GOYAL SALT PVT. LTD., Jaipur V. INCOME TAX OFFICER, WARD-6-2, Jaipur

ITA 1354/JPR/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5989 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 03-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNI PAUL
• Assessee Lawyers: S L PODDAR
• Keywords: Initiation of penalty proceedings; Set aside
• Section: 271(1)(c); 143(3); 143(1); 274; 68; 27

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 1354/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13 M/S. GOYAL SALT PVT. LTD. K-23, MALIVYA MARG, C-SCHEME JAIPUR CUKE VS. THE ITO WARD- 6(2) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAECG 0234D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.L. PODDAR , ADVOCATE JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAUL, (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 26/09/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 30 /09/2019 VKNS'K@ ORDER PER: SANDEEP GOSAIN, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF CIT(A)-2, JAIPUR DATED 31.10.2018 FOR THE A SSESSMENT YEAR 2012-13 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING G ROUNDS. 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE AO PASSED U/S 271(1)(C) OF THE I.T. ACT, 1961 WITHOUT ST RIKING OFF THE IRRELEVANT PORTION OF THE PRINTED SHOW CAUSE NOTICE ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 2 DATED 25-03-2015 VIZ FURNISHED INACCURATE PARTICU LARS OF INCOME OR CONCEALED PARTICULARS OF SUCH INCOME IS BAD IN LAW WHICH DESERVES TO BE QUASHED. 2. THAT THE ORDER PASSED BY THE AO U/S 271(1) OF TH E I.T. ACT, 1961 IS VOID ABINITO DESERVES TOBE QUASHED AS NO SATISFACTION WAS RECORDED WITH REFERENCE TO CONCEALME NT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS. 2,40,000/-U/S 271(1)(C) OF THE I.T. ACT, 1961. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION DECLARING L OSS OF RS. (-)17,41,988/- ON 22-09-2012. THE RETURN WAS PROCESSE D U/S 143(1) OF THE ACT AND SUBSEQUENTLY AFTER COMPLETION OF SCRUTI NY PROCEEDINGS THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON TH E TOTAL INCOME OF RS. 1,19,08,010/-. 2.2 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE CASE OF BOTH THE PARTIES DISMISSED THE APPEAL OF THE ASSESSEE BY CONFIRMING THE ADDITION MADE BY THE AO. ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 3 2.3 NOW AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL HAS DECIDED THE ISSUE AS UNDER:- (I) ADDITION MADE BY THE AO AND UPHELD BY THE LD. CIT(A) OF RS. 79,50,00/- WAS DELETED. (II) ADDITION MADE BY THE AO AND UPHELD BY THE LD. CIT(A) OF RS. 49,00, 000/- WAS SET ASIDE. (III) ADDITION MADE BY THE AO AND UPHELD BY THE LD. CIT(A) OF RS. 8,00,000/- WAS SUSTAINED. CONSIDERING THE ORDER OF THE ITAT JAIPUR BENCH IN IT A NO.270/JP/2016 DATED 20-09-2017 IN ASSESSEE OWN CASE FOR THE ASSES SMENT YEAR 2012- 13, THE LD. CIT(A) DELETED PART PENALTY LEVIED BY THE AO BUT SUSTAINED PENALTY LEVIED ON THE ADDITION OF RS. 8.00 LACS SUS TAINED BY THE ITAT. 2.4 AGAINST THIS ORDER OF SUSTAINING OF PENALTY ON THE ADDITION OF RS. 8.00 LACS, THE ASSESSEE HAS PREFERRED AN APPEAL BEF ORE US ON THE GROUND MENTIONED HEREINABOVE. 3.1 THE GROUND NO. 1 AND 2 RAISED BY THE ASSESSEE AR E INTERRELATED AND INTERCONNECTED AND RELATES TO CHALLENGING THE O RDER OF THE LD. CIT(A) IN CONFIRMING THE ORDER PASSED BY THE AO U/S 271(1)(C) OF THE ACT WITHOUT STRIKING OFF THE IRRELEVANT PORTION OF THE PRINTED SHOW CAUSE ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 4 NOTICE DATED 25-03-2015. WE THEREFORE, THOUGHT IT F IT TO DISPOSE OFF THESE GROUNDS BY A COMMON ORDER. 3.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE SUBMITTED THAT PENALTY LEVIED BY THE AO IS UNLAWFUL, ILLEGAL A ND UNJUSTIFIED. THE LD.AR OF THE ASSESSEE HAS FILED THE FOLLOWING WRITTEN SUBMISSION. THE LEVY OF PENALTY IS UNLAWFUL, ILLEGAL AND UNJUS TIFIED. THE SAME IS ASSAILED ON THE FOLLOWING GROUNDS: - 1. SHOW CAUSE NOTICE ISSUED ON 25.03.2015 & 11.08.2015 ARE ROUTINE: - THE SHOW CAUSE NOTICE ISSUED ALONG WITH THE ASSESSM ENT ORDER WAS IN ROUTINE MANNER AND THE LEARNED ASSESSING OFF ICER HAS NOT STRIKE OFF THAT UNDER WHICH LIMB THE ASSESSEE HAS C OMMITTED OFFENCE. IN THE ASSESSMENT ORDER ALSO THE LEARNED A SSESSING OFFICER IN LAST TWO HAS MENTIONED ' PENALTY PROCEEDING U/S 271(1)(C) FOR CONCEALING THE PARTICULAR OF INCOME A ND FURNISHING INACCURATE PARTICULARS OF INCOME HAVE BEEN INITIATE D SEPARATELY '. THEREFORE IT IS CLEAR THAT THE VERY INITIATION OF P ENALTY PROCEEDINGS ARE INVALID AND NOT SUSTAINABLE IN LAW. THE COPY OF NOTICE DATED 25.03.2015 & 11.08.2015 ARE SCANNED AS UNDER: - OFFICE OF : ITO, WARD- 6(2), JAIPUR NOTICE UNDER SECTION 174 READ WITH SECTION 271(1) OF THE INCOME TAX ACT, 1961 FILE NO. 115 DATED 15-03-2015 PAN NO. AAECH0234D ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 5 TO M/S. GOHAL SALT PVT. LIMITED K-23, SAPPHIRE HARITAGE, MALAVIYA NAGAR C-SCHEME, JAIPUR (RAJ.) 302 001 SIR/MADAM WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2012-13, IT APPEARS THAT YOU HAVE CONCEALED THE PAR TICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME ON 20 -04-2015 AT 11.00AM AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU S HOULD NOT BE MADE UNDER SECTION 271(1) OF THE INCOME TAX ACT, 1961. IF NO ONE ATTE NDS THIS OFFICE ON THE SAID DATE OF HEARING, THE CASE SHALL BE DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORDS. YOURS FAITHFULLY SEAL SD/- OFFICE OF ITO WARD6(2),JPR PLACE AND TIME OF ATTENDING 20-04-2015 AT 11:00 INCOME TAX DEPARTMENT OFFICE OF THE INCOME TAX OFFICER, WARD- 6(2),JAIPUR DATE: 11-08-2015 TO, PAN: AAECG0234D GOYAL SALT PVT. LTD K-23, SAPPHIRE HERITAGE, MALVIYA NAGAR ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 6 C-SCHEME,JAIPUR SIR/MADAM SUB: PENALTY PROCEEDINGS U/S 271(1) READ WITH SECT ION 274 OF THE INCOME TAX ACT, 1961 FOR THE A.Y. 2012-13 REG PENALTY PROCEEDINGS UNDER ABOVE MENTIONED SECTION O F THE INCOME TAX ACT WERE INITIATED DURING THE COURSE OF ASSESSMENT PROC EEDING IN YOUR CASE FOR THE ABOVE MENTIONED ASSESSMENT YEAR AND THE STATUTORY NOTICE HAS ALREADY BEEN ISSUED TO YOU AND DULY SERVED UPON YOU. NOW THESE PROCEEDINGS ARE TO BE FINALIZED AND FOR THE PURPOSE YOU ARE AGAIN GIVEN AN OPPORTUNITY TO EXPLA IN YOUR CASE AND TO SHOW CAUSE AS TO WHY PENALTY UNDER ABOVE MENTIONED SECTION OF THE INCOME-TAX ACT MAY NOT BE LEVIED UPON YOU. YOU MAY EXPLAIN AND SHOW CAUSE IN WRITING EITHER PERSONALLY OR THROUGH YOUR AUTHORIZED REPRESENTATIVE DULY AUTHORI ZED IN THIS BEHALF ON 21-08-2015 AT 4.20 PM IN MY OFFICE AT ROOM NO. 324, NCRB, STAT UE CIRCLE, C-SCHEME, JAIPUR PLEASE NOTE THAT NO FURTHER OPPORTUNITY WILL BE PRO VIDED AND MATTER WILL BE DECIDED AS PER THE MATERIAL AVAILABLE ON THE RECORD S. YOURS FAITHFULLY, SD/- (NAVINDRA SAINI) INCOME TAX OFFICER, WARD 6(2), JAI PUR 3.3 ON THE ORDER HAND, THE LD. DR RELIED ON THE ORD ERS PASSED BY THE REVENUE AUTHORITIES. 3.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. ON THE PERUSAL OF THE NOTICE D ATED 25-03-2015 ISSUED BY THE REVENUE AUTHORITIES U/S 274 READ WITH SECTION 27 1(1) OF THE ACT, WE NOTED THAT REVENUE AUTHORITIES HAS NOT STRUCK OFF I NAPPROPRIATE PORTION ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 7 CONTAINED IN THE NOTICE AND HAS MENTIONED BOTH LIMB S CONTAINED IN SECTION271(1) OF THE ACT WHICH SHOWS THAT NOTICE HA S BEEN ISSUED IN A VERY ROUTINE MANNER AND WITHOUT APPLICATION OF MIND AS IT NOWHERE SPECIFIES CONCEALED/INACCURATE PARTICULARS OF INCOME ON WHICH ASSESSEE WAS REQUIRED TO SHOW CAUSE. EVEN THE SAID SHOW CAUSE NOTES ISSUED BY THE AO DOES NOT INDICATE ANY GROUND FOR LEVY OF PENALTY FOR WHICH TH E ASSESSEE COULD PUT ITS DEFENCE. IN THIS RESPECT, WE RELY ON THE DECISION O F HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATH COTTON AND GI NNING FACTORY 359 ITR 565 WHEREIN IT WAS HELD THAT NOTICE U/S 274 OF THE I.T. ACT, 1961 SHOULD SPECIFICALLY STATE WHETHER PENALTY IS BEING PROPOSED TO THE IMPOSED OR CONCEAL OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULA RS OF INCOME. IN THE CASE OF THE ASSESSEE, THE AO HAS NOT DONE SO. IN VIEW OF TH IS THE VERY INITIATION OF PENALTY PROCEEDINGS IS VITIATED. ACCORDINGLY, THE L EVY OF PENALTY WAS NOT JUSTIFIED. ON THE SIMILAR GROUND, ITAT BANGLORE BENCH IN THE CA SE OF H LAKSHMINARAYNA VS ITO (2015) 41 ITR 465, DELETED THE PENALTY ON THE SOLE GROUND THAT THE SHOW CAUSE NOTICE WAS DEFECTIVE AS I T DID NOT SPELL OUT SPECIFICALLY THE GROUND ON WHICH THE PENALTY WAS SOU GHT TO BE IMPOSED. THE ITAT BANGALORE BENCH FURTHER HELD THAT SUCH DEFECT WA S NOT CURABLE U/S 292BB. IN VIEW OF THESE FACTS, THE PENALTY IN THE CA SE OF THE ASSESSEE ALSO ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 8 DESERVES TO BE DELETED. THUS CONSIDERING THE JUDGEMENT AS CITED BY THE ASSESSEE (SUPRA), WE ARE OF THE VIEW THAT NOTICES IS SUED BY THE REVENUE AUTHORITIES WERE NOT LEGALLY AND LAWFULLY PERFECT. THE LEVY OF PENALTY ON THE BASIS OF SUCH NOTICES IS UNLAWFUL, ILLEGAL AND UNJUS TIFIED. TAKING INTO CONSIDERATION ALL THESE FACTS, CIRCUMSTANCES OF THE CASE AND THE CASE LAWS RELIED UPON (SUPRA), WE ALLOW THESE GROUNDS OF THE AS SESSEE AND DELETE THE PENALTY LEVIED BY THE AO AND UPHELD BY THE LD. CIT(A ). THUS GROUND NO. 1 AND 2 OF THE ASSESSEE ARE ALLOWED. 4.1 THE GROUND NO. 3 OF THE RAISED BY THE ASSESSEE RELATES TO CHALLENGING THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE PENAL TY OF RS. 2.40 LACS U/S 271(1)(C) OF THE I.T. ACT, 1961. 4.2 DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED FOR DELETION OF PENALTY CONFIRMED BY THE LD. CIT(A) FOR WHICH THE LD.AR OF THE ASSESSEE FILED THE FOLLOWING WRITTEN SUBMISSION. AFTER THE ORDER OF THE HON'BLE ITAT OUT OF TOTAL AD DITION OF RS. 1,36,50,000/- ONLY ADDITION OF RS. 8,00,000/- WERE SUSTAINED IN RESPECT OF SHARE APPLICATION MONEY BY MR. AMIT KUMAR SHARMA WH O MADE APPLICATION FOR RS. 8,00,000/-. THE ASSESSEE SUBMIT TED THE CONFIRMATION, COMPLETE ADDRESS AS WELL AS BANK STATEMENT. BUT THE LEARNED ASSESSING OFFICER AS WELL AS THE APPELLATE AUTHORITIES DID NO T CONSIDER THE EVIDENCE FURNISHED REGARDING CREDITWORTHINESS AND SUSTAINED THE ADDITION. IN THIS ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 9 REGARD OUR SUBMISSION IS THAT THE PERSON WAS IN EXI STENCE. THE TRANSACTION WAS ALSO THROUGH THE PROPER BANKING CHA NNEL. THE REVENUE DID NOT BRING ANY EVIDENCE ON RECORD THAT THE PERSO N WAS NOT IN EXISTENCE OR THE CLAIM OF THE ASSESSEE WAS NOT GENU INE. ONLY THE EXPLANATION FURNISHED BY THE ASSESSEE WAS NOT ACCEP TED BECAUSE OF THE EVIDENCES FURNISHED BY THE ASSESSEE WAS NOT SUFFICI ENT FOR DETERMINING THE CREDITWORTHINESS OF THE SHARE APPLICANT. THEREF ORE ON SUCH TYPE OF ADDITION NO PENALTY IS LEVIABLE. THE NUMBER OF CASE S ARE THERE WHERE THE SHARE HOLDER IS FOUND IN EXISTENCE AND IF SHARE APP LICATION MONEY WAS DEPOSITED THROUGH PROPER BANKING CHANNEL THEN PENAL TY U/S 271(1)(C) HAS BEEN DELETED. IT HAS BEEN HELD BY THE INCOME TAX APPELLATE TRIBUN AL MUMBAI BENCH A, MUMBAI IN ITA NO. : 6267/MUM/2013 (ASSES SMENT YEAR: 2007-08) IN THE CASE OF DCIT (APPELLANT) VS. M/S A MORE JEWELS P LTD. (RESPONDENT) DATE OF ORDER: 04/03/2016 THAT ' THE EXPLANATION 1 TO SECTION 271(1)(C) RAISES REBUTTABLE PRESUMPTION AND ONCE THE ASSESSEE HAS FURNISHED ALL THE EVIDENCES IN SUPPORT OF ITS E XPLANATION AND HAS SUBSTANTIATED HIS CLAIM THEN THE ONUS COST UPON HIM IS DISCHARGED AND ONUS THEN SHIFTS UPON THE AO TO PROVE THAT SUCH AN EXPLANATION OR EVIDENCE IS FALSE' IN OUR CASE NO SUCH ENQUIRY WAS MADE BY THE LEARNED ASSESSING OFFICER TO PROVE THAT THE EXPLANATION FURNISHED BY THE ASSE SSEE WAS FALSE. THEREFORE THE FINDING GIVEN IN THE ABOVE CASE ARE A PPLICABLE. THE FINDING GIVEN IN LAST PARA OF THE ORDER IS REPRODUCING HERE WITH AS UNDER: - 'ALL THESE EVIDENCES FILED BY THE ASSESSEE HAS NOT BEEN REBUTTED OR DISPUTED BY THE AO. IT IS A TRITE LAW THAT PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT FROM THE ASSESSMENT PROCEEDINGS AND EV EN IF IN THE QUANTUM PROCEEDINGS, THE MATTER HAS ATTAINED FINALITY, HOWE VER IN THE PENALTY PROCEEDINGS, ASSESSEE MAY CHOSE TO RELY UPON THE SA ME MATERIAL TO PROVE THAT HE HAS NOT GUILTY OF FURNISHING OF CONCEALMENT OF INCOME. THE EXPLANATION 1 TO SECTION 271(1)(C) RAISES REBUTTABL E PRESUMPTION AND ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 10 ONCE THE ASSESSEE HAS FURNISHED ALL THE EVIDENCES I N SUPPORT OF ITS EXPLANATION AND HAS SUBSTANTIATED HIS CLAIM THEN TH E ONUS COST UPON HIM IS DISCHARGED AND ONUS THEN SHIFTS UPON THE AO TO P ROVE THAT SUCH AN EXPLANATION OR EVIDENCE IS FALSE. HERE IN THIS CASE THE AO HAS FAILED TO REBUT THE ASSESSEES EXPLANATION REGARDING NATURE A ND SOURCE OF CREDIT BY CONDUCTING ANY ENQUIRY OR BRINING ANY MATERIAL ON R ECORD. THE DEGREE OF BURDEN UNDER SECTION 68 UPON THE ASSESSEE IS TO PRI MA FACIE PROVE THE NATURE OF CREDIT AND THEN SOURCE WHICH HAS TO BE PR OVED BY SHOWING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE T RANSACTION. HERE ALL THESE PRIMARY INGREDIENT HAS BEEN DISCHARGED. THERE FORE, ON THESE FACTS, THE FINDING GIVEN BY THE CIT(A), AS ABOVE CANNOT BE DEVIATED FROM AND ACCORDINGLY, THE SAME IS CONFIRMED. ACCORDINGLY, GR OUND RAISED BY THE REVENUE STANDS DISMISSED.' THEREFORE THE FACTS OF THE ASSESSEE'S CASE IS SIMIL AR AND NO PENALTY IS LEVIABLE. LIKEWISE IN THE CASE OF REMEX PHARMACEUTICALS LTD V S. ACIT IN ITA NO. 2234/MUM/2013 DATED 14.10.2015 THE MUMBAI BENCH HAS HELD AS UNDER: - 6. IT IS WELL SETTLED PROPOSITION THAT ADDITION MA DE DURING THE COURSE OF ASSESSMENT PROCEEDINGS WOULD NOT AUTOMATICALLY GIVE RISE TO PENALTY UNDERSECTION 271(1)(C) OF THE ACT. DURING THE COURS E OF PENALTY PROCEEDINGS, THEAO IS REQUIRED TO EXAMINE THE ENTIR E ISSUE AFRESH AND FOR THAT PURPOSE THEDELIBERATIONS MADE IN THE ASSESSMEN T ORDER CAN BE TAKEN AS A GUIDE. IN THEINSTANT CASE, THE PENALTY H AS BEEN LEVIED U/S 68 OF THE ACT IN RESPECT OF LOANTAKEN BY THE ASSESSEE, SI NCE THE EVIDENCES FURNISHED BY THE ASSESSEE TOPROVE THE CREDITWORTHIN ESS OF THE CREDITOR WAS FOUND TO BE INADEQUATE. IT ISALSO PERTINENT TO NOTE THAT THE ADDITION PRESCRIBED U/S 68 OF THE ACT IS ALEGAL FICTION AND THE SAME NEED NOT NECESSARILY AS A RESULT OF CONCEALMENT OF PARTICULA RS OF INCOME. WHETHER A CASH CREDIT ADDITION WOULD FALL IN THECATEGORY OF CONCEALMENT OF PARTICULARS OF INCOME OR NOT WOULD DEPENDUPON THE F ACTS AND CIRCUMSTANCES OF EACH CASE. ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 11 7. IT IS PERTINENT TO NOTE THAT THE IDENTITY OF THE CREDITOR AND GENUINENESS OFTHE TRANSACTION HAVE NOT BEEN FOUND FAULT WITH. W E FURTHER NOTICE THAT THEEXPLANATIONS AND DOCUMENTS FURNISHED BY THE ASSE SSEE TO PROVE THE CREDITWORTHINESS WERE ONLY FOUND TO BE INADEQUATE A ND NOT FOUND TO BE FALSE. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THE EXPLANATION 1 TOSECTION 271 (1)(C) OF THE ACT WOULD COME TO THE H ELP OF THE ASSESSEE. HENCE, ON CONSPECTUS OF THE MATTER, WE ARE OF THE V IEW THAT THE ADDITION OF CASH CREDITS CONFIRMED BY THE ITAT, IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, WOULD NOT NECESSITATE LEVY OF PEN ALTY UNDER SECTION 271(1)(C) OF THEACT, AS THE SAME, IN OUR VIEW, CANN OT BE CONSIDERED TO BE CONCEALMENT OFPARTICULARS OF INCOME. ACCORDINGLY, W E SET ASIDE THE ORDER OF THE LD. CIT(A)ON THIS ISSUE AND DIRECT THE AO TO CANCEL THE PENALTY LEVIED ON THE CASHCREDIT ADDITION. THEREFORE IN THE LIGHT OF ABOVE OBSERVATIONS THE PE NALTY DESERVES TO BE DELETED. 4.3 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF THE REVENUE AUTHORITIES. 4.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE RECORDS, WE NOTICED THAT WHILE P ASSING THE ORDER OF PENALTY, THE AO HAS NOT CARRIED OUT ANY INDEPENDENT INVESTIGATION AND HAS MERELY RELIED UPON THE DECISION IN QUANTUM ASSESSME NT PROCEEDINGS. IN THIS RESPECT, THE LD.AR OF THE SUBMITTED THAT AT THE TIM E OF ASSESSMENT PROCEEDING THE ASSESSEE HAD SUPPLIED ALL THE REQUIRED DOCUMENT S IN THE SHAPE OF BANK ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 12 ACCOUNT OF SHAREHOLDERS WHICH INCLUDES COPY OF PAN, RATION CARD AND VOTER CARDS BEARING COMPLETE ADDRESSES. THE COPIES OF THE RETURN OF INCOME ALONGWITH COMPUTATION OF INCOME FOR THE YEAR UNDER C ONSIDERATION AND COPIES OF BANK STATEMENTS OF THE SHARE APPLICANTS WERE ALSO SUBMITTED. HOWEVER, THE COORDINATE BENCH OF ITAT HAD UPHELD PART ADDITION OF RS. 8.00 LACS ONLY BY TAKING INTO CONSIDERATION THAT NO DOCUMENTS IN RESP ECT OF CREDITWORTHINESS OF SHRI AMIT KUMAR SHARMA WERE FILED. IT WAS ALSO SUBMIT TED BY THE LD.AR OF THE ASSESSEE THAT THERE WAS NO DISPUTE WITH REGARD TO THE IDENTITY OF SHRI AMIT KUMAR SHARMA OR THE GENUINENESS OF THE TRANSACTIONS CARRIED OUT BY SHRI AMIT KUMAR SHARMA. THE LD.AR FURTHER SUBMITTED THAT MEREL Y BECAUSE THE ADDITIONS WERE UPHELD THEN THE PENALTY CANNOT BE AUTOMATIC. ON THIS ASPECT, WE FOUND FORCE IN THE ARGUMENTS OF THE LD.AR OF THE ASSESSEE AND WE ARE OF THE VIEW THAT PENALTY IS NOT AUTOMATIC MERELY BECAUSE THE AD DITIONS WERE UPHELD WHICH HAS BEEN ALREADY UPHELD BY THE COORDINATE BENCH IN THE CASE OF SONU KHANDELWAL VS ITO (ITA N01/JP/2015) VIDE ORDER DATED 27-09-2016. HOWEVER, THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS BARODA TIN WORKS, 221 ITR 661 HAD ALSO GIVEN VERDICT ON THE SAME PRINCIPLE S. ITAT MUMBAI BENCH IN THE CASE OF REMEX PHARMACEUTICALS LTD VS ACIT (ITA N O. 2234/MUM/2013 VIDE ORDER DATED 14-10-2015 HAD ALSO HELD THAT EVEN IF THE ASSESSEE COULD NOT ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 13 SUCCEED WITH REGARD TO THE ADDITION BOTH BEFORE THE LD. CIT(A) AS WELL AS ITAT IN THE QUANTUM ASSESSMENT PROCEEDING. EVEN THE AO WAS REQUIRED TO EXAMINE THE ISSUE AFRESH DURING PENALTY PROCEEDINGS AND FOR THAT PURPOSE THE DELIBERATIONS MADE IN THE ASSESSMENT ORDER CAN ONLY BE TAKEN AS A GUIDE. SINCE IN THE PRESENT CASE THE AO IN THE PENALTY PR OCEEDINGS HAD NOT EXAMINED THE ENTIRE ISSUE AFRESH AND EVEN OTHERWISE THE IDENTITY OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION HAS NOT BEEN FOUND FAULT WITH, THEREFORE, WE ARE OF THE VIEW THAT THE EXPLANATIONS A ND THE DOCUMENTS RELIED UPON BY THE ASSESSEE TO PROVE THE CREDITWORTHINESS WE RE ONLY FOUND TO BE INADEQUATE AND NOT FOUND TO BE FALSE. UNDER THE SET OF FACTS, WE ARE OF THE VIEW THAT THE EXPLANATION TO SECTION 271(1)(C) OF TH E ACT WOULD COME TO HELP OF THE ASSESSEE. HENCE ON CONSPECTUS OF THE MATTER, WE ARE OF THE VIEW THAT THE ADDITION OF CASH CREDIT CONFIRMED BY THE ITAT IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, WOULD NOT NECESSI TATE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, AS THE SAME IN OUR VIEW CANNOT BE CONSIDERED TO BE CONCEALMENT OF INCOME. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE PENAL TY. CONSEQUENTLY, THE GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. ITA NO. 1354/JP/2018 M/S.GOYAL SALT PVT.LTD. VS ITO, WARD- 6(2), JAIPUR 14 5.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 30/09/2019 . SD/- SD/- FOE FLAG ;KNO LANHI XKSLKBZ (VIKRAM SINGH YADAV) (SANDEEP GOSAIN) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 /09/2019. *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. GOYAL SALT PVT. LTD., JAIPUR 2. IZR;FKHZ@ THE RESPONDENT-THE ITO, WARD- 6(2) JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1354/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSTT. REGISTRAR