M/s. Pashupati Spinning & Weaving Mills Ltd., New Delhi V. DCIT, New Delhi

ITA 1510/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7868 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 13-04-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 13-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Keywords: Business expenditure; Opportunity of being heard; Bonafide belief; Additional evidence; Initiation of penalty proceedings

Judgement Text

ITA NO.1510/DEL/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO. 1510 /DEL/201 4 A.Y. : 200 7 - 0 8 M/S PASHUPATI SPINNING & WEAVING MILLS LTD., 1501, NIRMAL TOWER, 26, BARAKHAMBA ROAD, NEW DELHI )PANAAACP0164H) VS. DCIT, CIRCLE-14(1), NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. SALIL KAPOOR, ADV. DEPARTMENT BY : SH. SHRAVAN GOTRU, SR. DR DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 13 1313 13- -- -0 00 04 44 4- -- -201 201 201 2016 66 6 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 0 00 03 33 3- -- -0 00 05 55 5- -- -201 201 201 2016 66 6 ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU : : : : J JJ JM MM M ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDER D ATED 26.12.2013 OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXII, NEW DELHI PERTAINING TO ASSESSMENT YEAR 2007-08 ON THE FOLLOWING GROUNDS:- 1. THAT THE CIT(APPEALS) HAS , IN VIEW OF THE FACT AND CIRCUMSTANCES OF THE CASE, GROSSLY ERRED ON FACTS AND IN LAW IN UPHO LDING THE PENALTY ORDER PASSED BY THE AO LEVYING THE PENALTY ULS 271( 1)(C) OF RS 4,65,270/-. 2. THAT THE CIT(A) HAS FAILED TO APPRECIATE THAT NO SATISFACTION WAS RECORDED BEFORE INITIATION OF PENALTY PROCEEDINGS U /S 271 (1) (C) AND AS ITA NO.1510/DEL/2014 2 SUCH THE NOTICE ISSUED U/S 271 (1) (C) AND THE PENA LTY ORDER PASSED UNDER SAID SECTION ARE WITHOUT JURISDICTION AND ARE LIABLE TO BE QUASHED. 3. THAT THE CIT(A) HAS ERRED IN IGNORING THE FACT T HAT THE ASSESSING OFFICER HAS, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, GROSSLY ERRED IN LAW AND ON FACTS IN INITIATING AND LEVYING PENALTY PROCEEDINGS U/S 271 (1)( C) ON GROUND OF FURNISHING INACCURATE PARTICULARS OF INCOME. 4. THAT THE DISALLOWANCE OF CLAIM OF THE APPELLANT RELATING TO PRIOR PERIOD EXPENSE CANNOT BE THE REASON FOR IMPOSING PE NALTY AS THE EXPENSES RELATED TO THE BUSINESS AND THE CLAIM WAS BASED ON BONAFIDE BELIEF. 5. THAT THE ALLEGED FAILURE ON THE PART OF THE ASSE ESSEE TO SUBSTANTIATE THE BONAFIDE BUSINESS EXPENSES CANNOT BE THE GROUND FOR IMPOSING PENALTY. THE AO AND CIT(A) HAS FAILED TO ESTABLISH ANY CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE INCOME ON BEHALF OF THE APPELLANT. 6. THAT THE CIT(A HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE PENALTY OF RS 4,65,270/- WHEN THE RETURNED INCOME A ND THE ASSESSED INCOME IS NIL AND THERE IS NO TAX PAYABLE BY THE AP PELLANT FOR THE RELEVANT ASSESSMENT YEAR. 7. THAT THE CIT(APPEALS) HAS , IN VIEW OF THE, FACT AND CIRCUMSTANCES OF THE CASE, GROSSLY ERRED ON FACTS AND IN LAW IN IGNO RING AND REJECTING THE APPLICATION UNDER RULE 46A AND THE ADDITIONAL EVIDE NCES FILED BY THE ASSESSEE. 8. THAT THE CIT(APPEALS) HAS, IN VIEW OF THE FACT A ND CIRCUMSTANCES OF THE CASE AND IN LAW, FAILED TO APPRECIATE THE FACT THAT THIS IS ONLY A CASE WHERE THE DISALLOWANCES OF RS 13,82,267 WERE MADE ONLY BECAUSE ITA NO.1510/DEL/2014 3 THE ASSESSEE COULD NOT PRODUCE THE SUPPORTING BILLS AND VOUCHER AND THERE ARE NO OTHER ADVERSE FINDINGS BY THE AO . 9. THAT THE CIT(APPEALS) AS, IN VIEW OF THE FACT AN D CIRCUMSTANCES OF THE CASE AND IN LAW, FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAS NOW PRODUCED THE BILLS AND VOUCHERS FOR THE DISALLO WED AMOUNT OF RS 13,82,267 AND HENCE NO ADDITION AND OR PENALTY IS CALLED FOR NOW . 10. THAT THE AO HAS FAILED TO APPRECIATE THAT NO SA TISFACTION WAS RECORDED BEFORE INITIATION OF PENALTY PROCEEDINGS U /S 271 (1) (C) AND AS SUCH THE NOTICE ISSUED U/S 271 (1 ) (C) AND THE PEN ALTY ORDER PASSED UNDER SAID SECTION ARE WITHOUT JURISDICTION AND ARE LIABLE TO BE QUASHED. 11. THAT THE INFORMATION FILED AND THE MATERIAL AVA ILABLE ON 'RECORD ARE NOT PROPERLY CONSIDERED AND AS SUCH THE ORDER IMPOS ING PENALTY U/S 271 (1) (C) IS ILLEGAL AND BAD IN LAW. 12. THAT IN ANY CASE THE PENALTY IMPOSED IS UNJUST, ARBITRARY AND HIGHLY EXCESSIVE. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF BREVITY. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE DRAW OUR ATTENTION TOWARDS THE IMPUGNED ORDER AT PARA NO. 4 PAGE NO. 3 & 4 AND STATED THAT THE ASSESSEE HAS FILED SOME ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) WHICH HAS NOT BEEN ADMITTED BY THE LD. CIT(A) ON THE GROUND THAT THE ASSESSEE SHOULD HAVE BROUGHT THE ADDITIONAL EVIDENCE BEFORE THE APPELLAT E AUTHORITY AT THE TIME OF DECISION ON THE QUANTUM ADDITION, NOT IN PENALTY PR OCEEDINGS WHICH IS CONTRARY TO THE LAW AND FACTS OF THE CASE, BECAUSE THE ADDIT IONAL EVIDENCE CAN BE FILED AT ANY TIME FOR SUBSTANTIATING THE CLAIM OF THE AS SESSEE, IN VIEW OF THE DECISION OF ITA NO.1510/DEL/2014 4 THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF NTPC LIMITED 229 ITR 383 NTPC LIMITED 229 ITR 383 NTPC LIMITED 229 ITR 383 NTPC LIMITED 229 ITR 383 . . . . HE REQUESTED THAT THE ISSUE IN DISPUTE MAY BE SET ASIDE TO THE A O TO DECIDE THE SAME AFRESH UNDER THE LAW, AFTER GIVING ADEQUATE OP PORTUNITY OF BEING HEARD TO THE ASSESSEE AS WELL AS FOR PRODUCING THE EVIDENCE S FOR SUBSTANTIATING ITS CLAIM BEFORE THE AO. 4. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH THE PARTIERS AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS PASSED BY THE REVENUE AUTHORITIES, WE ARE OF THE CONSIDERED VIEW THAT AS PER THE DECIS ION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF NTPC LIMITED 229 ITR 383 NTPC LIMITED 229 ITR 383 NTPC LIMITED 229 ITR 383 NTPC LIMITED 229 ITR 383 , , , , THE ASSESSEE CAN FILE THE ADDITIONAL EVIDENCES BEFORE ANY AUTHORITY FOR S UBSTANTIATING ITS CLAIM SUBJECT TO SOME CONDITION. IN THE INTEREST OF JUSTICE, TH E EVIDENCE PRODUCED BY THE ASSESSEE WHICH THE ASSESSEE HAS ENCLOSED IN THE PAP ER BOOK CONTAINING PAGES 1 TO 40 IN WHICH HE HAS ATTACHED THE COPY OF THE SUB MISSION FILED ON 6.12.2013; COPY OF APPLICATION UNDER RULE 46A; LEDGER ACCOUNT OF JINDAL CARGO MOVERS; BANK STATEMENT OF PASHUPATI SPINNING AND WEAVING MI LLS; DETAILS OF TRAVELLING EXPENSES OF EMPLOYEES; LEDGER ACCOUNTS PERTAINING T O OTHER PARTIES; DETAILS OF EXPENSES OF H.M. JAIN AND LEDGER ACCOUNTS OF BIC LO GISTICS LTD. NEEDS TO BE EXAMINED BY THE AO BECAUSE THE SAME ARE VERY MUCH IMPORTANT FOR THE CORRECT DECISION ON THE ISSUE IN DISPUTE. THEREFORE, WE AR E ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE WHICH HAS WRONGLY BEEN REJECTED BY THE LD. ITA NO.1510/DEL/2014 5 CIT(A) AND ACCORDINGLY, WE SET ASIDE THE ISSUES IN DISPUTE TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH, UNDER THE LAW, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD AS WELL AS OPPORTUNITY OF PRODUCING THE ADDITIONAL EVIDENCES AS DISCUSSED ABOVE BEFORE THE AO. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03/5/2016 SD/- SD/- [ [[ [PRASHANT MAHARISHI] PRASHANT MAHARISHI] PRASHANT MAHARISHI] PRASHANT MAHARISHI] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 03/5/2016 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES