsider the issue afresh

and bring on record the nature of income which was not disclosed to 5 I.T.A. No.582/Mds/14

the Department / concealed by the assessee or the inaccurate

particulars furnished by the assessee and thereafter he will decide

the matter in accordance with law, after giving reasonable

opportunity to the assessee.

5. In the result, the appeal of the assessee is allowed for

statistical purposes.

Order pronounced on 30th June, 2015 at Chennai.

sd/- sd/- (डी. क!णाकर राव) (एन.आर.एस. गणेशन) (D. Karunakar Rao) (N.R.S. Ganesan) लेखा सद य/Accountant Member या यक सद य/Judicial Member

चे नई/Chennai, th 5दनांक/Dated, the 30 June, 2015.

Kri.

आदे श क. , त6ल7प अ8े7षत/Copy to: 1. अपीलाथ+/Appellant 2. ,-यथ+/Respondent 3. आयकर आयु9त (अपील)/CIT(A)-I, Coimbatore 4. आयकर आयु9त/CIT-III, Coimbatore 5. 7वभागीय , त न ध/DR 6. गाड' फाईल/GF.