M/s Universal Print O Pack, Nalagarh V. ITO , Baddi

ITA 1206/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6685 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 11-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Keywords: Set aside
• Section: 271(1)(c); 80IC; 208

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO.1206/CHD/2018 ASSESSMENT YEAR: 2007-08 M/S UNIVERSAL PRINT O PACK VS. THE ITO C/O PARIKSHIT AGGARWAL, BADDI H.NO. 1238, SECTOR 22-B HIMACHAL PRADESH CHANDIGARH PAN NO. AABFU8813G (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PARIKSHIT AGGARWAL REVENUE BY : SMT. CHANDRAKANTA DATE OF HEARING : 24/01/2019 DATE OF PRONOUNCEMENT : 28/02/2019 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DT. 09/07/2018 OF LD. CIT(A), SHIMLA, H. P. PERTAINING TO 2007-08 ASSESSMENT YEAR IN PENALTY PROCEEDING ON THE FOLLOWING GROUNDS : 1. THAT THE IMPUGNED ORDER IS AGAINST FACTS AND LAW. 2. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, T HE WORTHY CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE LD. A O FOR IMPOSING PENALTY U/S 271(1)(C) OF THE ACT ON CONFIRMED ADDITION OF RS. 2 ,80,000/- ON ACCOUNT OF ADDITION IN CAPITAL ACCOUNT OF PARTNERS. 3. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, T HE WORTHY CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE LD. A O FOR IMPOSING THE PENALTY U/S 271(1)(C) OF THE ACT EVEN WHEN THE ALLEGED ADDITION DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. 4. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, T HE WORTHY CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE LD. A O FOR IMPOSING PENALTY U/S 271(1)(C ) OF THE ACT BY PASSING A TOTALLY NON-SPEA KING ORDER AND WITHOUT LAYING DOWN THAT HOW THE ADDITION AMOUNTED TO EITHER CONCE ALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 5. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE IMPUGNED PENALTY ORDER DESERVES TO BE QUASHED SINCE THE APPELLANT HAS NOT BEEN CHARGED WITH ANY SPECIFIC LIMB OF SEC. 271(1)( C ). 6. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION, D ELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 2. LD. AR INVITING ATTENTION TO THE ASSESSMENT ORDE R DT. 08/12/2009 SUBMITTED THAT PENALTY HAS BEEN LEVIED ON THE BASIS OF THE FACT TH AT THE ADDITION MADE IN THE HANDS OF THE ASSESSEE REJECTING THE EXPLANATION OF THE ASSES SEE THAT THE CONTRIBUTION MADE IN THE CAPITAL ADVANCE BY SHRI VIKAS GUPTA AND SHRI SU NIL GUPTA TO THE EXTENT OF RS. 2 2,91,000/- AND RS. 1,10,000/- WERE NOT ACCEPTED IN THE QUANTUM PROCEEDINGS BY THE AO. 3. IN APPEAL BEFORE THE LD. CIT(A) THE EXPLANATION OF THE ASSESSEE WAS PARTLY ACCEPTED AND ONLY QUA THE INTRODUCTION OF THE CAPIT AL TO THE EXTENT OF RS. 2,00,000/- BY SHRI VIKAS GUPTA AND RS. 80,000/- BY SHRI. SUNIL GU PTA WAS NOT ACCEPTED. IT WAS SUBMITTED THAT THE ASSESSEE DID NOT CHALLENGE THE O RDER OF THE LD. CIT(A). HOWEVER IN THE PENALTY PROCEEDING THESE TWO ADDITIONS WAS CONS IDERED FOR LEVY OF PENALTY BY THE AO AS WELL AS THE LD. CIT(A). RELIES UPON THE INCOM E TAX RETURN FILED BY THESE TWO PARTNERS SHOWING MORE THAN 10 LACS INCOME STOOD DIS CLOSED IN THE RESPECTIVE YEARS INCLUDING THE CONFIRMATIONS FILED BY THESE TWO PART NERS, ACCEPTING THE FACT THAT THEY HAD MADE THESE CONTRIBUTIONS. IT WAS SUBMITTED THAT ON THE BASIS OF THOSE FACTS LEVY OF PENALTY AND THE ORDER OF THE LD. CIT(A) CONFIRMING THE ORDER WERE NOT IN ACCORDANCE WITH LAW. IT WAS SUBMITTED THAT IT HAD ALSO BEEN AR GUED IN THE QUANTUM PROCEEDING AND THE PENALTY PROCEEDING THAT THE FIRM IS NOT OBL IGED TO ASK FOR THE SOURCE OF THE SOURCE FROM THE PARTNERS. 4. INVITING ATTENTION TO THE ASSESSMENT ORDER IT W AS HIS SUBMISSION THAT THE INCOME OF THE ASSESSEE WAS ANYWAY ENTITLED FOR DEDUCTION UNDE R SECTION 80IC AND THE ASSESSEE CLAIMED THE DEDUCTION ALSO UNDER 80IC WHICH WAS MOR E OR LESS ACCEPTED EXCEPT FOR SOME ADJUSTMENT MADE ON ACCOUNT OF FREIGHT ETC. IN THE CIRCUMSTANCES IT WAS HIS ARGUMENT THAT EVEN OTHERWISE THERE WAS NO CAUSE FOR THE ASSESSEE TO EITHER FILE ANY INCORRECT FACT OR MAKE A CONCEALMENT. IN THESE CIRC UMSTANCES IT WAS HIS SUBMISSION THAT THOUGH THE ASSESSEE HAS NOT CONTESTED THE ADDITION IN THE QUANTUM PROCEEDING AS THE ASSESSEE IDEALLY SHOULD HAVE DONE EVEN OTHERWISE IN TERMS OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RA MESHWAR DASS SURESH PAL CHEEKA (2007) 208 CTR 459 (P&H HC), THE ADDITION ITSELF WAS NOT M AINTAINABLE. THESE FACTS WAS SUBMITTED COULD NOT BE IGNORED IN THE PENALTY PROCE EDINGS. ATTENTION WAS ALSO INVITED TO PARA 4 & 5 OF WRITTEN SUBMISSION WHICH WERE FILE D BEFORE THE LD. CIT(A). ACCORDINGLY IT WAS HIS SUBMISSION THAT THE ASSESEE HAS GIVEN AN EX PLANATION THERE IS NOTHING ON RECORD THAT THE EXPLANATION IS FALSE. ACCORDINGLY RELYING ON CIT VS. NATIONAL TEXTILES 249 ITR 125 (GUJ HC) AND DECISION OF THE JURISDICTIONAL HIGH CO URT IN THE CASE OF CIT VS. BALBIR SINGH 304 ITR 125 (P&H HC), IT WAS HIS PRAYER THAT THE OR DER MAY BE QUSHED. 5. LD. SR. DR RELIED UPON THE PENALTY ORDER. 6. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. IN THE FACTS OF THE PRESENT CASE IT IS SEEN THAT THE A DDITION MADE BY THE ASSESSING OFFICER IN THE QUANTUM ORDER STOOD REDUCED TO 2,80,000/- WH ICH FACT HAVE BEEN TAKEN NOTE OF THE LD. CIT(A) IN PARA 3.1.1 AND IS EXTRACTED HERE UNDER FOR READY REFERENCE: 3.1.1 THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). THE CIT(A) DECIDED THE APPEAL IN APPEAL NO. IT/382/2009-10/SML DATED 12/03 /2013 AND ADDITION MADE 3 ON ACCOUNT OF CAPITAL INTRODUCED OF RS. 4,10,000/- WAS REDUCED TO RS. 2,80,000/-. THE OTHER ADDITIONS MENTIONED SUPRA IN II(A) & (B) WERE ALSO SUSTAINED. 7. CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES AND THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH WHICH HAVE BEEN ELABORATED AT LENGTH IN THE EARLIER PART OF THIS ORDER I FIND THAT THE APPEAL OF THE ASSESSEE H AS TO BE ALLOWED. THE MERE FACT THAT ADDITION WAS NOT CHALLENGED IN THE PECULIAR FACTS O F THE PRESENT CASE DOES NOT LEAD TO THE CONCLUSION THAT THE RIGOURS OF SECTION 271(1)(C ) ARE AUTOMATICALLY ATTRACTED. THE EXPLANATION OFFERED HAS TO BE CONSIDERED IN THE LIG HT OF FACTS EVIDENCES AND POSITION OF LAW APPLICABLE TO THOSE FACTS. THE EXPLANATION OFFE RED HAS TO BE DISCARDED ON COGENT SUSTAINABLE REASONS AND NOT ON THE BASIS OF ARBITRA RILY WHIMSICAL CONCLUSIONS. THE FACTUM OF THE PARTNERS SHRI VIKAS GUPTA AND SHRI SUNIL GUP TA STANDING BY THEIR CONFIRMATIONS ARE RELEVANT FACTS AND WITHOUT REBUTTING THE FACTS THE MERE FACT THAT THE ADDITION STANDS SUSTAINED IN THE HANDS OF THE ASSESSEE FIRM BY ITSE LF CANNOT ATTRACT THE PROVISIONS. THE JUDICIAL PRECEDENT RELIED UPON BY THE ASSESSEE FULL Y SUPPORTS THE VIEW TAKEN. ACCORDINGLY CONSIDERING THE EXPLANATION AND THE PEC ULIAR FACTS OF THE PRESENT CASE IN THE LIGHT OF THE SETTLED LEGAL POSITION THE IMPUGNE D ORDER IS SET ASIDE AND THE PENALTY ORDER IS QUASHED. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF IN THE PRESENT OF THE PARTIES. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED :28/02/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR