TaxTMI 
TaxTMI 
2019 (9) TMI 602
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....ax Act, 1961 ("the Act") is without jurisdiction, illegal and bad in law. 2. That the Commissioner of Income Tax (Appeals) erred on facts and in law in upholding the levy of penalty of Rs. 10,000 under section 271(1)(b), without appreciating that the appellant had duly responded to and complied with the notice issued under section 142(1) of the Act. 3. That the Commissioner of Income Tax (Appeals) erred on facts and in law in holding that the appellant failed to co-operate in the investigation proceedings by refusing to sign the 'consent-form', without appreciating that the appellant was not at all competent to sign such form. 4. That the Commissioner of Income Tax (Appeals) erred on facts and in law in not appreciating that no addition had been made in the assessment order passed under section 153(C)/143(3) of the Act, wherein the assessing officer categorically acknowledged that no information was available with the department in respect of the alleged foreign bank account. 5. Without prejudice, that the Commissioner of Income Tax (Appeals) failed to appreciate that penalty under section 271(1)(b) r.w.s. 273B of the Act was even otherwise not l....
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....o provided a blank 'consent form' addressed to some counsel in Switzerland of HSBC Pvt. Bank (Suisse) of SA, Geneva, Switzerland and directed the assessee to fill in the requisite information and sign the consent form, in case the assessee is not in possession of requisite details. Similar consent form was received from ADIT (Inv.) & DDIT (Inv.), Unit-II (2), New Delhi, vide letter dated 15.04.2013 and 18.07.2013, respectively. In response to the said letter/notice dated 15.04.2013, the assessee vide letter dated 07.05.2013, submitted that, she did not maintain any foreign bank account with HSBC, Geneva, and therefore, information/documents required could not be furnished; and it was further stated that as per legal advice received by her, she was not at all competent to sign the consent/declaration form in respect of the same as bank account does not belong to her. Further, assessee vide letter dated 24.07.2013, filed a duly signed a 'consent form' with respect of one foreign bank account, admitting that she had maintained with HSBC, London, bearing account no. 31628879. Thereafter, again similar notice was issued by the Assessing Officer dated 18.07.2013; and in response assessee....
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....n the ground that assessee has not filed the consent letter form. 5. Before the ld. CIT (A), assessee had given very detail submissions which have been incorporated from pages 3 to 6 of the assessment order. In nutshell, assessee reiterated that she has duly complied with all the notices and not only that, she has filed the reply and also given the reasons as to why consent letter could not be signed by her. 6. Ld. CIT(A) has confirmed the penalty based on certain general observations that such kind of cases are not simple cases, but all are suspected tax evasion cases where people have kept illicit funds in the overseas bank. The suspected persons were required to sign consent letter to verify the truth of the allegation against them and it is the duty of every citizen of India to co-operate and join the investigation to ascertain the truth. Refusal to sign the consent form tantamount to refusal to join investigation and therefore, the assessee has violated the said provision and it is immaterial whether she has opened any bank account or not. According to him, such refusal entails penal consequences. However, nowhere there is any finding by him that, there is any material i....
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....th respect to HSBC account, Geneva as per legal advice given to her. 7.1 Mr. Vohra argued that, if assessee has duly complied with notice and had clearly given her clarification regarding not signing of consent form, then how the Department can allege that there has been non-compliance by the assessee. Not signing of consent form cannot be the ground for levy of penalty, especially when assessee, not only before the Investigation Wing but also before the Assessing Officer had stated that she is not competent to sign the consent form as she does not have any such bank account with the Switzerland. In respect of various contentions, he relied upon the catena of judgments; • Firstly, on the point that no penalty u/.271(1)(b) in respect of foreign bank account can be made simply on the ground that consent waiver has not been signed and; • Secondly, no penalty u/s.271(1)(b) can be levied when assessment year has been passed u/s.143(3) the list of such judgments are as under: Re: No Penalty' under section 271(1)(b) of the Income Tax Act, 1961 in In respect of foreign Bank account 1. Copy of decision of Delhi Bench of Tribunal in the case of....
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.... can be done. Even if assessee was not maintaining any bank account in HSBC Geneva, then also to ascertain the truth and to cooperate with investigation, assessee should have signed the consent form. Failure to do so, tantamount to non-compliance of the notice and hence penalty u/s 271(1)(b) is leviable. 9. We have heard the rival submissions and also perused the relevant findings given in the impugned orders as well as material referred to before us. Here, the sole reason for levying the penalty u/s. 271(1)(b) is that assessee has not complied with notice dated 05.08.2013 issued u/s.142(1) in as much as she has not signed consent waiver form for HSBC Geneva Bank Account. From the perusal of the said notice and the information called upon by the Assessing Officer, it is seen that the Assessing Officer had required the assessee to furnish information in respect of bank account in HSBC, Geneva, Switzerland having a particular code/account number. In response, the assessee had categorically submitted not only before the ADIT (Inv.) but also before the Assessing Officer that she does not maintain any foreign bank account with HSBC, Geneva, with any such account number as stated b....
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.... is as under:" 10.2 Thereafter, Assessing Officer observed that with a view to verify the above foreign bank account, a reference has been sent to competent authority in Switzerland and other countries and till date verificatory report has not been received, and as when report will come, then appropriate action shall be taken later on; and since the assessment is getting time barred he has to pass the assessment. Accordingly, no addition either on substantive or protective basis has been made by the Assessing Officer in any of the assessment orders passed for the impugned assessment years. This clearly indicates that the information which was received there was no mention about any disclosed or undisclosed amount deposited in the said bank account. 10.3 Another very important fact which is emerging from the question and answer recorded by the Assessing Officer u/s.131 is that, the assessee has stated that the bank account confronted to her relates to some LGT bank account and not HSBC Geneva, Switzerland. This is evident from the following relevant questions and answer given by the assessee which is reproduced hereunder: Q.1 Please identify yourself? Ans.....
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....n your behalf for the purpose of opening any account outside India? Ans. No, except for HSBC London for which documents were, as stated in my statement in question no. 5 dated 09.11.2011 sent by post to the representative of the bank Mr. Steward Browmley. Q10. Have you ever authorized any bank/institution/any other agency to open/operate any bank account outside India? Ans. No, I have only bank account in HSBC London. I haven't authorized any bank/institution/any other agency to open/operate any other bank account outside India. Q11. Did you ever authorize any person/institution/company to sign any document pertaining to formation of any company/trust/association of persons/societies outside India? Ans. No, I haven't authorized any person /institution/ company to sign any document pertaining to formation of any company/trust/association of persons /societies outside India. Q12 After coming to know that your name is appearing in a bank account with HSBC Geneva what have you done to find out the veracity of the document/information? Ans. I have only been shown one document today saying that it is from HSBC Geneva. This do....
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.... account? Ans. No, I haven't filed any case. Q21. Have you ever visited HSBC bank Geneva? Ans. I have no idea Q22. Do you think your name and address or any document pertaining to you may have been misused/used without your authorization for the purpose of opening any account in HSBC bank Geneva? Ans. I have no idea Q23. You are a woman of repute with high social standing. Your name, date of birth and address has been used in a bank account. Despite all this you have not taken any action against the bank You even have stated above that you have not communicated with the bank after coming to know of the existence of an account in your name. This appears highly improbable. Your comments please. Ans. I was only shown one unsigned paper containing my name, date of birth and address. There is no mention of the name of any bank on the said piece of paper. Therefore there was no question of any communication or taking of any action. Q.24 Your father Mr. K.K. Modi was shown a similar kind of paper/document in which his name, address and other particulars were appearing. The documents were unsigned as the docum....
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....ueless about how your particulars are appearing in that document which according to you is unsigned. Keeping all this thing in view government gave you an opportunity to help it get full details of the bank account in which your particulars was appearing. Had you signed the consent form the government would have got all the information relating to the account having your name? Your non cooperation in this regard appears to be intentional and misleading. What do you have to say? Ans. I have no idea about any such information available with the Government of India. I humbly repeat that I have no foreign bank account other than HSBC London. Therefore, I am not competent to sign any declaration form relating to HSBC Geneva. I am committed to giving full cooperation to the Government of India and I have replied to various notices/summons received from time to time. Q28. When the document was shown to you on 09.11.2011, how can you say you have no idea. Are you lying on oath? Ans. As stated earlier one unsigned paper was shown to me on 09.11.2011 and in my statement I had stated that I do not have any bank account in LGT bank Geneva. I am not lying on ....
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....purported to be opened and she has not confronted with any document for opening of any account in HSBC, Geneva except account in HSBC London nor she has authorized any one for opening it. When she was confronted that her name is bearing in bank account with HSBC Geneva, she stated that this account does not belong to her and does not have any signature or bank name and no copy was given to her and she was shown the same document stated to be of LGT Bank which does not pertain to her. • Lastly, she stated several times that why she is not competent to sign consent waiver form and she has been legally advised that she cannot sign the consent form because it does not contain any bank detail. 10.5 To reiterate once again, assessee kept on maintaining her stand that neither has she opened any bank account in LGT Bank Account in Geneva; nor she had any information or knowledge about HSBC Bank Geneva; nor has she made any communication with HSBC Bank Geneva after the date of search. She had also denied visiting HSBC Bank Geneva. Specifically in response to question no.30 she has stated that she has been legally advised that if she does not have any account with HSBC Gen....
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....efer to the subject mentioned above. 2. As per the information available with the department you are having an account in HSBC Geneva/Zurich, Switzerland having Code BUP_SIFIC_PER_ID 5090189871. 3. In this connection, it has been learnt that the HSBC Bank, Geneva, Switzerland has decided to send the copies of documents such as account opening form, copy of pass book, transaction details, instruction from accounts holders and alert received by them to the respective account holders in respect of all the Indian Account Holders maintaining account with them, either as the account holder or as beneficiary. Accordingly, as a foreign bank account holder in the HSBC Bank at Geneva/Zurich, Switzerland, you must have received all the relevant as mentioned supra. Therefore requested to furnish the following details/evidence: (i) Account opening form in respect of Foreign Bank Account mentioned at para 2 above. (ii) Complete Bank statement, in original, in the Foreign Bank mentioned at point (i) (iii) Residential status as per the I.T. Act as on the date of opening of Foreign Bank accounts mentioned at point i) and thereafter for all the A....
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....nt, which is necessary for the purpose of making an assessment; or if assessee is having such account or document, then if required by the Assessing Officer, he has to file or produce the same. However, if assessee is neither having such document nor she was in possession of any such document or is denying the document, then where is the question of default on the part of the assessee in terms of Section 142(1). Here, in this case, assessment proceedings have been initiated in pursuance of notice u/s.153C, which stipulates that, if any kind of money, bullion, jewellery, or any books of account or documents is seized from the person searched, belongs to or relates to a person other than the person searched. There has to be some document seized from the possession of person searched which is belonging to the assessee. Here, nowhere from the assessment order it is discernable that any incriminating document pertaining to alleged bank account or anything indirectly linking the said bank account of the assessee has been found. Only if anything belonging to the assessee has been found or seized from the person searched, then the entire inquiry of assessment ostensibly has to be confined ....
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....ng of consent waiver form, sent alongwith notice u/s 142(1). From the perusal of the said order, it is seen that there is categorical finding of fact that, firstly, the name of the assessee had appeared in particular bank account maintained with the HSBC and in wake of such specific information Assessing Officer has requested the assessee either to furnish the bank account or to give consent letter which can lead the Revenue to obtain the copy of the said bank account. But here in this case, it is not even clear whether the document confronted to the assessee was for LGT bank account or HSBC Geneva bank account. Further in case of Sanjay Dalmia, Revenue has established that particular bank account had some connection with the assessee and further the name of the family members was also appearing as attorney and account holder. Here no such material has been placed on record by the Assessing Officer indicating that the information shared was with respect to account held in HSBC Geneva account, because there is no mention of any bank name in the said document. Apart from that, assessee has truly disclosed before the Assessing Officer and Investigation Wing about one foreign bank acco....