Rajendra Saraf, Ghaziabad V. ACIT, New Delhi

ITA 1419/DEL/2012

• Counselvise Citation: 141920114 RSA 2012
• Duration Of Justice: 2 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 10-07-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SRINIWAS
• Keywords: Wrong claim; Difference of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F, NEW DELHI) BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.1418, 1419 /DEL/2012 ASSESSMENT YEAR : 2002-03 RAJENDRA SARAF, VS. ACIT, CC-9, 609, AHLCON APARTMENTS, NEW DELHI VAISHALI, SECTOR 4, GHAZIABAD GIR / PAN: BDVPS9518N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDESH GARG, ADV. RESPONDENT BY : SHRI B SRINIWAS, SR. DR ORDER PER T.S. KAPOOR, AM: THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF LD. CIT(A) BOTH DATED 24.01.2012. THE ONLY GROUND TAKE N IN THESE TWO APPEALS IS THE GRIEVANCE OF ASSESSEE FOR THE ACTION OF LD. CIT(A) BY WHICH HE HAD CONFIRMED THE IMPOSITION OF PENALTY U/S 271(1)(C) O F THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT WAS COMPLETED U/S 153C OF THE ACT. THE ASSESSING OFFICER HAD ARRIVED AT THE ASSESSED INCOME ON THE BASIS OF ESTIMATION OF 6% OF SALES WHEREAS T HE ASSESSEE HAD CLAIMED TO HAVE EARNED PROFITS @ 1%. BEFORE CIT(A), THE AS SESSEE FILED APPEAL AGAINST THE ASSESSMENT ORDER AND LD. CIT(A) RESTRI CTED THE ADDITION TO 2% OF THE TURNOVER. THE REVENUE TOOK THE MATER TO THE TR IBUNAL AND THE TRIBUNAL CONFIRMED THE ADDITION CONFIRMED BY LD. CIT(A). HO WEVER, IT MADE CERTAIN DIRECTIONS TO ESTIMATE THE EXPENSES @ 50% OF THE AS SESSEES CLAIM. ITA NOS.1418,1419/DEL/2012 2 3. IN VIEW OF THE ASSESSMENT MADE, THE ASSESSING OF FICER HAD INITIATED PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME AND H AD PASSED PENALTY ORDER IMPOSING PENALTY OF RS.60,295/-0 AND RS.1,10, 159/- RESPECTIVELY. AGAINST THE PENALTY ORDER, THE ASSESSEE FILED APPEA L BEFORE LD. CIT(A) WHO CONFIRMED THE ADDITION AND THEREFORE, ASSESSEE IS I N APPEAL BEFORE US. 4. AT THE OUTSET, LD. A.R. SUBMITTED THAT THE ASSES SEE WAS NOT MAINTAINING BOOKS OF ACCOUNTS AND HE WAS REQUIRED T O FILE INCOME TAX RETURN U/S 153C OF THE ACT WHICH HE HAD DULY FILED ON THE BASIS OF 1% GROSS PROFIT EARNED FROM TURNOVER. THE ASSESSING OFFICER ESTIMA TED THE PROFIT ON THE TURNOVER @ 6% WHEREAS LD. CIT(A) RESTRICTED THE ADD ITION @ 2% ONLY. IT WAS SUBMITTED THAT THE TRIBUNAL HAD ALSO CONFIRMED THE RESTRICTION AND ADDITION TO THE EXTENT OF 2% AND IN SUPPORT OF HIS CLAIM, OUR ATTENTION WAS INVITED TO PAPER BOOK PAGE 23-27 WHERE A COPY OF OR DER PASSED BY THE TRIBUNAL WAS PLACED. IT WAS SUBMITTED THAT LD. CIT (A) HAD UPHELD THE PENALTY HOLDING THAT THE ASSESSEE HAD NOT FILED RET URN VOLUNTARILY AND HAD FILED THE RETURN ONLY AFTER ACTION U/S 153C WAS TAK EN. LD. A.R. SUBNMITE4D THAT THE ASSESSMENT WAS COMPLETED BY APPLYING 6% G. P. RATIO WHICH WAS ARBITRARY AND WHICH THE TRIBUNAL HAD RESTRICTED TO 2% WHICH ITSELF REFLECTS THAT THE INCOME ASSESSED BY THE ASSESSING OFFICER W AS ON THE BASIS OF HIS SUBJECTIVE ASSESSMENT AND WAS NOT BASED UPON ANY MA TERIAL. THE RESTRICTION OF 2% BY CIT(A) ITSELF POINTS OUT THAT THERE WAS A DIFFERENCE OF OPINION BETWEEN THE TWO REVENUE AUTHORITIES AND IN CASE OF A DIFFERENCE OF OPINION, PENALTY U/S 271(1)(C) FOR CONCEALMENT OF INCOME IS NOT IMPOSABLE. IT WAS FURTHER SUBMITTED THAT HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS HAS ALSO HELD THAT MERE WRONG CLAIM WHICH IS REJECTED BY THE ASSESSING OFFICER CANNOT LEAD ITSELF TO IMPOSITION OF PENALTY U/S271(1)(C) OF ITA NOS.1418,1419/DEL/2012 3 THE ACT. THE LD. A.R. FURTHER PUT RELIANCE ON VARI OUS CASE LAWS AS PLACED IN THE PAPER BOOK PAGES 45-85. 5. LD. D.R. ON THE OTHER HAND RELIED UPON THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSEE HAD NOT BEEN FILING HIS RETURN OF INCOME AND IT WAS ONLY ON THE BASIS OF INITIATION OF PROCE EDINGS U/S 153C THAT HE HAD FILED HIS TAX RETURN ON THE BASIS OF TURNOVER DECLA RING GP RATIO @ 1%. THE ASSESSING OFFICER ACCEPTED THE TURNOVER OF THE ASSE SSEE BUT APPLIED GP RATIO @ 6% INSTEAD OF 1%. WHILE APPLYING THE RATIO OF 6% , HE DID NOT CITE ANY COMPARABLE CASE WITH FACTS AND FIGURES BUT JUST STA TED IN THE ASSESSMENT ORDER THAT IN THIS KIND OF TRADE 6% GP WAS NORMAL. THE CIT(A) HAS RESTRICTED THE RATIO TO 2% WHICH WAS CONFIRMED BY T HE TRIBUNAL. THEREFORE, WE FIND THAT THE INCOME ASSESSED BY THE ASSESSING O FFICER WAS DEBATABLE AND THAT IS WHY LD. CIT(A) HAD REDUCED IT FROM 6% TO 2% . ADMITTEDLY, THE ADDITION ON ACCOUNT OF APPLICATION OF HIGHER GP RAT E WAS ON ESTIMATION BASIS AND HENCE, WE ARE OF THE VIEW THAT IN THE ABSENCE O F DEFINITE FINDING IN THIS REGARD, IT CANNOT1 BE SAID THAT THE ASSESSEE HAD FU RNISHED INACCURATE PARTICULARS OF INCOME OR HAD CONCEALED PARTICULARS OF INCOME. THE CASES OF THE ASSESSEE ARE STRENGTHENED WITH THE FACT THAT L D. CIT(A) HAD REDUCED THE SAME AND THESE ARE NOT FIT CASES FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT AND THE SAME ARE DIRECTED TO BE DELETED. 7. IN VIEW OF ABOVE, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JULY, 2014. SD./- SD./- (I. C. SUDHIR ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 18 TH JULY, 2014 SP ITA NOS.1418,1419/DEL/2012 4 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING DATE OF DICTATION DATE OF TYPING DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.