R.L. Traders Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1534/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7209 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2004-2005
• Appeal Filed On: 17-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Bogus loan
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F , NEW DELHI BEFORE SH. BHAVNESH SAINI , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO .1534 /DE L/ 2015 ASSESSMENT YEAR: 2004 - 05 M/S. R.L. TRADERS PVT. LTD., 2046, KATRA TOBACCO, KHARI BAOLI, NEW DELHI VS. ACIT, CENTRAL CIRCLE - 17, NEW DELHI PAN : AAAFR5508G ( APPELLANT ) (RESPONDENT) ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 30/01/2015 PASSED BY THE LD. COMMISSIONER OF INCOME - T AX (APPEALS) - II , NEW DELHI [IN SHORT THE LD. CIT(A) ] FOR ASSESSMENT YEAR 2004 - 05 IN RELATION TO PENA LTY LEVIED UNDER SECTION 271(1) (C) OF THE INCOME - TAX A CT, 1961 (IN SHORT THE A CT ) . THE LD. CIT(A) HAS PASSED A COMBINED ORDER FOR ASSESSMENT YEARS FROM 2000 - 01 TO 2006 - 07 (INCLUDING THE ASSESSMENT YEAR 2004 - 05 I NVOLVED IN PRESENT APPEAL BEFORE US) , LE VYING PENALTY UNDER SECTION 27 1 ( 1 )( C ) OF THE A CT ON THE INCOME ENHANCED BY HER. THE GROUND S OF APPEAL RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDER: APPELLANT BY SH. K.R. MANJANI, ADV. RESPONDENT BY SH. ATIQ AHMED, SR.DR DATE OF HEARING 05 .07.2018 DATE OF PRONOUNCEMENT 06.07.2018 2 ITA NO.1534/DEL/2015 1. THE LD. CIT(A) HAS ERRED O N FACTS AS WELL AS IN LAW IN IMP OSING THE PENALTY EVEN THOUGH IT WAS NOT INITIATED BY HIM. 2. THE LD. CIT(A) HAS ERRED ON FACTS AS WELL AS IN LAW IN IMPOSING THE PENALTY EVEN THOUGH THE APPELLANT HAS DISCHARGED ONUS, THE APPELLANT HAV ING FILED THE NAMES, ADDRESSES, PERMANENT ACCOUNT NUMBERS, CONFIRMATION AND EVEN THOUGH THE TRANSACTIONS ARE THOUGH BANKING CHANNEL, T.D.S. IS DULY DEDUCTED ON THE INTEREST PAID ON WHICH THE CREDITORS HAVE PAID TAXES. 2. B RIEFLY STATED FACTS OF THE CASE ARE THAT WHILE PASSING THE APPELLATE ORDER DATED 30/09/2014, THE LD. CIT(A) ENHANCED THE INCOME OF THE ASSESSEE AND INITIATED PENALTY PROCEEDING UNDER SECTION 27 1(1)(C) OF THE ACT . AFTER PROVIDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND CONSIDERING THE WRITTEN SUBMISSION DATED 13/01/2015, THE LD. CIT(A) LEVIED PENALTY UNDER SECTION 27 1 ( 1 )( C ) OF THE A CT BY WAY OF A COMBINE D ORDER DATED 30/01/2015 FOR ASSESSMENT YEAR 2000 - 01 TO 2006 - 07, WHICH INCLUDED THE PRESENT ASSESSMENT YEAR IN CONSIDERATION IN THE APPEAL. AGGRIEVED, THE AS SESSEE FILED APPEAL BEFORE THE T RIBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE QUANTUM PROCEEDINGS BY WAY OF WHICH INCOME OF THE ASSESSEE WAS ENHANCED IN THE A SSESSMENT YEARS 2001 - 01 TO 2006 - 07 HAVE BEEN RESTORED BACK BY THE T RIBUNAL IN IT A NO. 6087/DEL/2014 TO 6093/D EL/2014 TO THE FILE OF ASSES SING OFFICER FOR ADJUDICATING A FRESH IN ACCORDANCE WITH L AW. HE ALSO SUBMITTED THAT THE T RIBUNAL IN IT A NO. 1530 TO 1533/DEL/2015 AND 1536/D EL/2015 FOR ASSESSMENT YEAR S 2000 - 01 TO 2003 - 04 AND 2006 - 07 RESPECTIVELY, HAS SET ASIDE THE ISSUE OF LEVYING OF THE PENALTY UNDER SECTION 271 (1)(C) OF THE A CT TO THE FILE OF THE ASSESSING 3 ITA NO.1534/DEL/2015 OFFICER FOR ADJUDICATING ON MERIT. HE , ACCO RDINGLY , REQUESTED THAT ISSUE IN DISPUTE IN THE YEAR UNDER CONSIDERATION BEING IDENTICAL TO THE ISSUE DECIDED IN IT A NO. 1530 TO 1533/DEL/2015 AND 1536/D EL/2015, MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING ON MERIT. 4. THE LD. D R COULD NOT CONTROVERT THE FACT THAT ISSUE IN DISPUTE INVOLVED IN THE PRESENT APPEAL IS IDENTICAL TO THE APPEALS DECIDED BY THE T RIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR S 2001 - 01 TO 2003 - 04 AND 2006 - 07 IN RELATION TO PENALTY U/S 271(1)(C) OF THE ACT 5. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE NOTE THAT THE LD. CIT(A) HAS L EVIED PENALTY UNDER SECTION 271 ( 1 )( C ) OF THE A CT BY WAY OF A COMBINED ORDER FOR ASSESSMENT YEAR 2001 - 01 TO 2005 - 06. THE RELEVANT EXTRACT OF THE ORDER OF THE LD. CIT(A) , RELATING TO LEVY OF THE PENALTY ON ENHANCED INCOME IS REPRODUCED AS UNDER: 5.7 IN THIS ORDER, PENALTY IS CONSIDERED ONLY WITH RESPECT TO THE SUMS ENHANCED BY THE APPEAL ORDER DATED 30.09.2014, AMOUNTING TO BOGUS LOA NS OF RS.6,83,274/ - AND RS.7,35,000/ - FOR AY 2003 - 04 AND 2006 - 07 RESPECTIVELY AND BOGUS INTEREST TO THE EXTENT OF 25% IN RESPECT OF EACH AY UNDER CONSIDERATION. IN THE APPEAL ORDER OF 30.09.2014, IT WAS HELD THAT THE SUMS OF RS.6,83,274/ - IN AY 2003 - 04 AND RS.7,35,000/ - , IN AY 2006 - 07 CLAIMED AS LOANS/CREDITS , WHICH HAD REMAINED TO BE ADDED BY THE AO WHILE PASSING THE ASSESSMENT ORDER ON 28.12.2007, CONSTITUTED UNEXPLAINED CREDITS; AND INTEREST CLAIMED AGAINST THE BOGUS LOANS, WERE REQUIRED TO BE DISALLOW ED TO THE EXTENT OF 100% AND NOT 75% AS WAS DONE BY THE AO SINCE THE LOANS WERE BOGUS IN ENTIRETY. 4 ITA NO.1534/DEL/2015 6. WE NOTE TH AT IN QUANTUM PROCEEDINGS, THE TRIBUNAL IN ITA NO. 6087/D EL/2014 FOR ASSESSMENT YEAR 2000 - 01 , RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER OBSERVING AS UNDER: 24. THUS, IN VIEW OF ABOVE, IN THE INTEREST OF JUSTICE AND FAIR PLAY WE ARE INCLINED TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO RAISE ITS POINTS OF CONTENTIONS. THEREFORE, WE RE RESTORING BACK THE ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION AS PER LAW AND WITH THE DIRECTION THAT HE WILL DEPUTE THE INSPECTOR OF INCOME TAX TO CARRY OUT THE NECESSARY VERIFICATION AS PER THE PROVISIONS OF LAW. IT IS NEEDLESS TO MENTION THAT THE ASSESSEE SHALL EXTEND FULL COOPERATION TO THE INSPECTOR OF INCOME TAX FOR CARRYING OUT SUCH ENQUIRIES. AS BOTH LD. AR & DR BEFORE US AGREED TO RESTORE THE ISSUE TO THE FILE OF AO FOR FRESH ADJUDICATION AS PER LAW, WE ARE NOT INCLINED TO ADJUDICATE THE OTHER ISSUES RAISED BY THE ASSESSEE ON TECH NICAL BASIS IN ADDITION GROUNDS OF APPEAL. THUS, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. T HE T RIBUNAL, FOLLOWING THE ABOVE , HAS RESTORED THE QUANTUM PROCEEDINGS TO THE ASSESSING OFFICER IN OTHER APPEALS HAVING IT A NO. 6088/ DEL/2014 TO 6093/D EL/2014 FOR ASSESSMENT YEAR 2001 - 02 TO 2006 - 07 OBSERVING AS UNDER: 25. NOW COMING TO THE REMAINING APPEAL I.E. ITA NOS. 6088/DEL/14, 6089/DEL/14, 6090/DEL/14, 6091/DEL/14, 6092/DEL/2014 & 6093/DEL/2014. THE ISSUES RAISED BY T HE ASSESSEE ARE EXACTLY IDENTICAL TO THE ISSUE RAISED IN ITA NO. 6087/DEL/2014, BOTH THE LD. AR AND D/R BEFORE US AGREED WHATEVER VIEW WILL BE TAKEN IN ITA NO. 6087/DEL/2014 WOULD BE APPLIED IN THE INSTANT CASE. AS WE HAVE ALREADY DECIDED THE ISSUE BY REST ORING BACK TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE TO THE PROVISIONS OF LAW IN ITA NO. 6087/DEL/2014. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE RESTORE THE IMPUGNED ISSUES RAISED BY THE ASSESSEE TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE TO THE PROVISIONS OF LAW. THUS, THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR THE STATISTICAL PURPOSES. 5 ITA NO.1534/DEL/2015 8. FOLLOWING THE FINDING IN QUANTUM PROCEEDINGS, THE T RIBUNAL IN ITA NO. 1535/D EL/2015 FOR ASSESSMENT YEAR 2005 - 06 RESTORED THE LEVY OF PE NALTY UNDER SECTION 271(1)(C) OF THE ACT TO THE FILE OF THE ASSESSING OFFICER OBSERVING AS UNDER: 27. CONSIDERING THE TOTALITY OF FACTS AND THE ARGUMENTS ADVANCED BEFORE US, WE ARE OF THE VIEW THAT EVEN THE MANDATE OF ARTICLE 265 OF CONSTITUTION OF INDIA ONLY DUE TAXES HAS TO BE LEVIED/COLLECTED, THEREFORE, WE RESTORE THE QUANTUM APPEAL, FILED BY THE ASSESSEE, TO THE LD. AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. SINCE, THE QUANTUM APPEALS HAVE BEEN RESTORED TO THE FILE OF THE LD. AO, THE PENALTY APPEAL IS ALSO RESTORED BACK AS THE SAME WILL BE DEPENDENT UPON THE OUTCOME OF THE QUANTUM APPEALS, THUS, THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. NEEDLESS TO MENTION HERE THAT DUE OPPORTUNITY OF BEING HEARD BE PROVIDED TO THE ASSESSEE. 9. SIMILARLY, THE T RIBUNAL IN IT A NO. 1530 TO 1533/DEL/2015 AND 1536/D EL/2015 HAS ALSO REST ORED THE ISSUE OF LEVY PENALTY TO THE FILE OF THE ASSESSING OFFICER OBSERVING AS UNDER: 2.1 WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WITHOUT GOING INTO MUCH DELIBERATION, WE FIND THAT SOME OF THE APPEALS OF THIS GROUP WERE HEARD ON 11.04.2018 AND DECIDED VIDE ORDER DT. 12.04.2018, WHEREIN AFTE R MAKING AN ELABORATE DISCUSSION, THE QUANTUM APPEALS OF THE ASSESSEE AS WELL AS ONE PENALTY APPEAL WERE SET, ASIDE TO THE FILE OF THE LD. AO WITH CERTAIN DIRECTIONS FOR FRESH ADJUDICATION. SINCE THE PRESENT APPEALS ARE BORN OUT OF THE SAME FACTS AND BELON GS TO THE SAME ASSESSEE, THEREFORE, ON SIMILAR DIRECTIONS THESE APPEALS ARE ALSO SET ASIDE TO THE FILE OF THE LD. AO TO ADJUDICATE ON MERIT. THE ASSESSEE BE GIVEN OPPORTUNITY OF BEING HEARD. ALL THESE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PUR POSES ONLY. 6 ITA NO.1534/DEL/2015 10. IN THE YEAR UNDER CONSIDERATION, GROUNDS RELATED TO LEVY OF PENALTY A R E IDENTICAL TO THE GROUNDS RAISED IN ITA NO.1530 TO 1533/DEL/2015 ; 1535/DEL/2015 AND 1536/D EL/2015, THUS , RESPECTFULLY FOLLOWING THE DECISION OF THE T RIBUNAL (SUPRA), W E RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATING ON MERIT WITH THE DIRECTIONS SIMILAR TO WHAT HAS BEEN GIVEN BY THE T RIBUNAL (SUPRA). IT IS NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF BEING HEAR D. THE GROUNDS OF APPEAL ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 11. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 6 T H JULY , 201 8 . S D / - S D / - ( BHAVNESH SAINI ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 6 T H JULY , 201 8 . RK / - (D.T.D . ) COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI