Gawar Constructions Co. Pvt Ltd., Hisar V. DCIT, Central Circle-1, Faridabad

ITA 2306/DEL/2022

AI Insights

The case involves Gawar Constructions Co. Pvt. Ltd., which appealed against the penalty orders imposed by the Deputy Commissioner of Income Tax, Central Circle-I, Faridabad, for four consecutive assessment years. The penalties were initially based on the concealment of income but were later imposed on the grounds of furnishing inaccurate particulars of income. The Tribunal found that the imposition of penalties on different grounds than those initially satisfied was legally unsustainable, referencing a similar case (Hatis Prabhu Das Chaudhary vs. ITO) where the penalty was struck down due to lack of continuity in the satisfaction of the Assessing Officer at different stages of the proceedings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121548 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-05-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 20-09-2022
• Other Referred Cases: Hatis Prabhu Das Chaudhary vs. ITO, New Sorathia Engineering Co. vs. CIT, Manu Engineering Works vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 27; 11; 201; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.As No.2306, 2307, 2308 & 2309/DEL/2022 Assessment Years 2013-14, 2014-15, 2015-16 & 2016-17 Gawar Constructions Co. Pvt. Ltd. DSS-378, Sector-16-17, Hisar, Haryana -125001 v. DCIT, Central Circle-I, Faridabad. TAN/PAN: AADCS3262N (Appellant) (Respondent) Appellant by: Shri Ashwani Kumar, Adv. Respondent by: Shri. T. James Singson, CIT-DR Date of hearing: 09 05 2023 Date of pronouncement: 05 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The capt io ned appeal s ha ve been f il ed b y t he Ass essee agai nst the or der s of t he Co mmi ssioner of I nco me Tax (Appeal s) -I II , Gur gaon ( ‘CI T( A) ’ i n short ) all dat ed 22. 07. 2022 ar isi ng f r o m the penalt y or der al l dated 15. 12.20 20 passed b y the Assessing Of ficer (A O) under Secti on 271(1) ( c) of t he Inc o me Tax Act , 1961 ( t he Act) concer ni ng Assess ment Years (AYs) 2013-14, 2014- 15, 2015- 16 & 2016- 17. 2. The assessee as per it s grounds of appeal has c hall enged the i mposit i on of pe nal t y under Se ct ion 271( 1) ( c) for di ffe rent assess ment years of dif fer ent a mo unts. 3. The A O i n t he pe nalt y orde r passed under Secti on I.T.A No.2306, 2307, 2308, 2309/Del/2022 2 271( 1)(c) has i mp osed penalt y of R s. 4, 63, 500/ - c once rni ng AY 2013- 14; Rs. 3,7 0, 800/ - f or AY 201 4- 15; Rs. 2, 16, 300/- for A Y 2015- 16 and Rs. 92, 700/ - for AY 2016-17 i n appeal . 4. We have hear d t he ri val sub mi ssions . 5. Mul ti ple object ions have been rai sed on behal f of the assessee t o assai l the i mposi ti on of pe nal t y. One of t he obj ecti ons bor ne out o n behal f of t he assessee is that w hi le the sat isfact i on has been drawn t owar d s conceal ment of part icul ars of inco me i n the cour se o f t he assess ment pr ocee dings, the cor res pon ding pe nalt y has been event ual l y i mp osed on the gr ounds of f ur nishi ng of i nacc urate par ti culars of i nco me i n s o far as A Y 2013- 14 i s concer n. Li ke wi se, AYs 2014- 15, 2015- 16 and 2016- 17, i ni ti al l y sati sfact ion has been dra wn b y t he Assessi ng Of fi cer i n t he course of the assess me nt pr oceedi ngs towar ds conceal ment of part i cul ar s of inco me. Based on t his sat isfact i on, t he not i ce under Secti on 274 r .w. Sect ion 271( 1)(c) was i ssued. How ever, the pe nalt y has been i mpos ed on t he gr ounds of fur nishi ng of i naccurate part iculars of i nc ome . Thus, the basi s f or draw i ng sati sfact io n un der Secti on 271( 1B) and t he actual basis for i mposit i on of pe nal t y are qui t e dif fer ent . The i mpugned act ion of t he Assessi ng Of ficer f or i mp ositi on of pen al t y on a di f f erent grou nd tha n t he gro und on whic h the sat isfact i on was drawn, i s whol l y unt ena ble i n law i n th e l ight of t he deci sion of C o- or di nate B enc h i n t he case of H at is Prabhu Das C haudhary vs. ITO, IT A No. 3557/ Ahd/ 2016 order dat ed 19. 06. 2018. The rele vant oper at ive paragraph of t he order of t he Co- or dinat e Bench i s repr od uced her eunder: I.T.A No.2306, 2307, 2308, 2309/Del/2022 3 " C ou pl e w i t h t hi s, we si m u l t a n e ou sl y n ot i c e t ha t t he a ct i o n of t h e A O i s q ui t e v a g ue . T h e ' s a t i sf ac t i o n' i n t h e c ou rs e o f t he a s s e ss m e n t w a s f o r m e d f o r a l l e g e d ' f u rn i s h i ng of i na c c u r at e p a rt i c u l a r s o f i n c o m e ' . T he p e n al t y n o ti c e do e s no t sp e c i f y t he n at u r e o f d e f a u l t a n d th u s su f f e r s f r o m vi c e o f am big ui t y . T he A O , ho w e v e r, i n d e pa rt u r e w i t h t he sa t i sf ac t i o n f o rm e d i n t he a s s e ss m e n t p r oc e e d i ng s, we nt on t o i m p o se p e n a l t y on a d i ff e re n t g r o un d i . e . c on c e a l m e n t o f pa rt i c u l a r s of i n c o m e . O s te n si b l y , th e o ri g i n al ba si s of i ni t i at i on of pe na l t y h a s b e en a l t e r e d i n a s i g n i f i c a nt w a y by t he A O h i m s e l f by im p o si n g t he p e n a lt y . T he A. Y . 2 01 0- 1 1 b a s i s fo r f o r m a t io n o f sat i sf a ct i on , t h u s, w as al t e re d a nd r e n d e r ed n on e x i st e nt . H e n ce , i n t he a b se n c e of c o n t i n u i t y i n th e sa t i s f a c t i o n o f t h e A O a t t he q ua nt u m st ag e v i s - à - v i s p e na lt y s ta g e , t h e p e n al t y or d e r p a s s e d b y t h e A O i s l i a b l e t o b e st ru c k do w n o n t h is g ro u nd a l so. F o r s u c h a vi e w , w e m ay u s ef u l l y re f e r t o t he de c i si on of t h e H o n ' bl e G u j a r a t H i g h C ou rt i n t h e c a se o f N e w So ra t h i a E n gi ne e ri n g C o . ( s up ra ) a s we l l a s a n ot h e r d e ci s i o n of t he H o n' b l e G u j a rat H ig h C ou r t i n th e c as e o f CI T v s. Ma nu E n gi ne e ri n g Wo rk s ( 1 9 80 ) 1 2 2 I T R 3 06 (G u j ). T h u s , in t o ta l i t y , p e n a l ac t i on u n d e r s. 2 7 1 ( 1 ) ( c ) o f t h e A c t i s n ot su st ai n ab le i n la w. " 6. Conse quentl y, the i mpugne d penalt y or ders passe d by t he AO in respecti ve capt io ned appeals are set asi de and the penalt y so i mp osed under Secti on 271( 1)(c) are cancell ed. 7. I n t he r es ul t, all the ca pti one d appeals of t he assessee ar e al lowe d. Order pronounced in the open Court on 09/05/2023. Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /05/2023 Prabhat