M/s 10-D Retails, Chandigarh V. ITO, W-1(3), Chandigarh

ITA 1277/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2938 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 10-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: VOHRA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 1277/CHD/2018 / ASSESSMENT YEAR : 2011-12 M/S 10D RETAILS, HOUSE NO.514, SECTOR 8-B, CHANDIGARH VS. THE ITO, WARD 1(3), CHANDIGARH ./PAN NO: AAAFZ7556L / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI M.S.VOHRA, ADVOCATE ' ! / REVENUE BY : SH. MANJIT SINGH, CIT DR # $ % /DATE OF HEARING : 25.07.2019 &'() % / DATE OF PRONOUNCEMENT : .2019 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 06.07.2018 OF THE COMMISSIONER OF INCO ME TAX (APPEALS)- 4, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)] . 2. THE ASSESSEE IN THIS APPEAL HAS AGITATED THE LEV Y OF PENALTY U/S 271 (1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE A CT') IMPOSED BY THE ASSESSING OFFICER AND FURTHER CONFIRMED BY THE LD. CIT(A). 3. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT I N THE QUANTUM PROCEEDINGS, THE ADDITION OF RS. 3 LACS WAS MADE BY THE ASSESSING OFFICER INTO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED ITA NO. 1277-CHD-2018- M/S IOB RETAILS, CHANDIGARH 2 DEPOSITS. THE PENALTY PROCEEDINGS U/S 271 (1)(C) WE RE INITIATED SEPARATELY FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THEREBY A PENALTY OF RS. 92,700/- WAS IMPOSED BY THE ASSESSING OFFICER @ 100% OF THE TAX AMOUNT S OUGHT TO BE EVADED. 4. IN APPEAL, THE LD. CIT(A) DELETED THE PENALTY IN RESPECT OF THE ADDITION MADE BY THE ASSESSING OFFICER OF AN AMOUNT OF RS. 70,000/-, HOWEVER, IN RESPECT OF THE REMAINING ADDITION OF R S. 2,30,000/- THE LD. CIT(A) CONFIRMED THE PENALTY @ 100% OF TAX AMOUNT S OUGHT TO BE EVADED ON THIS ADDITION. 5. BEING AGGRIEVED BY THE ABOVE ORDER OF THE LD. CI T(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. THE SOLE CON TENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE HAS BEEN THAT IN THIS CASE THE ASSESSEE HAD DECLARED LOSS OF RS. 4,02,723/- IN THE RETURN OF IN COME. CONSEQUENT TO THE ADDITION MADE OF RS. 3 LACS MADE BY THE ASSESSI NG OFFICER, THE RESULTANT EFFECT WAS REDUCTION OF THIS AMOUNT OUT O F THE TOTAL LOSS CLAIMED. HOWEVER, THE TOTAL INCOME OF THE ASSESSEE STILL REMAINED IN NEGATIVE I.E. NET LOSS OF RS. 1,02,723/-. THE LD. C OUNSEL PLACING RELIANCE ON THE DECISION OF THE HON'BLE JURISDICTIO NAL OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS PRITIPAL SINGH DATED 3.11.1988 REPORTED IN (1990) 183 ITR 69 (P&H), HAS SUBMITTED THAT AS PER THE LAW LAID DOWN BY THE HON'BLE HIGH COURT, L OSS CANNOT BE TERMED AS INCOME. THAT THE PENALTY PROVISIONS OF SECTIO N 271 (1)(C) OF THE ITA NO. 1277-CHD-2018- M/S IOB RETAILS, CHANDIGARH 3 ACT ARE ATTRACTED ONLY IN THE CASE OF AN ASSESSEE HAVING POSITIVE INCOME AND NOT IN THE CASE OF LOSS, AS THE QUESTION OF CON CEALMENT OF INCOME TO AVOID THE PAYMENT OF TAX WOULD ARISE ONLY IN THE FO RMER CASE. THE LD. COUNSEL, THEREFORE, HAS SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE AFORESAID DECISION OF THE HON'BLE JURISDICTION AL HIGH COURT AND SINCE IN THE CASE IN HAND EVEN AFTER THE ADDITION M ADE BY THE ASSESSING OFFICER, THERE WAS A NET LOSS, HENCE, THE PENAL PR OVISIONS OF SECTION 271 (1)(C) OF THE ACT WOULD NOT BE ATTRACTED IN THI S CASE. 6. THE LD. DR, ON THE OTHER HAND, HAS RELIED UPON T HE FINDINGS OF THE LOWER AUTHORITIES AND ALSO PLACED RELIANCE ON EXPLA NATION 4 TO SECTION 271 OF THE ACT, AS WERE APPLICABLE FOR THE ASSESSME NT YEAR UNDER CONSIDERATION, AND HAS SUBMITTED THAT EVEN WHERE T HE NET EFFECT IS REDUCTION OF LOSS, THE PENALTY CAN BE IMPOSED ON TH E AMOUNT SO REDUCED FROM THE NET LOSS DECLARED BY THE ASSESSEE. 7. I HAVE CONSIDERED THE RIVAL SUBMISSION AND HAVE ALSO GONE THROUGH THE RECORD. EXPLANATION 4(A) TO SECTION 271 AS AME NDED BY FINANCE ACT, 2002 W.E.F 1.4.2003 READS AS UNDER:- EXPLANATION 4 - FOR THE PURPOSE OF CLAUSE (III) OF THIS SUB SECTION, THE EXPRESSION THE AMOUNT OF TAX SOUGHT T O BE EVADED - (A) IN ANY CASE WHERE THE AMOUNT OF INCOME IN RESPECT O F WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTI CULARS HAVE BEEN FURNISHED HAS THE EFFECT OF REDUCING THE LOSS DECLARED IN THE RETURN OR CONVERTING THAT LOSS INTO INCOME, MEANS THE TAX THAT WOULD HAVE BEEN CHARGEABLE ON TH E INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED ITA NO. 1277-CHD-2018- M/S IOB RETAILS, CHANDIGARH 4 OR INACCURATE PARTICULARS HAVE BEEN FURNISHED HAD SUCH INCOME BEEN THE TOTAL INCOME. 8. THE DECISION RELIED UPON BY THE COUNSEL FOR THE ASSESSEE IN THE CASE OF CIT VS PRITIPAL SINGH (SUPRA) IS DATED 3 .11.1988 IN RESPECT OF THE ISSUE INVOLVED FOR THE ASSESSMENT YEAR 1970-71. HOWEVER, A LOT OF WATER HAS FLOWED UNDER THE BRIDGE SINCE THEN. AS PE R THE AFORESAID STATUTORY PROVISIONS AS GIVEN IN EXPLANATION 4 TO S ECTION 271, IN THE CASE WHERE THE AMOUNT OF INCOME IN RESPECT OF WHICH THE PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTICULARS OF INCOME FURNISHED HAS THE EFFECT OF REDUCING THE LOSS DECLARED IN THE RETURN OF INCOME, THE PROVISIONS OF SECTION 271C OF THE ACT WOULD APPLY ON THE AMOUNT SO REDUCED FROM THE LOSS DECLARED. IN VIEW OF THIS, WE DO NOT FIND ANY MERIT IN THE AP PEAL OF THE ASSESSEE, AND THE SAME IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.08.2019 SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 06.08.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE ITA NO. 1277-CHD-2018- M/S IOB RETAILS, CHANDIGARH 5 '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR