Swiss Bakerie and Patisserie Pvt. Ltd., Hyderabad, Secunderabad V. DCIT, Circle-3(2), Hyderabad, Hyderabad

ITA 1711/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2381 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 21-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Keywords: Invalid notice; Additional evidence
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B (SMC) BENCH : HYDERABAD [BEFORE SMT ASHA VIJAYARAGHAVAN, JUDICAL MEMB ER ] ./I.T.A. NO. 1711/HYD/2016 / ASSESSMENT YEAR : 2006-2007 M/S. SWISS BAKERIE & PATISSERIE PRIVATE LIMITED, NO.8-2-608/49, ROAD NO. 10, BANJARA HILLS, HYDERABAD 34 [PAN AAICS 3709F] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(2) HYDERABAD. ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI. PAWAN KUMAR CHAKRAPANI. /RESPONDENT BY : SHRI. K.J. RAO. /DATE OF HEARING : 09-05-2017 /DATE OF PRONOUNCEMENT : 21-06-2017 / O R D E R THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R PASSED BY THE CIT(A)-10, HYDERABAD ON 11.07.2016 CONFIRMI NG THE PENALTY OF 6,60,000/- IMPOSED BY THE AO U/S.271(1)(C) OF THE ACT IN RELATION TO ASSESSMENT YEAR 2006-2007. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF SELLING BAKERY PRODUCTS. FOR THE A SSESSMENT YEAR 2006-2007, ASSESSEE FILED RETURN OF INCOME ON 31.10 .2006 ADMITTING LOSS OF 19,16,361/-. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, ITA NO.1711/HYD/2016 :- 2 - : THE LD. ASSESSING OFFICER ADDED A SUM OF 20,00,00 0/- REPRESENTING SHARE CAPITAL BROUGHT IN BY MOTHER OF THE MANAGING DIRECTOR SMT. MUKTESWARI K.BASCO U/S. 68 OF THE INCOME TAX ACT, 1 961 (IN SHORT THE ACT). THE LD. ASSESSING OFFICER INITIATED PROCEED INGS U/S. 271(1) (C) OF THE ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS . LD. ASSESSING OFFICER VIDE ORDER DATED 24.04.2009 LEVIED A PENALT Y OF 6,60,000/- U/S. 271(1) (C) OF THE ACT. 3. THE ASSESSEE INSTEAD OF FILING APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) FILED A PETITI ON U/S. 264 OF THE ACT BEFORE LD. COMMISSIONER OF INCOME TAX. LD. COM MISSIONER OF INCOME TAX VIDE ORDER DATED 31.03.2011 REJECTED TH E PETITION FILED U/S. 264 OF THE ACT AS BARRED BY LIMITATION. 4. AGGRIEVED BY THE PENALTY ORDER PASSED BY THE LD. AS SESSING OFFICER, ASSESSEE HAS FILED AN APPEAL RISING FOLLOW ING GROUNDS OF APPEAL AS UNDER:- 1. THE LD. ASSESSING OFFICER HAS ERRED IN LEVYIN G A PENALTY U/S. 271(1) ( C) FOR 6,60,000/- IN THE ABS ENCE OF ANY EXPLANATION FILED FOR THE SHARE CAPITAL INTR ODUCED OF 20 LAKHS. 2. FOR THAT YOUR PETITIONER CRAVES THE RIGHT TO PU T ADDITIONAL GROUNDS AT THE TIME OF APPEAL. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS)-10, HYDERABAD , THE ASSESSEE FILED ADDITIONAL EVIDENCE U/R 46A OF THE INCOME TAX RULES, 1961. THE ITA NO.1711/HYD/2016 :- 3 - : ADDITIONAL EVIDENCE, WRITTEN SUBMISSIONS AND PETITI ON FOR ADMISSION OF ADDITIONAL EVIDENCE WERE SENT TO THE LD. ASSESSING OFFICER FOR FACTUAL REPORT. LD. ASSESSING OFFICER VIDE ORDER DATED 02 .06.2013 SUBMITTED THE REMAND REPORT AS UNDER:- 1. THE REPORT CALLED FOR ON THE SUBMISSIONS MADE BY THE ASSESSEE COMPANY BEFORE THE CIT (A) IS SUBMITTE D AS UNDER: 2. I T IS SUBMITTED THAT AS PER THE INFORMATION ON RECORD THE ASSESSEE COMPANY HAS RECEIVED AN AMOUNT OF RS.61,05,239/- AS UNSECURED LOAN FROM MUKTESHWAR I K BOSCO DURING THE F. Y 2005-06. DURING THE SCRUTIN Y PROCEEDINGS THE ASSESSEE PRODUCED CONFIRMATION/ BAN K ACCOUNT COPIES/ OTHER DOCUMENTARY EVIDENCE TO PROVE THE GENUINENESS FOR AN AMOUNT OF RS.41,05,239 AND FAILED TO SUBMIT ANY EVIDENCE FOR RS.20,OO,OOO. THE AO HAS COMPLETED THE ASSESSMENT BY MAKING AN ADDITION OF RS.20,OO,OOO U/S.68 OF I.T ACT. SUBSEQUENTLY THE AO HAS LEVIED A PENALTY OF RS.6,66,OOO IN THE ABSENCE OF ANY EXPLANATION FILED FOR RS.20,OO,OOO. 3. AT THE OUTSET, IT IS SUBMITTED THAT THE ASSESSEE COMPANY HAD FAILED TO SUBMIT THE NECESSARY DOCUMENTARY EVIDENCE IN SUPPORT OF GENUINENESS OF LOAN RECEIVED DURING THE ASSESSMENT PROCEEDINGS. A NOTICE U/ S 274 R. W.S. 271 (L)(C) WAS ISSUED ALONG WITH THE ASST ORDER AND THE ASSESSEE FAILED TO FILE ANY INFORMATION ASSESSEE'S LETTER DATED 22/12/2008. ACCORDINGLY TIME WAS GRANTED UP TO13/1/2009. THE ASSESSEE AGAIN FAILED TO FILE ANY INFORMATION AND F ILED A LETTER ON 20/1/2009 REQUESTING JOR ADJOURNMENT TILL 2ND WEEK OF FEB, 2009. AGAIN TIME WAS GIVEN UP TO 13/2/2009. THE AO HAS IMPOSED A PENALTY OF RS.6,60,000 ON 20/4/2009 AS THE ASSESSEE HAS NO EXPLANATION TO OFFER TO THE PENALTY PROCEEDINGS. 3.1 IT IS CLEAR FROM THE ABOVE THAT THE ASSESSEE WA S AFFORDED OPPORTUNITIES TO EXPLAIN THE (4 SOURCES FOR RS. 20,00,000 BUT IT FAILED TO DO SO. FURTHER, THE UNSECURED LOAN WAS TAKEN FROM THE DIRECTOR OF THE COMPANY I.E., MS MUKTESHWARI K. BOSCO, WHO FAILED TO ITA NO.1711/HYD/2016 :- 4 - : FURNISH EXPLANATION TO THE SOURCES FOR RS 20,00,000 EITHER DURING SCRUTINY PROCEEDINGS OR PENALTY PROCEEDINGS U/ S 271 (1)(C). 3.2. WITHOUT CONCEDING TO THE CLAIMS OF THE ASSESSEE VIS-A-VIS ADMISSIBILITY OF THE EVIDENCE, IT IS SUBM ITTED THAT THE EXPLANATIONS / DOCUMENTARY EVIDENCE SUBMITTED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS)-10, HYDERABAD, COULD HAVE BEEN FURNISHED BEFORE THE ASSESSING OFFICER DURING THE PENALTY PROCEEDINGS. NO REASONS HAVE BEEN PUT FORTH TO EXPL AIN WHY THE SAME COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER. SINCE THE LETTERS/INFORMATION SUBMITTED BY THE ASSESSEE COMPANY IN THE FORM OF ADDITIONAL EVIDENCE DOES NOT FALL UNDER THE EXCEPTI ONS OF RULE 46A, THE SAME NEED NOT BE ADMITTED AT THIS STAGE. 4. THE CONTENTS OF THE ASSESSEE'S LETTER DATED 12/4/2015 AND THE ADDITIONAL EVIDENCE HAS BEEN VERIFIED. THE ASSESSEE HAS SUBMITTED THE COPIES OF US TAX RETURNS, BANK STATEMENT AND PASSPORT OF MOTHER OF MUKTESHWARI BOSCO. THE INFORMATION PERTAINS TO THE F . Y 2004-05. THE BANK STATEMENT OF MS.MUKTESHWARI K BOSCO WAS ALSO ENCLOSED AND IT CONTAINS THE STATEME NT FROM 1-4-2004 TO 30-9-2004. THE ASSESSEE HAS STATED VIDE LETTER DATED 6/11/2010 THAT THERE IS NO FRESH INTRODUCTION OF SHARE CAPITAL DURING THE A. Y 2006-07. HOWEVER, IT IS SUBMITTED THAT THE ADDITION OF RS.20,00,000 WAS MADE DURING THE A. Y 2006-07 AS THE ASSESSEE COULD NOT SUBSTANTIATE OR PROVIDE ANY EVIDENCE IN SUPPORT OF UNSECURED LOAN RECEIVED FRO M MS MUKTESHWARI K BOSCO. THE ASSESSEE HAS FAILED TO PROVIDE ANY INFORMATION PERTAINING TO THE A. Y 2006-07 IN WHICH THE ADDITION OF RS.20, 00, 000 WAS MADE EVEN IN THE ADDITIONAL EVIDENCE FILED BEFORE THE HONOURABLE CIT(APPEALS)-10 . 5. IN LIGHT OF THE ABOVE SUBMISSIONS AND THE PROVISIONS OF RULE 46A, THE ADDITIONAL INFORMATION BEING SOUGHT TO BE ADMITTED BEFORE THE HONOURABLE CIT (APPEALS)-10, HYDERABAD, MAY NOT BE CONSIDERED. ITA NO.1711/HYD/2016 :- 5 - : 6. LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER HEAR ING THE ASSESSEE OBSERVED THAT REASONS FOR ADMISSION OF ADD ITIONAL EVIDENCE STATED THAT THERE WAS A DELAY IN OBTAINING DOCUMENT S, I.E., US TAX RETURNS, COPY OF PASSPORT, COPY OF BANK STATEMENT F ROM THE MOTHER NAMELY MRS. MUKTESWARI BASCO. FURTHER, LD. COMMISS IONER OF INCOME TAX (APPEALS) OBSERVED THAT ASSESSEE HAD FILED CON FIRMATION LETTER WRITTEN BY MR. KAUSHIK DOROTHY PAUL WHICH IS UNDATE D BUT HE ALSO OBSERVED THAT THE AFFIDAVIT IS DATED 03.06.2009. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER POINTED OUT THAT THE D OCUMENTS WERE NOT PRODUCED DURING THE COURSE OF PROCEEDINGS U/S. 264 BEFORE THE LD. COMMISSIONER OF INCOME TAX. THE LD. COMMISSIONER O F INCOME TAX (APPEALS) HELD AS UNDER:- THE ASSESSING OFFICER ALSO OBJECTED TO THE ADMISSIO N OF ADDITIONAL EVIDENCES VIDE REPORT DATED 02.06.2016. WITH REGARD TO THE CONTENTS OF THE ADDITIONAL EVIDENCES ALSO, THE ASSESSING OFFICER MENTIONED THA T THE BANK STATEMENT AND INFORMATION PERTAIN TO FINAN CIAL YEAR 2004-05 RELEVANT TO AY 2005-06, HOWEVER, THE ADDITION RELATES TO AY 2006-07. THOUGH NO SHARE APPLICATION MONEY WAS CLAIMED TO HAVE BEEN RECEIVED DURING THE FINANCIAL YEAR 2005-06 (RELEVANT TO AY 2006- 07), UNSECURED LOAN WAS RECEIVED DURING THE YEAR AN D THE DIRECTOR SMT. MUKTESWARI COULD EXPLAIN SOURCES FOR RS.41,05,239/ - OUT OF RS.61 ,05,239/-. IN FACT, T HE ASSESSEE ADMITTED THAT RS.14,00,000/ - WERE INTRODU CED AS UNSECURED LOAN DURING FY 2004-05 (AY 2005-06) RS.12,00,000/- DURING FY 2005-06 (A Y 2006-07). THU S, THERE IS NO CLARITY IN THE SUBMISSIONS MADE BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. ITA NO.1711/HYD/2016 :- 6 - : 7. LD. COMMISSIONER OF INCOME TAX (APPEALS) CONCLUDED THAT ASSESSEE DID NOT PROVE THE GENUINENESS OF THE UNSEC URED LOAN CREDITORS/ SHARE APPLICATION MONEY TO THE EXTENT OF 20,00,000/- AND THEREFORE LD. ASSESSING OFFICER MADE ADDITION IN T HE ASSESSMENT YEAR 2006-2007. LD. COMMISSIONER OF INCOME TAX (APPEALS ) CONCLUDED THAT ADDITIONAL EVIDENCE ARE NOT TO BE ADMITTED AS THE A SSESSEE DID NOT PUT FORTH THE FACTS BEFORE LD. ASSESSING OFFICER DURING THE COURSE OF PENALTY PROCEEDING NOR HE FILED BEFORE LD. COMMISSIONER OF INCOME TAX DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 264 OF T HE ACT. WITH RESPECT TO THE DECISION RELIED ON BY THE ASSESSEE N AMELY BARJATIAYA STEEL INDUSTRIES VS. COMMISSIONER OF SALES TAXES UP (SC), LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT IT W AS NOT RELEVANT TO THE FACTS OF THE ASSESSEES CASE. LD. COMMISSI ONER OF INCOME TAX (APPEALS) UPHELD THE ORDER OF THE LD. ASSESSING OFF ICER AND CONFIRMED THE PENALTY. 8. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE ME AND RAI SED THE FOLLOWING GROUNDS. 1. THE ORDER OF THE AUTHORITIES BELOW IN SO FAR A S IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES AND THE FACTS AND CIRCUMSTANCES IN TH E APPELLANT'S CASE. 2. THE ORDER OF PENALTY PASSED BY THE LEARNED ASSES SING OFFICER UNDER SECTION 271 (1 )(C) OF THE ACT IS WI THOUT JURISDICTION AS THE MANDATORY CONDITIONS FOR INVOKI NG THE PROVISIONS OF SECTION 271 (1 )(C) OF THE ACT HAS NO T BEEN COMPLIED WITH AND THE NOTICE ISSUED UNDER SECTION 2 74 OF THE ITA NO.1711/HYD/2016 :- 7 - : ACT IS AN INVALID NOTICE ON THE FACTS AND CIRCUMSTA NCES OF THE CASE. 3. THE ORDER OF PENALTY PASSED BY THE ASSESSING OFF ICER IS BAD IN LAW AS THE LEARNED ASSESSING OFFICER HAS NOT ARRIVED AT SATISFACTION THAT THE APPELLANT HAS CONCEALED OR FU RNISHED INACCURATE PARTICULARS OF INCOME AND THE VERY INITI ATION OF PENALTY PROCEEDINGS UNDER THE PROVISIONS OF SECTION 271 (1 )(C) OF THE ACT IS BAD IN LAW ON THE FACTS AND CIRCUMSTA NCES OF THE CASE. 4. WITHOUT PREJUDICE, THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN LAW IN NOT APPRECIATING THAT THE MERE ADDITIONS TO THE RETURNED INCOME IN THE ASSESSMENT PROCEEDINGS D O NOT AUTOMATICALLY ATTRACT LEVY OF PENALTY UNDER THE FAC TS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED ASSESSING OFFICER FAILED TO APPRECIA TE THAT THE PENALTY PROCEEDINGS ARE INDEPENDENT OF THE ASSESSM ENT PROCEEDINGS AND OUGHT TO HAVE VERIFIED THE FACTS OF THE CASE INDEPENDENTLY UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LEARNED ASSESSING OFFICER FAILED TO APPRECIA TE THAT THE APPELLANT HAS NEITHER CONCEALED ANY INCOME NOR FUR NISHED INACCURATE PARTICULARS OF INCOME TO WARRANT LEVY OF PENALTY AND THEREFORE THE PENALTY LEVIED UNDER SECTION 271 (1 ) (C) OF THE ACT REQUIRES TO BE CANCELLED. 7. THE APPELLANT DENIES HIMSELF LIABLE FOR PENALTY UNDER SECTION 271 (1 )(C) OF THE ACT, FOR AN AMOUNT BEING RS. 6,60,000/-, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LEARNED AUTHORITIES BELOW ARE NOT JUSTIFIED IN LEVYING PENALTY UNDER SECTION 271 (1 )(C) OF THE ACT, OF AN AMOUNT BEING RS. 6,60,0001-, ON SHARE CAPITAL INTRODUCED, WHEN THERE IS NO SHARE CAPITAL INTRODUCED DURING THE IMPUGNED ASSESSMENT YEAR, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE . 9. WITHOUT PREJUDICE, THE LEARNED COMMISSIONER OF I NCOME- TAX (APPEALS) - 10, HYDERABAD, IS NOT JUSTIFIED IN LEVYING PENALTY UNDER SECTION 271 (1 )(C) OF THE ACT, OF AN AMOUNT BEING RS. 6,60,000/ UN-SECURED LOANS CREDITORS 1 SHARE CAPITAL, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. WITHOUT PREJUDICE, THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) - 10, HYDERABAD, IS NOT JUSTIFIED IN LEVYING PENALTY UNDER SECTION 271 (1 )(C) OF THE ACT, OF AN AMOUNT BEING RS. 6,60,000/-, BY CHANGING THE HEAD ON WHICH THE PENALTY WAS ITA NO.1711/HYD/2016 :- 8 - : LEVIED, UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE. 11. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) - 10, HYDERAB AD, OUGHT TO HAVE GIVEN SEPARATE OPPORTUNITY OF HEARING / SHOW CAUSE NOTICE BEFORE PROCEEDINGS WITH THE CHANGE IN THE HEAD OF PENALTY AS DETERMINED BY THE LEARNED ASSESSING O FFICER, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELET E OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 13. IN THE VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. LD. COUNSEL FOR THE ASSESSEE SUBMITTED AS UNDER: IN ASSESSING OFFICER (AO) HAS LEVIED A PENALTY U/ S 271 (1)(C) FORRS. 660000/ - IN THE ABSENCEOF ANY EXPLANATION TILED FOR THE SHARE CAPITAL INTRODUCED OF RS .20.00 LAKHS. COMING TO FACTS OF THE CASE, THE ASSESSEE'S CASE WA S SELECTED FOR SCRUTINY AND WAS PROCESSED U/ S 143(3) OF INCOME TAX ACT. 1 961 DATED 20.10.2008. WHILE PASSING THE ASSESSMENT ORDER THE AO HAD MADE AN ADDITION OF RS.20.00 LAKHS STATING THAT 'THE ASSESSEE HAS INTRODUCED SHARE CAPITAL OF RS. 20 LAKHS AS HAVING BEEN RECEIVED FROM THE MOTHER OF MANAGING DIRECTOR SMT. MUKTESHWA RI K BOSCO. BUT, NO CONFIRMATION FILED NOR SOURCES EXPLA INED. IN THE ABSENCE OF SUCH DETAILS, THE ABOVE SHARE CAPITA L IS TREATED AS ASSEESSSS'S INCOME U/S 68 AND DEDUCTION FROM LOSS RETURNED.' IN THIS REGARDS. YOUR HONOUR IS REQ UESTED TO NOTE THAT THE ASSESSEE HAD NOT INTRODUCED ANY SHARE CAPITAL DURING THE ASST. YEAR 2006-2007 AS CAN BE SEEN FROM THE BALANCE SHEET (A COPY ALREADY ENCLOSED AS ANNEXURE -1 ALONG WITH THE APPLICATION OF APPEAL). THE SHARE CA PITAL OF RS. 20.00 LAKHS WAS INTRODUCED IN THE PREVIOUS ASST YEAR I.E., 2005-2006 AND NOT DURING THE YEAR. AS SUCH THE ADDITIONS MADE BY AO WAS WRONG, BAD AND ILLEGAL . FURTHER TO THE ABOVE WE WOULD LIKE TO INFORM YOU TH AT THE ENTIRE SHARE CAPITAL WAS INTRODUCED DURING THE ASST . YEAR 2005-2006 ONLY. THE SHARE CAPITAL OF RS. 20.00 LAKHS INTRODUCED BY SMT. MUKTESHWARI K. BOSCO WAS A DIREC TOR IN THE COMPANY AND SHE IS AN NRI. AND THE AMOUNT INTRODUCED BY HER WAS RECEIVED FROM HER MOTHER SMT. KAUSHIK DOROTHY PAUL WHO IS ALSO AN NRI. WE HAVE OBTAINED CONFIRMATION, BANK ACCOUNT COPY AND ITA NO.1711/HYD/2016 :- 9 - : INCOME TAX RETURN OF SMT. KAUSHIK DOROTHY PAUL AS A PROOF OF MONEY GIVEN TO HER DAUGHTER SMT. MUKTESHWA RI K. BOSCO (COPIES ALREADY ENCLOSED AS ANNEXURE - 2 ALONG WITH THE APPLICATION OF APPEAL) AND ALSO THE CONFIR MATION AND BANK ACCOUNT COPY FROM SMT. MUKTESHWARI K. BOSC O AS A PROOF OF SHARE CAPITAL INTRODUCED IN THE COMPA NY DURING THE ASST. YEAR 2005-2006 (COPIES ALREADY ENCLOSED AS ANNEXURE - 3 ALONG WITH THE APPLICATION OF APPEAL). AS SUCH THE ADDITIONS OF INTRODUCING SHARE CAPITAL OF RS. 20.00 LAKHS SHALL NOT ADDED TO THE INCOME EVEN IN THE ASST. YEAR 2005-2006. 9. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY SUPPORTED THE ORDERS OF THE LD. ASSESSING OFFICER A ND THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 10. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE REVENUE AUTHORITIES. SEC. 271(1) (C) OF THE ACT STATES THAT PENALTY CAN BE LEVIED IF THERE IS CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE HONBE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. RAJ TRADING CO. 217 ITR 208 EXPLAINING THE DIFFERENCE BETWEEN TWO, HELD THAT TH E WORDS 'FURNISHING INACCURATE PARTICULARS OF INCOME' REFER TO THE PARTICULARS WHICH HAVE BEEN FURNISHED BY AN ASSESSEE OF HIS INC OME AND THE REQUIREMENT OF CONCEALMENT OF INCOME IS THAT INCOME HAS NOT BEEN DECLARED AT ALL OR IS NOT EVEN RECORDED IN THE BOOK S OF ACCOUNT OR IN A PARTICULAR CASE THE CONCEALMENT OF THE PARTICULARS OF INCOME MAY BE FROM THE BOOKS OF ACCOUNT AS WELL AS FROM THE FURNI SHED MATERIAL. HENCE, PENALTY CANNOT BE IMPOSED WHEN ALL NECESSARY FACTS WERE DISCLOSED BY THE ASSESSEE. ITA NO.1711/HYD/2016 :- 10 - : 11. EVEN OTHERWISE LD. ASSESSING OFFICER HAS MADE A MIS TAKE THAT THE SHARE CAPITAL WAS INTRODUCED IN PREVIOUS ASSESS MENT YEAR I.E. 2005-2006 AND NOT DURING THIS ASSESSMENT YEAR I.E. 2006-2007. 12. FURTHER, THE SHARE CAPITAL OF 20,00,000/- WAS INT RODUCED BY SMT. MUKTESHWARI K BOSCO WHO IS MOTHER OF THE MANA GING DIRECTOR OF THE COMPANY AND AN NRI. LD. COMMISSIONER OF INCOME TAX (APPEALS) OBJECTION WAS THAT THE DETAILS NAMELY DOCUMENTARY E VIDENCE WAS NOT SUBMITTED BEFORE THE LD. ASSESSING OFFICER AND THER EFORE THE SAME CANNOT BE ADMITTED AS ADDITIONAL EVIDENCE BEFORE HI M. IN MY OPINION THE ADDITIONAL EVIDENCE HAS TO BE ADMITTED SINCE AS SESSEE HAS EXPLAINED THAT IT HAD TAKEN EFFORTS AND TIME TO PRO CURE THE SAME. ON PERUSAL OF THE ORDER U/S. 264 OF THE ACT, I AM OF THE OPINION THAT THE ORDER REFUSE THE CONDONATION PETITION U/S. 264 OF T HE ACT, AND LD. COMMISSIONER OF INCOME TAX-3, HYDERABAD HAD DISMIS SED THE PETITION AS BARRED BY LIMITATION. LD. CIT HAS NOT GONE INTO THE MERITS OF THE CASE AND ASSESSEE WAS LEFT WITH NO OTHER ALTERNATIV E BUT TO FILE AN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEA LS) AND PRODUCE THE EVIDENCE. IN THESE CIRCUMSTANCES FOR MORE THAN ONE REASON I.E. SEC. 271(1) (C) OF THE ACT CANNOT BE LEVIED AS THE ASSESSEE HAS NOT FURNISHED (I) INACCURATE PARTICULARS OF INCOME OR THERE IS NO CONCEALMENT OF ANY INCOME (II) THERE IS NO SHARE CA PITAL INTRODUCED IN THE IMPUGNED ASSESSMENT YEAR (III) DISMISSING PETIT ION U/S. 264 OF THE ITA NO.1711/HYD/2016 :- 11 - : ACT ON THE GROUND OF LIMITATION IS NOT RELEVANT ON THE MERITS OF THE CASE. PENALTY PROCEEDINGS ARE OF INDEPENDENT OF AS SESSMENT PROCEEDINGS. IN THIS CASE, PENALTY PROCEEDINGS V ERIFIED INDEPENDENTLY SHOW THAT THERE IS NO ELEMENT OF MENSREA IN THIS C ASE. HENCE, PENALTY LEVIED BY THE LD. ASSESSING OFFICER AND CON FIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS DELETED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 21 ST DAY OF JUNE, 2017, AT HYDERABAD. SD/- (ASHA VIJAYARAGHAVAN) / JUDICIAL MEMBER HYDERABAD / DATED: 21 ST JUNE, 2017 KV ! / COPY TO: 1 . / APPELLANT 3. ' ( ) / CIT(A) 5. / DR 2. / RESPONDENT 4. ' / CIT 6. / GF