Naveen Chand Khanna & Sons (HUF), Delhi V. ACIT, New Delhi

ITA 2114/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2858 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: LALITHA KRISHNAMURTHY; VIDHI AGRAWAL CAS
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D , NEW DELHI BEFORE SH. BHAVNESH SAINI , JUDICIAL M EMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER ITA NO .2114 /DE L/ 2016 ASSESSMENT YEAR: 2009 - 10 M/S. NAVEEN CHAND KHANNA & SONS (HUF), 17, ALIPUR ROAD, CIVIL LINES, DELHI VS. ACIT, CIRCLE - 20(1), NEW DELHI PAN : AAAHN2704A ( APPELLANT ) (RESPONDENT) APPELLANT BY SMT. LALITHA KRISHNAMURTHY & MS. VIDHI AGRAWAL, CAS RESPONDENT BY SH. AMIT JAIN, SR.DR DATE OF HEARING 15.02.2018 DATE OF PRONOUNCEMENT 16.03.2018 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 18/02/2016 PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - 34, NEW DELHI [IN SHORT THE LD. CIT(A) ] IN RELATION TO PENALTY UNDER SECTION 271(1)(C) THE INCOME - TAX A CT, 1961 (IN SHORT THE A CT ) FOR ASSESSMENT 2009 - 10, RAISING FOLLOWING GROUND S : 1. THAT THE LD. CIT(APPEALS) HAD ERRED IN SUSTAINING THE PENALTY IMPOSED BY THE AO OF RS.9,09,295/ - U NDER SECTION 271(1) (C) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') ON VARIOUS FACTUAL AND LEGAL GROUNDS. 2 2. B RIEFLY STATED FACTS OF THE CASE ARE THAT ASSESSMENT UNDER SECTION 143(3) OF THE A CT WAS COMPLETED ON 30/11/2011 AFTER MAKING ADDITION FOR ENHANCED COMPENSATION RECEIVED ON ACQUISITION OF LAND BY THE DELHI METRO CORPORATION AS LONG - TERM CAPITAL GAIN (LTCG) . THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS.9, 09,295/ - V IDE ORDER DATED 06/03/2014. ON FURTHER APPEAL, THE LD. CIT(A), DISMISSED THE APPEAL OF THE ASSESSEE AND UP HELD THE PENALTY LEVIED BY THE ASSESSING O FFICER. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE T RIBUNAL RAISING THE GROUND A S REPRODUCED ABOVE. 3. BEFORE US, THE L D. COUNSEL OF THE ASSESSEE ASSAILED THE IMPUGNED ORDER ON LEGAL GROUNDS AS WELL AS ON MERIT. THE LD. COUNSEL FILED TWO PAPER BOOKS CONTAINING PAGES 1 TO 50 AND PAGES 51 TO 92. THE LD. COUNSEL REFERRED TO PAGE 42 OF THE PAPER BOOK AND SUBMITTED THAT IN THE ORIGINAL ASSESSMENT ORDER DATED 30/11/2011 , NO PENALTY WAS INITIATED AND THE A SSESSING O FFICER PASSED AN ADDENDUM DATED 22/12/2011 TO THE ASSESSMENT ORDER DATED 30/11/2011 FOR INITIATING T HE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ACCORD ING TO HIM, THI S ACTION OF THE A SSESSING O FFICER IS NOT PERMITTED IN LAW . THE LD. COUNSEL ALSO ASSAILED THE PENALTY ORDER PASSED ON THE GROUND THAT PENALTY HAS BEEN LEVIED BOTH FOR CONCEALMENT OF INCOME AND INACCURATE PARTICULARS OF INCOME, WHICH IS ALSO NOT PERMITTED BY LAW IN VIEW OF THE DECISION OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATH COTTON & GINNING FACTORY, 359 ITR 565 (KER.) . THE LD. COUNSEL ALSO ARGUED THAT ON MERIT ALSO THE PENALTY WAS NOT LEVIABLE AS THE ASSESSEE HAS FILED FULL PARTICULARS A BOUT THE TRANSACTIONS BEFORE THE ASSESSING OFFICER AND GIVEN BONAFIDE EXPLANATION . 3 4. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE LD. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE OBSERVE THAT ASSESSING OFFICER PASSED THE ASSESSMENT ORDER ON 30/11/20 11 AFTER MAKING ADDITION OF RS.45,46 ,473/ - , BUT HE OMITTED TO INITIATE PENALTY PR OCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT IN THE BODY OF THE ASSESSMENT ORDER. ON 22/12/2011, THE ASSESSING OFFICER PASSED AN ADDENDUM TO THE ASSESSMENT ORDER DATED 30/11/2011 CITING THAT INITIATION OF PENALTY PROCEEDING IN THE ASSESSMENT ORDER WAS LEFT DUE TO TYPOGRAPHICAL ERROR. CONTENTS OF THE ORDER DATED 22/12/2011 ARE REPRODUCED AS UNDER: ASSESSMENT ORDER IN THIS CASE WAS PASSED ON 30.11.2011 , WHEREIN AN AMOUNT OF RS.45,46, 473 WAS TAXED AS CAPITAL GAINS, AND FINAL ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.64,16,700. THE ASSESSEE HAD CLAIMED EXEMPTION ON THE RECEIPT OF RS.45,46,473 WHICH WAS NOT QUALIFYING F OR EXEMPTION, AS PER DETAILED DISCUSSION IN THE ASSTT ORDER PASSED ON 30.11.2011. THE ASSESSEE HAD THUS FURNISHED INACCURATE PARTICULARS OF INCOME, AND FOR THIS DEFAULT HE IS HELD TO BE IN DEFAULT U/S 271(1) FOR WHICH SATISFACTION IS BEING RECORDED FOR I NITIATION OF PENALTY PROCEEDINGS UNDER THIS SECTION. NOTICE U/S 271(1)(C) IS BEING ISSUED SEPARATELY. THIS MATTER WAS LEFT TO BE MENTIONED IN THE ASSTT. ORDER PASSED ON 30.11.2011 DUE TO TYPOGRAPHICAL ERROR. THUS THIS ORDER IS BEING PASSED AS ADDENDUM TO THE ASSTT ORDER PASSED DATED 30.11.2011. 4 ORDER DETAILS OF FINAL INCOME ASSESSMENT AMOUNT REMAIN UNCHANGED. 6. I T IS EVIDENT FROM THE ABOVE ADDENDUM ORDER DATED 22/11/2011 THAT PENALTY PROCEEDINGS HAVE NOT BEEN INITIATED IN THE ASSESSMENT ORDER DATED 30/ 11/2011. IN OUR OPINION, THE ASSESSING OFFICER DOES NOT HAVE ANY POWER OF REVIEWING HIS OWN ORDER. IN CASE OF ANY APPARENT MISTAKE IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER CAN RESORT TO RECTIFICATION UNDER SECTION 154 OF THE ACT EITHER SUO MOTU OR AN APPLICATION BY THE ASSESSEE. IN CASE OF ANY ERROR OTHER THAN APPARENT MISTAKE IN THE ORDER, THE ASSESSING OFFICER CANNOT REVISE OR REVIEW HIS OWN ORDER. THERE ARE OTHER PROVISIONS IN THE ACT FOR REMEDY IN CASE OF SUCH A SITUATION BUT THE ASSESSING OFFICER HIMSELF CANNOT ISSUE AN ADDENDUM AND INCORPORATE PARAGRAPHS TO THE ASSESSMENT ORDER FOR INITIATING PENALTY PROCEEDINGS. THE ASSESSING OFFICER HAS NOT RECORDED ANY SATISFACTION FOR INITIATING PENALTY PROCEEDING IN THE ORIGINAL ASSESSMENT PROCEEDINGS. THE S ATISFACTION OF THE ASSESSING OFFICER I N THE COURSE OF ANY PROCEEDINGS , IS A PREREQUISITE FOR INITIATING PENALTY PROCEEDING, WHICH CANNOT BE ADDED BY WAY OF AN ADDENDUM TO THE ASSESSMENT ORDER , SUBSEQUENT TO THE COMPLETION OF THE ASSESSMENT PROCEEDING AND , THUS , IN THE INSTANT CASE, INITIATION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT ITSELF IS WITHOUT JURISDICTION AND BAD IN LAW AND THUS ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO CANCEL THE PENA LTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. SINCE WE HAVE DIRECTED TO CANCEL THE PENALTY ON THE GROUND OF INITIATION ITSELF, WE ARE NOT ADJUDICATING 5 OTHER ARGUMENTS OF THE LD. COUNSEL CHALLENGING THE DELETION OF PENALTY. THE GROUND OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 1 6 T H MARCH . , 201 8 . S D / - S D / - ( BHAVNESH SAINI ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 6 T H MARCH , 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