Shri Vivek Aggarwal, New Delhi V. ACIT, New Delhi

ITA 2540/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7112 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-11-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 25-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHAND DUBEY
• Assessee Lawyers: DR RAM SAMUJH
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NOS. 2540 TO 2542/DEL/2014 ASSESSMENT YEARS: 2003-04 TO 2005-06 SH. VIVEK AGGARWAL, VS. ACIT, CC-13, E-384, GREATER KAILASH, PART-II, NEW DELHI NEW DELHI 110 048 (PAN: AAEPA0902H) (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAM SAMUJH, A.R. REVENUE BY : SHRI UMESH CHAND DUBEY, SR. DR ORDER PER H.S. SIDHU, JM THESE THREE APPEALS ARE FILED BY THE ASSESSEE AGAIN ST THE SEPARATE ORDERS ALL DATED 08.1.2014 PASSED BY THE L D. CIT(A)-XXV, NEW DELHI RELATING TO ASSESSMENT YEAR 2003-04 TO 20 05-06. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON AND IDE NTICAL, HENCE, WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER FOR THE SAKE CONVENIENCE, BY DEALING WITH ITA NO. 2 540/DEL/2014 (AY 2003-04). 2. THE GROUNDS RAISED IN 2540/DEL/2014 (AY 2003-04) READ AS UNDER:- (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED UPHOLDING THE LEVY OF PENALTY ON I NCOME OF 2 RS. 2,46,644/- BY AO ON THE LOSSES INCURRED BY THE APPELLANT FROM GARMENT BUSINESS WITHOUT SUBSTANTIAT ING THE MANIPULATION AND TAMPERING. II) THE APPELLANT CRAVES LEAVE FOR RESERVING THE RI GHT TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE APPEAL. 3. THE GROUNDS RAISED IN 2541/DEL/2014 (AY 2004-05) READ AS UNDER:- (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED UPHOLDING THE LEVY OF PENALTY ON I NCOME OF RS. 2,06,991/- BY AO ON THE LOSSES INCURRED BY THE APPELLANT FROM GARMENT BUSINESS WITHOUT SUBSTANTIAT ING THE MANIPULATION AND TAMPERING. II) THE APPELLANT CRAVES LEAVE FOR RESERVING THE RI GHT TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE APPEAL. 4. THE GROUNDS RAISED IN 2542/DEL/2014 (AY 2005-06) READ AS UNDER:- (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE CIT(A) HAS ERRED UPHOLDING THE LEVY OF PENALTY ON I NCOME OF RS. 96,065/- BY AO ON THE LOSSES INCURRED BY THE 3 APPELLANT FROM GARMENT BUSINESS WITHOUT SUBSTANTIAT ING THE MANIPULATION AND TAMPERING. II) THE APPELLANT CRAVES LEAVE FOR RESERVING THE RI GHT TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE APPEAL. 5. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH A ND SEIZURE ACTION U/S. 132 OF THE I.T. ACT, 1961 WAS CARRIED OUT IN T HE SURESH NANDA GROUP OF CASES ON 28.2.2007 OF WHICH THE ASSESSEE W AS A MEMBER. IN THIS CASE NOTICE U/S. 153A WAS ISSUED ON 18.11.2008 AND SERVED ON THE ASSESSEE. PURSUANT THERETO THE APPLICANT FILED ITS RETURN DECLARING INCOME OF RS. 15,14,302/- U/S. 153A(1)(A) OF THE I. T. ACT, ON 6.2.2009. THEREUPON THE AO ISSUED NOTICE U/S. 143(2) OF THE I .T. ACT, ON 9.2.2009 AND THE ASSESSMENT WERE ACCORDINGLY COMPL ETED AT RS. 28,12,213/- U/S. 143(3) R.W.S. 153A OF THE I.T. ACT , 1961 DATED 29.12.2009 AFTER MAKING VARIOUS ADDITIONS AND DISAL LOWANCES AND PENALTY PROCEEDINGS WERE ALSO INITIATED AGAINST THE ASSESSEE. IN THIS CASE, AGAINST THE AOS ORDER, IN THE QUANTUM PROCEE DINGS, BY REASON OF WHICH THE ASSESSEES INCOME WAS DETERMINED AT RS. 2 8,13,213/- THE ASSESSEE APPROACHED THE LD. CIT(A), NEW DELHI AND T HE ITAT, NEW DELHI, WHO UPHELD THE DISALLOWANCE OF BUSINESS LOSS AMOUNTING TO RS. 2,46,644/- ONLY WHILE DELETING MOST OF THE OTHER A DDITIONS/ DISALLOWANCES. AS A RESULT TO THE ORDER OF THE LD. CIT(A), THE AO PASSED THE ORDER IMPOSING PENALTY U/S. 271(1)(C) OF THE I.T. ACT, 1961 4 ON THE ASSESSEE ON 10.12.2012 WAS IMPOSED OF RS. 77 ,693/- I.E. @100% OF TAX SOUGHT TO BE EVADED I.E. RS. 2,46,644/ -. 6. AGAINST THE ABOVE PENALTY ORDER DATED 10.12.2012 PASSED BY THE ASSESSING OFFICER, ASSESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 08.1.2014 DISMISSED THE APPEAL OF THE ASSESSEE. 7. AGAINST THE ABOVE ORDER OF THE LD. CIT(A) DATED 08.1.2014, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. LD. COUNSEL OF THE ASSESSEE STATED THAT ASSESSEE NEITHER CONCEALED ANY INCOME NOR HE WAS LIABLE FOR FURNISH ING ANY INACCURATE PARTICULARS OF INCOME. THE DISALLOWANCE OF BUSINES S LOSS IN AFORESAID 3 YEARS WERE NEITHER BASED ON ANY SEIZED MATERIAL N OR WITH OTHER DOCUMENTARY EVIDENCE. HE FURTHER STATED THAT AO DI D NOT CONSIDER THE ASSESSEES EXPLANATION IN PROPER PERSPECTIVE BUT HE LEVIED THE PENALTY U/S. 271(1)(C) MERELY ON THE BASIS OF DISALLOWANCE MADE IN THE ASSESSMENT ORDER AND UPHELD IN THE APPELLATE ORDERS IN QUANTUM APPEALS. ALSO AS PER THE ASSESSEES COUNSEL CONTENT ION, THERE WAS NO SATISFACTION FOR CONCEALMENT WAS RECORDED BY THE AO ; THE ONUS PROVING THE CONCEALMENT LIES ON THE REVENUE. IT WAS HIS FUR THER CONTENTION THAT PENALTY CANNOT BE LEVIED ON THE BASIS OF ASSESSMENT ORDER AND APPELLATE ORDER AS THE PENALTY ARE ALL TOGETHER DI FFERENT THAN THE ASSESSMENT PROCEEDINGS. IN VIEW OF ABOVE, THE PENAL TY IS NOT LEVIABLE. 5 IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE DE CISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PR ODUCTS (2010) TAXMAN 322. 9. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND REQUESTED THAT THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT IN THIS CASE NO SATISFACTION FOR CONCEALMENT WAS RECORDED FOR PE NALTY OF IN DISPUTE. WE FURTHER NOTE THE AO OBSERVED THAT ASSESSEE FURNI SHED INACCURATE PARTICULARS OF ITS INCOME AND IS LIABLE FOR PENALTY U/S 271(1)(C), WHICH DID NOT ESTABLISH FROM THE FACTS AND CIRCUMSTANCES OF THE CASE THAT HOW THE ASSESSEE HAS FURNISHED INACCURATE PARTICULA RS OF ITS INCOME. SECTION 271(1)(C) POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. IN THIS REGARD, WE DRAW MY SUPPORT FROM THE DECISION OF THE HON'BLE AP EX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2 010) 322 ITR-158 (SC) WHEREIN THE HON'BLE SUPREME COURT HAS HELD TH AT 'WHERE THERE IS NO FINDINGS THAT ANY DETAILS SUPPLIED BY THE ASSESS EE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE, THERE IS NO QUESTION OF INVITING THE PENALTY U/SEC. 271(1)(C) OF THE ACT. A MERE MAKING A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NO T AMOUNT OF FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM 6 MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING A IN ACCURATE PARTICULARS OF INCOME. AS THE ASSESSEE HAS FURNISHED ALL THE DE TAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COU LD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. MERELY, BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WA S NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINI ON, ATTRACT THE PENALTY U/SEC. 271(1)(C). IF WE ACCEPT THE CONTENTION OF TH E REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTE D BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PE NALTY U/SEC. 271(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLAT URE'. 11. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOW THE PRECEDENT, AS AFORESAID, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULA RS OF INCOME AND THERE ARE NO FINDINGS OF THE ASSESSING OFFICER AND THE CIT (APPEALS) THAT THE DETAILS FURNISHED BY THE ASSESSEE IN HIS R ETURN ARE FOUND TO BE INACCURATE OR ERRONEOUS OR FALSE. UNDER THESE CIRC UMSTANCES, IN OUR VIEW THE PENALTY IN DISPUTE IS TOTALLY UNWARRANTED AND DESERVE TO BE DELETED. ACCORDINGLY, WE DELETE THE PENALTY IN DIS PUTE AND CANCEL THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE IN DIS PUTE. 12. FOLLOWING THE CONSISTENT VIEW AS TAKEN IN ASSES SMENT YEAR 2003-04, AS AFORESAID, THE PENALTY IN DISPUTE IN AP PEALS RELATING TO 7 ASSESSMENT YEARS 2004-05 & 2005-06 ALSO STAND DELET ED AND ACCORDINGLY, THE APPEALS RELATING FOR AYRS. 2004-05 & 2005-06 ALSO STAND ALLOWED. 13. IN THE RESULT, ALL THE 03 APPEALS FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03/1/2017. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 03/1/2017 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 8