QUIKR INDIA P.LTD, MUMBAI V. DCIT 8(3), MUMBAI

ITA 1046/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5904 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 14-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKASH KR AGARWAL
• Keywords: Non-deduction of tax
• Section: 271(1)(c)

Judgement Text

, ,, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEMBER ./ ITA NO.1046/MUM/2017 ( / ASSESSMENT YEAR :2009-2010) QUIKR INDIA PVT. LTD, ECO SPACE IT PARK, UNIT NO.502-505, MOGRA VILLAGE, HOTEL SHIV SAGAR LANE, OLD NAGARDAS ROAD, ANDHERI EAST, MUMBAI-400069 VS. DCIT, CIRCLE-8(3), MUMBAI (NOW, DY.CIT, CIRCLE-11(1)(1), MUMBAI ./PAN NO. : AACC 7004 R ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI DEVENDRA JAIN, AR /REVENUE BY : SHRI VIKASH KR. AGARWAL, DR / DATE OF HEARING : 02/01/2019 /DATE OF PRONOUNCEMENT 15/01/2019 / O R D E R PER SHRI RAJESH KUMAR, AM : THIS APPEAL BY ASSESSEE IS FILED AGAINST THE ORDER OF THE CIT(A) 18, MUMBAI, DATED 26.10.2016, RELATING TO A.Y. 2009 -2010, IN THE MATTER OF ORDER PASSED U/S.271(1)(C) OF THE ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL BEING AGGRIEVED BY THE ORDER DATED 26.10.2016 PASSE D BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-L8, MU MBAI. ['LD. CIT(A)'] U/S 250 OF THE INCOME-TAX ACT, 1961 ('ACT' ), YOUR APPELLANT PREFERS THIS APPEAL, AMONG OTHERS, ON THE FOLLOWING GROUNDS OF APPEAL, EACH OF WHICH IS WITHOUT PREJUDICE TO, AND INDEPENDENT OF, THE OTHER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS.22,85,000/- IMPOSED BY THE LD. A.O. U/S.271(L)(C ) OF THE ACT. THE LD. CIT(A) FAILED TO APPRECIATE, AND OUGHT TO HAVE ACCEPTED, THAT THE APPELLANT NEITHER CONCEALED ANY PARTICULARS OF INCOME, NOR DID IT FURNISH ANY INACC URATE PARTICULARS OF SUCH INCOME. YOUR APPELLANT, THEREFO RE, PRAYS THAT THE LEVY OF PENALTY OF RS.22,85,000/- BE CANCE LLED. ITA NO.1046/17 2 2. YOUR APPELLANT CRAVES LEAVE TO ALTER, MODIFY, AMEND OR DELETE THE ABOVE GROUND OF APPEAL, OR TO ADD ONE OR MORE N EW GROUND(S), AS MAY BE NECESSARY. 3. FACTS IN BRIEF ARE THAT THE ASSESSMENT WAS MADE IN THE CASE OF ASSESSEE U/S.143(3) OF THE ACT ON 26.12.2011 DETERM INING TOTAL LOSS OF RS.4,78,54,805/-. THE DIFFERENCE BETWEEN THE RETURN ED LOSS AND ASSESSED LOSS WAS ON ACCOUNT OF DISALLOWANCE AND THE ADDITIO N OF RS.73,44,298/- U/S.40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TAX A T SOURCE AND STAMP DUTY OF RS.50,020/- PAID ON REDEMPTION OF SHARES. IN THE ASSESSMENT ORDER THE AO INITIATED THE PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT FOR THE DEFAULT WITHIN THE MEANING OF SAID SECTION, WHEREAS IN THE PENALTY ORDER THE AO IMPOSED PENALTY VIDE ORDER DATED 24.03.2014 ON CONCEALED INCOME OF RS.67,20,068/- EQUAL TO 100% OF THE TAX S OUGHT TO BE EVADED WHICH WORKED OUT TO RS.22,84,151/-. LD. CIT(A) CONF IRMED THE ORDER OF AO UPHOLDING THE PENALTY IMPOSED BY HOLDING THAT THE A SSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME PARTICULARS OF INC OME/LOSS WITH KNOWLEDGE WITHOUT REFLECTING THE SAME IN THE TAX AUDIT REPORT AND FINALLY DISMISSED THE APPEAL OF THE ASSESSEE. 4. LD. AR VEHEMENTLY SUBMITTED BEFORE US THAT IN TH E ASSESSMENT ORDER DATED 26.12.2011, LD.AO DID NOT SPECIFY ONE O F THE TWO LIMBS UNDER WHICH THE PENALTY WAS PROPOSED TO BE LEVIED WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FILING INACCURATE PARTICULARS OF I NCOME PARTICULARS OF INCOME, HOWEVER, ONLY MENTIONED THAT PENALTY INITIA TED FOR THE DEFAULT COMMITTED WITHIN THE MEANING OF THE SECTION 271(1)( C) OF THE ACT. IN THE PENALTY ORDER DATED 24.03.2014 THE AO IN PARA 4.3 S TATED THAT THE ITA NO.1046/17 3 ASSESSEE HAS CONCEALED ITS INCOME AS WELL AS FURNIS HED INACCURATE PARTICULARS OF INCOME PARTICULARS OF INCOME WHEREAS IN PARA 5.2 OF THE PENALTY ORDER THE AO SATED THAT HE SATISFIED ABOUT THE IMPOSITION OF PENALTY U/S.271(1)(C) OF THE ACT AND FINALLY IMPOSE D PENALTY AT PARA 6 EQUAL TO RS.67,20,068/- WHICH WORKS OUT TO 100% OF THE TAX SOUGHT TO BE EVADED. LD. AR VEHEMENTLY SUBMITTED THAT IT IS SETT LED LAW THAT THE AO HAS TO STRIKE DOWN THE IRRELEVANT OF THE TWO LIMBS IN THE PENALTY NOTICE ISSUED U/S.274/271(1)(C) OF THE ACT, WHEREAS THE AO HAS FAILED TO DO SO IN THE NOTICE ISSUED DATED 26.12.2011, A COPY OF WHICH IS PLACED AT PAGE 74 OF THE PAPER BOOK. THIS IS CLEAR THAT THE ASSESSEE HAS NOT BEEN GIVEN AN OPPORTUNITY TO DEFEND ITSELF AS TO HOW THE PENALTY IS BEING IMPOSED ON IT. LD. AR SUBMITTED THAT IN VIEW OF THE DECISION IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY & ORS., 359 ITR 565 (KAR .) AND THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ASHOK PAI VS CIT 292 ITR 11(SC), AND CIT VS SAMSON PERINCHERY ITA NO 1154 OF 2014 ORDER DATED 5.1.207 IN WHICH THE HONBLE BOMBAY HIGH COURT HAS HELD THAT THE PENALTY IS NOT TO BE LEVIED WHERE THE AO HAS NOT SP ECIFIED THE PARTICULAR CHARGE ON WHICH IT WAS PROPOSED TO BE LEVIED. 5. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER O F CIT(A) AND SUBMITTED THAT THE ASSESSEE WAS GIVEN SUFFICIENT OP PORTUNITY DURING THE COURSE OF PENALTY PROCEEDINGS AND EVEN PARTICIPATED AND REPLIED THE NOTICE ISSUED BY THE AO AND, THEREFORE, THERE IS NO FORCE IN THE ARGUMENTS OF THE ASSESSEE THAT THE PENALTY SHOULD BE DELETED ON THE BASIS OF NON- STRIKING OF THE IRRELEVANT LIMB IN THE PENALTY NOT ICE. ITA NO.1046/17 4 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE OBSERVE FROM THE PAGE NO.74 OF THE PAPER BOOK WHICH IS A NOTICE ISSUED U/S.274/271(1)( C) OF THE ACT DATED 26.12.2011 IN WHICH THE AO HAS NOT MENTIONED THE CH ARGE ON WHICH THE PENALTY WAS PROPOSED TO BE LEVIED AND THE AO ISSUED NOTICE IN A MECHANICAL MANNER WITHOUT APPLICATION OF MIND. WE, THEREFORE, FIND MERIT IN THE CONTENTION OF THE ASSESSEE THAT THE PENALTY IN THE PRESENT FACTS OF THE CASE CANNOT BE SUSTAINED AS THE ASSESSEE WAS DE PRIVED AN OPPORTUNITY TO RESPOND ON THE PARTICULAR CHARGE ON WHICH THE PENALTY WAS TO BE LEVIED. THE CASE OF THE ASSESSEE IS SQUAREL Y COVERED BY THE DECISION OF MANJUNATHA COTTON AND GINNING FACTORY & ORS., 359 ITR 565 (KAR.) AND THE CIT VS SAMSAON PERINCHERRY (SUPRA) IN WHICH IT HAS BEEN HELD THAT NO PENALTY HAS TO BE LEVIED WHERE THE AO HAS NOT STATED IN THE NOTICE ISSUED U/S 271 R.W.S. 271(1)(C) OF THE ACT ONE OF THE TWO LIMB ON WHICH THE PENALTY IS PROPOSED TO BE LEVIED. EVEN ON MERIT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF HON 'BLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) L TD. [2010] 322 ITR 158 (SC), WHEREIN IT HAS BEEN STATED THAT WHERE THE ASS ESSEE HAS FULLY DISCLOSED ALL THE PARTICULARS OF EXPENSES IN THE RE TURN FILED EVEN THOUGH THE CLAIM OF ASSESSEE IS NOT CORRECT, PENALTY CANNO T BE IMPOSED. IN THE PRESENT CASE BEFORE US THE DISALLOWANCE WAS MADE U/ S.40(A)(IA) OF THE ACT TO RS.66,70,048/- AND STAMP DUTY ON ISSUANCE OF SHARES OF RS.50,020/- AGGREGATING TO RS.66,70,048/- AND PENA LTY WAS ON THIS ADDITIONS. IN OUR OPINION, EVEN ON MERIT THE ASSES SEE HAS A STRONG CASE ITA NO.1046/17 5 AND THE PENALTY CANNOT BE SUSTAINED IN ANY CASE. AC CORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO DELE TE THE PENALTY SO IMPOSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 15/01/2019. SD/- (RAM LAL NEGI) SD/- (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 15/01/2019 . . /PRAKASH KUMAR MISHRA , SR.PS. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSISTANT REGISTRAR ) , / ITAT, MUMBAI 1. / THE APPELLANT- 2. / THE RESPONDENT- 3. ( ) / THE CIT(A), MUMBAI 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//