Sh. Jatinder Kumar Nanda, Chandigarh V. DCIT, CC-II, Chandigarh

ITA 239/CHANDI/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3693 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M P DWIVEDI
• Assessee Lawyers: PARKKSHIT AGGARWAL
• Section: 147; 27; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 239/CHD/2019 / ASSESSMENT YEAR : 2009-10 SH JATINDER KUMAR NANDA, HOUSE NO.2208, SECTOR 15, CHANDIGARH VS. THE DCIT, CENTRAL CIRCLE-II, CHANDIGARH ./PAN NO. AAJPN1739J / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI PARKKSHIT AGGARWAL, CA ' ! / REVENUE BY : SH. M.P.DWIVEDI, JCIT # $ % /DATE OF HEARING : 06.11.2019 &'() % / DATE OF PRONOUNCEMENT : 06.11.2019 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 30.01.2019 OF THE COMMISSIONER OF INCO ME TAX (APPEALS)- 3, GURGAON [HEREINAFTER REFERRED TO AS CIT(A)] AGI TATING THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271 (1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT D URING THE COURSE OF SEARCH PROCEEDINGS, THE ASSESSING OFFICER NOTICED T HAT THE ASSESSEE IS INVOLVED IN CLIENT CODE MODIFICATION (CCM) AND HAD GAINED CONTRIVED LOSS OF RS. 1,59,147 AND HAD REDUCED THE TAXABLE IN COME TO THE TUNE OF ITA NO. 239-CHD-2019- SHRI JATINDER KUMAR NANDA, CHANDIGARH 2 RS. 1,59,147/- . THE ASSESSING OFFICER, ACCORDI NGLY REOPENED THE CASE OF THE ASSESSEE U/S 147 READ WITH SECTION 148 OF TH E INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') AND SHOW CAUSED THE ASSE SSEE AS TO WHY THE ADDITION MAY NOT BE MADE FOR BOOKING THIS LOSS BY W AY OF CLIENT CODE MODIFICATION AND THEREBY EVADING THE TAX. HOWEVER, IN REPLY, THE ASSESSEE SUBMITTED THAT THE ASSESSEE DID NOT CARRY OUT ANY TRANSACTION DURING THE YEAR AND NEITHER ANY LOSS ON ACCOUNT OF ANY SHARE TRANSACTION WAS BOOKED. THE ASSESSEE ALSO DID NOT CARRY OUT ANY CCM IN HIS D-MAT ACCOUNT EITHER DIRECTLY OR THROUGH BROKER. THE ASS ESSEE PLEADED THAT IT WAS A CASE OF MISTAKEN IDENTITY. HOWEVER, TO AVOID THE LITIGATION, HE AGREED FOR ADDITION OF AN AMOUNT OF RS. 1,59,147/- IN THE RETURNED INCOME. THE ASSESSING OFFICER SUBSEQUENT TO THAT, I NITIATED PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE ACT . 3. DURING PENALTY PROCEEDINGS, THE ASSESSEE REITERA TED HIS STAND AND SUBMITTED THAT THE ADDITION WAS AGREED TO AVOID LIT IGATION AS THE ASSESSEE IS AN OLD AGE PERSON OF 80 YEARS. THAT THERE WAS NO EVIDENCE AVAILABLE AGAINST THE ASSESSEE OF ANY SHARE TRANSACTION DONE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION.. MERELY BECAUS E THAT THE QUANTUM ADDITION HAS BEEN MADE THAT WAS NOT THE GROUND FOR LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. THE LD. ASSESSING OFFICER, H OWEVER, OBSERVED FROM THE REPORT OF THE INVESTIGATION WING THAT THE CONCERNED BROKER HAD DONE SO MANY CLIENT CODE MODIFICATION TRANSACTIONS AND THEREBY BOOKED THE PROFIT AND LOSS FROM SHARE TRANSACTIONS IN THE ACCOUNTS OF VARIOUS ITA NO. 239-CHD-2019- SHRI JATINDER KUMAR NANDA, CHANDIGARH 3 PERSONS. THE ASSESSING OFFICER FURTHER OBSERVED THA T SINCE THE ASSESSEE HAD AGREED FOR THE ADDITION IN THE QUANTUM ASSESSME NT PROCEEDINGS, HENCE, IT WAS A FIT CASE FOR LEVY OF PENALTY U/S 27 1 (1)(C) OF THE ACT. THE LD. CIT(A) CONFIRMED THE PENALTY SO LEVIED BY T HE ASSESSING OFFICER. THE ASSESSEE, THUS, HAS COME IN APPEAL BEF ORE THIS TRIBUNAL. 4. I HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. A UTHORIZED REPRESENTATIVES OF BOTH THE PARTIES AND HAVE GONE T HROUGH THE RECORD. IN THIS CASE, THE ASSESSEE HAS TAKEN A CONSISTENT STAN D THAT HE HAD NOT DONE ANY SHARE TRANSACTIONS, WHAT TO SAY OF BOOKING OF A NY BOGUS LOSS AS ALLEGED BY THE ASSESSING OFFICER. IT HAS BEEN TIME AND AGAINST HELD THAT THE PENALTY PROCEEDINGS ARE DIFFERENT FROM QUANTUM PROCEEDINGS. IN THE PENALTY PROCEEDINGS, IT HAS TO BE ESTABLISHED THAT THERE WAS ANY ACT OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE TO EVADE PAYMENT OF TAX. THERE IS NO EVIDE NCE ON THE FILE TO SHOW THAT THE ASSESSEE HAD CARRIED OUT ANY SHARE TR ANSACTION. MERELY BECAUSE THE ADDITIONS HAVE BEEN MADE IN THE QUANTUM PROCEEDING AND AS THE ASSESSEE HAD AGREED FOR THE SAME, HOWEVER, WITH OUT ADMITTING THAT HE HAD BOOKED ANY BOGUS LOSSES, THAT ITSELF CANNOT BE HELD TO BE A GROUND OF LEVY OF PENALTY U/S 271 (1)(C) OF THE ACT. . THE LD. COUNSEL HAS INVITED MY ATTENTION TO THE INC OME TAX RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION FILED B Y THE ASSESSEE WHICH SHOWS THAT THE ASSESSEE DID NOT BOOK EITHER ANY SHO RT TERM CAPITAL LOSS OR GAIN OR ANY LONG TERM CAPITAL LOSS OR GAIN DURING T HE YEAR UNDER ITA NO. 239-CHD-2019- SHRI JATINDER KUMAR NANDA, CHANDIGARH 4 CONSIDERATION. UNDER SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAD MADE ANY ATTEMPT TO EVADE PAYMENT OF T AX BY WAY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME IN THIS RESPECT. IN VIEW OF THIS, THE PENALTY LEVIED BY THE LOWER AU THORITIES IS NOT SUSTAINABLE IN THE EYES OF LAW AND THE SAME IS ACCO RDINGLY ORDERED TO BE DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS AL LOWED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 06. 11.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR ITA NO. 239-CHD-2019- SHRI JATINDER KUMAR NANDA, CHANDIGARH 5