Yogender Nath Bhardwaj, Delhi V. ITO, New Delhi

ITA 1689/DEL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0805 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 31-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1689/DEL/2016 (ASSESSMENT YEAR: 2011 - 12 ) YOGENDER NATH BHARDWAJ, 81 - 82, 1 ST FLOOR, GOKHALE MARKET, DELHI PAN: AAGPB0780J VS. ITO, WARD - 37(3), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.C. SRIVASTAVA, ADV SHRI DAKSH S. BHARDWAJ, ADV SHRI SUVINAY K. DASH, ADV REVENUE BY: SHRI AMIT JAIN, SR. DR DATE OF HEARING 26/07 / 2018 DATE OF PRONOUNCEMENT 0 8 / 10 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1 . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - 20, NEW DELHI WHEREIN HE CONFIRMED THE LEVY OF THE PENALTY U/S 271(1)(C) OF THE ACT OF RS. 420495/ - FOR ASSESSMENT YEAR 2011 - 12. 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE IMPUGNED APPELLATE ORDER DATED 23.02.2016 PASSED BY THE COMMISSIONER OF INCOME TAX APPEALS - 20, NEW DELHI U/S 271 (1) (C) READ WITH SECTION 274 OF THE INCOME TAX ACT 1961 IS BAD AND DEFECTIVE IN THE EYES OF LAW. 2. THAT THE ABOVE CITED PENALTY ORDER AS FRAMED IS AN ARBITRARY ACTION, IN FACT NO PROPER AND REASONABLE OPPORTUNITY HAS EVER BE EN GIVEN TO THE ASSESSEE FOR THE HEARING OF CASE AND TO DEFEND HIS CASE. 3. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - 20 HAS NOT CONSIDERED THE AMOUNT OF RS. 12,16,143/ - SURRENDERED BY THE ASSESSEE ON ACCOUNT OF PROFESSIONAL RECEIPTS WHICH IS UNJUSTIFI ED AND UNLAWFUL. 4. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - 20 HAS NOT CONSIDERED PLEA OF THE ASSESSEE AGAINST THE PENALTY IMPOSED BY THE ASSESSING OFFICER ON ACCOUNT OF ADDITION MADE ON ACCOUNT OF PAGE | 2 EXPENDITURES DISALLOWED BY THE A.O. FOR AMOUNTING RS . 96831/ - AND 65400/ - WHICH IS UNREASONABLE AND UNJUSTIFIED AND IT SHOULD BE DELETED. 5 . THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - 20 HAS NOT CONSIDERED THE PLEA GIVEN BY THE ASSESSEE AGAINST THE PENALTY ON INCOME/EXPENSES DISALLOWED ON ACCOUNT OF DIV IDEND OF RS. 10252/ - , SET OFF OF SHARE LOSS OF RS. 144684/ - , EXPENSES OF PERSONAL NATURE 1400/ - AND RS. 350/ - ON ACCOUNT OF DIFFERENCE IN INCOME AS PER COMPUTATION OF INCOME, PENALTY ON THESE ADDITIONS MADE BY THE ASSESSING OFFICER HAS BEEN IMPOSED WITHOUT CONSIDERING THE NATURE OF ADDITION AND WITHOUT PROVIDING ANY PROPER OPPORTUNITY TO THE ASSESSEE TO DEFEND HIS CASE. 6. THE ASSESSEE HAD SURRENDERED THE INCOME OF RS. 12,16,143/ - ON ACCOUNT OF PROFESSIONAL RECEIPTS DURING THE HEARING OF THE CASE WITH ASSUR ANCE NO PENALTY PROCEEDINGS WILL BE LEVIED BY THE DEPARTMENT THIS AMOUNT OF RS. 12,16,143/ - WAS SURRENDERED JUST TO BUY PEACE OF MIND AND TO AVOID FURTHER HARASSMENT FROM THE DEPARTMENT. 3 . BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS AN ADVOCATE BY PROFESSION WHO FILED HIS RETURN OF INCOME ON 30.09.2011 FOR RS. 1035250/ - . THE ASSESSMENT U/S 143(3) OF THE ACT WAS PASSED ON 10.03.2014 DETERMINING TOTAL INCOME OF RS. 2570310/ - . ADDITIONS WER E NOT CHALLENGED. 4 . CONSEQUENT TO THAT PENALTY U/S 271(1)(C) OF THE ACT WAS INITIATED. THE LD AO STATED THAT PENALTY PROCEEDINGS ARE INITIATED ON ALL THE ADDITIONS AND DISALLOWANCES MADE TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE SUBMITTED HIS REPLY O N 21.08.2014 THAT THE ASSESSEE HAS OFFERED A SUM OF RS. 1216143/ - AS DIFFERENCE IN PROFESSIONAL RECEIPT AS STATED IN FORM NO. 26AS AS WELL AS PROFIT AND LOSS ACCOUNT OF THE ASSESSEE. HE THEREFORE, STATED THAT PENALTY THEREON CANNOT BE LEVIED. HE FURTHER ST ATED THAT ON VARIOUS DISALLOWANCE OF THE EXPENDITURE NO PENALTY COULD BE LEVIED. HE FURTHER STATED THAT SET OFF SHARE OF LOSS , ASSESSEE HAS COMPLETELY DISCLOSED DETAILS OF SUCH LOSS AND IT CANNOT BE SAID THAT THERE IS ANY CONCEALMENT OF INCOME. HE THERE FORE, STATED THAT ADDITION ARE ROUTINE AND GENERAL IN NATURE ON ACCOUNT OF EXPENSES WHICH DOES NOT INVITE PENALTY U/S 271(1)(C) OF THE ACT. 5 . THE LD AO REJECTED THE CONTENTION OF THE ASSESSEE AND STATED THAT ADDITION OF RS. 121843/ - IS UNDISCLOSED PROFESSI ONAL RECEIPTS AND SET UP OF LOSS OF SHARE OF RS. 144684/ - AGAINST NON - SPECULATIVE WOULD HAVE REMAIN PAGE | 3 UNDE TECTED AND CONCEALED UNLESS RETURN WOULD NOT HAVE BEEN SCRUTINIZED. THEREFORE HE LEVIED PENALTY U/S 271(1 ) ( C) OF THE ACT OF RS. 420495/ - VIDE ORDE R DATED 23.09.2014. 6 . THE ASSESSEE AGGRIEVED WITH THE ORDER - PREFERRED APPEAL BEFORE THE LD CIT ( A), WHO CONFIRMED THE PENALTY ON THE DECISION OF THE HON'BLE SUPREME COURT IN CASE OF MAKDATA PVT. LTD VS. CIT. THEREFORE, THE ASSESSEE AGGRIEVED HAS PREFERRED T HIS APPEAL. 7 . THE LD AR VEHEMENTLY SUBMITTED THAT A . THERE IS NO SATISFACTION IN THE ASSESSMENT ORDER ABOUT ANY SPECIFIC CHARGE, IN NOTICE ALSO, A O HAS NOT STRUCK OFF ANY OF THE TWIN CHARGES IN THE NOTICE ISSUED. FURTHER, IN THE ASSESSMENT ORDER ALSO THERE IS NO SPECIFIC CHARGE. B . NO PENALTY CAN BE LEVIED ON MERE DISALLOWANCES OF EXPENSES ON ESTIMATE BASIS C . ON THE DIFFERENCE BETWEEN FORM NO 26 AS AND GROSS RECEIPT IN PROFIT AND LOSS ACCOUNT, SURRENDER IS VOLUNTARY. D . ON SUCH DIFFERENCE, NO PENALTY CAN BE LEVIED. E . ON CLAIM OF SET OFF COMPLETE DETAILS ARE DISCLOSED. HE REFERRED TO SEVERAL JUDGMENTS ON THIS GROUND TO STATE THAT IN SUCH A CASE PENALTY DESERVES TO BE CANCELLED. HE ALSO RELIED UP ON THE DECISION OF HON KARNATAKA HIGH COURT IN CASE OF MANJUNATHA COTTON & GINNING CO LIMITED AND SAS EMERALD MEADOWS. 8 . THE LD DR VEHEMENTLY RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 9 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ADMITTEDLY IN THIS CASE AS PER ASSESSMENT ORDER, THE LD AO HAS INITIATED PENALTY PROCEEDINGS FOR CONCEALING THE PARTICULARS OF INCOME AND FURNISHES INACCURATE PARTICULARS. IN THE NOTICE ISSUED U/S 274 OF THE ACT DATED 10/3/2014 , THE LD AO HAS NOT STRUCK OFF ONE OF THE TWIN CHARGE S . THEREFORE, IT IS APPARENT THAT THE LD AO HAS NOT MADE CHARGE ABSOLUTELY CLEAR TO THE ASSESSEE WITH RESPECT TO WHICH HE SUPPOSED TO BE PENALIZED. THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN CASE OF MANJUNATHA COTTON AND GINNING INDUSTRIES [359 ITR 565] AS WELL SAS PAGE | 4 EMERALD MEADOWS . IN BOTH THE CASE, THE HON'BLE SUPREME COURT HAS ALSO DISMISSED THE SPECIAL PETITION. ON THIS GROUND ITSELF, THE PENALTY LEVIED BY THE LD AO AND CONFIRMED BY THE LD CIT ( A) DESERVES TO BE CANCELLED. 10 . IN VIEW OF THE ABOVE FACTS AND THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN SPECIFYING ANY SPECIFIC CHARGE , THE PENALTY CANNOT SURVIVE. ACCORDINGLY, APPEAL FILED BY THE ASSESSEE IS ALLOWED REVERSING THE FINDING OF THE LD CIT ( A). WE DIRECT THE LD AO TO DELETE RS. 420495/ - LEVIED U/S 271(1 ) ( C) OF THE ACT. 11 . IN THE RESULT, APPEAL OF THE ASSESSE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 8 / 10 / 2018 . - S D / - - S D / - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 8 / 10 / 2018 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI