Smt. Kusum Gupta, New Delhi V. DCIT, New Delhi

ITA 1514/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6453 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 22-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 13-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAGUN GOTRU
• Keywords: Initiation of penalty proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI L.P. SAHU ITA NO. 1 5 1 4 /DEL/201 4 ASSESSMENT YEAR: 200 7 - 0 8 KUSUM GUPTA, VS. DCIT, 21/40, SHAKTI NAGAR, CENTRAL CIRCLE - 15 , NEW DELHI. NEW DELHI. (PAN: A EDPG4771M ) (APPELLANT) (RESPONDENT) ASSESSEE BY: S /S HRI SALIL AGGARWAL, ADV. AND SHAILESH GUPTA, CA DEPARTM ENT BY: SHRI SHRAGUN GOTRU , SR. DR DATE OF HEARING : 22 . 0 2 .201 6 DATE OF PRONOUNCEMENT: 21 : 0 3 .201 6 ORDER PER I.C. SUDHIR : JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER WHEREBY THE LEARNED CIT(APP EALS) HAS UPHELD THE PENALTY OF RS.2,18,790 LEVIED UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961. THIS ACTION OF THE LEARNED CIT(APPEALS) HAS BEEN QUESTIONED ON SEVERAL GROUNDS. 2. IN SUPPORT OF THE GROUNDS ON THE ISSUE, THE LEARNED AR SUBMITTED THA T THE PENALTY IN QUESTION HAS BEEN LEVIED ON AD HOC DISALLOWANCE OF RS.5,50,000 MADE ON ESTIMATED BASIS ON ACCOUNT OF BOARDING AND LODGING EXPENSES OF THE SON OF THE ASSESSEE STUDYING IN A COLLEGE IN UK (RS.2LACS ) 2 AND ON FOREIGN VISIT OF THE ASSESSEE AND HER FAMILY TO DUBAI AND SINGAPORE (RS.3,50,000). THE LEARNED AR SUBMITTED THAT BOTH THE ADDITIONS HAVE BEEN UPHELD BY THE ITAT WHICH WERE MADE ON ESTIMATE BASIS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND THE DISCLOSURE MADE BY THE ASSESSEE, HENCE, IT CANNOT BE SAID THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OF FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE TOWARDS THE ADDITIONS TO ATTRACT PENAL PROVISIONS UNDER SEC. 271(1)(C) OF THE ACT. THE LEARNED AR SUBMITTED FURTHER THAT THE ASSESSING OFFICER WHILE DIRECTING FOR INITIATION OF PENAL PROCEEDINGS IN THE ASSESSMENT ORDER HAS FAILED TO RECORD HIS SATISFACTION TO JUSTIFY THE PENAL ACTION. THE PENALTY IS THUS NOT MAINTAINABLE EVEN ON THIS GROUND ALONE. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) CIT VS. ANWAR ALI (1970) 76 ITR 696(SC); II) CIT VS. P. ROJES (2013) 31 TAXMANN. COM 253 (MAD.); III) CIT VS. MAHINDER SINGH KHEDLA (2012) 252 CTR 253 (RAJ.); 3. THE LEARNED SENIOR DR ON THE OTHER HAND PLACED RELI A N C E ON THE ORDERS OF THE AUTHORITIES BELOW . HE SUBMITTED THAT THE ADDITIONS MADE ON ACCOUNT OF STAYING OF THE ASSESSEES SON IN U.K. FOR HIS STUDY AND TRAVELLING OF ASSESSEE WITH HIS WIFE TO DUBAI AND SINGAPORE HAVE BEEN ULTIMATELY UPHELD BY THE ITAT. THE ASSESSEE COULD NOT SUBSTANTIATE THE CLAIMED 3 EXPENDITURE AND SATISFACTION OF THE ASSESSING OFFICER THAT THERE WAS FURNISHING OF INACCURATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE ON ACCOUNT OF THE ABOVE STATED ADDITIONS IS DISCERNIBLE FROM THE AS SESSMENT ORDER ITSELF WHEREIN THE ASSESSING OFFICER HAS DIRECTED FOR INITIATION OF PENALTY PROCEEDINGS ON THESE ADDITIONS DEALT BY HIM INDEPENDENTLY TO EACH OTHER. 4. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND TWO UNDISPUTED MATERIAL FACT S IN THE PRESEN T CASE TO ADJUDICATE UPON THE VALIDITY OF PENALTY LEVIED AND SUSTAINED BY THE AUTHORITIES BELOW UNDER SEC TION 271(1)(C) , FIRSTLY , BOTH THE ADDITIONS I.E. EXPENSES INCURRED ON THE STUDY OF ASSESSEES SON DURING HIS STAY IN UK AND TRAVELLING EXPENSE INCU RRED ON THE VISIT OF DUBAI AND SINGAPORE BY THE ASSESSEE WITH H ER F AMILY ARE BASED ON ESTIMATION AND THE ADDITIONS HAVE BEEN MADE ON AD HOC BASIS; AND SECONDLY , THE ADDITIONS HAVE BEEN MADE ON THE BASIS OF INFORMATION AND DISCLOSURE MADE BY THE ASSESSEE . I T IS AN ESTABLISHED PROPOSITION OF LAW THAT PROVIS I ONS LAID DOWN UNDER SEC. 271(1)(C) OF THE ACT BEING PENAL IN NATURE CAN BE INVOKED WITH PRECAUTION ONLY IN THOSE CASES WHERE THERE IS EVIDENCE BEYOND DOUBT THAT TOWARDS THE ADDITION I.E. THE SUBJECT MATTER OF THE PENALTY, THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART 4 OF THE ASSESSEE. AS DISCUSSED ABOVE IN AN ADDITIONS/DISALLOWANCE MADE AND SUSTAINED ON ESTIMATION BASIS, IT CANNOT BE SAID BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE. IN ABSENCE OF SUCH FINDING OF CONCEALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME TOWARDS THE ADDITIONS, PENALTY LEVIED UN DER SEC. 271(1)(C) OF THE ACT. WE THUS WH ILE SETTING ASIDE ORDERS OF THE AUTHORITIES BELOW, DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED UNDER SEC. 271(1)(C) OF THE ACT IN QUESTION AT RS. 2,18,790. THE GROUNDS INVOLVING THE ISSUE ARE THUS ALLO WED. 5 . IN RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 . 0 3 . 201 6 S D/ - SD/ - ( L.P. SAHU ) ( I.C. UDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 / 0 3 /201 6 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 5 DATE DRAFT DICTATED DIRECTLY ON COMPUTER 2 1 . 0 3 .201 6 DRAFT PLACED BEFORE AUTHOR 2 1 . 0 3 .2016 DRAFT P ROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 21.03 .2016 APPROVED DRAFT COMES TO THE SR.PS/PS 21. 0 3 .2016 KEPT FOR PRONOUNCEMENT ON 21.03 .2016 FILE SENT TO THE BENCH CLERK 22. 0 3 .2016 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.