Shree Joints International P. Ltd., V. DCIT, Coy. Circle-2(3),

ITA 1185/DEL/2005

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8102 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 07-07-2009
• Assessment Year: 1995-1996
• Appeal Filed On: 11-03-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: S KRISHNAN
• Keywords: Presumptive income; Additional evidence; Set aside
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `G: NEW DELHI BEFORE SHRI R.P.TOLANI,JM AND SHRI K.D. RANJAN, A M I.T.A. NO.1185/DEL OF 2005 ASSESSMENT YEAR: 1995-96 SHREE JOINTS INTERNATIONAL P. LTD. DCIT, CO. CIRCL E 2(3), C/O SH. SUNIL NANDA ADVOCATE VS NEW DELHI. 37, RAJOURI APARTMENTS, RAJOURI GARDEN, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI K. SAMPATH & S. KRIS HNAN DEPARTMENT BY : S HRI KISHORE B, SR. DR ORDER PER R.P. TOLANI: JM THIS APPEAL HAS BEEN FIXED FOR HEARING CONSEQUENT T O THE DIRECTIONS OF HONBLE DELHI HIGH COURT IN ITA NO.252 OF 2006 VIDE ORDER DATED 4 TH DECEMBER, 2008 SETTING ASIDE TO DECIDE THE APPEAL B ACK TO THE ITAT WITH A DIRECTION TO DECIDE THE APPEAL ON MERITS. SOLE GRO UND RAISED BY ASSESSEE IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN HOLDING THE APPELLANT GUILTY OF CONTRAVENTION OF THE PROVISIONS ENVISAGED IN SECTION 271(1)(C ) OF THE INCOME-TAX ACT, 1961 AND CONSEQUENTLY SUSTAINING THE PENALTY LEVIED IN A SUM OF RS.3,91,000/-. 2 2. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT A SSESSEE HAD FILED ITS ORIGINAL RETURN OF INCOME RE-COURSING TO SECTION 44 AD I.E. PRESUMPTIVE TAXATION IN THE CASE OF CIVIL CONTRACTORS. AO WHILE FRAMING THE ASSESSMENT MADE ADDITIONS IN RESPECT OF CASH CREDITS. AGGRIEV ED ASSESSEE PREFERRED FIRST APPEAL WHEREIN IN RESPECT OF SOME OF THE CASH CREDI TS, ADDITIONS WERE DELETED. IN RESPECT OF TWO CREDITORS OUT OF THREE, ASSESSEE FILED CONFIRMATIONS WHICH WERE NOT ENTERTAINED BY CIT(A) HOLDING THEM T O BE INADMISSIBLE ADDITIONAL EVIDENCE. THESE ADDITIONS WERE CONFIRME D. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE ITAT. THE ASSESSEE COMPANY HAS SINCE LONG CLOSED OPERATIONS AND FOR WANT OF PROPER REPRESENTATION, T HE SAID APPEAL (ITA NO.1433/DEL/99) VIDE ORDER DATED 22.7.2004 WAS DISM ISSED IN LIMINE RELYING ON THE CASE OF MULTIPLAN INDIA LTD., 38 ITD 320 (DE L). IT WAS CONTENDED THAT THE PENALTY MAY BE DECIDED ON MERITS. 3. LEARNED COUNSEL CONTENDS THAT THE MATTER BEING O LD AND PROPER RECORD BEING NOT IN POSSESSION, THE PENALTY MAY BE DELETED BECAUSE ASSESSEE WAS UNDER BONAFIDE IMPRESSION THAT IT WAS ASSESSABLE U/ S 44AD DUE TO WHICH CONFIRMATIONS WERE NOT PROCURED BY THE ASSESSEE. B Y THE TIME OF APPELLATE PROCEEDINGS, ASSESSEE COULD GET HOLD OF TWO CONFIRM ATIONS. CIT(A) UNJUSTIFIABLE REFUSED TO ADMIT THE ADDITIONAL EVIDE NCE, WHICH WAS QUITE ENTERTAIN ABLE IN TERMS OF RULE 46A. CIT(A) IN PEN ALTY PROCEEDINGS HAS ALSO 3 HELD THAT THE CONFIRMATIONS WERE NOT FILED DURING T HE COURSE O ASSESSMENT. IT HAS BEEN LOST SIGHT OF THE PENALTY PROCEEDINGS, WHI CH ARE DISTINCT AND SEPARATE THAN ASSESSMENT PROCEEDINGS, AND EVIDENCE, WHICH WAS NOT FILED IN ASSESSMENT PROCEEDINGS, CAN BE VERY WELL FILED IN P ENALTY PROCEEDINGS. IN THIS VIEW OF THE MATTER, LOWER AUTHORITIES HAVE ERR ED IN BANKING UPON THE ASSESSEES INABILITY DURING ASSESSMENT PROCEEDINGS. THE PENALTIES MAY NOT BE PROPERLY IMPOSED. 4. LEARNED DR, ON THE OTHER HAND, CONTENDS THAT ASS ESSEE DID NOT FILE THE CONFIRMATIONS DURING ASSESSMENT PROCEEDINGS AND CIT (A) DID NOT ADMIT THE ADDITIONAL EVIDENCE WHICH ORDER BY NOW HAS BECOME F INAL DUE TO DISMISSAL OF ASSESSEES APPEAL BEFORE THE TRIBUNAL. IT IS NO T CLEAR WHETHER THE ASSESSEE FILED THESE CONFIRMATIONS IN PENALTY PROCEEDINGS OR NOT. WHAT IS EMANATING OUT FROM THE RECORD IS THE FACT THAT THE ASSESSEE F AILED TO PRODUCE THE SAME IN THE ASSESSMENT PROCEEDINGS AND CIT(A) REFUSED TO AD MIT THE ADDITIONAL EVIDENCE. THEREFORE, THE PLEA OF THE ASSESSEE IN T HIS BEHALF CANNOT BE ACCEPTED ON FACE VALUE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS A SETTLED PROPOSITION THAT PENALTY P ROCEEDINGS ARE DISTINCT AND SEPARATE FROM ASSESSMENT PROCEEDINGS. EVIDENCE, WH ICH WAS NOT FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, CAN BE ADDUCED IN PENALTY 4 PROCEEDINGS. IN THE ENTIRELY OF THE FACTS AND CIRC UMSTANCES, IN OUR VIEW, THE AO SHOULD HAVE GIVEN NECESSARY OBSERVATIONS ABOUT F ILING OF CONFIRMATIONS DURING THE PENALTY PROCEEDINGS OR OTHERWISE. BESID ES, CIT(A) ALSO THOUGH HAS REFERRED TO CONFIRMATIONS BEING NOT ADMITTED, H OWEVER, IN THE INTEREST OF JUSTICE, THESE BEING PENALTY PROCEEDINGS, THE CONFI RMATIONS SHOULD HAVE REFERRED TO WHILE DECIDING THESE PROCEEDINGS. IN T HE ENTIRETY OF THE FACTS AND CIRCUMSTANCES, WE ARE INCLINED TO SET ASIDE THE ISS UE BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW KEEPING IN VIEW OUR OBSERVATIONS. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JULY, 2009. (K.D. RANJAN) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH JULY, 2009 VIJAY COPY TO:- 1. APPELLANT. 2. RESPONDENT 3. CIT 4. CIT(A)-VIII, NEW DELHI. 5. THE DR ASSISTANT REGISTRAR. 5