Pawan Kumar Agarwal, New Delhi V. Pr. CIT-12, New Delhi

ITA 1356/DEL/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3138 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 01-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 6; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F” DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER I.T.As. No. 1356 & 1358/DEL/2020 Assessment Years 2013-14 & 2014-15 Pawan Kumar Agarwal, A-4/2, Rana Pratap Bagh, New Delhi. v. Pr.CIT-12, New Delhi. TAN/PAN: ADUPA9815A (Appellant) (Respondent) Appellant by: Shri Satish Agarwal, CA Shri Dharender Kumar, CA Respondent by: Shri T. Kipgen, CIT-DR Date of hearing: 07 04 2022 Date of pronouncement: 04 05 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The c ap ti one d ap p eal s ha ve be en f ile d a t the i ns ta nc e o f the ass es se e ag ai nst t h e rev is io na l or der s of the Pr in ci pa l Co mmi s si on er of Inc o me T ax -X I I, D el hi (‘ Pr. CI T’ in s ho rt ) d ate d 10. 06 .2 02 0 pas se d u nd er S ec ti on 2 63 of the I nc o me Ta x A ct, 19 61 (t he A ct ) wh ere b y th e as ses s ment o rd ers p as s ed b y th e As ses sing Of f icer un der Se ct io n 14 3( 3) r .w . S ect io n 1 53 A of th e A ct wer e s ou ght to be set a si de f or ref r a mi ng t he a ss es s me nt in t er ms of su pe rv is or y jur is di ct io n. IT A No .1 35 6/ Del /2 02 0 ( A. Y. 2 01 3- 14 ) 2. W h en t he mat te r was ca lle d f or h ea rin g, ld. co unse l f or t he ass es se e poi nt ed o ut th at a re vi sed con ci se gr ou n d of ap pe al ha s I.T.A. No.1356 & 1358/Del/2020 2 bee n p la ce d at pa g e no .2 1 a nd 22 of pap er bo ok . H e h o we ver in th e sa me ve in s ub mi t ted t ha t h e do es no t se ek to p re ss va ri ou s gri ev an ce s ra ise d in t he r ev is ed c o nci se gro un d e xce pt G ro un d no. 5( ii ) a nd G ro un d no .6 t he reof wh ic h is r ep ro duc ed h er e in. “ 5 (i i ) . i n d i r e c t i n g t h e A O t o m a k e v e r i f i c a t i o n o f c l a i m o f t a x d e d u c t e d a t s o u r c e b y H H E C L t d a G o v e r n m e n t o f I n d ia U n d e r t a k i n g f o r a l l e g e d c l a i m o f e x c e s s T D S p r o p o r ti o n a t e t o i n t e r e s t o f R s . 1 3 , 9 1 3 0 2 / - n o t p e r t a i n i n g t o t h e a ss e s s e e b y d i r e c t i n g h i m t o v e r i f y t h e s a m e i g n o r i n g t h e f a c t t h a t H H E C L t d h a d d e d u c t e d e x c e s s T D S w i t h o u t a n y a c c r u a l o f c o r re s p o n d i n g a d d i t i o n a l i n t e r e s t i n c o m e . 6 . T h a t t h e L e a r n e d P r i n c i p a l C o m m i s s i o n e r o f i n c o me T a x h a s g r o s s l y e r r e d i n d i r e c t i n g t h e A O t o i n i t i a t e pe n a l t y p r o c e e d i n g s u n d e r s e c t i o n 2 7 1 A A B ( 1 ) ( c ) i n s t e a d o f u/ s 2 7 1 ( 1 ) ( c ) o f t h e A c t i g n o r i n g t h e f a c t t h a t i n p r o c e e d i n g s u /s . 2 6 3 , t h e P C 1 T i s n o t e m p o w e r e d t o g i v e d i r e c t i o n s o n t h e i s s u e o f p e n a l t y w h i c h d i r e c t i o n i s b a d i n l a w a n d f a c t s o f t h e c a s e . ” 3. Ad ver ti ng to Gr ou nd No. 5( ii ) s upr a, the ld . co unse l f or t he ass es se e s ub mi tt ed tha t t he P r. CIT in t he re vi si on al ord er ha s all eg ed no n di sc lo sur e / u nd er st ate m ent of i nt er est i nc o me t o the tun e of Rs. 14 ,1 2, 95 2/- on th e b as is of dif f ere nce be tw ee n the in co me ret ur ne d b y t he as s ess ee qu a a nn ua l i n f or ma ti on st at e men t, i .e ., AI R inf or ma ti on i n t he po sse ss io n of t he D epa rt me nt . 3.1 In th e ma tt er, t he l d. co un se l su b mit te d tha t th e as se sse e is a pro pr ie to r of M/ s. Su pre me G ol d wh ic h i s en ga ge d in th e bu sin es s of bul li on . Th e as se s see i nt er a li a w as in re cei pt of int ere st f ro m HH EC In dia Lt d. , a Go ve rn me nt of Indi a u nd er tak in g. The as se ss ee has ea rne d i nt ere st inc o me of R s.3 6, 3 0,5 7, 24 5. 49 f ro m HH EC In dia Ltd . a nd di sc lo se d the sa me in it s P& L ac co un t. A cop y of rel ev an t I.T.A. No.1356 & 1358/Del/2020 3 ext ra ct le dg er ac co unt of th e a ss es se e in t he b oo ks of M/ s. H HE C Ind ia L td . p la ce d i n t he p ape r bo ok a nd al so p lac ed b ef ore P CI T in the rev is io na l pr oc eed in gs wa s ref er re d an d it wa s su b mit ted tha t t he ide nt ic al a mo un t w as a ls o sh o wn t o h ave be en c re di ted i n th e na me of the as se ss ee b y M/ s. HH EC In di a L td. It wa s t hu s c on t end ed th at the in ter es t in co me of Rs. 13 ,9 1, 30 2/- d oes no t be long to t h e as se sse e and t hu s d id n ot a ccr ue to t he as se ss ee de spi te it s ref er enc e i n th e AI R inf o r mati o n. I t was c on te nd ed t ha t th e st an ce of th e ass es se e is vo uch ed b y t he le d ger a cc ou nt of th e ass es se e in t he b oo ks of HH EC Ind ia L td . w hic h is a G ov er n men t of Indi a u nde rt ak ing. It w as f urth er su b mit te d tha t bal an ce a mou nt of Rs .2 1, 65 0/- ha s b ee n dis cl os ed a s in co m e f ro m ot he r so ur c es. I t wa s su b mit te d tha t T DS was c la i med a s p er th e cre di ts a va ila b le in t he AI R inf o r mat io n bu t exc es s c red it gr a nte d i n r es pec t of all eg ed t ra ns a cti on s of Rs .1 4,1 2, 95 2/ - c ou ld n ot gi ve ri se t o inf er en ce of a n y un dis cl os ed inc o me in e xis te n ce wh ic h is a dr ast ic al le ga ti on with ou t an y cor re sp on di ng co n f ir ma ti on f ro m t h e p ar t y th at t oo, a Go vt . un der ta ki ng . T he L d. C ou ns el th us su b mit te d t ha t n o er ro r sho ul d b e per ce iv ed i n t he as s ess me nt or de r mer e l y o n a cc ou nt of dif f eren ce i n f igur e be tw ee n the AI R inf or ma ti on a n d the r et ur n of inc o me in t he abs en ce a n y ac cr ua l of in co me pe r se. 4. As re ga rd s ot her i s sue a s pe r Gro un d No. 6, l d. cou ns el f or th e ass es se e su b mit te d tha t th e di re ct i on g iv en b y t he rev isi on al Co mmi s si on er t o the As se ss in g Of f ice r t o i nit ia te th e pe na lt y pro ce ed in gs un der Sec ti on 27 1( 1) ( c) of t he Ac t i nstea d of 27 1A AB (1 )(c ) of t he A ct i n t he a ss es s ment or de r is bad in la w a nd cha rg e f or p en al t y can no t b e mod if ied und er th e re vi si on al p ow er s of Se ct io n 2 63 of t he Ac t. F or th is pr o po sit io n, t he ld . c o un sel r eli ed up on se ver al ju dg me nts , na mel y, A d dl. C IT vs . J K D ’C ost a, (1 98 2 ) 13 3 IT R 7 (D el ) an d de ci si on of the C o-o rd in at e B enc h o f Trib un al I.T.A. No.1356 & 1358/Del/2020 4 in S un il a As as th i v s. P r. CI T in I T A N o.4 96 /D el /2 02 1 ord er d at ed 7 t h Jul y, 20 21 a nd A ma rje et D ha ll vs. CI T i n I TA N o. 35 7/ Ch d/2 01 3 or der da te d Ap ri l 2 1, 2 01 4. T he L d. c ou nse l t hu s su b mit t ed t hat an y mo dif ic at io n in th e sa ti sf act io n dr aw n b y t he A ss essi ng Of f icer w ith ref er enc e to nat ur e of def aul t f or t he p urp os es of initi at io n of pen al t y p ro ce ed in gs i s no t pe r mi ssi bl e wi th in t he sco pe of jur is di ct io n e xe rc is abl e un de r Sec ti on 26 3 of th e Act . 5. The L d. C IT -D R f o r t he R ev en ue on t h e o th er ha nd r el ied up on the r ev is io nal ord e r of the Pr .C IT . Th e Ld. CIT -D R f urt h er ref er re d to th e ju dg me nt r e nde re d b y t he H on ’bl e Al la ha ba d Hi g h Co ur t in the ca se of CI T v s . S ure nd ra P ra sa d Ag ra wa l (20 05 ) 1 42 Ta xm an 65 3 (A ll d ) f or th e p rop os it io n t hat o mi ssi on of th e As se ss ing Of f icer to in it ia te pe na lt y proc ee di ng s in t he co ur se of the ass es s men t ren de rs ass es s men t ord er err on eo us an d pr ej ud ici al to the int er est of Re ven ue a nd t hu s sus ce pt ib le t o pro c eed in gs u nd er Sec t ion 2 63 of the Ac t. T he L d. CI T- DR t hu s su b mit te d th at t he ld . Pr .C IT i s cap ab le of modif i cat io n i n t he c har ge f or i mp os iti on of pe na lt y un der S ec tio n 26 3 of th e Ac t whe r e t he As se ss in g Off icer ha s co mmi tt ed g la ri ng err or re su lt in g in lo ss of R ev en ue . 6. W e ha ve ca ref ul l y con si de re d t he ri va l su b mis si on s. Fi rs t iss ue rel at es t o u nde rs t ate me nt of inte re st i nc o me to t he ext ent of Rs .1 4,1 2, 95 2/ -. T h e P r. CI T on p er us al of r eco rd s f oun d t ha t th e int er es t i nc o me is u nde r- re po rte d b y t h e a ss es see to the a b ove e xt en t as d ete ct ed f ro m t h e co rre sp on di ng AI R inf o r mat io n av ail abl e to th e De par t men t. W h er e as th e T D S a mo un t w as de d uct ed o n th e hig he r f igur e a nd a ls o c la i me d b y t he as ses s ee i n t he r et ur n of inc o me t he ass es se e h as re por t ed i nt er es t i nco me l ow er t o a bo ve ex te nt. In th es e f acts , t he Pr. CI T h as i nv ok ed th e j uri sdi ct io n u nd er Se ct ion 26 3 of the Ac t a nd h as s et a si de th e mat te r to th e f ile of th e As se ss in g I.T.A. No.1356 & 1358/Del/2020 5 Of f icer . In ou r vi e w, t he a ct io n of th e Pr .C IT c an no t b e con de mn ed as w it ho ut j ur is dic tio n. The Pr .C IT h as s uf f icie nt b as is to p res u me err or i n t he a ss es s me nt or de r in th e abs en ce of a n y i nq uir y i n t hi s reg ar d b y t h e A ss es sin g Of f icer . W h ile th e a ss es se e h as at te mpt ed t o jus tif y it s c as e t ha t th e i mp ug ne d i nt er est in co me h as no t acc ru ed to it at a ll a nd i s n ot in e xi st en ce, t his a sp ec t re quire s ob jec ti ve ver if ica ti on w hi ch was n ot d one b y t h e A ss es si ng Off ice r . W hi le th e ass es se e ma y po ssi bl y ex pl ai n it s s ta n ce w it h f act ua l c or rob or at io n in t he p ro ce ed in g s bef o re t he As s ess in g Of f ice r ar isin g f ro m rev is io na l pr oc ee di ng s, t he a ct io n of the Pr . CI T can no t be f aul te d per se. W e t hu s ar e not inc li ne d to i nte rf ere wit h t he o rde r of the Pr. CI T. H en ce , t hi s gr ou nd i n the a ss es see ’s a pp eal i s di s mi sse d. 7. Ad ver ti ng t o ot her iss ue c on cer ni ng modif i ca ti on in t he c har ge of in it iat io n of pe n alt y p r oce ed in gs f ro m Se ct io n 27 1A A B t o Se ct io n 27 1(1 )( c) in t he re vis io na l o rd er, we f ind t ha t t he i ss ue is s qu ar el y cov er ed i n f avo ur o f the as se ss ee b y s eve ra l de ci sion s as ref err ed to on be ha lf of t he as ses se e. T he Ho n’ bl e D el hi H ig h Co urt in c ase of Ad dl. CI T v s. JK D’ Co st a (s up ra ) h as o bs er ve d t ha t f ailu re of th e As ses si ng Of f ice r i n r ec or din g sa ti sf acti on f or in it iat io n of p ena lt y pro ce ed in gs c an no t be sai d to be a f act or f or vi ti at in g the ass es s men t ord er or ma ki ng i t err on eo us or p re j udi ci al to t he in te res t of t he Re ven ue . Th e re vi s ion al C o mmi s si on e r is th us no t veste d wit h p ow er to re ct if y/ mo dif y s uch all eg ed e rr or s in t he r ev ision al j uri sd ic ti on . Si mil ar vi ew ha s bee n e xp re ss ed b y the Co -o rd in at e Be nch es in Su nil a As as th i v s. Pr .C IT (s up ra ) and A ma rj eet D ha ll vs. C IT (su pr a ) b y pla ci ng rel ian ce on ser ie s of deci si on s re n d ered i n th is reg ar d. Th e pl ea of the as se ss ee i s t hu s f oun d t o be c on si ste nt wi th bin di ng j udi ci al pr e ced en ts . I n v ie w of th e J ur is dic ti on al Hi gh Co ur t exp re ss in g it s v ie w in f av ou r of th e ass es see , w e do not de e m i t nec es sa r y t o ref er to t he j ud g ment de liv er ed b y Ho n’ bl e Alla ha ba d I.T.A. No.1356 & 1358/Del/2020 6 Hi gh C o urt in t he cas e of Su re nd ra P ras a d Ag ra w al (su pr a ) r eli ed up on b y R ev en ue . 8. In t he r es ul t, t he a cti on of the Pr. CI T di re cting th e As s ess in g Of f icer t o mod if y t he i ni tia ti on of pen alt y p ro cee di ng s u n der Se ct io n 27 1(1 )( c) in st ea d of 27 1A A B(1 )( c) of th e Act i s set as id e. Th e gro un d pe rt ain in g t o t he af or es ai d is su e i s th us allo we d. 9. In th e res ul t, t he ap pea l of th e as se ss ee is p artl y a ll ow ed . IT A No .1 35 8/ Del /2 02 0 ( A. Y. 2 01 4- 15 ) 10. In th e r ev ise d co n cis e gro un ds of a ppe al , t he as se ss e e h as rai se d the f ol lo wi n g g ro un ds of ap pea l . “ (1 ) T h a t t h e o r d e r p a s s e d b y t h e L e a r n e d P r i n c i p a l C o m m i s s i o n e r o f I n c o m e T a x - 1 2 , D e l h i u n d e r s e c t i o n 2 6 3 o f t h e A ct , i s a r b i t r a r y , b i a s e d a n d b a d i n l a w a n d i n f a c t s o f t h e c a s e . ( 2 ) T h a t t h e a s s u m p t i o n o f j u r i s d i c t i o n b y t h e L e a rn e d P r i n c i p a l C o m m i s s i o n e r o f I n c o m e T a x u n d e r s e c t i o n 2 6 3 i s b a d i n l a w a s t h e o r d e r p a s s e d b y t h e A s s e s s i n g O f f i c e r w a s n e i t he r e r r o n e o u s n o r p r e - j u d i c i a l t o t h e i n t e r e s t o f t h e r e v e n u e . ( 3 ) T h a t t h e L e a r n e d P r i n c i p a l C o m m i s s i o n e r o f I n c om e T a x h a s g r o s s l y e r r e d i n p a s s i n g a n o r d e r u n d e r s e c t i o n 2 6 3 a n d i n s u m m a r i l y d i s m i s s i n g t h e s u b m i s s i o n o f t h e a p p e l l a nt . ( 4 ) T h a t t h e L e a r n e d P r i n c i p a l C o m m i s s i o n e r o f I n co m e T a x h a s g r o s s l y e r r e d i n p a s s i n g o r d e r u / s 2 6 3 w i t h o u t m a k in g a n y i n d e p e n d e n t e n q u i r y h e r s e l f r e n d e r i n g t h e a s s u m p t i on o f j u r i s d i c t i o n u / s 2 6 3 u n s u s t a i n a b l e i n l a w a n d f a c t s o f t h e c a s e . ( 5 ) Wi t h o u t p r e j u d i c e t o t h e a b o v e g r o u n d s t h a t t h e a s s u m p t i o n o f j u r i s d i c t i o n u / s 2 6 3 b y t h e P r . C 1 T i s b a d i n l aw . a s t h e o r d e r p a s s e d b y t h e A s s e s s i n g O f f i c e r w a s n e i t h e r e r r o n e ou s n o r p r e - I.T.A. No.1356 & 1358/Del/2020 7 j u d i c i a l t o t h e i n t e r e s t o f t h e r e v e n u e , t h e L e a r n ed P r i n c i p a l C o m m i s s i o n e r o f I n c o m e T a x h a s g r o s s l y e r r e d i n d i re c t i n g t h e A O t o m a k e f u r t h e r d e t a i l e d e n q u i r y a n d v e r i f i c a t i o n on t h e f o l l o w i n g i s s u e s : ( i ) t o m a k e e n q u i r y a n d v e r i f i c a t i o n o f s o u r c e o f pa y m e n t m a d e t o M / s B o n a n z a P o r t f o l i o L t d . f o r c o n d u c t i n g d e r i v a t i ve s t r a n s a c t i o n s i g n o r i n g t h e f a c t t h a t t h e a m o u n t s p a i d t o M / s B o n an z a P o r t f o l i o L t d . h a d b e e n m a d e t h r o u g h p r o p e r b a n k i n g c h a n n e l an d s o u r c e d f r o m t a x r e f l e c t e d s o u r c e s o f t h e a s s e s s e e . F u r t h e r, t h e P r i n c i p a l C o m m i s s i o n e r o f I n c o m e T a x h a s g r o s s l y e r r e d i n i g no r i n g t h e f a c t t h a t M / s . B o n a n z a P o r t f o l i o L t d . h a s b e e n m a d e p a y me n t t h r o u g h p e r s o n a l b a n k a c c o u n t o f t h e a s s e s s e e i n w h i c h t h e a m o u n t h a d b e e n t r a n s f e r r e d f r o m t h e p r o p r i e t o r s h i p c o n c e r n o f t h e a s s e s s e e M / s . S u p r e m e G o l d w h o s e b o o k s o f a c c o u n t , b a n k s t a te m e n t a n d o t h e r r e c o r d w a s v e r i f i e d b y t h e j u r i s d i c t i o n a l A s se s s i n g O f f i c e r d u r i n g t h e r e m a n d p r o c e e d i n g s o n e x a m i n a t i o n o f w h ic h n o a d v e r s e i n f e r e n c e w a s d r a w n b y h i m i n h i s r e m a n d r ep o r t a n d t h e P r . C I T f a i l e d t o m a k e a n y e n q u i r y f r o m t h e r e c o r d av a i l a b l e w i t h t h e d e p a r t m e n t r e n d e r i n g t h e d i r e c t i o n o n t h e i s s u e u n s u s t a i n a b l e i n f a c t s a n d l a w o f t h e c a s e . 6 . T h a t t h e L e a r n e d P r i n c i p a l C o m m i s s i o n e r o f i n c o me T a x h a s g r o s s l y e r r e d i n d i r e c t i n g t h e A O t o i n i t i a t e p e n a lt y p r o c e e d i n g s u n d e r s e c t i o n 2 7 1 A A B ( 1 ) ( c ) i n s t e a d o f u / s 2 7 1 ( 1 ) ( c ) o f t h e A c t i g n o r i n g t h e f a c t t h a t i n p r o c e e d i n g s u / s . 2 6 3 , t h e P C 1 T i s n o t e m p o w e r e d t o g i v e d i r e c t i o n s o n t h e i s s u e o f p e n a l ty w h i c h d i r e c t i o n i s b a d i n l a w a n d f a c t s o f t h e c a s e . ” 11. The as se sse e h as tak en sev er al g ro u nd s bu t ho weve r f air l y su b mitt ed t ha t al l o the r gr ou nd s ar e n o t pre ss ed exc ep t Gr ou nd n o. 6 con ce rn in g th e di r ect io n of th e Pr .C I T to t he As se ss in g Of f icer t o ini ti at e pe nal t y p ro cee di ng s un de r Se c tio n 27 1 AA B( 1)( c) inst ea d of 27 1(1 )( c) of th e A ct. Id en ti cal is su e has be en ad judi ca t ed i n f av ou r I.T.A. No.1356 & 1358/Del/2020 8 of the a ss es see i n ITA N o. 13 56 /D el /20 20 co nce rn in g As ses s me nt Yea r 20 13- 14 . Th e ob se rva ti on s ma de in As se ss me nt Ye ar 20 13- 1 4 thu s sh al l a pp l y m uta ti s mu ta nd is t o As se ss me nt Y ea r 20 14- 15 i n que st io n a s w ell . C on seq ue nt l y, t he a c tio n of t he Pr. CI T dir ec tin g the A ss es si ng Of f ic er to mod if y th e in i tia ti on of pe nal t y p roc ee di ng s un der S ec ti on 2 71 ( 1)( c) i ns tea d of 2 7 1A AB (1 )(c ) of t he Ac t is s et asi de . In th e re sul t, th is g ro un d of ap p eal i s a ll ow ed . In t he wa ke of oth er g ro un ds n ot b ein g pr es se d, th e ap pea l is pa rtl y a llo w ed. 12. In t he co mb in ed r esu lt , b ot h t he ap p eal s of t he as se sse e ar e par tl y a ll o wed . Order pronounced in the open Court on 04/05/2022. Sd/- Sd/- [NARENDER KUMAR CHOUDHRY] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 04/05/2022 Prabhat