Asha Gandhi vs. ITO (ITAT Chandigarh)

DATE: August 29, 2019 (Date of pronouncement)
DATE: September 14, 2019 (Date of publication)
AY: 2014-15
FILE: Click here to download the file in pdf format
ITAT offers suggestions on how to remove hindrances to India's goal to become a $5 Trillion economy. Violations of tax laws by new assessees occur because of lack of proper advice. Instead of letting these sparks of economic change stifle and die due to fear of compliances, they should be assisted by the State. (i) Set up a Tax Advisory Cell consisting of public spirited Revenue officers with strong ethics, full awareness of tax laws and people skills (ii) Identify new successful businesses as the agents of economic change (e.g. Haldiram, Lijjat Papad) and assist them, (iii) Create a Tax Compliance Scheme specially for the benefits of these new ventures so as to address their past lack of compliance


ITA No. 1224/CHD/2018
Assessment Year : 2014-15
Smt. Asha Gandhi,
C/o Yuvraj Hospital, Street No. 7 ½
Ward 74, Hargobind Nagar,
Giaspura, Ludhiana.

The ITO,
Ward – II(1),

./PAN No: AGWPG9408Q

/Assessee by : Shri Gaurav Sharma

/ Revenue by : Shri Shiv Swaroop Sharma
/Date of Hearing : 30.05.2019
/Date of Pronouncement : 29.08.2019
The present appeal has been f i led by the assessee
as sai l ing the cor rectness of the order dated 16.07.2018 of
CIT(A) -1, Ludhiana per taining to 2014-15 assessment year on
the fol lowing grounds :
1. That on the facts and the circumstances of the case, the order of ld. CIT(A) is
bad in law.
2. That the Worthy CIT(A) has erred in sustaining an addition of Rs. 5,65,000/-
in the income of the Assessee under Section 68 of the Act on account of unexplained
Cash Credits.
3. That the addition sustained by the Id. CIT(A) are against the facts and
circumstances of the case.
4. That the Worthy CIT(A) has erred in concluding that the Source of Rs.
5,65,000/- have not been proved.
5. That the Appellant craves leave to add/amend any ground of appeal during
the course of Appellate Proceedings.
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2. The relevant fact s of the case are that the assesse e’s
return was picked up for scrut iny under CASS. The AO
requi red the asse ssee to just i fy the deposi t s in he r HDFC Bank
ac count . The asse ssee claimed these to be business re ceipt s.
The Assessing Of f icer not convinced wi th the explanat ion and
the e vidence made the addi t ion of Rs. 5 lakh odd for the
reasons set out in paras 5 to 8 of his order . The se are
reproduced hereunder for the sake of completeness:
5. On 26.12.2016 a written reply has been received. In the reply it is submitted
that the assessee was carrying on the business of Boutique during the year under
consideration. Basically, the assessee is having her own setup of sewing machines
in her home and had given the setup on contract to Tailor, She used to received
Order from the Customers and the stitching of that Order was to be done by the
Tailor. Also all the expenses, such as on needles, on Threads, on Oil &
Lubricants, on Button etc. were to be borne by the Tailor. For the above said job,
the assessee and tailor used to divide the receipt in the ratio of 35:65. The Sample
Copies of the bills are enclosed herewith as Annexure-1.
6. In the annexure-1, the assessee has produced 16 copies of bills of different
dates under the name & Style ‘Asha Boutique, Hargobind Nagar. Near pin Colony,
Ward No.74, Back Side Hero Cycle, Giaspura Ludhiana”, starting with Bill
No.309 dated 01.04.2013 and ends with Sr No. 1501 dated 21.03.2014. None of
the bills amount is tally with the cash book For example the assessee has produced
copies of bills No.309 dated 01.04.2014 showing the receipt of cash of Rs.3500/-
whereas in the Cash Book shown the amount of 1250 vide voucher No.l. On
25.05.2013 the assessee received cash of Rs. 5500/- vide bill No.495, but in the
cash book on 25.05.2013 the assessee has shown the cash receipt of Rs.1920/- vide
voucher No.53. On 09.07.2013 assessee has shown cash receipt of Rs.6370 vide
bills No.660,661 & 662 whereas in the cash book, the assessee has shown cash
receipt of Rs.1530/- vide voucher No. 95.
7. From the above nothing is matching between the copies of bills and copy of
cash book produced during the assessment proceedings. The assessee has tried to
manage a story to justify the cash deposits of Rs. 5,65,000/- made in her HDFC
saving bank account which is recorded in the books of her account which is
recorded in the books of her account. It is also visible from the copies of bills
produced that to justify her story the assessee has managed the copies of bills
according to the ratio of 35:65. The number of voucher entries shown” in the cash
book are of 1 to 343 whereas as per copy of bills produced the Serial Number of Bill
starts with Sr.No. 309 on 01.04.2013 and ends with Sr. No, 1501 on 21.03.2014.
This proves that there must be minimum 1193 (1501 -308} entries in the cash book
during the year as against 343 entries shown in the cash book. There is no link with
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the income shown by the assessee from BOUTIQUE and the Bank Deposits. As the
Business is in the name of assessee, she was required to enter the entire cash book.
8. In view of the above findings, the cash deposits of 5,65,000/-is assessed under
section 68 of the Income Tax Act, 1961 read with section 115BBE of the Income
Tax Act, 1961 being undisclosed cash deposits found credited in the books of
account of assessee. The assessee has shown an amount of Rs.4,98,000/- in the
profit and loss account. This amount of has been shown as income from boutique.
The same is being part of the undisclosed income of Rs.5,65,000/- is being assessed
as undisclosed income under section 68 read with section 115BBE Tax Act as the
assessee could not give satisfactory reply for the c Rs.5,65,000/- made in HDFC
Bank. As the assessee has furnished inaccurate particular of her income, therefore,
penalty proceedings u/s 27 3 Section 274 of the I.T.Act, 1961 are initiated
3. The asses see car r ied the i ssue in appeal before the CIT(A)
and re l ied upon fur the r suppor t ing evidences to just i fy the
claims made on the basis of the audi ted books of account .
Though the CIT(A) remanded the ev idences to the AO, however ,
ul t imately the addi t ions made by the AO were conf i rmed by
him. Agg r ieved by this, the asse sse e i s in appe al before the
4. The ld. AR invi t ing at tent ion to the wr i t t en submi ssions
f i led be fore the CIT(A) drew spec i f ic at tent ion to page 8 of the
same . Reading i t alongwi th the synopsis f i led in the present
proceedings he submi t ted that the at tempt s of the AO at the
as sessment stage as wel l as at the remand stage to l ink the
deposi ts wi th the receipt s was an e xercise whi ch was bound to
fai l as he had fai led to understand the business mode l of the
as sessee. Addres sing the record, i t was submi t ted that the
as sessee had repeatedly c laimed that the amount s received
were shared wi th the tai lor s and her sel f . The asse ssee’ s share
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was only 35% of the total amount s rece ived for making
avai lable he r premise s, name , contact s and e stabl ishment
cost s et c.
4.1 Invi t ing at tent ion to the impugned order , i t was his
submission that the CIT(A) af ter set t ing out the facts of the
case in para 2 and refer r ing to the provi sions of the Act in
para 4, e xt ract ed the ent i re remand repor t of the AO and in the
order passed, the claim on fact s was again not considered.
4.2 At tent ion was invi ted again to the busines s model of the
as sessee addressed in para 5 of the as sessment order and the
wr i t ten submissions f i led before the CIT(A) . I t was submi t t ed
that though they have been ext racted in para 5 pages 7 to 11
of the order , howeve r have remained unaddressed.
4.3 The ld. AR of fered to demonst rate thi s c laim by addressing
the vouchers of any spec i f ic day on a test check bas is stat ing
that he would be able to show that 35% of the sum total of the
said date has been ref le cted in the books.
5. The ld. Sr .DR consider ing the submissions advanced
submi t ted that though the argument s to this e f fe ct are on
re cord, howeve r the of fer of the ld. AR to demonst rate hi s claim
on a test check basi s at thi s Forum was obje cted to. I t was his
prayer that inst ead of at tempt ing this exer ci se of co- relat ing
the amounts on a tes t check basis wi th the vouchers, at this
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stage the issue may be remanded back for car r ying out this
exer cise ei ther to the AO or the CIT(A) . The remand to the AO,
i t was submi t ted, would be more appropr iate.
6. The ld. AR in reply agreed to the remand back for
ve r i f icat ion to the AO. On quer y, i t was submi t ted that the
as sessee in the immediatel y pre ceding asses sment year as wel l
as in the subsequent assessment ye ar has returned income
f rom a simi lar ac t ivi ty f rom Bout ique business whi ch has been
ac cepted by the depar tment . I t was hi s submission that the
as sessee ul t imately has stopped her bus iness f inal l y in the
ne xt assessment year .
7. I have heard the r ival submi ssions and perused the
mate r ial avai lable on re cord. I t is seen that the assessee in the
fact s of the present case re l ies upon the computer i zed books of
ac count to jus t i fy her return of income. The ld. AR re lying
upon wr i t ten submi ssions f i led before the CIT(A) has argued
that the assessee has e xplained the disc repancy in the
vouchers, the cash book and deposi t s by stat ing that the ful l
amount s ref le cted in the vouchers have not be en entered in the
cash book and i t is only the 35% of the sum total of al l the
vouchers is sued on a speci f i c date whi ch has be en ref lect ed in
the cash book. Re ly ing on the consi stent arguments before the
AO as wel l as the CIT(A) , i t has been submi t ted that f rom the
total amount ref lected in the voucher s of the day only 35%
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be longed to the assessee, consequent l y, only thi s amount is
ref le cted in the cash book and is the basi s of the deposi ts
made in the Bank account . The remaining 65%, i t has be en
stated belonged to the tai lors who took and exe cuted the
orders f rom her premises.
8. A perusal of the wr i t ten submissions before the CIT(A)
shows that the f i ve machines used were stated to be old as
such there was no occasion to claim any depreciat ion whi ch
was one of the reasons which prevai led wi th the CIT(A) to
uphold the addi t ion. I t has be en claimed that the running cost
of fans and two tube- l ight s were borne by her as her premises
and contact s we re used to at t ract the custome rs . For the said
expense s, no deduct ion, i t has be en stated was claimed. The
ar rangement that for making he r premise s and her contacts
et c. 35% of the vouched e xpenses were accepted as he r share
and the remaining 65% belonged to the tai lor s for the i r t ime,
work and mater ial costs l ike needles, oi l lubr icants, thread,
cloth et c.
9. From an ext ract of the assessment orde r in the ear l ie r
par t of thi s orde r i t i s se en that the shar ing rat io of 65:35
wi th the tai lors has been consistent l y claimed by the asse ssee .
10. Thus, I f ind on a perusal of the orders that though the
explanat ion has been of fered consistent ly and i t has al so been
par t ly ext racted in the order however , the exe rcise to see
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whethe r on facts the cashbook re f le cted 35% of the amounts
ref le cted in the vouchers of the day has never been examined.
The arbi t rary wi l l ful reluctance to look into the fact s cannot be
11. As noted, the ld. AR has of fered to demonst rate the
as sessee’s claim on a test che ck basis. The said of fer has be en
de cl ined by the ld. Sr .DR at this stage and the par t ies have
agreed that the issue may be remanded back for car rying out
the said exercise. Accordingl y, conside r ing thi s fac tual
background, I am of the view that a remand is necessi tated.
12. The issue thus could wel l be concluded by making an
appropr iate di rec t ion to the said e f fe ct as i t would adequate ly
addre ss the i ssue in terms of the pronouncement made at the
t ime of hear ing. However , such an act would leave those
impediment s unaddressed which appear to pose se r ious
obstac les and hindrance s to the nat i on’ s goal to becoming a 5
tr i l l ion dol lar economy.
13. Accordingly, encouraged and inspi red by the laudable aim
and conscious of the nature of the jur isdict ion whi ch
predicate s that the Tr ibunal shal l approach and decide every
case in a judi cial spi r i t wi th i r refutable reasoning and to “pass
such order as thinks f i t ” . In view thereof , I deem i t ne cessary,
drawing on my exper ience as a di spense r of just i ce to of fe r
ce r tain const ruct ive suggest ions consi stent wi th the rende r ing
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of just ice on the facts of the case which t r igger the impe rat ive
need for making the fol lowing suggest ions whi ch I bel ieve shal l
inje ct impetus and st imulate growth in the e conomy by
providing a boost to the nat ion’ s enterpr ise and provide a
signi f icant momentum pushing the sluggish economy towards
achieving the goal of augment ing the nat ion’ s weal th.
14. Wi th the said aim, I propose that ;
Fi rst ly a Tax Advi sory Cel l be const i tuted consis t ing
of publ ic spi r i ted of f icer s of the Re venue wi th
st rong e thics, ful l awareness of tax laws and
people ski l ls;
Secondly ident i fy the new successful busine sses,
however smal l as the agents of economic
change. The me chani sm and sy s tem i s al re ady in
pl ace , i t should be put to us e as the depos i ts in
idle /new/unused account s are rout ine l y red
f lag ge d.
Thi rdly a Tax Compl iance Scheme special ly created for
the benef i ts of these new ventures so as to
address the i r past lack of compl iance s e t c.
14.1 The se suggest ions i f implemented, I am conf ident wi l l
re sul t in picking the low hanging f rui t al ready avai lable to us.
On these suggest ions I propose to del iberate in greate r detai ls
he reinaf te r .
15. As suggest ed f i rst and foremost I am of the view that a
Tax Advisory Cel l be created for br inging the demonst rably
successful busine sse s f rom amongst the aspi r ing mi l ieu f rom
the level of tax f ree thre shold to the leve l above the said
threshold. Thi s is the need of the hour . The creat ion of such
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a me chanism I be l ieve is imperat ive in orde r to nur ture the
successful ventures of semi -ski l led f i rst t ime unt rained
ent repreneurs f rom a below the tax- f ree threshold to incomes
above this level .
16. The se upward movements in income s, I am aware , are f i rst
not iced by the Tax Administ rator (Assessing Of f icer ) where
deposi ts in bank account s or other vis ible marker s of f inancial
success qua a new player in the market are f i r st not iced in the
system. The se businesses whether engaged in a tai lor ing
ac t ivi ty or bout ique owner ; restaurat eur , dhaba/caterer s food
out le t ; t i f f in packer , f lor ist , innovator e t c. to my mind should
be given a spe cial vel vet gloved t reatment and encouraged to
succeed. No business is too smal l . I bel ieve that i t is only
these ent repreneur ial f re sh ventures appropr iatel y nur tured
wi thin the f ramework of the taxat ion system which can be the
agents of economic change of the nat ion. Thei r value to the
nat ion’s e conomy cannot be over -emphas ized. A mechanism to
guide these brand new asses sees through the tax and the
bureauc rat ic maz e must be made avai labl e by the State. Thei r
f i r st brush wi th thei r f inancial succe ss must not be so
stunning that i t poses a se emingly impossible hurdle of
compl iances that they ul t imately crumble and unfor tunate ly
vani sh in the teeming masse s who instead of ut i l i z ing the
State’ s oppor tuni t ies of growth bel ieve in r idding piggy-back on
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the ente rpr ise of a few perpetual l y clamour ing for f ree f inancial
packages and depending onl y on State af f i rmat i ve act ions . The
populat ion needs to be weened away and di scouraged f rom this
hopele ss l i fe of l iv ing on State dependenc y for al l t ime s to
come . The State f inancial assistance and af f i rmat ive act ions
should be encouraged to be seen only as a l imi ted t ime bound
suppor t . The lack of ef for t and enterpr i se should not appear to
be rewarded. The enterpr i sing should be rewarded. The
successful venture s when star ted should not be al lowed to fai l
at the al tar of compl iances as fai lures of such venture s though
at a personal level i s only an individual loss but the se smal l
drops of fai lures t r ickl ing resul t s in a deluge of nat ional
fai lure having huge det r imental consequences for the nat ion.
Pro-act ive ef for ts need be made by such Tax Advi sory Cel l
immediatel y on not i cing the succes s of a venture as the
Assessing Of f icer i s too i l l equipped and cannot be saddled
wi th the re sponsibi l i ty of assist ing them to become taxcompl
iant as in the envi ronment whe re he is e xpe cted to
funct ion he i s al ready hard pres sed for t ime wi th weekly,
monthl y targe t s e tc. to be adhered to, he nei ther has the t ime
and may also lack the ski l ls for providing the assistance.
17. I t is the Tax Advisory Cel l whi ch can only ass ist these
agents of economic change in becoming tax compl iant . I t can
al so make avai lable to these ventures the weal th of the
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inst i tut ional st rengths of the State created in the f inancial ;
te chnical and vocat ional inst i tut ions of the count ry.
18. Car rying these suggest ions fur the r conside r ing the
provisions of the law and the precedents as avai lable, I be l ieve
that in order to ensure the success of the Tax Advisory Cel l , i t
is also nece ssar y to come out wi th some Scheme which wi l l
enable the se new busine sses who may ne ed assi stance to
be come tax compl iant . The ventures, i t is not iced general ly do
not have any advise, expe r ience or knowledge to fal l back on
and i t has been not iced that unknowingl y there may be
t ransgressions of the tax laws et c. Even i f these are bonaf ide,
they need to be le gal ly addressed. In order to assi st these new
venture s to come wi thin the fold of the law for thei r past
ac t ions/inac t ions and car r y on thei r businesses ensur ing
future compl iances past t rans gressions need to be f i rst
addre ssed through clear concessions under Tax Compl iance
Scheme/Voluntary Di sclosure Scheme for such smal l
enterpr ises. Int roduct ion of such a scheme become s nece ssary.
Such an af f i rmat ive act ion wi l l enable these agent s of Economic
Change to stay aler t and l ive to thei r c ivic duty that paying
taxe s i s inevi table and non-ne got iable . Such ef for ts would
dr ive home the point and ensure that these new businesses
shal l always consciousl y choose to be on the r ight side of law
and not l ive in constant fear of be ing discovered having
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unknowingl y commi t ted some bonaf ide t ransgressions . To my
mind, wi thout such a scheme the Tax Advisory Ce l l may be
handicapped in pe r forming thei r role wi thin the conf ines of
19. Whi le on the subject , I would humbly suggest that the
work of the Tax Advisory Cel l is not out sourced. To my mind,
the lack of accountabi l i ty and commi tment in a f ly by night
operator however compe tent would be det r imental to these
aims and I bel ieve would be at the cost of the State. The
outsourced adhoc per sonnel are bound to lack commi tment and
ac countabi l i ty as unl ike publ ic se rvants , thei r ethical values
and vi sion is nei the r moni tored nor has i t been tested at any
level . Ent rust ing this impor tant mi ssion to untested personnel
may prove a dangerousl y rash exer ci se wi th ser ious long term
ne gat i ve consequence s. The Asse ssing Of f icer , I bel ieve , also
cannot be expected to hand hold these new assessees towards
compl iances as in the absence of any system created to
nur ture these sparks of Indian e conomic change, the Assessing
Of f icer having his own l imi tat ions of meet ing his monthly,
weekly target s et c. cannot be expe cted to pause his work and
as sist these new ventures. Howeve r , i t is my be l ief that even
in the target or iented mindset , there are gove rnment servants
avai lable in the tax administ rat ion who have joined the
se rvices wi th the aim of nat ion bui lding and a sense of publ ic
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se rvice. I would humbly suggest that the Tax Adv isor y Cel l
ideal ly be const i tuted/populated by the br ighte st dedicated
pe rsonnel who have proven re cords of publ ic se rvi ce.
20. Having del iberat ed on ways to as sist the agents of Indian
economic change i .e. the smal l business; ent repreneur ial sel f
employment generated ventures et c. I bel ieve that i t would not
be out of place to br ief ly explain why I consider thi s c lass of
populat ion deser ving of a special t reatment . No studies or
stat ist ics need be quot ed to acknowledge the fact that
st ructured educat ion may not ne ce ssar i l y promote leadership
and innovat ion and may infact at t imes at the cost of these
ski l l s cont r ibute in producing able and competent employee s.
Equal l y wel l acknowledged is the fact that the unique and
innovat i ve way wi th which some people view l i fe can not be
taught , i t i s a gi f t which at t ime s emerges in chal lenging
si tuat ions where formal educat ion may not have been avai lable
as an opt ion or may have be en consciousl y been opt ed out . I
be l ie ve that I am not in a minor i ty in holding that no amount
of ski l led worker s, qual i f ied persons can for ce into c reat ion a
succes sful bus ine ss venture. Simi lar ly the fact that business
oppor tuni t ie s can be visual i zed only by the formal ly educat ed
is also wel l accepted to be not a ne cess i ty. The of t quoted
successful ventures of semi -ski l led women (Li j jat Papad) ; semi
ski l led fami ly business (Haldiram) , (MDH) etc.non-exper t -need based
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venture (Rajah Spice [UK] ) high end tai lor ing services provided by
Tami l Nadu f ishermen power ing Savi le Row tai lors
a-tn-fisherman/articleshow/65639243.cms) can be some of the Indian
examples quoted which demonst rate that i t is the pass ion and
the vision which i s the spark. One may wel l quote Lar ry Kim
(CFO of Mobi le Monkey) whi le de scr ibing an ent repreneur that ,
“you have to be c razy to star t a company. ” I t may also not be
out of context to quote the case study of Subway Sandwiches
which is arguabl y the largest fast food company. The said
enterpr ise was founded by a par tner ship compr ising of a Ph.D
Scholar Dr . Peter Buck and a 17 years old aspir ing medical
school student Mr . Fred Deluca who did not visual ize the whopping
success, the business would garner. The venture was ent ered
into wi th the mode st aim of funding his studies wi th the
prof i ts so generated. The venture was star ted by him wi th a
loan of 1000$ f rom Dr . Buck thus, wi th vi r tual ly no money and
indust r ial knowledge. As a resul t of thi s reason, the company
was cal led Doc tor ’s Assoc iates Inc orporat ion. These re ferences
are just a t ip of the ice berg. The fol lowing instances may as
an i l lust rat ion fur the r dr i ve home the point :
i )
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21. I bel ieve the re is no dear th in the count r y of talent , aims
and ambi t ions aspi r ing to create ar t i f icial jewel ler y; clothing
l ine, cosmet ics & beauty; heal th & wel fare; fast food; jam;
chutney; seasonal decorat ions, educat ional aids, sof tware
game s; apps for ente r taining; learning; ski l l ing etc. Howeve r , i f
the enterpr ising and innovat ive who could have star ted smal l ,
out of fears of compl iance related responsibi l i t ies and instead
chose to accept to work for a steady salar y for MNC instead of
star t ing smal l enterpr i ses themselves, then i t is in the
nat ional interest that the envi ronment is addressed.
22. I bel ieve that techni cal ly sound and qual i f ied peopl e can
only assist these agents of economic change to become more
viable and help them in inc reasing thei r scale and prof i t .
Howeve r , they cannot provide the spark. On the othe r hand,
these f i r st t ime asse ssee s because of thei r succe ssful venture
due to thei r lack of awareness, understanding and exi st ing
l imi tat ions of the i r capabi l i t ie s to adhere to Rules that tax
as sistance become s nece ssar y as the y are ei the r ignorant or
too bus y looking at things di f ferent ly. I bel ieve that ul t imately
i t i s such ent repreneurs who can fuel the progress of the Indian
economic juggernaut . The se sparks of ent repreneur ial act ivi ty I
would suggest consequent ly should be ident i f ied as agent s of
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economic change at the ear l iest point of t ime when they come
in the radar of the tax administ rat ion by vi r tue of deposi ts in
banks or acqui si t ion of as sets etc. As faced wi th the possibi l i ty
of probably not being tax compl iant , these new ventures
should not be al lowed to fal l in dubious hands where they may
be so made aware that whatever they do, they are bound to
f lout the law. The tax administ rator i . e. the Asse ssing Of f icer
should then immediately pass these new assessees to the Tax
Advisory Cel l . These agents of ec onomic change should not be
lef t in the lur ch t rying to address the consequences of thei r
suc cessful venture s as i t i s on the back of these agents of
economic change that the Indian economy can r is e and f ly. We
cannot and should not depend on g overnment spend alone .
Weal th has to be c re ated, by the people and a machinery to
nur ture them should be urg ent ly created wi thin the tax
admini s t rat ion depar tment i ts el f . I t i s in the interes ts of the
State to ensure that relevant informat ion, guidance and advice
is made avai lable to these a gents of economic change. The
Indian economy can be power ed by such ente rpr ising people
who bravely star t thei r business venture s relying on thei r vision
and pass ions wi th no f inanc ial nets to f al l back on in case of
fai lure of thei r business venture. The se f i rst t ime businesses
lacking the exper ience and ski l ls are i l l equipped even to
handle thei r f inancial succe ss and need assi stance to guide
them through the tax requi rement s and the bureaucrat ic maze
ITA 1224/CHD/2018
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Page 17 of 20
of nece ssar y compl iances. I t i s the Tax Advi sory Cel l can help
them to be come tax compl iant . The Revenue may consider
de veloping the ski l ls to col lect ( tax) l ike honey is col lected
f rom f lower s by be es and but ter f l ie s. The f lower doe s not miss
the honey taken. I t cont inues to bloom and remain v iable for
hone y col le ct ion again and again t i l l i ts l i fe t ime .
23. In my exper ience as a dispenser of Just ice, I have not iced
that general ly the violat ions of tax laws by new assesse es do
not occur because the y are so de si red but because of sheer
lack of proper advice. Instead of le t t ing the se sparks of
economic change st i f le and die due to fear of compl iances, I
f i rmly bel ieve for the de ta i led rea sons set out hereinabove that
they be urgent ly as s i s ted in the interest s of the State. Such
sparks may be re f lect ed at t ime s in par t t ime enterpr i sing
housewives , i l l i t erate , semi -ski l led men/women or teenagers. I
would ser iousl y e xhor t and urge the State through the tax
administ rat ion to provide a plat form spec ial ly c reated to assi st
these ventures to remain relevant and tax compl iant .
24. I am aware that viable and sui table envi ronments are
be ing created for the success of businesses but due to lack of
exposure, educat ion and equal ly ignorant pee r group, these
sparks of ent repreneur ship belonging not ne cessar i ly to
the me t ropol i tan ci t ies and the el i te s many a t ime s die si lent
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A.Y. 2014-15
Page 18 of 20
deaths wi th broken dreams and aspi rat ions. These deaths as
noted come at the cost of the Indian economy. The minimum
tax gene rated by these dy ing ventures should not be the aim of
the tax adminis t rat ion or the State. The aim should be to help
and ass ist them to be come bi g and remain tax compl iant .
The rein comes the role of the tax adminis t rat ion. I t is the tax
administ rat ion which as noted ear l ier i s f i r st aler ted about
successful ventures by way of deposi t s in bank account s,
acquis i t ion of proper ty, vehicle et c. The change not iced should
be re sponded to wi th alacr i ty by the machine ry spe cial ly
created wi thin the tax depar tment which has ski l led knowledge
in abundance as i t s re source st rength.
25. I t is f or the said purposes to highl ight the concepts of
a) agents of economi c change; b) cr eat ion of Tax Advisory Cel l ;
and coming out wi th; c) Pol icy/Tax Compl iance Scheme f or
these new bus inesses that a c opy of this order , i t i s c onsidered
necessary to be marked to the Chai rman, CBDT, New Delhi .
26. Re ver t ing back to the fact s of the present case conside r ing
the submissions advanced on behal f of the par t ies in the facts
which have be en brought out in greater detai l in paras 2 to 11
of this orde r , the impugned order is set aside back to the f i le
of the AO wi th the di re ct ion to ve r i fy the stated claim of the
as sessee namel y that the sums ref le cted by her as he r income
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Page 19 of 20
of a speci f ic day i s the 35% of the sum total of the rece ipt s of
the vouchers of the spec i f ic date .
26.1 I t is di rected that in case the asse ssee succeeds in
demonst rat ing he r claim, the addi t ion is to be de leted.
26.2. However in case af ter car r ying out the said ve r i f icat ion,
the claim is found to be not acceptable, i t is di rect ed that the
AO neces sar i ly shal l conf ront the def iciencie s not i ced to the
as sessee and af ter giving the assessee a re asonable
oppor tuni ty of be ing heard in the spi r i t of the sug gest ions
made here inabove shal l then pass a speaking orde r in
ac cordance wi th law.
26.3 I t is made clear that the assesse e in i ts own interest s
shal l par t icipate ful ly and fai r ly in the proceedings be fore the
AO as fai l ing whi ch the AO shal l be at l ibe r ty to pass an orde r
on the basi s of mater ial avai lable on record. Said order was
pronounced in the Open Cour t at the t ime of hear ing i t sel f .
27. The Regi st ry i s di re cted to forward a copy of thi s order to;
( i ) The Chai rman, CBDT, New Delhi . (spec i f ic paras 12 to 25 of
this order being ref er red f or inf ormat ion and nec essary ac t ion,
i f deemed f i t ) .
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28. In the resul t , appeal of the assesse e is al lowed for
stat ist ical purpose s.
Order pronounced in the Open Cour t on 29th August ,2019.
/Judicial Member

2 comments on “Asha Gandhi vs. ITO (ITAT Chandigarh)
  1. Paarth says:

    A political statement than a judicial order.

  2. Sher Singh says:

    What a travesty of the judicial process. Desperation for attention getting out of hands. Lets hope Ld. Member gets a note of appreciation from High(er) courts.

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