Torrence Capital Advisors Private Ltd., Noida V. DCIT,Ccircle-25(2), New Delhi

ITA 2546/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3613 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 25-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Keywords: Set aside
• Section: 271(1)(c); 143(3); 274

Judgement Text

ITA NO.- 2546/DEL/2019. TORRENCE CAPITAL ADVISORS PVT. LTD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: G: NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 2546/DEL/2019 ( ASSESSMENT YEAR: 2011-12) TORRENCE CAPITAL ADVISORS PRIVATE LTD., NOIDA. VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE- 25(2), C.R. BUILDING, NEW DELHI. PAN NO: AACCT7972M APPELLANT RESPONDENT ASSESSEE BY : SHRI AMIT ARORA, CA REVENUE BY : SHRI SARAS KUMAR, SR. DR ORDER PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED APPELLATE ORDER DATED 27.02.2019 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-28, NEW DELHI [IN SHORT, LD.CIT(A)] PERTAINING TO ASSESSM ENT YEAR 2011-12. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. AO HAS ERRED BOTH IN LAW AND ON FACTS IN LEVYING PENALTY U/S 271(1)(C) AMOUN TING TO RS. 16,19,522/-. 1.1 THE LD. AO HAS ERRED IN LAW IN NOT FOLLOWING THE DE CISION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (20 10) 2010 322 ITR 158. ITA NO.- 2546/DEL/2019. TORRENCE CAPITAL ADVISORS PVT. LTD. PAGE 2 OF 5 2. THAT THE LD. AO HAS ERRED BOTH IN FACTS AND IN L AW IN CONCLUDING THAT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF INCOME AND ALSO CONCEALED PARTICULARS OF INCOME. 2.1 THAT THE LD. AO FAILED TO APPRECIATED THAT THE APPELLANT HAS NOT FAILED TO OFFER AN EXPLANATION. 2.2 THAT THE LD. AO FAILED TO APPRECIATE THAT THE A PPELLANT HAS NOT EVEN FAILED TO SUBSTANTIATE THE EXPLANATION. 3. THAT THE NOTICE DATED 31.03.2014 FOR INITIATION OF PENALTY U/S 271(1)(C) READ WITH SECTION 274 OF THE I.T. ACT 1961 IS AMBIGUOUS AND VAGUE. 3.1 THAT THE LD. AO HAS NOT SPECIFIED UNDER WHICH L IMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAS BEEN INITIATED I.E. WHE THER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS. 3.2 THAT THE IMPUGNED NOTICE SPECIFIED BOTH LIMB OF SECTION 271(1)(C) I.E. FURNISHING OF INACCURATE PARTICULARS OF INCOME AS WELL AS CONCEAL MENT OF INCOME HAVE BEEN MENTIONED. 3.3 THE LD. AO HAS ERRED IN LAW IN NOT FOLLOWING TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS (CC NO. 11485/ 2016) WHILE IMPOSING THE PENALTY. 4. THE APPELLANT CRAVES LEAVE TO ADD TO OR ALTER, B Y DELETION, SUBSTITUTION OR OTHERWISE, ANY OR ALL OF THE FOREGOING GROUNDS OF APPEAL AT OR BEFORE THE HEARING, AND TO SUBMIT SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CON SIDERED NECESSARY EITHER AT OR BEFORE THE APPEAL HEARING. (B) ASSESSMENT ORDER DATED 31.03.2014 WAS PASSED BY TH E ASSESSING OFFICER (AO, FOR SHORT) UNDER SECTION 143(3) OF INCOME TAX ACT, 1961 (I.T. ACT, FOR SHORT); WHEREIN EXPENSES TOTALING RS. 52,41,171/- WERE DISALLOWED A ND ADDED TO THE ASSESSEES INCOME. THEREAFTER, PENALTY U/S 271(1)(C) OF I.T. ACT WAS A LSO LEVIED BY THE ASSESSING OFFICER VIDE ORDER DATED 27.03.2018, AMOUNTING TO RS. 16,19 ,522/- IN RESPECT OF THE AFORESAID DISALLOWANCES / ADDITIONS TOTALING RS. 52,41,171/-. VIDE SEPARATE APPELLATE ORDERS DATED 28.05.2016 AND 27.02.2019 RESPECTIVELY, THE LD. CIT (A) CONFIRMED THE AFORESAID ITA NO.- 2546/DEL/2019. TORRENCE CAPITAL ADVISORS PVT. LTD. PAGE 3 OF 5 DISALLOWANCES/ ADDITIONS TOTALING RS. 52,41,171/- A ND PENALTY AMOUNTING TO RS. 16,19,522/-. THE PRESENT APPEAL BEFORE INCOME TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT) HAS BEEN FILED BY ASSESSEE AGAINST THE AFORE SAID ORDER DATED 27.02.2019 WHEREBY LD. CIT(A) CONFIRMED THE PENALTY. DURING A PPELLATE PROCEEDINGS IN ITAT, A COPY OF ORDER DATED 03.02.2020 OF CO-ORDINATE BENCH OF ITAT, DELHI WAS FILED FROM THE ASSESSEES SIDE, PASSED IN ASSESSEES OWN CASE IN I TA NO. 4419/DEL/2016 FOR ASSESSMENT YEAR 2011-12 WHEREBY THE AFORESAID DISAL LOWANCES / ADDITIONS TOTALING RS. 52,41,171/- WAS DELETED. (C) AT THE TIME OF HEARING BEFORE US, THE LEARNED AUTH ORIZED REPRESENTATIVE (LD. AR, FOR SHORT) OF THE ASSESSEE SUBMITTED THAT THE PENALTY LEVIED U/S 271(1)(C) OF I.T. ACT SHOULD BE DELETED TOO, AS THE CORRESPONDING QUA NTUM ADDITION HAS ALREADY BEEN DELETED BY ITAT VIDE AFORESAID ORDER DATED 03.02.20 20. THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE (LD. SR. DR, FOR SHOR T] APPEARING FOR REVENUE ALSO AGREED THAT AFORESAID PENALTY AMOUNTING TO RS. 16,1 9,522/- CANNOT SURVIVE WHEN CORRESPONDING QUANTUM ADDITIONS AMOUNTING TO AFORES AID RS. 52,41,171/- HAVE ALREADY BEEN DELETED BY ITAT. IN VIEW OF THE FOREGOING, AN D AS BOTH SIDES AGREE, WE ARE OF THE VIEW THAT AFORESAID PENALTY U/S 271(1)(C) I.T. ACT AMOUNTING TO RS. 16,19,522/- LEVIED BY AO, AND CONFIRMED BY THE LD. CIT(A); HAS NO LEGS TO STAND WHEN THE CORRESPONDING ADDITIONS MADE BY THE AO HAVE ALREADY BEEN DELETED BY ITAT VIDE ITS AFORESAID ORDER DATED 03.02.2020. WHEN THE QUANTUM ADDITION DOES N OT SURVIVE, THE PENALTY LEVIED U/S 271(1)(C) OF I.T. ACT ON THE CORRESPONDING QUANTUM ADDITION ALSO CANNOT SURVIVE. WE TAKE SUPPORT FROM JUDICIAL PRECEDENT IN THE CASE OF K.C. BUILDERS VS. ACIT 135 TAXMAN ITA NO.- 2546/DEL/2019. TORRENCE CAPITAL ADVISORS PVT. LTD. PAGE 4 OF 5 461 (SC), IN WHICH THE HONBLE APEX COURT HELD THAT WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER, ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT WAS LEVIED, ARE DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY FOR CONCEALMENT, AND THEREFORE, IN SUCH A CASE, NO SUCH PENALTY CAN SURV IVE AND THE SAME IS LIABLE TO BE CANCELLED. ACCORDINGLY, WE SET ASIDE THE AFORESAID ORDERS DATED 27.02.2019 AND 27.03.2018 OF LD. CIT(A) AND AO RESPECTIVELY, AND W E CANCEL THE AFORESAID PENALTY AMOUNTING TO RS. 16,19,522/-. (D) IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. OUR DECISION WAS ORALLY PRONOUNCED IN OPEN COURT-RO OM IMMEDIATELY AFTER CONCLUSION OF HEARING ON 04.03.2020. THIS WRITTEN ORDER IS PRONOUNCED IN OPEN COURT ON 05/03/2020. SD/- SD/- (DIVA SINGH) (ANADEE NAT H MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 05/03/2020 (POOJA) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.- 2546/DEL/2019. TORRENCE CAPITAL ADVISORS PVT. LTD. PAGE 5 OF 5 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER