Sh. Naresh Chaudhary, New Delhi V. ACIT, New Delhi

ITA 1793/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8267 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: C L ARORA ADV SUMIT ARORA
• Section: 143(3); 27

Judgement Text

1 ITA NO. 1793/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI G. D. AGRAWAL, VICE P RESIDENT AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.-1793/DEL/2014 (ASSESSM ENT YEAR-2009-10) NARESH CHAUDHARY B-7/6, 3 RD FLOOR, SAFDARJUNG ENCLAVE NEW DELHI AAAPC374J (APPELLANT) VS ACIT CIRCLE-24(1) NEW DELHI (RESPONDENT) APPELLANT BY SH. C. L. ARORA, ADV, SUMIT ARORA, ADV. RESPONDENT BY SH. P. DAM KANUNJNA, SR.DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 28/1/2014 PASSED BY CIT(A)-XXIII, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS: 1. THAT THE IMPUGNED PENALTY ORDER IS AGAINST LAW AND FACTS OF THE CASE. DATE OF HEARING 07.04.2016 DATE OF PRONOUNCEMENT 08.04.2016 2 ITA NO. 1793/DEL/2014 2. THAT THE APPELLANT FURNISHED THE ENTIRE DETAILS OF EXPENSES INCURRED AND NOTHING WAS CONCEALED DURING THE ASSESSMENT PROCEEDINGS. 3. THAT THE ASSESSING OFFICER ERRED IN OBSERVING TH AT THE APPELLANT HIMSELF HAS ACCEPTED THE WRONG FURNISHING OF DETAILS WHICH IS NOT ACCEPTED AT ALL. 4. THAT THE APPELLANT NEVER WILLFULLY CONCEALED THE PARTICULARS OF INCOME. 5. THAT THE A.O DID NOT APPRECIATE THE LATEST SUPRE ME COURT RULING AS CONTAINED IN M/S RELIANCE PETRO PRODUCTS PVT. LTD. REGARDING IMPOSING OF PENALTY UNDER SECTION 27 1(A)(C) OF THE INCOME TAX ACT. 6. THAT THE COMMISSIONER OF INCOME TAX (APPEAL) ERR ED IN CONFIRMING THE PENALTY ON ACCOUNT OF DISALLOWANCES SUCH AS BUSINESS PROMOTION EXPENSES AND EXPENSES OF CONFERENCE AS WELL AS EXPENSES INCURRED IN CASH FOR PURCHASE OF MOBILES. 7. THAT THE COMMISSIONER (APPEAL) DID NOT DISTINGUI SH THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF M/ S RELIANCE PETRO PRODUCTS (P LTD AND M/S ZOOM COMMUNICATIONS (P) LTD. CONFIRMING THE IMPOSITION O F PENALTY IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THAT THE DECISION OF ITAT (DELHI) IN ITA NO. 319 4/DEL/2012 DATED 20/6/2013 IS APPLICABLE IN THE PRESENT CASE A S SUCH THE PENALTY IMPOSED AND CONFIRMED IN 1 ST APPEAL BE QUASHED. 9. THAT THE APPELLANT CRAVES TO RAISE ANY OTHER GRO UND DURING THE COURSE OF HEARING. IT IS RESPECTFULLY PRAYED THAT THE ORDER OF PENAL TY IMPOSED BEING ILLEGAL MAY KINDLY BE QUASHED AND OR BE GIVEN ANY OTHER RELIEF AS DEEMED FIT IN THE FACTS A ND CIRCUMSTANCES OF THE CASE. 3 ITA NO. 1793/DEL/2014 3. THIS APPEAL PERTAINS TO PENALTY U/S 271(1)(C). THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 19/12/2011 AT AN INCOME OF RS.67,19,904/- MAKING AN ADDITION OF RS.7,80,910/-. THE ADDITION WAS MAINLY ON AD-HOC BASIS. THE ASSESSEE DID NOT F ILE ANY APPEAL AGAINST THE SAID ASSESSMENT ORDER. THEREFORE, THE PENALTY ORDER U/S 271(1) (C) WAS PASSED ON 19/22-6-2012 AGAINST WHICH THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) PARTL Y ALLOWED THE APPEAL OF THE ASSESSEE THEREBY SUSTAINING THE PENAL TY IN RESPECT OF DISALLOWANCE UNDER CONFERENCE EXPENSES TO THE EXTEN T OF 20%. THE SAID DISALLOWANCE WAS ON THE AD-HOC BASIS. 4. THE LD. AR SUBMITTED THAT THE ENTIRE PENALTY ORD ER WAS BASED ON AD-HOC BASIS EXPENSES DISALLOWED BY THE ASSESSIN G OFFICER AND THERE WAS NO FINDING AT ALL THAT THERE IS A CONCEAL MENT OF PARTICULARS OF INCOME. THEREFORE, PENALTY U/S 271(1)(C) SHOULD HAVE NOT BEEN LEVIED. THE LD. AR RELIED UPON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. L TD 322 ITR 158 (S.C.) 5. THE LD. DR SUBMITTED THAT THE PENALTY ORDER AS W ELL AS THE CIT (A)S ORDER ARE JUST AND PROPER. THE LD. D.R REFER RED PARA 4.2 & 4.3 OF THE CIT (A)S ORDER. 6. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. IT IS FOUND THAT THERE IS NO CONCEALMENT AS SUCH AND M ERELY THE DISALLOWANCE WAS MADE ON AD-HOC BASIS WHICH CANNOT TANTAMOUNT 4 ITA NO. 1793/DEL/2014 TO CONCEALMENT OR INACCURATE FURNISHING OF THE DOCU MENTS. THE JUDGMENT IN THE CASE OF RELIANCE PETRO PRODUCTS (SU PRA) IS APPLICABLE IN THE PRESENT CASE. THEREFORE, WE ARE INCLINED TO ALLOW THE APPEAL OF THE ASSESSEE. 7. IN RESULT, THE APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 8TH OF APRIL, 2016. SD/- SD/- (G. D. AGRAWAL) (SUC HITRA KAMBLE) VICE PRESIDENT JUDICIAL MEMBER DATED: 08/04/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGIS TRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 07/04/2016 PS 2. DRAFT PLACED BEFORE AUTHOR 08/04/2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY JM/AM 5 ITA NO. 1793/DEL/2014 SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 8.04.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 8 .04.2016 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.