The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that signing of ‘consent waiver form’ proves its bonafide that trust has no role in opening of overseas bank account, the matter is restored back to the file of the Assessing Officer (AO) .
The assessee M/s. Niraguna Balik Satsang Mandal 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 Income Tax Act, 1961.
On the basis of some information received under DTAA (Double Taxation Avoidance Agreement), 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 AO 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 under Section 69 of the Income Tax Act and accordingly made an addition of Rs. 18,10,35,773/- . Consequently penalty proceedings under Section 271(1)(c) of the Income Tax Act was initiated separately for concealing the income.
Aggrieved by the order the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT (A)], which confirmed the order of AO.
Further aggrieved the assessee filed an appeal before the Tribunal. The Authorized Representative (AR) of the assessee Abhishek Mathur, contended that the information which was already available with the Department prior to the date of search the same cannot be treated as incriminating material found during the course of search and, therefore, the entire addition made by the Assessing Officer is beyond the scope of Section 153A of the Income Tax Act.
Further the AR submitted that name of the assessee is appearing in the information as account holder but neither the trust nor any of the trustee have opened such account nor the names of any of the trustee are appearing in the information.
The Departmental Representative Dilip Singh Kothari, submitted that if assessee really wanted to prove bonafide then it should have signed the consent waiver form to get the clarity and information, whether trust had any role in opening of the bank account or the amount deposited therein belongs to the assessee trust.
The Bench comprising of G. S. Pannu, President and Amit Shukla, Judicial Member specifically asked the AR 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.
Further the assessee agreed to sign the ‘consent waiver form’, thus the tribunal restored the matter to the files of AO 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.
Hence the appeal of the assessee is allowed for statistical purpose.
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