Asstt. Commissioner of Income Tax, Khanna V. M/s Kashmir Apiaries Exports, Doraha

ITA 1459/CHANDI/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73580 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-03-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 30-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J S NAGAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, JM ITA NO. 1459/CHD/2010 ASSESSMENT YEAR : 2006-07 A.C.I.T. CIRCLE, KHANNA VS. KASHMIR APIARIES EXPOR TS GT ROAD VILLAGE MALHIPUR, DORAHA AADFK 0902A (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI J.S.NAGAR DEPARTMENT BY: SHRI ASHWANI KUMAR DATE OF HEARING 1 2.3.2014 DATE OF PRONOUNCEMENT 20.3.2014 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 18.10.2010 OF THE LD. CIT(A)-II. LUDHIANA. 2 IN THIS APPEAL THE REVENUE HAS FILED THE FOLLOWIN G GROUNDS: 1 THAT THE LD. CIT(A)-II HAS ERRED IN LAW AND ON F ACTS IN DELETING PENALTY OF RS. 3,96, 010/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) BY OBSERVING THAT THE ASSESSE E HAS AGREED FOR ADDITION DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. 2 THAT THERE IS NOTHING ON RECORD IN ASSESSMENT ORD ER /NOTING SHEET TO SHOW THAT THE ADDITION IN RESPECT OF WHIC H PENALTY HAS BEEN IMPOSED, WAS MADE ON AGREED BASES. 3 THAT THE ORDER OF THE LD. CIT(A)-II BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THERE WE RE FOLLOWING CREDITORS WHERE THERE IS NO CHANGE DURING THE YEAR: APEX PRODUCTS, MUZAFFARPUR NAGR RS. 1,72,694 DEEPAK ENTERPRISES RS. 1,78,757 HARPAT RAI TIMBER (P) LTD. RS. 2,39,772 2 THE ASSESSEE WAS ISSUED SHOW CAUSE NOTICE TO EXPLAI N WHY THESE AMOUNTS SHOULD NOT BE TREATED AS TAXABLE. TH E ASSESSEE FAILED TO GIVE ANY EXPLANATION AND THEREFORE THE AM OUNTS PERTAINING TO THEE CREDITORS AMOUNTING TO RS. 5,91, 223/- WAS ADDED TO THE INCOME OF THE ASSESSEE AND PENALTY PRO CEEDINGS U/S 271(1)(C) WERE INITIATED. IN RESPONSE TO SHOW CAUSE NOTICE FOR LEVY OF PENALTY IT WAS MAINLY SUBMITTED THAT DU RING ASSESSMENT PROCEEDINGS CERTAIN CREDITORS WERE SELEC TED ON RANDOM BASIS AND THE ASSESSEE WAS ASKED TO FILE CON FIRMATION. THE CONFIRMATIONS WERE ACCORDINGLY FILED AND SINCE THESE THREE CREDITORS WERE NOT CLAIMING DUES THEREFORE ASSESSEE HAD AGREED FOR ADDITION ON THESE AMOUNTS. BUT THAT CAN NOT BE THE REASON FOR LEVY OF PENALTY. THE ASSESSING OFFICER DID NOT AGREE WITH THESE SUBMISSIONS AND THE PENALTY WAS LEVIED @ 200% AMOUNTING TO RS. 396010/-. 4 ON APPEAL BEFORE THE LD. CIT(A), IT WAS MAINLY ST ATED THAT THERE WAS NO CONCEALMENT OF THE INCOME OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME. IT WAS FURTHER S UBMITTED THAT IN FACT THE PAYMENTS WERE MADE IN THE SUBSEQUENT YE ARS TO THESE CREDITORS. VARIOUS CASE LAWS WERE ALSO RELIE D. 5 THE LD. CIT(A) FOUND FORCE IN THE SUBMISSIONS AND DELETED THE PENALTY. 6 BEFORE US, THE LD. D.R. FOR THE REVENUE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 7 ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT IN FACT THIS ADDITION ITSELF WAS NOT JUSTIFIED IN VIEW OF THE DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN CASE OF CIT VS. G.P. INTERNATIONAL LTD, 325 ITR 25 AND 3 DECISION OF HON'BLE DELHI HIGH COURT IN CASE OF CI T VS. SHRI VARDHMAN OVERSEASLTD., 343 ITR 408. THE ASSESSEE A GREED TO THE ADDITION ON THE SUGGESTION OF THE DEPARTMENT EV EN WHEN ACTUAL PAYMENTS HAVE BEEN MADE IN THE SUBSEQUENT YE ARS. THE ASSESSEE DID NOT FILE APPEAL IN THESE CASE BECAUSE OF SMALLNESS OF THE AMOUNT AND THEREFORE IN THIS CASE NO PENALTY SHOULD HAVE BEEN LEVIED. IN THIS REGARD HE RELIED O N THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT V. RELIANCE PETROPRODUCTS PVT LTD, 322 ITR 158 (SC). 8 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE LD. CIT(A) DELETED THE PENALTY VIDE PARA 5 WHICH IS UNDER: I HAVE GONE THROUGH THE WRITTEN SUBMISSIONS FILED B Y THE LD. COUNSEL FOR THE APPELLANT AND ALSO PERUSED THE RELEVANT RECORD. THOUGHT THE A.O. IMPOSED PENALTY @ 200% ON ACCOUNT OF ADDITION MADE U/S 41(1) DURING ASSESSMENT PROCEEDINGS. THE LIABILITY OF THIS AMOUN T IS CURRENT AND IN REASONABLE TIME IT HAS BEEN PAID. AS THE APPELLANT DURING THE PROCEEDINGS ALSO AGREED FOR ADDITION OF RS. 5,91,22 3/- TO AVOID LITIGATION AND BUY PEACE OF MIND. DECISION OF THE HONBLE PUNJ AB AND HARYANA HIGH COURT IN THE CASE OF CIT-I VS. M/S AMIRO INTER NATIONAL ITA NO. 86 OF 2010 IS APPLICABLE IN THE CASE OF THE APPELLANT THA T MERE FACT THAT THE APPELLANT SURRENDERED THE AMOUNT, IT COULD NOT BE H ELD THAT THERE WAS CONCEALMENT OF INCOME. KEEPING IN VIEW OF THE ABOVE AGREE WITH THE SUBMISSIONS OF THE APPELLANT EXPRESSED VIDE HIS WRI TTEN SUBMISSION DURING THE APPELLATE PROCEEDINGS AND HEREBY DELETED THE PENALTY IMPOSED BY THE A.O. AMOUNTING TO RS. 3,96,010/- U/S 271(1) (C) OF THE INCOME TAX ACT, 1961. IN FACT HON'BLE PUNJAB AND HARYANA HIGH COURT IN CA SE OF CIT VS. G.P. INTERNATIONAL LTD (SUPRA) HAS HELD AS UNDE R: HELD, DISMISSING HE APPEAL, (I) THAT DURING THE PRO CEEDINGS UNDER SECTION 143(3) READ WITH SECTION 250 OF THE ACT, TH E ASSESSEE FURNISHED A CONFIRMATION CERTIFICATE FROM A ALONG WITH PAN NUMB ER. THE ASSESSEE HAD CONFIRMED THAT THE LIABILITY WAS STILL OUTSTAND ING. HENCE SECTION 41(1) WAS NOT APPLICABLE. THIS CLEARLY SHOWS THAT IN FACT SEC 41(1) WAS NOT A TTRACTED. DESPITE THIS THE ASSESSEE ACCEPTED THE ADDITION ON THE SUGGESTION OF THE DEPARTMENT BUT THEN THE SAME CANN OT LEAD TO PENAL CONSEQUENCES. THEREFORE THIS IS NOT A FIT C ASE FOR LEVY 4 OF PENALTY. IN ANY CASE THE ASSESSEE HAS NOT FILED ANY INACCURATE PARTICULARS OF INCOME. IN FACT THE HON' BLE SUPREME COURT IN CASE OF CIT V. RELIANCE PETROPRODUCTS PVT LTD (SUPRA) HAS OBSERVED AS UNDER: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BED COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICU LARS IF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO IN FORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY CO VERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STR ETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS T HE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LI ABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. IN VIEW OF THE ABOVE DECISION WE ARE OF THE OPINION THAT PENALTY IS NOT ATTRACTED IN THIS CASE AND ACCORDINGLY WE CONFI RM THE ORDER OF THE LD. CIT(A). 9 IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 20.3.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20.3.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR