Mr. Ravindra Nath Chatterjee, New Delhi V. ITO, New Delhi

ITA 2495/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3529 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 13-04-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: NEHA MATHUR
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO. 2495/DEL/2014 A.Y. : 2009-10 RAVINDRA NATH CHATTERJEE, E-176, 2 ND FLOOR, KALKAJI, NEW DELHI 110 019 (PAN: AACPC0305Q) VS. ITO, WARD 22(1), NEW DELHI (APPELLANT ) (RESPONDENT ) ASSESSEE BY : MS. NEHA MATHUR, CA DEPARTMENT BY : SH. F.R. MEENA, SR. DR ORDER PER H.S. SIDHU, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXIII, NEW DELHI DATED 24.2.2014 PERTAINING TO ASSESSMENT YEAR 2009-10 ON T HE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN LEVYING THE PENALTY 2 OF RS. 5,16,894/- RELYING UPON THE IMPUGNED PENALTY ORDER IS LIABLE TO BE QUASHED. 2. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE LEVY OF PENALTY JUST BECAUSE THE APPELLANT DID NOT CONTEST ADDITION MADE IN ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF AO IN IMPOSING PENALTY ON THE BASIS OF THE ADDITIONS MADE IN THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT DATED 21.11.2011 IGNORING THE FACT THAT THE ADDITION MADE IN THE ASSESSMENT ORDER BY WRONGLY INVOKING THE PROVISIONS OF SECTION 41(1)(A) OF THE ACT ONLY ON THE BASIS OF PERSONAL JUDGEMENT OF THE AO AND THE SAME ARE DEBATABLE ADDITIONS. 4. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN WRONGLY APPLYING DECISION OF HONBLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD. VS. CIT, 358 ITR 593. 5. THAT THE APPELLANT COMPANY CRAVES LEAVE TO ADD, DELETE, MODIFY AND AMEND ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 6. THAT ABOVE GROUNDS OF APPEAL IS WITHOUT PREJUDICE TO EACH OTHER. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE I.T. ACT, 1961 AT AN IN COME OF 3 RS.20,98,820/- AS AGAINST THE RETURNED INCOME OF RS. 6,04,235/- THEREBY MAKING ADDITION OF RS.14,94,5 86/-. WHILE C OMPLETING THE ASSESSMENT, ASSESSING OFFICER TRIED TO VERIFY THE GEN UINENESS OF CLAIM OF CURRENT LIABILITIES OF RS.87,88,220/-, FOR WHICH A SSESSING OFFICER ASKED THE ASSESSEE TO FURNISH DOCUMENTARY CONFIRMATI ONS/EVIDENCE IN THIS REGARD. ASSESSING OFFICER ALSO ISSUED NOTICES U/S 133(6) OF THE ACT TO M/S DEEKAY STUDIOS, M/S INTERNATIONAL MERCHANDISE CORPORATION AND M/S NIMBUS COMMUNICATION LIMITED, WHICH REMAINED UN- SERVED, AS SAME WERE RECEIVED BACK FROM THE POSTAL AUTHORITY HAVI NG 'LEFT' REMARK. FURTHER, IN RESPONSE TO NOTICE ISSUED U/S 133(6 ) TO DOORDARSHAN, IT WAS SUBMITTED THAT NO PAYMENT HAS BEE N MADE TO THE ASSESSEE AND DOES NOT PERTAIN TO THEM. ASSESSING OFF ICER ASKED THE ASSESSEE TO EXPLAIN THE RESPONSE OF HIS CREDITORS TO N OTICES U/S. 133(6). 2.1 SINCE NOTICES ISSUED U/S 133(6) OF THE ACT WERE R ECEIVED UN- SERVED FROM POSTAL AUTHORITY IN RESPECT OF M/S DEEKAY STUDIOS, MIS INTERNATIONAL MERCHANDISE CORPORATION AND M/S NIMBUS COMMUNICATION LTD., ASSESSING OFFICER ASKED THE ASSE SSEE TO SHOW CAUSE WHY LIABILITIES IN RESPECT OF THESE PARTIES BE NOT TREATED AS CEASED IN VIEW OF PROVISIONS OF SECTION 41(1)(A) OF THE ACT, AS HE FAILED 4 TO FILE SUPPORTING CONFIRMATIONS FROM THESE PARTIES. IN RESPONSE TO THIS, IT WAS SUBMITTED BY THE ASSESSEE THAT SUBMISSIONS H AVE BEEN FILED BY HIM IN RESPECT OF M/S INTERNATIONAL MERCHANDISE CORPORA TION VIDE LETTER DATED 10.10.2011 AND SUBMISSIONS IN RESPECT OF REMAIN ING TWO PARTIES WERE MADE THROUGH LETTER DATED 21.10.2011. THE SUBMIS SIONS MADE BY THE ASSESSEE HAVE BEEN MADE PART OF THE PENALTY ORDE R (PARA 3), WHICH WERE CONSIDERED BY THE ASSESSING OFFICER. AFT ER GOING THROUGH THE SUBMISSIONS OF THE ASSESSEE, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT IN RESPECT OF ALL THE ABOVE PARTIES THAT CLAIM OF LIABILITIES WAS QUITE OLD (RANGING FROM 10 YEARS TO 18 YEARS) IN R ESPECT OF WHICH ASSESSEE FAILED TO FURNISH ANY CONFIRMATION DESPITE B EING GIVEN AMPLE OPPORTUNITIES. THEREFORE, ASSESSING OFFICER OBSERVED THA T IT PROVES THAT ASSESSEE HAS NOTHING TO SAY IN THE MATTER AND HAD OB TAINED BENEFIT BY WAY OF REMISSION/CESSATION AS PER THE PROVISIONS OF S ECTION 41(1)(A) OF THE IT ACT. CONSIDERING THESE FACTS OF THE CASE, IT WAS HELD BY THE ASSESSING OFFICER THAT ASSESSEE HAS CONCEALED THE TR UE PARTICULARS OF INCOME. THEREFORE, ASSESSING OFFICER ISSUED SHOW CAU SE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT ON 21.11.2011 AND ASSESS EE WAS REQUIRED TO FILE REPLY BY 09.12.2011. ASSESSEE FILED HIS REPL Y ON THE DUE DATE, WHICH WAS EXAMINED AND CONSIDERED BY THE ASSESSING OFFICER AND HAS BEEN MADE PART OF THE PENALTY ORDER (IN PARA 6 & 7). HO WEVER, 5 CONSIDERING THE FACTS OF THE CASE, IT WAS HELD BY TH E ASSESSING OFFICER THAT ASSESSEE HAS FAILED TO FURNISH THE CONFIRMATION FROM THE ABOVE PARTIES DESPITE AMPLE OPPORTUNITIES PROVIDED AT THE AS SESSMENT STAGE AND DURING PENALTY PROCEEDINGS. CONSIDERING THE SAME, IT WAS HELD BY THE ASSESSING OFFICER THAT CLAIM OF THE ASSESSEE IS BOGUS IN NATURE AND LIABILITIES ARE CEASES TO BE EXISTED. THEREFORE, IT W AS HELD BY THE ASSESSING OFFICER THAT ASSESSEE HAS CONCEALED THE P ARTICULARS OF INCOME TO THE EXTENT OF RS.14,94,586/- ON WHICH TAX SOUGHT TO BE EVADED WAS CALCULATED AT RS.5,16,894/- AND MINIMUM PENALTY @ 100% OF TAX SOUGHT TO BE EVADED WAS CALCULATED AT RS .5,16,894/- AND IMPOSED VIDE PENALTY ORDER DATED 22.5.2012 PASSED U/S . 271(1) OF THE I.T. ACT, 1961. 3. AGAINST THE ABOVE PENALTY ORDER, THE ASSESSEE AP PEALED BEFORE THE LD. CIT(A) WHO VIDE HIS IMPUGNED ORDER DATED 24.2. 2014 HAS SUSTAINED THE PENALTY. 4. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. LD. A.R. OF THE ASSESSEE HAS STATED THAT THE LD. CIT(A) WAS ERRED IN CONFIRMING THE ACTION OF THE AO IN LEVYING THE PE NALTY OF RS. 5,16,894/- RELYING UPON THE IMPUGNED PENALTY ORDER WHI CH NEEDS TO BE 6 QUASHED. SHE FURTHER STATED ASSEESSEE DID NOT CON TEST THE ADDITION MADE IN THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE I.T. ACT AND AO ON THE BASIS OF THE ADDITIONS MADE LEVIED THE PE NALTY U/S. 271(1)(C) OF THE I.T. ACT BY WRONGLY INVOKING THE PRO VISIONS OF SECTION 41(1)(A) OF THE I.T. ACT AND LD. CIT(A) ALSO WRONGLY APPLIED THE CASE LAW. IN VIEW OF THE ABOVE, SHE REQUESTED THAT THE PENALTY IN DISPUTE MAY BE DELETED BECAUSE THE ISSUE IN DISPUTE IS SQUA RELY COVERED BY THE ITAT, DELHI DECISION DATED 31.3.2013 IN THE CASE OF ASSTT. I.T. VS. SH. SHAILESH MITAL (ITA NO. 2556/DEL/2012). 6. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. WE F IND THAT ITAT, DELHI BENCH VIDE ITS DECISION DATED 31.3.2013 IN TH E CASE OF ASSTT. I.T. VS. SH. SHAILESH MITAL (ITA NO. 2556/DEL/2012) HAS DE ALT THE SIMILAR AND IDENTICAL ISSUE WHEREIN THE ADDITION WAS MADE B Y THE AO ON ACCOUNT OF UNCONFIRMED TRADE CREDITORS AGREED UPON BY T HE ASSESSEE. IN THIS CASE PENALTY PROCEEDINGS WERE INITIATED FOR FU RNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSEE DID N OT PREFER APPEAL AGAINST THE ASSESSMENT ORDER. IN THIS CASE THE ASSESS EE SUBMITTED THAT 7 IN RESPECT OF SUNDRY CREDITORS, THE LIABILITY DID NOT CEASE TO EXIST BUT THE OUTSTANDING AMOUNT WAS SURRENDERED TO AVOID LITIG ATION AND NO PENALTY WAS LEVIABLE. WE FURTHER NOTE THAT THE LD. C IT(A) IN THIS CASE CONCLUDED THAT THE PENALTY COULD NOT BE LEVIED ON THE AMOUNT SURRENDERED BY THE ASSESSEE, UNLESS THERE WAS MATERIAL ON THE RECORD TO SHOW THAT THE SURRENDERED ITEM WAS HIS INCOME. TH ERE WAS NO CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME SO AS TO MAKE THE ASSESSEE LIABLE FOR PENAL CONSEQUENCES WHICH WAS L ATER BEEN CONFIRMED BY THE ITAT, DELHI, AS AFORESAID. 7.1 KEEPING IN VIEW OF THE FACTS OF THE CASE, WE AR E OF THE CONSIDERED OPINION THAT IT BECOME EVIDENT THAT THE INCOME ASSE SSED BY THE AO WAS AGREED UPON BY THE ASSESSEE AS A MEASURE OF COOP ERATION AND WITH A VIEW TO ESCAPE PENAL CONSEQUENCES. HOWEVER, W E FURTHER NOTE THAT ASSESSMENT ORDER ALSO DO NOT INDICATE ANY CONCEA LMENT OF INCOME AT ALL. IN OUR VIEW, THE INCOME WAS MERELY ESTIMATED WITHOUT FINDING ANY CONCEALMENT AS SUCH, HENCE THE PENALTY IS NOT A TTRACTED. WE ALSO FIND THAT SECTION 271(1)(C) POSTULATES IMPOSITION O F PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT O F INCOME. ON THE FACTS AND CIRCUMSTANCES OF THIS CASE THE ASSESSE ES CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF P ENALTY. 8 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENT, AS AFORESAID, WE FIND THAT THE LEVY OF PENALTY IN THIS CASE IS NOT JUSTIFIED. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY IN DISPUTE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/04/2017. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 18-04-2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES