M/s. Sharp Business Systems India Ltd., New Delhi V. DCIT, New Delhi

ITA 1045/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6960 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 30-06-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Assessee Lawyers: VIVEK JAIN
• Keywords: Question of law
• Section: 14A; 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 1045/DEL/2013 ASSESSMENT YEAR: 2001-02 M/S SHARP BUSINESS SYSTEMS INDIA LTD. VS. DCIT, 214-221, ANSAL TOWER, CIRCLE 8(1), 38, NEHRU PLACE, NEW DELHI NEW DELHI 110 019 (PAN: AAECS2980A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIVEK JAIN, CA REVENUE BY : SMT. ANIMA BARNWAL, SR. DR DATE OF HEARING : 30/06/2016 DATE OF ORDER : 08/07/2016 ORDER PER H.S. SIDHU, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF THE LD. CIT(A)-XI, DELHI DATED 21.11.2012 IN APPEAL NO. 289/11-12 RELEVANT FOR AY 2001-02 BY WHICH THE CIT( A) UPHELD AND CONFIRMED THE PENALTY IMPOSED BY THE AO U/S 271(1)( C) OF THE INCOME TAX ACT 1961. 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDE R:- ITA NO. 1045/DEL/2013 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PE NALTY ORDER PASSED BY THE LD. CIT(A) IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONF IRMING THE ORDER PASSED BY THE AO IMPOSING THE PENALTY U/S . 271(1)(C) OF THE ACT AS ASSESSEE DID NOT FURNISH INACCURATE PARTICULARS OF INCOME. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN IGNORING THE CONTENTION OF THE ASSESSEE THAT THE ABOVE SAID PENA LTY ORDER PASSED BY AO BY ARBITRARY REJECTING THE MATER IAL AND EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT ASSESSEE DID NOT FURNISH INACCURATE PARTI CULARS OF INCOME. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT ASSESSEE HAS PREFERRED AN APPEAL BEING CIVIL APPEAL NO. 4072/2014 BEFORE THE HONBLE SUPREME COURT OF INDIA IN ASSESS EES OWN CASE PERTAINING TO THE QUANTUM PROCEEDINGS WHICH IS STIL L PENDING BEFORE THE HONBLE SUPREME COURT OF INDIA. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN VIEW OF DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF C IT VS. LIQUID INVESTMENTS LTD. IN ITA NO. 240/2009 DATED 5.10.201 0 WHEREIN IT ITA NO. 1045/DEL/2013 3 HAS BEEN HELD THAT WHEN A QUESTION OF LAW HAS BEEN FRAMED ON A PARTICULAR ISSUE THEN THE ISSUE BECOMES DEBATABLE A ND NO PENALTY IS SUSTAINABLE IN REGARD TO SUCH IMPUGNED ADDITION. 4. LD. COUNSEL OF THE ASSESSEE FURTHER DRAW OUR ATT ENTION BY FILING A COPY OF JUDGMENT DATED 8 TH JULY, 2014 IN THE CASE OF CIT VS. NAYAN BUILDERS AND DEVELOPERS PASSED IN INCOME TAX APPEAL NO. 415 OF 2012 BY THE HONBLE HIGH COURT AT BOMBAY AN D STATED THAT THE PRESENT ISSUE IN DISPUTE IS SQUARELY COVERED BY THE AFORESAID DECISION. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTI ES AND CAREFULLY PERUSED THE RECORDS AND OTHER RELEVANT MATERIAL PLA CED BEFORE US. 6.1 WE FIND THAT THE HONBLE JURISDICTIONAL HIGH C OURT OF DELHI IN THE CASE OF CIT VS. LIQUID INVESTMENTS LTD. IN ITA NO. 240/2009 DATED 5.10.2010 HAS HELD AS UNDER :- BOTH THE CIT(A) AS WELL AS THE ITAT HAVE SET ASIDE THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT THE ISSUE OF DEDUCTION UNDER SECTION 14A OF THE ACT WAS A DEBATABLE ISSUE. WE MAY ALSO NOTE THAT AGAINST THE QUANTUM ITA NO. 1045/DEL/2013 4 ASSESSMENT WHEREUNDER DEDUCTION UNDER SECTION 14A OF THE ACT WAS PRESCRIBED TO THE ASSESSEE, THE ASSESSEE HAD PREFERRED AN APPEAL IN THIS COURT UNDER SECTION 260A OF THE ACT WHICH HAS ALSO BEEN ADMITTED AND SUBSTANTIAL QUESTION OF LAW FRAMED. THIS ITSELF SHOWS THAT THE ISSUE IS DEBATABLE. FOR THESE REASONS, WE ARE OF THE OPINION THAT NO QUESTION OF LAW ARISES IN THE PRESENT CASE. THIS APPEAL IS ACCORDINGLY DISMISSED. 6.2 WE FURTHER FIND THAT THE HONBLE BOMBAY HIGH CO URT VIDE ITS JUDGMENT DATED 8 TH JULY, 2014 IN THE CASE OF CIT VS. NAYAN BUILDERS AND DEVELOPERS PASSED IN INCOME TAX APPEAL NO. 415 OF 2012 HAS HELD AS UNDER:- HAVING HEARD MR. AHUJA, LEARNED COUNSEL APPEARING ON BEHALF OF THE APPELLANT, WE FIND THAT THIS APPEAL CANNOT BE ENTERTAINED AS IT DOES NOT RAISE ANY SUBSTANTIAL QUESTION OF LAW. THE IMPOSITION OF PENALTY WAS FOUND NOT TO BE JUSTIFI ED AND THE APPEAL WAS ALLOWED. AS A PROOF THAT THE PENALTY WAS DEBATABLE AND ARGUABLE ISSUE, THE TRIBUNAL REFERRED TO THE ORDER ON ASSESSEES APPEAL IN QUANTUM PROCEEDINGS AND THE SUBSTANTIAL QUESTIONS OF LAW WHICH HAVE BEEN FRAMED THEREIN. WE HAVE ALSO PERUSED THAT ORDER DATED 27 TH SEPTEMBER, 2010 ADMITTING INCOME TAX APPEAL NO. 2368 OF 2009. IN OUR VIEW, THERE WAS NO CASE MADE OUT FOR IMPOSITION OF PENALTY AND THE SAME WAS ITA NO. 1045/DEL/2013 5 RIGHTLY SET ASIDE. THE APPEAL RAISES NO SUBSTANTIA L QUESTION OF LAW, IT IS DISMISSED. NO COSTS. 6.3 AFTER GOING THROUGH THE AFORESAID FINDINGS OF THE DIFFERENT HONBLE HIGH COURTS, AS AFORESAID, WE OBSERVED THA T ADMITTEDLY THE IMPUGNED ADDITION HAS BEEN UPHELD BY THE LD. CIT(A) , TRIBUNAL AND LATER BY THE HONBLE HIGH COURT. AT THE SAME TIME WE ALSO OBSERVED THAT ASSESSEE FILED AN APPEAL BEING CIVIL APPEAL NO. 4072/2014 BEFORE THE HONBLE SUPREME COURT OF INDIA WHICH IS STILL PENDING. AFTER PERUSING THE FINDINGS OF THE HONBL E JURISDICTIONAL HIGH COURT IN THE CASE OF LIQUID INVESTMENT LTD. (S UPRA) AND THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. M/S NAYAN BUILDERS AND DEVELOPERS (SUPRA), WE REA CH TO A LOGICAL CONCLUSION THAT WHEN APPEAL OF THE ASSESSEE IS PEND ING BEFORE THE HONBLE SUPREME COURT OF INDIA, THEN THE ISSUE BECO MES DEBATABLE AND IN THIS SITUATION NO PENALTY U/S 271(1)(C) OF T HE ACT IS LEVIABLE ON THE ASSESSEE. 7. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF HO NBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF L IQUID INVESTMENT LTD. (SUPRA) AND THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. NAYAN BUILDERS AND DEVELOPE RS (SUPRA), WE ARE INCLINED TO HOLD THAT THE PENALTY WAS IMPOSED O N THE ASSESSEE PERTAINING TO THE ISSUE ON WHICH APPEAL IS PENDING BEFORE THE ITA NO. 1045/DEL/2013 6 HONBLE SUPREME COURT OF INDIA BEING CIVIL APPEAL N O. 4072/2014 AND THE SAME HAS BECOME DEBATABLE THEN NO PENALTY IS LEVIABLE THEREON. IN OUR CONSIDERED OPINION, THE PENALTY IN THE PRESENT CASE IS NOT EXIGIBLE UNDER THIS SECTION. WE, THEREFORE, ORDER FOR THE DELETION OF PENALTY IN DISPUTE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/07/2016 . SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 08/07/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES