ITO, Rohtak V. Sh. Balwan Singh & Co., Rohtak

ITA 179/DEL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2785 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-01-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 09-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 179/DEL/2014 (ASSESSMENT YEA R-2007-08) ITO WARD-1 ROHTAK (APPELLANT) VS BALWAN SINGH & CO. 889/29, KAMAL COLONY ROHTAK AABFB3521A (RESPONDENT) APPELLANT BY SH. K. K. JAISWAL, DR RESPONDENT BY NONE ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 12/11/ 2013 PASSED BY LD. CIT (A), ROHTAK. THIS APPEAL IS FILE D BY THE REVENUE FOR THE ASSESSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS BY DELETING TH E DATE OF HEARING 05.01.2016 DATE OF PRONOUNCEMENT 07.01.2016 PENALTY OF RS.16,70,004/- IMPOSED BY A.O U/S 271(1) (C) OF THE IT ACT, WHILE ERRONEOUSLY MAKING THE OBSERVATIO N THAT PENALTY PROCEEDING WERE INITIATED IN RESPECT OF UNCONFIRMED SUNDRY CREDITORS THEREBY IGNORING THE F ACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS BY DELETING T HE PENALTY OF RS.16,70,004/- IMPOSED BY A. O U/S 271(1 )(C) OF THE I.T ACT WHILE THE ASSESSEE HAS NOT PREFERRED AN APPEAL AGAINST THE QUANTUM ADDITION MADE THEREBY ACCEPTING THE ORDER PASSED BY THE ASSESSING OFFICER . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS BY DELETING TH E PENALTY OF RS.16,70,004/- IMPOSED BY A. O U/S 271(1 )(C) OF THE IT ACT, WITH THE OBSERVATIONS THAT NO CONCEALME NT PENALTY COULD BE LEVIED IN RESPECT OF ASSESSING INC OME ON ESTIMATED BASIS; WHEREAS INSPITE OF AMPLE OPPORTUNI TIES AFFORDED TO THE ASSESSEE DURING ASSESSMENT PROCEEDI NGS NO BOOKS OF ACCOUNTS/BILLS/VOUCHERS WERE PRODUCED F OR VERIFICATION IN ABSENCE OF WHICH THE RETURNED INCOM E REMAINED UNVERIFIABLE AND GENUINENESS OF THE EXPENS ES CLAIMED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS COU LD NOT BE PROVED AND NET PROFIT WAS ESTIMATED AND HENCE TH E SAID PENALTY WAS RIGHTLY IMPOSED BY THE ASSESSING O FFICER. 3. THE ASSESSEE IS A CIVIL CONTRACTOR AND DECLARED TOTAL INCOME OF RS.3,99,510/-. THE ASSESSEE DERIVED INCOME FROM CI VIL CONSTRUCTION ON CONTRACT BASIS. THE ORIGINAL ASSESSMENT WAS COM PLETED U/S 144 ON 15/12/2009 AND INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) AT TOTAL INCOME OF RS.84,38,480/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, PROFIT WAS ESTIMATED BY APPLYING NET P ROFIT RATE OF 12% ON THE TOTAL RECEIPTS OF RS.7,03,20,659/-. THE ASS ESSEE FILED AN APPEAL BEFORE LD. CIT(APPEALS) ROHTAK WHO ALSO CONF IRMED THE ORDER OF THE A.O. THE ASSESSEE FILED SECOND APPEAL BEFOR E HONBLE ITAT NEW DELHI IN ITA NO. 2299/DEL/2010 DATED 23/07/2010 . 4. THE A.O LEVIED MINIMUM PENALTY OF RS.16,70,004/- U/S 271(1)(C) ON THE BALANCE TAXABLE INCOME. 5. THE A.O INITIATED PENALTY PROCEEDINGS IN RESPECT OF THE ADDITION MADE ON ACCOUNT OF SUNDRY CREDITORS. THE CIT (A) DELETED THE SAID ADDITION AND ESTIMATED THE PROFIT @ 12% WH ICH HAS BEEN FURTHER REDUCED BY HONBLE ITAT TO 8%. 6. THE DR RELIED UPON THE PENALTY ORDER. 7. WE HAVE PERUSED ALL THE RECORDS AND HEARD THE DR . WHILE THE PENALTY PROCEEDINGS HAVE BEEN INITIATED IN RESPECT OF SUNDRY CREDITORS, NO PENALTY COULD BE LEVIED ON ACCOUNT OF ASSESSING THE INCOME ON SOME OTHER BASIS. FURTHER, IT IS SETTLED LAW THAT NO PENALTY CAN BE IMPOSED WHEN THE ADDITION IS MADE ON ESTIMATE BASIS. THE PENALTY PROCEEDINGS WERE INITIATED IN RE SPECT OF THE UNCONFIRMED SUNDRY CREDITORS WHEREAS THE INCOME WAS FINALLY ASSESSED ON ESTIMATE BASIS @ 8% ON GROSS RECEIPTS A S PER THE ORDER OF HONBLE ITAT. IT IS PERTINENT TO NOTE THAT LEVY ING OF PENALTY IN RESPECT OF ISSUES ON WHICH PENALTY PROCEEDINGS HAVE NOT BEEN INITIATED IS NOT VALID. FURTHER, NO CONCEALMENT PE NALTY COULD BE LEVIED IN RESPECT OF ASSESSING INCOME ON ESTIMATE B ASIS. THE CIT(A) RIGHTLY QUASHED THE PENALTY LEVIED BY THE A.O. 8. IN RESULT, APPEAL OF THE REVENUE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 07 TH OF JANUARY 2016. SD/- SD/- (R.S. SYAL) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/01/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON .05.01.2016 PS 2. DRAFT PLACED BEFORE AUTHOR .05.01.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE PS/PS SR.PS/PS 06.01.2016 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 07.01.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.