I.T.A. No.3586/Ahd/2015 Assessment Year: 2009-10 Page 1 of 4 IN INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH, SMC , AHMEDABAD [Coram: Pramod Kumar AM] I.T.A. No.3586/Ahd/2015 Assessment Year: 2009-10 Kamlesh Natwarlal Parmar ............... .Appellant 43, Shyamsatya Bunglows, Near Satyamev Hospital, Chandkheda Ahmedabad 382 424. [PAN: AJMPP 6994 R] Vs. Income Tax Officer, Ward 7(1)(4), Ahmedabad. ................ Respondent Appearances by: Pritesh Shah, for appellant Antony Pariath, for respondent Date of concluding hearing: 05.07.2016 Date of pronouncing order: 04.10.2016 ORDER 1. appeal is time barred by 22 days but assessee has moved condonation petition seeking condonation of delay. Having perused petition, and having heard rival contention on same, I am inclined to condone delay as delay was due to impugned order having been served on neighbour of assessee and assessee physically received said order very late. Delay condoned. 2. appeal is directed against order dated 23rd July, 2015 passed by learned CIT(A), confirming penalty of Rs.6,30,800/- imposed on assessee under section 271(1)(c) of Income Tax Act 1961, for assessment year 2009-10. I.T.A. No.3586/Ahd/2015 Assessment Year: 2009-10 Page 2 of 4 3. impugned penalty is levied in respect of cash deposits, aggregating to Rs.20,50,700/-, on bank account of assessee. These deposits were explained as follows :- Source Source Particulars Amount Document No. Rs. Submitted to AO Salary Certificate, Income Tax Salary Accumulated Savings of 15 years 402741 Return & Income from Statement of 1 Last 18 years Income A.Y. 2009/10 He was Government Employee worked with Health & Medical Services and Medical Education at Civil Hospital for many years. He Father Mr. Pension Payment Natvarlal Retired in 1998 and thereafter Declaration 2 Mangldas worked independently. He has kept 600000 Certificate and huge cash to meet any medical Parmer Death Certificate. emergency. He died in 2006 intestate (without making any will). Assessee received Rs.6,00,000/- by way of inheritance. Government Employee worked with Pension Payment Kamdar Rajya Vima Yojna, ESIC Declaration Department for many years. Retired Certificate, Mother Smt. in 2002. She gave gifts of 500000 Election Card, Paniben Rs.5,00,000/- to assessee in Photocopy of 3 aggregate. [Rs.1,00,000/- on Bank Passbook, Natvarlal Parmar 06/02/2009, Rs.3,00,000/- on photocopy of Gift 21/02/2009 and Rs.1,00,000/- on Deed. Gold Sale 25/03/2009.] Bills. He is having agricultural income Election Card, 7 x from land situated at Zulasan, Dist. 12 Abstract, Gift Father in law Kadi. He gave gift of Rs.5,00,000/- Deeds, Sales Mr. to assessee. [Rs.2,50,000/- on Bills of 4 Girdharbhai 500000 06/01/2009, Rs.2,50,000/- on Agricultural Maganbhai 12/01/2009.] Products Bajra, Leuva Wheat, Jowar, Rajagra etc. Total 2002741 I.T.A. No.3586/Ahd/2015 Assessment Year: 2009-10 Page 3 of 4 05. Since, Assessing Officer was not satisfied with submissions of assessee, he issued show cause notice/letter was issued to assessee on 21/11/2011 requesting him to explain as to why cash deposit made in his bank account should not be added to his total income in absence of any clear and concrete documentary evidences to substantiate his claim. 4. However, not satisfied with above explanation, quantum addition was made in hands of assessee, and when matter reached this Tribunal, additions were confirmed. It is in this backdrop that penalty under section 271(1)(c) of Act has been imposed, and same has been confirmed by learned CIT(A) as well. assessee is not satisfied and is in further appeal before me. 5. I have heard rival contentions, perused material on record and duly considered facts of case in light of applicable legal position. 6. I have noted that while explanations and evidences given by assessee may have been rejected, on merits, by Tribunal, these explanations are reasonable explanations so far as considerations for penalty proceedings are concerned. As long as explanation of assessee is reasonable, even though not proved to hilt, imposition of penalty under section 271(1)(c) of Act cannot be justified. As I say so, I am reminded of following observation made by full bench of Hon ble Patna High Court in case of CIT vs. Nathulal Agarwal & Sons (153 ITR 292), which were later approved by Hon ble Supreme Court in case of CIT vs. Mussadi Lal Ram Bharose (165 ITR 14), as follows :- As to nature of explanation to be rendered by assessee, it seems plain on principle that it is not law that moment any fantastic or unacceptable explanation is given, burden placed upon him would be discharged and presumption rebutted. It is not law and perhaps hardly can be that any and every explanation by assessee must be accepted. In my view, explanation of assessee for purpose of avoidance of penalty must be acceptable explanation. He may not prove what he asserts to hilt positively I.T.A. No.3586/Ahd/2015 Assessment Year: 2009-10 Page 4 of 4 but as matter of fact materials must be brought on record to show that what he says is reasonably valid. 7. When I see explanation of assessee, in above light, I find that explanation of assessee is prima facie reasonable explanation. assessee may not have been able to prove it to hilt, but that aspect of matter, as I have noted above, is not really decisive so far penalty under section 271(1)(c) is concerned. 8. In light of above discussions, as also bearing in mind entirety of case, I uphold grievance of assessee. penalty of Rs.6,30,800/-, accordingly, stands deleted. 9. In result, appeal is allowed. Pronounced in open Court on this 4th day of October, 2016. Sd/- Pramod Kumar (Accountant Member) Dated: 4 th day of October, 2016. PBN Copies to: (1) appellant (2) respondent (3) CIT (4) CIT(A) (5) DR (6) Guard File By order Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Kamlesh Natwarlal Parmar v. Income-tax Officer, Ward-7(1)(4), Ahmedabad