ACIT Central Circle 14, New Delhi V. Bhudeva Estates Pvt. Ltd., New Delhi

ITA 1403/DEL/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9826 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 08-07-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 271(1)(c); 144; 250; 274; 73; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘A’ : NEW DELHI) BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.1403/Del/2020, A.Y. 2008-09 ACIT, Central Circle-14, New Delhi Vs. M/s. Bhudeva Estate Pvt. Ltd. Flat No. 4, R.R.Apartments, 3-4 Mangla Puri, Mehrauli, New Delhi - 110030 (APPELLANT) (RESPONDENT) Assessee by Sh. Lalit Mohan, CA Revenue by Shri R.K.Gupta, CIT DR Date of hearing: 01.09.2022 Date of Pronouncement: 6 th .09.2022 ORDER PER ANUBHAV SHARMA, JM: The appeal has been filed by the Revenue against order dated 30.01.2020 in appeal no. 10143/19-20 for assessment year 2008-09 passed by Commissioner of Income Tax (Appeals)-26, New Delhi (hereinafter referred to as the First Appellate Authority in short ‘Ld. F.A.A.’) in regard to the appeal before it arising out of Penalty order dated 31.03.2017 u/s 271(1)(c) r.w.s. 274 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by DCIT, CC-14, New Delhi. ITA No. 1403/Del/2020 Bhudeva Estates Pvt. Ltd. 2 2. The facts in brief are assessee is a company engaged in real estates, land trading and development. A search was conducted at the office premises of the company on 31.01.2008. Subsequent to that assessment order u/s 144 r.w.s. 153A was passed on 25.02.2013 and the Ld. AO had made additions on three counts for which he also observed “penalty proceedings u/s 271(1)(c) is initiated for concealment of income and for furnishing of inaccurate particulars”. Thereafter after issuing notice and hearing the assessee the impugned penalty order u/s 271(1)(c) r.w.s. 274 of the Act, was passed. However, in appeal the Ld. CIT(A) had deleted the same. Primarily for the reason that the AO has failed to specify the appropriate limb of charges by striking off the inappropriate limb, either in the assessment order while initiating penalty u/s 271(1)(c), or while issuing the notice of penalty u/s 274 r.w.s. 271(1)(c) or even while concluding the imposition of penalty u/s 271(1)(c). Ld. CIT(A) followed the judgment of Hon’ble Supreme Court of India in CIT vs. SSA’s Emerald Meadows [2016] 73 taxman.com 248(SC). He also followed the judgment of Hon’ble Jurisdictional High Court in Pr. CIT Versus Sahara India Life Insurance Co ITA no 475/2019 vide order dated 2/8/2019. 3. Revenue has come in appeal raising following grounds :- “1. That the Ld. CIT(A) has erred in facts and in law in deleting the penalty of Rs.10,19,41,131/- imposed u/s 271 (1 )(c) of the I.T. Act on the technical ground that the A O has not struck off one of the limbs i.e. concealment of income/furnishing of inaccurate particulars. 2. That the Ld. CIT(A) has erred in facts and in law in not appreciating the fact that the AO has made additions in the assessment order on multiple issues but as only single notice was to be issued for initiation of penalty accordingly, and it is not possible to strike off one of the limbs because on some issues ITA No. 1403/Del/2020 Bhudeva Estates Pvt. Ltd. 3 penalty on account of inaccurate particulars may be initiated and on other issues penalty for concealment was initiated. 3. That the Ld. CIT(A) has erred in facts and in law in ignoring the fact that the AO has rightly recorded the satisfaction in the assessment order before initiation of penalty and as additions were made on multiple issues the penalty was rightly imposed in accordance with the law. a. The order of the CIT(Appeals) is erroneous and not tenable in law and on facts. b. The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of hearing of the appeal.” 4. Heard and perused the record. 5. On behalf of the Revenue the Ld. CIT DR submitted that Ld. CIT(A) has fallen in error in not appreciating the facts in the correct perspective and he submitted that the ld. AO had initiated the penalty proceedings not merely for concealment of income or for furnishing of inaccurate particulars but as a whole finding concealment of income and for furnishing inaccurate particulars. Therefore, there was no question of striking off one of the limb. He relied judgment of Hon’ble Madras High Court in M/s. Sundaram Finance Limited vs. ACIT (2018) 93 taxman.com 250 (Madras) and relied the para no. 16 of the judgment to submit that in case the assessee, have concealed particulars of income and furnished inaccurate particulars of income then the notice is not vitiated if it did not specifically state the grounds mentioned in Section 271(1)(c) of the Act. He submitted that this judgment is considered by the Gauhati Bench in Sri Rajendra, Nagaon vs. ITO, ITA No. 327 and 328/Gau/2018 wherein the Tribunal has observed that Hon’ble Supreme Court has dismissed the SLP of assessee in the case of M/s. Sundaram Finance Limited Case. ITA No. 1403/Del/2020 Bhudeva Estates Pvt. Ltd. 4 5.1 On the other hand, it was submitted on behalf of the respondent-assessee that the persistent view of the Co-ordinate Benches at Delhi has been to follow the Jurisdictional High Court judgement in the case of Pr. CIT Versus Sahara India Life Insurance Co ITA no 475/2019 vide order dated 2/8/2019. and reliance was placed on the judgment of Co-ordinate Bench in Ram Singh Saini vs. ITO, ITA No. 6167/Del/2019. It has also submitted that even Gauhati Bench although, referred to judgment of Hon’ble Madras High Court but ultimately benefited the assessee due to two conflicting views. 6. Giving thoughtful consideration to the matter on record and the submissions, the bench is of considered opinion that the assessee has although raised four grounds. The same are based on common set of facts and law. A perusal of the order of ld. CIT(A) shows that it reproduced / scanned the notice issued by the Ld. AO for the purpose of proceedings u/s 271(1)(c) of the Act and the same shows that it is on a Performa where certain columns have been even left blank. The notice shows that assessee was charged with ; *have concealed the particulars of your income .............furnished inaccurate particulars of such income.* 7. This notice on its face shows that it is not a case where the Assessing officer had issued the notice in consonance with its findings mentioned in para no. 11, 12 and 13 of the order where he had concluded that penalty proceedings u/s 271(1)(c) is initiated for concealment of income and for furnishing of inaccurate particulars. 8. The bench is of considered opinion that Section 271(1)(c) of the Act talks of penalty proceedings in cases where assessing officer is satisfied that any person has concealed the particulars of his income or furnish inaccurate particulars of such income. The section talks of only two nature of default ; First where assessee has concealed the particulars of his income and second where the assessee has furnished inaccurate particulars of such income. ITA No. 1403/Del/2020 Bhudeva Estates Pvt. Ltd. 5 9. Ld. Sr. DR is trying to defend the act of Ld. AO in carving out the third nature of default being a composite default of nature, concealment of income and for furnishing of inaccurate particulars. If the intention of Ld. AO was of finding the assessee guilty of concealment of income and also for furnishing of inaccurate particulars then that would be a case of proceedings for two different defaults but for which a common charge of the nature framed and conveyed to the assessee by the impugned notice is not sustainable. 10. The Bench is bound by the ratio laid down by Hon’ble Jurisdictional High Court in case of M/s. Sahara India Life Insurance Co. Ltd v(supra). and the relevant para 21 is reproduced below for convenience : “21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT vs. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed 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 High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA’s Emerald Meadows (2016) 73 Taxman.com 241(Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by order dated 5 th August, 2016. 22. On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises.” ITA No. 1403/Del/2020 Bhudeva Estates Pvt. Ltd. 6 11. The co-ordinate bench at Delhi in Ram Singh Saini vs. ITO (supra), in which one of us, the Hon’ble Accountant Member, was on coram had dealt with the argument of Revenue for reliance on Sundaram Finance Ltd. Case (supra) and held :- “The reliance of the Ld. DR in respect of Sunderam Finance Ltd. (supra) cannot be taken into account in toto in the present case as the jurisdictional High Court in case of Sahara India Life Insurance Co. Ltd. (supra) has clearly set out the necessity of the actual provisions for which the penalty is issued by the Revenue. Thus, notice under Section 271 (l)(c) r.w.s. 274 of the Act itself is bad in law. We, therefore, set-aside the order of the CIT(A) and direct the Assessing Officer to cancel the penalty so levied.” 12. In the light of aforesaid discussion, there is no substance in the grounds raised and there is no error in the findings of ld. CIT(A) requiring interference. The appeal of Revenue is dismissed. Order pronounced in the open court on 6 th September, 2022. Sd/- Sd/- (N.K.BILLAIYA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 06 .09.2022 *Binita, SR.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI