Failure to retain invoice for agricultural sale proceeds for a small amount may not result in an income tax penalty: ITAT
The Delhi Bench of the Income Tax Appeals Tribunal (ITAT) has removed a penalty order observing that the assessee cannot be penalized for failing to keep an invoice for a small amount of proceeds of agricultural sale, for a prudent man cannot be expected to keep a record of the proceeds of the sale of such a small amount.
The assessee, Mr. Mohan SambhajiJagthap, challenged the orders of the tax authorities claiming that the assessee’s father-in-law is the owner of the land from which agricultural income was generated and the money was received by the assessee as father in law is a resident of Canada. He was just a post keeper.
The department alleged that the onus was on the assessee to show that the amount was held as a custodian.
A bench of Shri BRR Kumar (accounting member) and Shri Anubhav Sharma (judicial member) observed that “In assessing the evidence on file, it can be observed that the tax authorities did not doubt the assertion of the valued according to which the father-in-law was a resident of Canada or he owned land. When this fact is admitted, the tax authorities had to conduct an investigation and collect evidence to refute the claim of the assessee. Which was not done. However, the ld CIT(A) discredited the claim on the grounds that no evidence was adduced that could link the money to the father-in-law’s farming income, he failed to understand that the filing dates back to 2001. -02 and that the valuation was initiated in 2015. No prudent man could expect to keep a record of the sale proceeds of such a small amount of Rs 20,000/.The presumption is that of the veracity of ‘a claim made before an authority when a false claim gives rise to criminal proceedings. Assessed’s assertion that he held the source was agricultural income and that he held it as a custodian deserved to be allowed. »
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