{"id":21088,"date":"2019-09-14T12:09:16","date_gmt":"2019-09-14T06:39:16","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=21088"},"modified":"2019-09-14T12:22:21","modified_gmt":"2019-09-14T06:52:21","slug":"asha-gandhi-vs-ito-itat-chandigarh-itat-offers-suggestions-on-to-remove-hindrances-to-indias-goal-to-become-a-5-trillion-economy-violations-of-tax-laws-by-new-assessees-occur-because-of-lack-of-pr","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/asha-gandhi-vs-ito-itat-chandigarh-itat-offers-suggestions-on-to-remove-hindrances-to-indias-goal-to-become-a-5-trillion-economy-violations-of-tax-laws-by-new-assessees-occur-because-of-lack-of-pr\/","title":{"rendered":"Asha Gandhi vs. ITO (ITAT Chandigarh)"},"content":{"rendered":"<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">Our dream:<\/p>\n<p>More investment in India.<\/p>\n<p>More opportunities for Indians.<\/p>\n<p>Making India a five trillion dollar economy. <a href=\"https:\/\/t.co\/GlpOU9KlfP\">pic.twitter.com\/GlpOU9KlfP<\/a><\/p>\n<p>&mdash; Narendra Modi (@narendramodi) <a href=\"https:\/\/twitter.com\/narendramodi\/status\/1143528651092140032?ref_src=twsrc%5Etfw\">June 25, 2019<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">Let it be our collective endeavour to make India a five trillion dollar economy: PM <a href=\"https:\/\/twitter.com\/narendramodi?ref_src=twsrc%5Etfw\">@narendramodi<\/a><\/p>\n<p>&mdash; PMO India (@PMOIndia) <a href=\"https:\/\/twitter.com\/PMOIndia\/status\/1143496228463792128?ref_src=twsrc%5Etfw\">June 25, 2019<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"twitter-tweet\" data-cards=\"hidden\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">5 things to know about India by 2030:<\/p>\n<p>1. second largest economy (GDP), ahead of US <br \/>2. more than 1 billion internet users<br \/>3. 77% or population under age 44<br \/>4. 80% of population is middle class<br \/>5. $5.7 trillion consumer spending <a href=\"https:\/\/t.co\/KLtLWXPHm0\">https:\/\/t.co\/KLtLWXPHm0<\/a> <a href=\"https:\/\/t.co\/iNo76GkC78\">pic.twitter.com\/iNo76GkC78<\/a><\/p>\n<p>&mdash; Vala Afshar (@ValaAfshar) <a href=\"https:\/\/twitter.com\/ValaAfshar\/status\/1143594151780503553?ref_src=twsrc%5Etfw\">June 25, 2019<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"twitter-tweet\" data-lang=\"en\">\n<p lang=\"en\" dir=\"ltr\">Several key decision have been taken by Modi Govt. keeping up with the vision to achieve $5 Trillion Economy. <a href=\"https:\/\/twitter.com\/hashtag\/MODIfied100?src=hash&amp;ref_src=twsrc%5Etfw\">#MODIfied100<\/a> <a href=\"https:\/\/t.co\/pqz59ZD5he\">pic.twitter.com\/pqz59ZD5he<\/a><\/p>\n<p>&mdash; BJP Goa (@BJP4Goa) <a href=\"https:\/\/twitter.com\/BJP4Goa\/status\/1170566579492249600?ref_src=twsrc%5Etfw\">September 8, 2019<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH<br \/>\n\u2018SMC\u2019 CHANDIGARH<\/p>\n<p>BEFORE: SMT. DIVA SINGH, JM<br \/>\n ITA No. 1224\/CHD\/2018<br \/>\nAssessment Year : 2014-15<br \/>\nSmt. Asha Gandhi,<br \/>\nC\/o Yuvraj Hospital, Street No. 7 \u00bd<br \/>\nWard 74, Hargobind Nagar,<br \/>\nGiaspura, Ludhiana.<\/p>\n<p>VS<br \/>\nThe ITO,<br \/>\nWard \u2013 II(1),<br \/>\nLudhiana.<\/p>\n<p>.\/PAN No: AGWPG9408Q<br \/>\n\/Respondent<\/p>\n<p>\/Assessee by : Shri Gaurav Sharma<\/p>\n<p>\/ Revenue by : Shri Shiv Swaroop Sharma<br \/>\n\/Date of Hearing : 30.05.2019<br \/>\n\/Date of Pronouncement : 29.08.2019<br \/>\nORDER<br \/>\nThe present appeal has been f i led by the assessee<br \/>\nas sai l ing the cor rectness of the order dated 16.07.2018 of<br \/>\nCIT(A) -1, Ludhiana per taining to 2014-15 assessment year on<br \/>\nthe fol lowing grounds :<br \/>\n1. That on the facts and the circumstances of the case, the order of ld. CIT(A) is<br \/>\nbad in law.<br \/>\n2. That the Worthy CIT(A) has erred in sustaining an addition of Rs. 5,65,000\/-<br \/>\nin the income of the Assessee under Section 68 of the Act on account of unexplained<br \/>\nCash Credits.<br \/>\n3. That the addition sustained by the Id. CIT(A) are against the facts and<br \/>\ncircumstances of the case.<br \/>\n4. That the Worthy CIT(A) has erred in concluding that the Source of Rs.<br \/>\n5,65,000\/- have not been proved.<br \/>\n5. That the Appellant craves leave to add\/amend any ground of appeal during<br \/>\nthe course of Appellate Proceedings.<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 2 of 20<br \/>\n2. The relevant fact s of the case are that the assesse e&#8217;s<br \/>\nreturn was picked up for scrut iny under CASS. The AO<br \/>\nrequi red the asse ssee to just i fy the deposi t s in he r HDFC Bank<br \/>\nac count . The asse ssee claimed these to be business re ceipt s.<br \/>\nThe Assessing Of f icer not convinced wi th the explanat ion and<br \/>\nthe e vidence made the addi t ion of Rs. 5 lakh odd for the<br \/>\nreasons set out in paras 5 to 8 of his order . The se are<br \/>\nreproduced hereunder for the sake of completeness:<br \/>\n5. On 26.12.2016 a written reply has been received. In the reply it is submitted<br \/>\nthat the assessee was carrying on the business of Boutique during the year under<br \/>\nconsideration. Basically, the assessee is having her own setup of sewing machines<br \/>\nin her home and had given the setup on contract to Tailor, She used to received<br \/>\nOrder from the Customers and the stitching of that Order was to be done by the<br \/>\nTailor. Also all the expenses, such as on needles, on Threads, on Oil &#038;<br \/>\nLubricants, on Button etc. were to be borne by the Tailor. For the above said job,<br \/>\nthe assessee and tailor used to divide the receipt in the ratio of 35:65. The Sample<br \/>\nCopies of the bills are enclosed herewith as Annexure-1.<br \/>\n6. In the annexure-1, the assessee has produced 16 copies of bills of different<br \/>\ndates under the name &#038; Style &#8216;Asha Boutique, Hargobind Nagar. Near pin Colony,<br \/>\nWard No.74, Back Side Hero Cycle, Giaspura Ludhiana&#8221;, starting with Bill<br \/>\nNo.309 dated 01.04.2013 and ends with Sr No. 1501 dated 21.03.2014. None of<br \/>\nthe bills amount is tally with the cash book For example the assessee has produced<br \/>\ncopies of bills No.309 dated 01.04.2014 showing the receipt of cash of Rs.3500\/-<br \/>\nwhereas in the Cash Book shown the amount of 1250 vide voucher No.l. On<br \/>\n25.05.2013 the assessee received cash of Rs. 5500\/- vide bill No.495, but in the<br \/>\ncash book on 25.05.2013 the assessee has shown the cash receipt of Rs.1920\/- vide<br \/>\nvoucher No.53. On 09.07.2013 assessee has shown cash receipt of Rs.6370 vide<br \/>\nbills No.660,661 &#038; 662 whereas in the cash book, the assessee has shown cash<br \/>\nreceipt of Rs.1530\/- vide voucher No. 95.<br \/>\n7. From the above nothing is matching between the copies of bills and copy of<br \/>\ncash book produced during the assessment proceedings. The assessee has tried to<br \/>\nmanage a story to justify the cash deposits of Rs. 5,65,000\/- made in her HDFC<br \/>\nsaving bank account which is recorded in the books of her account which is<br \/>\nrecorded in the books of her account. It is also visible from the copies of bills<br \/>\nproduced that to justify her story the assessee has managed the copies of bills<br \/>\naccording to the ratio of 35:65. The number of voucher entries shown&#8221; in the cash<br \/>\nbook are of 1 to 343 whereas as per copy of bills produced the Serial Number of Bill<br \/>\nstarts with Sr.No. 309 on 01.04.2013 and ends with Sr. No, 1501 on 21.03.2014.<br \/>\nThis proves that there must be minimum 1193 (1501 -308} entries in the cash book<br \/>\nduring the year as against 343 entries shown in the cash book. There is no link with<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 3 of 20<br \/>\nthe income shown by the assessee from BOUTIQUE and the Bank Deposits. As the<br \/>\nBusiness is in the name of assessee, she was required to enter the entire cash book.<br \/>\n8. In view of the above findings, the cash deposits of 5,65,000\/-is assessed under<br \/>\nsection 68 of the Income Tax Act, 1961 read with section 115BBE of the Income<br \/>\nTax Act, 1961 being undisclosed cash deposits found credited in the books of<br \/>\naccount of assessee. The assessee has shown an amount of Rs.4,98,000\/- in the<br \/>\nprofit and loss account. This amount of has been shown as income from boutique.<br \/>\nThe same is being part of the undisclosed income of Rs.5,65,000\/- is being assessed<br \/>\nas undisclosed income under section 68 read with section 115BBE Tax Act as the<br \/>\nassessee could not give satisfactory reply for the c Rs.5,65,000\/- made in HDFC<br \/>\nBank. As the assessee has furnished inaccurate particular of her income, therefore,<br \/>\npenalty proceedings u\/s 27 3 Section 274 of the I.T.Act, 1961 are initiated<br \/>\nseparately.\u201d<br \/>\n3. The asses see car r ied the i ssue in appeal before the CIT(A)<br \/>\nand re l ied upon fur the r suppor t ing evidences to just i fy the<br \/>\nclaims made on the basis of the audi ted books of account .<br \/>\nThough the CIT(A) remanded the ev idences to the AO, however ,<br \/>\nul t imately the addi t ions made by the AO were conf i rmed by<br \/>\nhim. Agg r ieved by this, the asse sse e i s in appe al before the<br \/>\nITAT.<br \/>\n4. The ld. AR invi t ing at tent ion to the wr i t t en submi ssions<br \/>\nf i led be fore the CIT(A) drew spec i f ic at tent ion to page 8 of the<br \/>\nsame . Reading i t alongwi th the synopsis f i led in the present<br \/>\nproceedings he submi t ted that the at tempt s of the AO at the<br \/>\nas sessment stage as wel l as at the remand stage to l ink the<br \/>\ndeposi ts wi th the receipt s was an e xercise whi ch was bound to<br \/>\nfai l as he had fai led to understand the business mode l of the<br \/>\nas sessee. Addres sing the record, i t was submi t ted that the<br \/>\nas sessee had repeatedly c laimed that the amount s received<br \/>\nwere shared wi th the tai lor s and her sel f . The asse ssee&#8217; s share<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 4 of 20<br \/>\nwas only 35% of the total amount s rece ived for making<br \/>\navai lable he r premise s, name , contact s and e stabl ishment<br \/>\ncost s et c.<br \/>\n4.1 Invi t ing at tent ion to the impugned order , i t was his<br \/>\nsubmission that the CIT(A) af ter set t ing out the facts of the<br \/>\ncase in para 2 and refer r ing to the provi sions of the Act in<br \/>\npara 4, e xt ract ed the ent i re remand repor t of the AO and in the<br \/>\norder passed, the claim on fact s was again not considered.<br \/>\n4.2 At tent ion was invi ted again to the busines s model of the<br \/>\nas sessee addressed in para 5 of the as sessment order and the<br \/>\nwr i t ten submissions f i led before the CIT(A) . I t was submi t t ed<br \/>\nthat though they have been ext racted in para 5 pages 7 to 11<br \/>\nof the order , howeve r have remained unaddressed.<br \/>\n4.3 The ld. AR of fered to demonst rate thi s c laim by addressing<br \/>\nthe vouchers of any spec i f ic day on a test check bas is stat ing<br \/>\nthat he would be able to show that 35% of the sum total of the<br \/>\nsaid date has been ref le cted in the books.<br \/>\n5. The ld. Sr .DR consider ing the submissions advanced<br \/>\nsubmi t ted that though the argument s to this e f fe ct are on<br \/>\nre cord, howeve r the of fer of the ld. AR to demonst rate hi s claim<br \/>\non a test check basi s at thi s Forum was obje cted to. I t was his<br \/>\nprayer that inst ead of at tempt ing this exer ci se of co- relat ing<br \/>\nthe amounts on a tes t check basis wi th the vouchers, at this<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 5 of 20<br \/>\nstage the issue may be remanded back for car r ying out this<br \/>\nexer cise ei ther to the AO or the CIT(A) . The remand to the AO,<br \/>\ni t was submi t ted, would be more appropr iate.<br \/>\n6. The ld. AR in reply agreed to the remand back for<br \/>\nve r i f icat ion to the AO. On quer y, i t was submi t ted that the<br \/>\nas sessee in the immediatel y pre ceding asses sment year as wel l<br \/>\nas in the subsequent assessment ye ar has returned income<br \/>\nf rom a simi lar ac t ivi ty f rom Bout ique business whi ch has been<br \/>\nac cepted by the depar tment . I t was hi s submission that the<br \/>\nas sessee ul t imately has stopped her bus iness f inal l y in the<br \/>\nne xt assessment year .<br \/>\n7. I have heard the r ival submi ssions and perused the<br \/>\nmate r ial avai lable on re cord. I t is seen that the assessee in the<br \/>\nfact s of the present case re l ies upon the computer i zed books of<br \/>\nac count to jus t i fy her return of income. The ld. AR re lying<br \/>\nupon wr i t ten submi ssions f i led before the CIT(A) has argued<br \/>\nthat the assessee has e xplained the disc repancy in the<br \/>\nvouchers, the cash book and deposi t s by stat ing that the ful l<br \/>\namount s ref le cted in the vouchers have not be en entered in the<br \/>\ncash book and i t is only the 35% of the sum total of al l the<br \/>\nvouchers is sued on a speci f i c date whi ch has be en ref lect ed in<br \/>\nthe cash book. Re ly ing on the consi stent arguments before the<br \/>\nAO as wel l as the CIT(A) , i t has been submi t ted that f rom the<br \/>\ntotal amount ref lected in the voucher s of the day only 35%<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 6 of 20<br \/>\nbe longed to the assessee, consequent l y, only thi s amount is<br \/>\nref le cted in the cash book and is the basi s of the deposi ts<br \/>\nmade in the Bank account . The remaining 65%, i t has be en<br \/>\nstated belonged to the tai lors who took and exe cuted the<br \/>\norders f rom her premises.<br \/>\n8. A perusal of the wr i t ten submissions before the CIT(A)<br \/>\nshows that the f i ve machines used were stated to be old as<br \/>\nsuch there was no occasion to claim any depreciat ion whi ch<br \/>\nwas one of the reasons which prevai led wi th the CIT(A) to<br \/>\nuphold the addi t ion. I t has be en claimed that the running cost<br \/>\nof fans and two tube- l ight s were borne by her as her premises<br \/>\nand contact s we re used to at t ract the custome rs . For the said<br \/>\nexpense s, no deduct ion, i t has be en stated was claimed. The<br \/>\nar rangement that for making he r premise s and her contacts<br \/>\net c. 35% of the vouched e xpenses were accepted as he r share<br \/>\nand the remaining 65% belonged to the tai lor s for the i r t ime,<br \/>\nwork and mater ial costs l ike needles, oi l lubr icants, thread,<br \/>\ncloth et c.<br \/>\n9. From an ext ract of the assessment orde r in the ear l ie r<br \/>\npar t of thi s orde r i t i s se en that the shar ing rat io of 65:35<br \/>\nwi th the tai lors has been consistent l y claimed by the asse ssee .<br \/>\n10. Thus, I f ind on a perusal of the orders that though the<br \/>\nexplanat ion has been of fered consistent ly and i t has al so been<br \/>\npar t ly ext racted in the order however , the exe rcise to see<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 7 of 20<br \/>\nwhethe r on facts the cashbook re f le cted 35% of the amounts<br \/>\nref le cted in the vouchers of the day has never been examined.<br \/>\nThe arbi t rary wi l l ful reluctance to look into the fact s cannot be<br \/>\nupheld.<br \/>\n11. As noted, the ld. AR has of fered to demonst rate the<br \/>\nas sessee&#8217;s claim on a test che ck basis. The said of fer has be en<br \/>\nde cl ined by the ld. Sr .DR at this stage and the par t ies have<br \/>\nagreed that the issue may be remanded back for car rying out<br \/>\nthe said exercise. Accordingl y, conside r ing thi s fac tual<br \/>\nbackground, I am of the view that a remand is necessi tated.<br \/>\n12. The issue thus could wel l be concluded by making an<br \/>\nappropr iate di rec t ion to the said e f fe ct as i t would adequate ly<br \/>\naddre ss the i ssue in terms of the pronouncement made at the<br \/>\nt ime of hear ing. However , such an act would leave those<br \/>\nimpediment s unaddressed which appear to pose se r ious<br \/>\nobstac les and hindrance s to the nat i on\u2019 s goal to becoming a 5<br \/>\ntr i l l ion dol lar economy.<br \/>\n13. Accordingly, encouraged and inspi red by the laudable aim<br \/>\nand conscious of the nature of the jur isdict ion whi ch<br \/>\npredicate s that the Tr ibunal shal l approach and decide every<br \/>\ncase in a judi cial spi r i t wi th i r refutable reasoning and to \u201cpass<br \/>\nsuch order as thinks f i t \u201d . In view thereof , I deem i t ne cessary,<br \/>\ndrawing on my exper ience as a di spense r of just i ce to of fe r<br \/>\nce r tain const ruct ive suggest ions consi stent wi th the rende r ing<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 8 of 20<br \/>\nof just ice on the facts of the case which t r igger the impe rat ive<br \/>\nneed for making the fol lowing suggest ions whi ch I bel ieve shal l<br \/>\ninje ct impetus and st imulate growth in the e conomy by<br \/>\nproviding a boost to the nat ion\u2019 s enterpr ise and provide a<br \/>\nsigni f icant momentum pushing the sluggish economy towards<br \/>\nachieving the goal of augment ing the nat ion\u2019 s weal th.<br \/>\n14. Wi th the said aim, I propose that ;<br \/>\nFi rst ly a Tax Advi sory Cel l be const i tuted consis t ing<br \/>\nof publ ic spi r i ted of f icer s of the Re venue wi th<br \/>\nst rong e thics, ful l awareness of tax laws and<br \/>\npeople ski l ls;<br \/>\nSecondly ident i fy the new successful busine sses,<br \/>\nhowever smal l as the agents of economic<br \/>\nchange. The me chani sm and sy s tem i s al re ady in<br \/>\npl ace , i t should be put to us e as the depos i ts in<br \/>\nidle \/new\/unused account s are rout ine l y red<br \/>\nf lag ge d.<br \/>\nThi rdly a Tax Compl iance Scheme special ly created for<br \/>\nthe benef i ts of these new ventures so as to<br \/>\naddress the i r past lack of compl iance s e t c.<br \/>\n14.1 The se suggest ions i f implemented, I am conf ident wi l l<br \/>\nre sul t in picking the low hanging f rui t al ready avai lable to us.<br \/>\nOn these suggest ions I propose to del iberate in greate r detai ls<br \/>\nhe reinaf te r .<br \/>\n15. As suggest ed f i rst and foremost I am of the view that a<br \/>\nTax Advisory Cel l be created for br inging the demonst rably<br \/>\nsuccessful busine sse s f rom amongst the aspi r ing mi l ieu f rom<br \/>\nthe level of tax f ree thre shold to the leve l above the said<br \/>\nthreshold. Thi s is the need of the hour . The creat ion of such<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 9 of 20<br \/>\na me chanism I be l ieve is imperat ive in orde r to nur ture the<br \/>\nsuccessful ventures of semi -ski l led f i rst t ime unt rained<br \/>\nent repreneurs f rom a below the tax- f ree threshold to incomes<br \/>\nabove this level .<br \/>\n16. The se upward movements in income s, I am aware , are f i rst<br \/>\nnot iced by the Tax Administ rator (Assessing Of f icer ) where<br \/>\ndeposi ts in bank account s or other vis ible marker s of f inancial<br \/>\nsuccess qua a new player in the market are f i r st not iced in the<br \/>\nsystem. The se businesses whether engaged in a tai lor ing<br \/>\nac t ivi ty or bout ique owner ; restaurat eur , dhaba\/caterer s food<br \/>\nout le t ; t i f f in packer , f lor ist , innovator e t c. to my mind should<br \/>\nbe given a spe cial vel vet gloved t reatment and encouraged to<br \/>\nsucceed. No business is too smal l . I bel ieve that i t is only<br \/>\nthese ent repreneur ial f re sh ventures appropr iatel y nur tured<br \/>\nwi thin the f ramework of the taxat ion system which can be the<br \/>\nagents of economic change of the nat ion. Thei r value to the<br \/>\nnat ion\u2019s e conomy cannot be over -emphas ized. A mechanism to<br \/>\nguide these brand new asses sees through the tax and the<br \/>\nbureauc rat ic maz e must be made avai labl e by the State. Thei r<br \/>\nf i r st brush wi th thei r f inancial succe ss must not be so<br \/>\nstunning that i t poses a se emingly impossible hurdle of<br \/>\ncompl iances that they ul t imately crumble and unfor tunate ly<br \/>\nvani sh in the teeming masse s who instead of ut i l i z ing the<br \/>\nState\u2019 s oppor tuni t ies of growth bel ieve in r idding piggy-back on<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 10 of 20<br \/>\nthe ente rpr ise of a few perpetual l y clamour ing for f ree f inancial<br \/>\npackages and depending onl y on State af f i rmat i ve act ions . The<br \/>\npopulat ion needs to be weened away and di scouraged f rom this<br \/>\nhopele ss l i fe of l iv ing on State dependenc y for al l t ime s to<br \/>\ncome . The State f inancial assistance and af f i rmat ive act ions<br \/>\nshould be encouraged to be seen only as a l imi ted t ime bound<br \/>\nsuppor t . The lack of ef for t and enterpr i se should not appear to<br \/>\nbe rewarded. The enterpr i sing should be rewarded. The<br \/>\nsuccessful venture s when star ted should not be al lowed to fai l<br \/>\nat the al tar of compl iances as fai lures of such venture s though<br \/>\nat a personal level i s only an individual loss but the se smal l<br \/>\ndrops of fai lures t r ickl ing resul t s in a deluge of nat ional<br \/>\nfai lure having huge det r imental consequences for the nat ion.<br \/>\nPro-act ive ef for ts need be made by such Tax Advi sory Cel l<br \/>\nimmediatel y on not i cing the succes s of a venture as the<br \/>\nAssessing Of f icer i s too i l l equipped and cannot be saddled<br \/>\nwi th the re sponsibi l i ty of assist ing them to become taxcompl<br \/>\niant as in the envi ronment whe re he is e xpe cted to<br \/>\nfunct ion he i s al ready hard pres sed for t ime wi th weekly,<br \/>\nmonthl y targe t s e tc. to be adhered to, he nei ther has the t ime<br \/>\nand may also lack the ski l ls for providing the assistance.<br \/>\n17. I t is the Tax Advisory Cel l whi ch can only ass ist these<br \/>\nagents of economic change in becoming tax compl iant . I t can<br \/>\nal so make avai lable to these ventures the weal th of the<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 11 of 20<br \/>\ninst i tut ional st rengths of the State created in the f inancial ;<br \/>\nte chnical and vocat ional inst i tut ions of the count ry.<br \/>\n18. Car rying these suggest ions fur the r conside r ing the<br \/>\nprovisions of the law and the precedents as avai lable, I be l ieve<br \/>\nthat in order to ensure the success of the Tax Advisory Cel l , i t<br \/>\nis also nece ssar y to come out wi th some Scheme which wi l l<br \/>\nenable the se new busine sses who may ne ed assi stance to<br \/>\nbe come tax compl iant . The ventures, i t is not iced general ly do<br \/>\nnot have any advise, expe r ience or knowledge to fal l back on<br \/>\nand i t has been not iced that unknowingl y there may be<br \/>\nt ransgressions of the tax laws et c. Even i f these are bonaf ide,<br \/>\nthey need to be le gal ly addressed. In order to assi st these new<br \/>\nventure s to come wi thin the fold of the law for thei r past<br \/>\nac t ions\/inac t ions and car r y on thei r businesses ensur ing<br \/>\nfuture compl iances past t rans gressions need to be f i rst<br \/>\naddre ssed through clear concessions under Tax Compl iance<br \/>\nScheme\/Voluntary Di sclosure Scheme for such smal l<br \/>\nenterpr ises. Int roduct ion of such a scheme become s nece ssary.<br \/>\nSuch an af f i rmat ive act ion wi l l enable these agent s of Economic<br \/>\nChange to stay aler t and l ive to thei r c ivic duty that paying<br \/>\ntaxe s i s inevi table and non-ne got iable . Such ef for ts would<br \/>\ndr ive home the point and ensure that these new businesses<br \/>\nshal l always consciousl y choose to be on the r ight side of law<br \/>\nand not l ive in constant fear of be ing discovered having<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 12 of 20<br \/>\nunknowingl y commi t ted some bonaf ide t ransgressions . To my<br \/>\nmind, wi thout such a scheme the Tax Advisory Ce l l may be<br \/>\nhandicapped in pe r forming thei r role wi thin the conf ines of<br \/>\nlaw.<br \/>\n19. Whi le on the subject , I would humbly suggest that the<br \/>\nwork of the Tax Advisory Cel l is not out sourced. To my mind,<br \/>\nthe lack of accountabi l i ty and commi tment in a f ly by night<br \/>\noperator however compe tent would be det r imental to these<br \/>\naims and I bel ieve would be at the cost of the State. The<br \/>\noutsourced adhoc per sonnel are bound to lack commi tment and<br \/>\nac countabi l i ty as unl ike publ ic se rvants , thei r ethical values<br \/>\nand vi sion is nei the r moni tored nor has i t been tested at any<br \/>\nlevel . Ent rust ing this impor tant mi ssion to untested personnel<br \/>\nmay prove a dangerousl y rash exer ci se wi th ser ious long term<br \/>\nne gat i ve consequence s. The Asse ssing Of f icer , I bel ieve , also<br \/>\ncannot be expected to hand hold these new assessees towards<br \/>\ncompl iances as in the absence of any system created to<br \/>\nnur ture these sparks of Indian e conomic change, the Assessing<br \/>\nOf f icer having his own l imi tat ions of meet ing his monthly,<br \/>\nweekly target s et c. cannot be expe cted to pause his work and<br \/>\nas sist these new ventures. Howeve r , i t is my be l ief that even<br \/>\nin the target or iented mindset , there are gove rnment servants<br \/>\navai lable in the tax administ rat ion who have joined the<br \/>\nse rvices wi th the aim of nat ion bui lding and a sense of publ ic<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 13 of 20<br \/>\nse rvice. I would humbly suggest that the Tax Adv isor y Cel l<br \/>\nideal ly be const i tuted\/populated by the br ighte st dedicated<br \/>\npe rsonnel who have proven re cords of publ ic se rvi ce.<br \/>\n20. Having del iberat ed on ways to as sist the agents of Indian<br \/>\neconomic change i .e. the smal l business; ent repreneur ial sel f<br \/>\nemployment generated ventures et c. I bel ieve that i t would not<br \/>\nbe out of place to br ief ly explain why I consider thi s c lass of<br \/>\npopulat ion deser ving of a special t reatment . No studies or<br \/>\nstat ist ics need be quot ed to acknowledge the fact that<br \/>\nst ructured educat ion may not ne ce ssar i l y promote leadership<br \/>\nand innovat ion and may infact at t imes at the cost of these<br \/>\nski l l s cont r ibute in producing able and competent employee s.<br \/>\nEqual l y wel l acknowledged is the fact that the unique and<br \/>\ninnovat i ve way wi th which some people view l i fe can not be<br \/>\ntaught , i t i s a gi f t which at t ime s emerges in chal lenging<br \/>\nsi tuat ions where formal educat ion may not have been avai lable<br \/>\nas an opt ion or may have be en consciousl y been opt ed out . I<br \/>\nbe l ie ve that I am not in a minor i ty in holding that no amount<br \/>\nof ski l led worker s, qual i f ied persons can for ce into c reat ion a<br \/>\nsucces sful bus ine ss venture. Simi lar ly the fact that business<br \/>\noppor tuni t ie s can be visual i zed only by the formal ly educat ed<br \/>\nis also wel l accepted to be not a ne cess i ty. The of t quoted<br \/>\nsuccessful ventures of semi -ski l led women (Li j jat Papad) ; semi<br \/>\nski l led fami ly business (Haldiram) , (MDH) etc.non-exper t -need based<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 14 of 20<br \/>\nventure (Rajah Spice [UK] ) high end tai lor ing services provided by<br \/>\nTami l Nadu f ishermen power ing Savi le Row tai lors<br \/>\n( https:\/\/timesofindia.indiatimes.com\/home\/sunday-times\/behind-the-natty-men-in-black-jacketis-<br \/>\na-tn-fisherman\/articleshow\/65639243.cms) can be some of the Indian<br \/>\nexamples quoted which demonst rate that i t is the pass ion and<br \/>\nthe vision which i s the spark. One may wel l quote Lar ry Kim<br \/>\n(CFO of Mobi le Monkey) whi le de scr ibing an ent repreneur that ,<br \/>\n\u201cyou have to be c razy to star t a company. \u201d I t may also not be<br \/>\nout of context to quote the case study of Subway Sandwiches<br \/>\nwhich is arguabl y the largest fast food company. The said<br \/>\nenterpr ise was founded by a par tner ship compr ising of a Ph.D<br \/>\nScholar Dr . Peter Buck and a 17 years old aspir ing medical<br \/>\nschool student Mr . Fred Deluca who did not visual ize the whopping<br \/>\nsuccess, the business would garner. The venture was ent ered<br \/>\ninto wi th the mode st aim of funding his studies wi th the<br \/>\nprof i ts so generated. The venture was star ted by him wi th a<br \/>\nloan of 1000$ f rom Dr . Buck thus, wi th vi r tual ly no money and<br \/>\nindust r ial knowledge. As a resul t of thi s reason, the company<br \/>\nwas cal led Doc tor \u2019s Assoc iates Inc orporat ion. These re ferences<br \/>\nare just a t ip of the ice berg. The fol lowing instances may as<br \/>\nan i l lust rat ion fur the r dr i ve home the point :<br \/>\ni ) https:\/\/hackernoon.com\/50-big-companies-that-started-with-littleor-<br \/>\nno-money-4ef1b68aac25;<br \/>\nii) https:\/\/www.webs.com\/blog\/2015\/02\/11\/7-powerhousecompanies-<br \/>\nstarted-small\/<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 15 of 20<br \/>\niii) https:\/\/www.strawberrybranding.com\/blogs\/top-10-newgeneration-<br \/>\nsuccessful-entrepreneurs-of-india\/<br \/>\niv) https:\/\/www.badabusiness.com\/articles\/lijjat-papad-company-astory-<br \/>\nof-women-empowerment\/<br \/>\n21. I bel ieve the re is no dear th in the count r y of talent , aims<br \/>\nand ambi t ions aspi r ing to create ar t i f icial jewel ler y; clothing<br \/>\nl ine, cosmet ics &#038; beauty; heal th &#038; wel fare; fast food; jam;<br \/>\nchutney; seasonal decorat ions, educat ional aids, sof tware<br \/>\ngame s; apps for ente r taining; learning; ski l l ing etc. Howeve r , i f<br \/>\nthe enterpr ising and innovat ive who could have star ted smal l ,<br \/>\nout of fears of compl iance related responsibi l i t ies and instead<br \/>\nchose to accept to work for a steady salar y for MNC instead of<br \/>\nstar t ing smal l enterpr i ses themselves, then i t is in the<br \/>\nnat ional interest that the envi ronment is addressed.<br \/>\n22. I bel ieve that techni cal ly sound and qual i f ied peopl e can<br \/>\nonly assist these agents of economic change to become more<br \/>\nviable and help them in inc reasing thei r scale and prof i t .<br \/>\nHoweve r , they cannot provide the spark. On the othe r hand,<br \/>\nthese f i r st t ime asse ssee s because of thei r succe ssful venture<br \/>\ndue to thei r lack of awareness, understanding and exi st ing<br \/>\nl imi tat ions of the i r capabi l i t ie s to adhere to Rules that tax<br \/>\nas sistance become s nece ssar y as the y are ei the r ignorant or<br \/>\ntoo bus y looking at things di f ferent ly. I bel ieve that ul t imately<br \/>\ni t i s such ent repreneurs who can fuel the progress of the Indian<br \/>\neconomic juggernaut . The se sparks of ent repreneur ial act ivi ty I<br \/>\nwould suggest consequent ly should be ident i f ied as agent s of<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 16 of 20<br \/>\neconomic change at the ear l iest point of t ime when they come<br \/>\nin the radar of the tax administ rat ion by vi r tue of deposi ts in<br \/>\nbanks or acqui si t ion of as sets etc. As faced wi th the possibi l i ty<br \/>\nof probably not being tax compl iant , these new ventures<br \/>\nshould not be al lowed to fal l in dubious hands where they may<br \/>\nbe so made aware that whatever they do, they are bound to<br \/>\nf lout the law. The tax administ rator i . e. the Asse ssing Of f icer<br \/>\nshould then immediately pass these new assessees to the Tax<br \/>\nAdvisory Cel l . These agents of ec onomic change should not be<br \/>\nlef t in the lur ch t rying to address the consequences of thei r<br \/>\nsuc cessful venture s as i t i s on the back of these agents of<br \/>\neconomic change that the Indian economy can r is e and f ly. We<br \/>\ncannot and should not depend on g overnment spend alone .<br \/>\nWeal th has to be c re ated, by the people and a machinery to<br \/>\nnur ture them should be urg ent ly created wi thin the tax<br \/>\nadmini s t rat ion depar tment i ts el f . I t i s in the interes ts of the<br \/>\nState to ensure that relevant informat ion, guidance and advice<br \/>\nis made avai lable to these a gents of economic change. The<br \/>\nIndian economy can be power ed by such ente rpr ising people<br \/>\nwho bravely star t thei r business venture s relying on thei r vision<br \/>\nand pass ions wi th no f inanc ial nets to f al l back on in case of<br \/>\nfai lure of thei r business venture. The se f i rst t ime businesses<br \/>\nlacking the exper ience and ski l ls are i l l equipped even to<br \/>\nhandle thei r f inancial succe ss and need assi stance to guide<br \/>\nthem through the tax requi rement s and the bureaucrat ic maze<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 17 of 20<br \/>\nof nece ssar y compl iances. I t i s the Tax Advi sory Cel l can help<br \/>\nthem to be come tax compl iant . The Revenue may consider<br \/>\nde veloping the ski l ls to col lect ( tax) l ike honey is col lected<br \/>\nf rom f lower s by be es and but ter f l ie s. The f lower doe s not miss<br \/>\nthe honey taken. I t cont inues to bloom and remain v iable for<br \/>\nhone y col le ct ion again and again t i l l i ts l i fe t ime .<br \/>\n23. In my exper ience as a dispenser of Just ice, I have not iced<br \/>\nthat general ly the violat ions of tax laws by new assesse es do<br \/>\nnot occur because the y are so de si red but because of sheer<br \/>\nlack of proper advice. Instead of le t t ing the se sparks of<br \/>\neconomic change st i f le and die due to fear of compl iances, I<br \/>\nf i rmly bel ieve for the de ta i led rea sons set out hereinabove that<br \/>\nthey be urgent ly as s i s ted in the interest s of the State. Such<br \/>\nsparks may be re f lect ed at t ime s in par t t ime enterpr i sing<br \/>\nhousewives , i l l i t erate , semi -ski l led men\/women or teenagers. I<br \/>\nwould ser iousl y e xhor t and urge the State through the tax<br \/>\nadminist rat ion to provide a plat form spec ial ly c reated to assi st<br \/>\nthese ventures to remain relevant and tax compl iant .<br \/>\n24. I am aware that viable and sui table envi ronments are<br \/>\nbe ing created for the success of businesses but due to lack of<br \/>\nexposure, educat ion and equal ly ignorant pee r group, these<br \/>\nsparks of ent repreneur ship belonging not ne cessar i ly to<br \/>\nthe me t ropol i tan ci t ies and the el i te s many a t ime s die si lent<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 18 of 20<br \/>\ndeaths wi th broken dreams and aspi rat ions. These deaths as<br \/>\nnoted come at the cost of the Indian economy. The minimum<br \/>\ntax gene rated by these dy ing ventures should not be the aim of<br \/>\nthe tax adminis t rat ion or the State. The aim should be to help<br \/>\nand ass ist them to be come bi g and remain tax compl iant .<br \/>\nThe rein comes the role of the tax adminis t rat ion. I t is the tax<br \/>\nadminist rat ion which as noted ear l ier i s f i r st aler ted about<br \/>\nsuccessful ventures by way of deposi t s in bank account s,<br \/>\nacquis i t ion of proper ty, vehicle et c. The change not iced should<br \/>\nbe re sponded to wi th alacr i ty by the machine ry spe cial ly<br \/>\ncreated wi thin the tax depar tment which has ski l led knowledge<br \/>\nin abundance as i t s re source st rength.<br \/>\n25. I t is f or the said purposes to highl ight the concepts of<br \/>\na) agents of economi c change; b) cr eat ion of Tax Advisory Cel l ;<br \/>\nand coming out wi th; c) Pol icy\/Tax Compl iance Scheme f or<br \/>\nthese new bus inesses that a c opy of this order , i t i s c onsidered<br \/>\nnecessary to be marked to the Chai rman, CBDT, New Delhi .<br \/>\n26. Re ver t ing back to the fact s of the present case conside r ing<br \/>\nthe submissions advanced on behal f of the par t ies in the facts<br \/>\nwhich have be en brought out in greater detai l in paras 2 to 11<br \/>\nof this orde r , the impugned order is set aside back to the f i le<br \/>\nof the AO wi th the di re ct ion to ve r i fy the stated claim of the<br \/>\nas sessee namel y that the sums ref le cted by her as he r income<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 19 of 20<br \/>\nof a speci f ic day i s the 35% of the sum total of the rece ipt s of<br \/>\nthe vouchers of the spec i f ic date .<br \/>\n26.1 I t is di rected that in case the asse ssee succeeds in<br \/>\ndemonst rat ing he r claim, the addi t ion is to be de leted.<br \/>\n26.2. However in case af ter car r ying out the said ve r i f icat ion,<br \/>\nthe claim is found to be not acceptable, i t is di rect ed that the<br \/>\nAO neces sar i ly shal l conf ront the def iciencie s not i ced to the<br \/>\nas sessee and af ter giving the assessee a re asonable<br \/>\noppor tuni ty of be ing heard in the spi r i t of the sug gest ions<br \/>\nmade here inabove shal l then pass a speaking orde r in<br \/>\nac cordance wi th law.<br \/>\n26.3 I t is made clear that the assesse e in i ts own interest s<br \/>\nshal l par t icipate ful ly and fai r ly in the proceedings be fore the<br \/>\nAO as fai l ing whi ch the AO shal l be at l ibe r ty to pass an orde r<br \/>\non the basi s of mater ial avai lable on record. Said order was<br \/>\npronounced in the Open Cour t at the t ime of hear ing i t sel f .<br \/>\n27. The Regi st ry i s di re cted to forward a copy of thi s order to;<br \/>\n( i ) The Chai rman, CBDT, New Delhi . (spec i f ic paras 12 to 25 of<br \/>\nthis order being ref er red f or inf ormat ion and nec essary ac t ion,<br \/>\ni f deemed f i t ) .<br \/>\nITA 1224\/CHD\/2018<br \/>\nA.Y. 2014-15<br \/>\nPage 20 of 20<br \/>\n28. In the resul t , appeal of the assesse e is al lowed for<br \/>\nstat ist ical purpose s.<br \/>\nOrder pronounced in the Open Cour t on 29th August ,2019.<br \/>\nSd\/-<br \/>\n(DIVA SINGH)<br \/>\n\/Judicial Member<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In my experience as a dispenser of Justice, I have noticed that generally the violations of tax laws by new assessees do not occur because they are so desired but because of sheer lack of proper advice. Instead of letting these sparks of economic change stifle and die due to fear of compliances, I firmly believe for the detailed reasons set out hereinabove that they be urgent ly assisted in the interests of the State. Such sparks may be reflected at times in part time enterprising housewives, illiterate, semi-skilled men\/women or teenagers. I would seriously exhort and urge the State through the tax administration to provide a platform specially created to assist these ventures to remain relevant and tax compliant<\/p>\n<div class=\"read-more\"><a href=\"https:\/\/itatonline.org\/archives\/asha-gandhi-vs-ito-itat-chandigarh-itat-offers-suggestions-on-to-remove-hindrances-to-indias-goal-to-become-a-5-trillion-economy-violations-of-tax-laws-by-new-assessees-occur-because-of-lack-of-pr\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,8],"tags":[],"class_list":["post-21088","post","type-post","status-publish","format-standard","hentry","category-all-judgements","category-tribunal","judges-diva-singh-jm","section-1084","counsel-gaurav-sharma","court-itat-chandigarh","catchwords-5-trillion-economy","genre-domestic-tax"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/21088","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=21088"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/21088\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=21088"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/categories?post=21088"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/tags?post=21088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}