Niraguna Balik Satsang Mandal (India) Vs DCIT (ITAT Delhi)
ITAT Delhi held that addition towards undisclosed overseas bank account was confirmed on wrong notion of denial of appellant to sign consent waiver form. Matter remanded back as appellant has signed the consent waiver form and accordingly AO can carry out relevant enquiry.
Facts- The assessee is a society registered under Societies Registration Act, 1860. Since it was a registered trust showing income from donation of the contribution and accordingly it has been claiming exemption under Section 11(1) of the Act.
Based on some information received under DTAA that the assessee society was having undisclosed overseas bank account with HSBC Bank at Geneva, Switzerland, and the details of such bank account have not been disclosed by the assessee to the Income Tax Department.
The Assessing officer after analyzing the various statements on oath recorded during the course of search, held that in such circumstances the income in the foreign bank account is to be taxed as undisclosed income. Accordingly, AO made addition u/s. 69 of the Act of Rs. 18,10,35,773/-. Consequently, since the assessee has concealed the particulars of income and furnished inaccurate particulars, penalty proceedings u/s. 271(1)(c) of the Income Tax Act are initiated separately.
CIT(A) confirmed addition made by AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that when the name of the assessee trust has been specifically mentioned as an account holder in the information available with the department, and if the assessee trust is denying existence of opening any such bank account and claims it does not belong to it, then the best course should have to sign the ‘consent waiver form’, to absolve itself and come clean. However, here, the assessee trust has agreed to sign the consent waiver form and is ready for the department to get the relevant information. Under these circumstances and looking to the fact that now the assessee itself has agreed to sign the consent waiver form, accordingly the matter is restored back to the file of the Assessing Officer; before whom assessee will sign the consent waiver form and the Assessing Officer may call for further information about the veracity of the contention of the assessee that the bank account belong to the assessee or not or is beneficiary of such deposits in the said bank account. The reason for remanding back the matter before the AO is that, the entire basis of the Assessing Officer while making the addition was that assessee has not signed the consent waiver form to prove its bonafide. Now when the assessee has consented to sign the consent waiver form then the Assessing Officer should seek the information through proper channel and carry out every enquiry in this regard. And in case no such information is received or the assessee is found not to be beneficiary or owner of the bank account, then no adverse inference should be drawn against the assessee. Needless to say that the ld. Assessing Officer once he procures the consent waiver form from the assessee and calls for the information through proper channel, then the same should be confronted to the assessee and after giving due effective opportunity of hearing, the Assessing Officer may decide the issue in accordance with law.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The aforesaid appeals have been filed by the assessee against the consolidated order dated 25.10.2016, passed by the ld. Commissioner of Income Tax (Appeals)-31 [hereinafter referred to as CIT (Appeals)] New Delhi, for the quantum of assessment passed under section 153A/143(3) of the Income Tax Act, 1961 (the Act) for assessment years 2006-07 and 2007-08. The issdues and grounds raised in all the appeals are identical and were heard together and are being disposed of, for the sake of convenience, by this common order.
2. First, we will take up assessee’s appeal in ITA. No. 264/Del/2017, wherein assessee has raised the following grounds:-
1) That the Hon’ble Commissioner of Income Tax (Appeals) has erred in law as much as on the facts fo the case by sustaining the arbitrary additions of Rs.18,10,35,773/- made by the learned Assessing Officer u/sec69 of the Income Tax Act1961 for the reasons that the alleged peak amount US$ 40,72,796/-standing to the credit of the bank account with HSBC Bank, Geneva in the name of “NIRGUN BALAK SALSANG MANDAL” belonged to the appellant namely “NIRAGUNA BALIK SATSANG MANDAL (INDIA)” without appreciating the fact that though the name looked similar to the appellant society, it had no direct or indirect connection with the appellant society.
2) That the Hon’ble Commissioner of Income Tax (Appeals) while sustaining the aforesaid addition as made by the learned Assessing Officer had held that the denial by the appellant society to sign the consent waiver form leads to the conclusion that such bank account belonged to the appellant without appreciating the fact that had the appellant signed the consent waiver form, it would have been a deemed acceptance of the fact that the account maintained with HSBC Bank Geneva clearly belonged to the appellant when the fact was that eh HSBC bank account did not belong to the appellant society.
3) That the Hon’ble Commissioner of Income Tax (Appeals) has further erred in law as much as on the facts of the case by holding that an affidavit filed by the appellant society through its Chief Trustee was only self serving document without bringing any material on record to show that the contents of the affidavit were false or incorrect or had not evidentiary value.
4) That the Hon’ble Commissioner of Income Tax (Appeals) has further erred in law in not appreciating the fact that the assessment as completed by the learned Assessing officer u/sec. 153A read with section 143(3) of the Income Tax Act 1961 during the pendency of an enquiry, carried out by the learned Assessing Officer with competent Swiss authority is based only on suspicious and surmises and is thus, ab initio void.
5) That the Hon’ble Commissioner of Income Tax (Appeals) has erred in law as much as on the facts of the case in not appreciating the fact that completed assessment can be interfered with while making the assessment u/sec. 153A of the said Act only on the basis of sum incriminating materials unearthed during the course of search or undisclosed income or property discovered during the course of search and that in the case of the appellant no incriminating material whatsoever was found during the course of search and thus, the assessment as completed by the learned Assessing Officer is liable to be quashed.”
3. The facts in brief are that assessee is a society registered under Societies Registration Act, 1860 which was registered way back on 19th October, 1953. Since it was a registered trust showing income from donation of the contribution and accordingly it has been claiming exemption under section 11(1) of the Act. A search and seizure operation under section 132 of the Act was carried out on 24th January, 2012 on the basis of some information received under DTAA that the assessee society was having undisclosed overseas bank account with HSBC Bank at Geneva, Switzerland, and the details of such bank account have not been disclosed by the assessee to the Income Tax Department. During the course of search, statement of one trustee Ms. Radhika Chellaram was recorded wherein she was confronted with certain people who were named and information received to the Department and also statement of her brother Shri Haresh C. Mansukhani and they were enquired about the person who were mentioned in connection with the opening of the bank account in HSBC Bank at Geneva. The main allegation against the trust was that it was having undisclosed overseas bank account at HSBC Bank at Geneva in the name with BCP code 5090178049 which was not disclosed to the Department and the said account was opened in July, 2004. The bank statement was also provided to the Department which says certain peak balances maintained in the account right from 2005 to February, 2007. The nominee and other linked account of this bank account in the name of the trust contain the name of Smt. Jamuna Devi Thakurdas Lakhani, Sh. Bansi Lakhani, M/s JTL Enterprises Ltd. and JTL trust. It was suspected that documents regarding opening of the above Swiss Bank accounts and related transactions are available at the Ashram premises.
4. The details of entire information has been incorporated in the assessment order which runs into 5 pages which is in English and French and the contents of the part has been elaborated by the Assessing Officer in the following manner:-
