Adman Advertising, New Delhi V. ACIT, circle-34(1), New Delhi

ITA 1393/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2425 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 20-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 271(1)(c); 143(3); 274; 73; 27

Judgement Text

1 ITA NO. 1393/DEL/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I(2) + SM C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEM BER, AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 1393/DEL/2019 ( A.Y 2010-11) ADMAN ADVERTISING F-137, ASHOK VIHAR, PHASE-1 NEW DELHI PIN 110052 AAAFA7942D (APPELLANT) VS ACIT CIRCLE-34(1) ROOM NO. 804, 8 TH FLOOR, PRATYAKASH KAR BHAWAN CIVIC CENTRE NEW DELHI PIN 110002 (RESPONDENT) APPELLANT BY SH. SANJAY JAIN, FCA RESPONDENT BY SH. PRADEEP SINGH GAUTAM, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 22/6/2018 PASSED BY CIT(A)-12 FOR ASSESSMENT YEAR 2010-11. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE ID. AO AS WELL AS LD. CIT (A) HAVE ERRED IN CO NFIRMING THE PENALTY U/S 271(L)(C) BEING 100% OF THE TAX SOUGHT TO BE EVADED ON RS. 5,95,940.00. 2. THAT THERE CANNOT BE ANY PENALTY U/S 271(L)(C) MER ELY BECAUSE OF DISCREPANCY WITH THE AIR INFORMATION AND THUS PENAL TY ORDER IS BAD. 3. THE LD. AO FAILED TO PROVIDE THE DETAILS ON THE BA SIS OF WHICH THE AIR INFORMATION WAS FILED BY THE RESPECTIVE PARTIES AND THUS IT CANNOT BE SAID THAT DATE OF HEARING 03.03.2020 DATE OF PRONOUNCEMENT 19.03.2020 2 ITA NO. 1393/DEL/2019 ASSESSEE HAS EITHER FILED INACCURATE PARTICULARS OF INCOME ARE CANCELED HIS INCOME. 4. THAT THE NOTICE U/S 274 READ WITH SEC. 271 IS BAD AND DEFECTIVE AS IT IS ISSUED WITHOUT DELETING THE APPROPRIATE CLAUSE UNDE R WHICH THE PENALTY IS PROPOSED TO BE IMPOSED IS EITHER FOR FILLING OF INA CCURATE PARTICULAR OF INCOME OR CONCEALMENT OF PARTICULAR OF INCOME AND AS SUCH THE NOTICE IS NOT SUSTAINABLE AND NOT CURABLE. 5. THE PENALTY IMPOSED U/S 27 L(L)(C) IS BAD IN LAW A ND FACTS OF THE CASE. 6. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER. 3. THE ASSESSMENT WAS COMPLETED U/S 143(3) AT AN I NCOME OF RS. 26,07,280/-. PENALTY PROCEEDINGS U/S 271(1)(C) WER E INITIATED AND THE SATISFACTION NOTE WAS RECORDED. THE PENALTY WAS IM POSED AT RS. 2,07,478/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE NOTICE U/S 274 REA D WITH SECTION 271 DATED 20/03/2013 HAS NOT STRIKE OFF THE PARTICULAR LIMB OF SECTION 271 OF THE ACT UPON WHICH THE PENALTY WAS IMPOSED. THUS, THE LD. AR SUBMITTED THAT THE NOTICE ISSUED U/S 274 READ WITH SECTION 271(1)(C) I S INVALID AS IT DID NOT SPECIFY THE CHARGE AGAINST WHICH THE PENALTY IS LEVIED. EV EN IN THE ASSESSMENT ORDER, THERE IS NO SEPARATE CHARGE MENTIONED. THUS, NOT O NLY THE NOTICE ISSUED TO THE ASSESSEE U/S 274 READ WITH SECTION 271(1)(C) IS DEF ECTIVE, BUT ASSESSING OFFICER HAS NOT EVEN MADE HIMSELF SATISFIED AT THE TIME OF MAKING DISALLOWANCE/ADDITIONS IN ASSESSMENT ORDER WHETHER THE ASSESSEE FURNISHED INACCURATE PARTICULAR OF INCOME OR CONCEALED PARTIC ULARS OF INCOME. THEREFORE, THE LD. AR SUBMITTED THAT ENTIRE PENALTY PROCEEDING STAND VITIATED, IF THE NOTICE ITSELF IS NOT IN ACCORDANCE WITH LAW. THE LD. AR R ELIED UPON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN CASE OF CIT(A) VS. M/S MANJUNATHAN AND GINNI FACTORY AND ORS 359 ITR 565. THE ABOVE PRINC IPAL WAS FURTHER AFFIRMED BY THE APEX COURT IN CASE OF CIT(A) VS. M/S SSA EM ERALD MEADOWS. 3 ITA NO. 1393/DEL/2019 6. THE LD. DR RELIED UPON THE DECISION OF THE HON'B LE HIGH COURT IN THE CASE OF NEW HOLLAND TRACTORS INDIA PVT. LTD. VS. CIT 49 TAXMAN.COM 573. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THERE IS NO CONCEALMENT IN THE PRESENT CASE. THE ASSESSEE HAS ALSO FILED ALL THE DETAILS DURING THE REGULAR ASSESSMENT PROCEEDINGS. FROM THE NOTICE DATED 28.12.2011 PRODU CED BY THE LD. AR DURING THE HEARING, IT CAN BE SEEN THAT THE ASSESSING OFFI CER WAS NOT SURE UNDER WHICH PROVISIONS OF SECTION 271 OF THE INCOME TAX ACT, 19 61, THE ASSESSEE IS LIABLE FOR PENALTY. THE ISSUE IS SQUARELY COVERED BY THE DECIS ION OF THE HON'BLE SUPREME COURT IN CASE OF M/S SSA EMERALD MEADOWS. THE EXTR ACT OF THE HONBLE KARNATAKA HIGH COURT IN M/S. SSA EMERALD MEADOWS A RE AS UNDER WHICH WAS CONFIRMED BY THE HONBLE APEX COURT: 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY TH E ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SE CTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHE R FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE , HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDER ED IN THE CASE OF COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON A ND GINNING FACTORY (2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDG MENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBS TANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COU RT. THE APPEAL IS ACCORDINGLY DISMISSED. SINCE IN THE INSTANT CASE ALSO THE INAPPROPRIATE WO RDS IN THE PENALTY NOTICE HAS NOT BEEN STRUCK OFF AND THE NOTICE DOES NOT SPECIFY AS TO UNDER WHICH LIMB OF 4 ITA NO. 1393/DEL/2019 THE PROVISIONS, THE PENALTY U/S 271(1)(C) HAS BEEN INITIATED, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY LEVIED U/S 271(1)(C) IS NOT SUSTAINABLE AND HAS TO BE DELETED. ALTHOUGH THE LD. DR SUBMITT ED THAT MERE NON-STRIKING OFF OF THE INAPPROPRIATE WORDS WILL NOT INVALIDATE THE PENALTY PROCEEDINGS, HOWEVER, THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SSAS EMERALD MEADOWS (SUPRA) WHERE THE SLP FILED BY THE REVENUE HAS BEEN DISMISSED IS DIRECTLY ON THE ISSUE CONTESTED HEREIN BY THE ASSESSEE. FURTHER, WHEN THE NOTICE IS NOT MENTIONING THE CONCEALMENT O R THE FURNISHING OF INACCURATE PARTICULARS, THE RATIO LAID DOWN BY THE HONBLE HIGH COURT IN CASE OF M/S. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPR A) WILL BE APPLICABLE IN THE PRESENT CASE. THE HONBLE DELHI HIGH COURT HELD AS UNDER: 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT, WHICH W AS ACCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA HIGH COURT I N CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) AND OBSE RVED THAT THE NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) THE PENALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIG H COURT HAD FOLLOWED THE ABOVE JUDGMENT IN THE SUBSEQUENT ORDER IN COMMISSIO NER OF INCOME TAX V. SSAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 241(KAR) , THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF INDIA I N SLP NO. 11485 OF 2016 BY ORDER DATED 5 TH AUGUST, 2016. 22. ON THIS ISSUE AGAIN THIS COURT IS UNABLE TO FIN D ANY ERROR HAVING BEEN COMMITTED BY THE ITAT. NO SUBSTANTIAL QUESTION OF LAW ARISES. FURTHER, THE CASE LAW REFERRED BY THE LD. DR THAT O F NEW HOLLAND TRACTOR INDIA (SUPRA) WILL NOT BE APPLICABLE IN THE PRESENT CASE AS IN THAT CASE THE PARTICULAR CHARGE OF SECTION 271 (1)(C) THAT OF CON CEALMENT OF INCOME WAS 5 ITA NO. 1393/DEL/2019 MENTIONED, BUT IN PRESENT CASE THAT IS NOT THE CASE . THUS, NOTICE UNDER SECTION 271(1)(C) R.W.S. 274 OF THE ACT ITSELF IS BAD IN LA W. WE, THEREFORE, SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICE R TO CANCEL THE PENALTY SO LEVIED. 8. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH MARC H , 2020. SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/03/2020 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 1393/DEL/2019 DATE OF DICTATION 04.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 05.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 1 9 .03.2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 9 .03.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1 9 .03.2020 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER