M/s HBN Housing Finance Ltd., New Delhi V. DCIT, New Delhi

ITA 2650/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7367 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 01-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 271(1)(c); 143(3); 153A; 274; 73; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C, NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NOS. 2648, 2649 & 2650/DEL/2017 ASSESSMENT YEARS: 2005-06, 2009-10 & 2010-11 M/S. HBN HOUSING FINANCE LTD., 572B, 5 TH FLOOR, HBN OFFICE, D-MALL, DISTT. CENTRE, PASCHIM VIHAR, NEW DELHI VS. DCIT, CENTRAL CIRCLE-29, NEW DELHI PAN :AABCH3930J (APPLICANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AG AINST THREE SEPARATE ORDERS, EACH DATED 30/01/2017 PASSED BY THE LEARNED CIT (APPEALS)-30, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEARS 2005-06; 2009-10 AND 2010-11 RESPE CTIVELY, IN RELATION TO PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME- TAX ACT, 1961 (IN SHORT THE ACT). IDENTICAL GROUN DS HAVE BEEN RAISED IN ALL THE THREE APPEALS IN SAME SET OF CIRC UMSTANCES. ACCORDINGLY, WE HEARD ALL THE THREE APPEALS TOGETHE R AND DISPOSED APPLICANT BY MS. ASHISHA MITTAL, CA RESPONDENT BY SHRI S.N. MEENA, SR. DR DATE OF HEARING 14.11.2019 DATE OF PRONOUNCEMENT 30.01.2020 2 ITA NO. 2648, 2649 & 2650/DEL/2017 OFF BY WAY OF THIS CONSOLIDATED ORDER FOR CONVENIEN CE AND TO AVOID REPETITION OF FACTS. 2. GROUNDS OF APPEAL IN ITA NO. 2648/DEL/2017 FOR ASSESSMENT YEAR 2005-06 IS REPRODUCED AS UNDER: 1. UNDER THE FACTS AND THE CIRCUMSTANCES OF THE CAS E, PENALTY ORDER PASSED U/S 271(L)(C) OF THE ACT BY THE ID. A.O. AND CONFIRMED BY THE ID. CIT(A) IS INVALID & BAD IN LAW AS FROM THE NOTICE ISSUED U/S 274 R.W.S 271(L)(C) OF THE ACT IT IS NOT DISCEM ABLE AS TO WHETHER THE PENALTY PROCEEDINGS WAS INITIATED FOR F URNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME AND THEREFORE, THE IMPUGNED PENALTY ORDER PASSED DESERV ES TO BE QUASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE ID. CIT(A) HAS GROSSLY ERRED IN PASSING THE APPELLATE ORDER WITHOU T AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE APPELLAN T. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. FIRST APPELLATE AUTHORITY HAS GROSSLY ERRED IN UPHOLDING THE ACTION OF LD. ASSESSING AUTHORITY IMPOSING THE PENALTY OF' 41 ,23,947/- U/S 271(L)(C) OF THE INCOME TAX ACT, 1961 WHICH IS HIGH LY INJUDICIOUS, UNWARRANTED, AGAINST THE FACTS OF THE CASE AND BAD AT LAW. 4. THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, ALT ER OR WITHDRAW ANY GROUNDS OF APPEAL. 3. IDENTICAL GROUNDS HAVE BEEN RAISED IN REMAINING TWO APPEALS EXCEPT CHANGE OF AMOUNT OF PENALTY LEVIED. 4. BRIEFLY STATED FACTS OF THE CASE ARE THAT ASSESSME NT IN ALL THE THREE ASSESSMENT YEARS ARE COMPLETED ON 30/12/2011. THE ASSESSMENTS IN THE YEAR 2005-06, AND ASSESSMENT YEA R 2009-10 ARE COMPLETED UNDER SECTION 153A OF THE ACT, WHEREA S THE ASSESSMENT FOR ASSESSMENT YEAR 2010-11 HAS BEEN COM PLETED UNDER SECTION 143(3) OF THE ACT. THE PENALTY PROCEE DINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED IN ALL THE THREE ASSESSMENT YEARS. THE ADDITIONS MADE IN QUANTUM AS SESSMENT 3 ITA NO. 2648, 2649 & 2650/DEL/2017 PROCEEDING ALL THE THREE ASSESSMENT YEARS WERE CONF IRMED BY THE FIRST APPELLATE AUTHORITY. IN VIEW OF THE ADDITIONS CONFIRMED BY THE FIRST APPELLATE AUTHORITY, THE ASSESSING OFFICER LE VIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN ALL THE THREE ASSESSMENT YEARS HAVING AMOUNTS AS FOLLOWS: S. NO. DATE OF ORDER AMOUNT OF PENALTY LEVIED FOR ASSESSMENT YEAR 1 10.03.2015 41,23,947/ - 2005 - 06 2. 09.03.2015 84,97,500/ - 2009 - 10 3. 19.03.2015 50,98,500/ - 2010 - 11 3.1 THE ASSESSEE FILED APPEALS BEFORE THE LD. CIT(A) A GAINST PENALTY IN ALL THE THREE ASSESSMENT YEARS AND OBJEC TED THAT THE ASSESSING OFFICER HAS NOT SPECIFIED REASONS FOR L EVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN THE NOTICE IS SUED WHILE INITIATING THE PROCEEDINGS. THE ASSESSEE ALSO OBJEC TED THE PENALTY ON GROUND OF MERIT. THE LD. CIT(A) UPHELD THE PEN ALTY ON THE GROUND THAT THE ASSESSEE FAILED TO PROVIDE THE EXPL ANATION AND THERE WAS NO ERROR OR INFIRMITY IN THE PENALTY INIT IATED BY THE ASSESSING OFFICER. THE FINDING OF THE LD. CIT(A) IN AY 2005-06 IS REPRODUCED AS UNDER: FROM THE ABOVE, IT IS CLEAR THAT THE APPELLANT HAS NOT ONLY FAILED TO PROVE THE SOURCE OF ALLEGED TRANSACTIONS OF SHARE C APITAL/' SHARE PREMIUM MONEY RECEIVED OF RS.1,12,14,949 IN THE ASS ESSMENT PROCEEDINGS, APPELLATE PROCEEDINGS IN QUANTUM APPEA L AND ALSO IN THE PENALTY PROCEEDINGS BEFORE THE A.O. BESIDES THI S, EVEN IN THE PENALTY PROCEEDINGS U/S 271(1 XC) OF THE ACT, THE A PPELLANT FAILED TO FURNISH BOOAFIDE EXPLANATION BEFORE THE A.O., IN OR DER TO OVERCOME THE DEEMING PROVISION AS PER EXPLANATION OF SECTION 271(1XC) OF THE ACT. IN THESE FACTS, IT IS CLEAR THAT THE A.O. HAS INITIATED PENALTY PROCEEDINGS FOR CONCEALING THE PARTICULARS OF INCOM E AND THEREFORE, THERE IS A DEFAULT COMMITTED BY THE APPELLANT AS PE R PROVISIONS OF SECTION 271(])(C) OF THE ACT. IN THESE FACTS, 1 DO NOT FIND ANY INFIRMITY 4 ITA NO. 2648, 2649 & 2650/DEL/2017 IN THE REASONS RECORDED BY A.O FOR SATISFACTION, BE FORE INITIATING PENALTY PROCEEDINGS U/S 271(11(C) OF THE ACT. ACCOR DINGLY, THE OBJECTIONS RAISED BV THE APPELLANT THROUGH ADDITION AL GROUND, ARC NOT CORRECT AND THEREFORE, THE ADDITIONAL GROUND TAKEN BY THE APPELLANT, IS DISMISSED. FROM THE ABOVE, IT IS ALSO CLEAR THAT THE APPELLANT WAS REPEATEDLY ALLOWED ADEQUATE OPPORTUNITIES TO PROVE THE GENUINE NESS OF THE ALLEGED TRANSACTIONS OF SHARE CAPITAL/ SHARE PREMIU M MONEY RECEIVED, BUT FAILED TO DO SO, DURING THE ASSESSMEN T PROCEEDINGS, APPELLATE PROCEEDINGS, PENALTY PROCEEDINGS AND ALSO IN THE APPELLATE PROCEEDINGS AGAINST THE PENALTY ORDER U/S 271(1 )(C ) OF THE ACT, THEREFORE, IT IS CLEARLY ESTABLISHED THAT THESE TRA NSACTIONS RELATING TO SHARE CAPITA! SHARE PREMIUM MONEY RECEIVED, ARC NOT PROVED TO BE GENUINE AND THE SAME IS THE UNDISCLOSED INCOME OF T HE APPELLANT ITSELF. ACCORDINGLY, IT IS CLEAR THAT THE APPELLANT HAS NOT ONLY CONCEALED THE INCOME BY FURNISHING INACCURATE PARTI CULARS, BUT HAS ALSO DELIBERATELY GIVEN WRONG VERIFICATION IN THE R ETURN OF INCOME . FILED FOR THE A.Y. 2005-06. IN THESE FACTS AND CIRC UMSTANCES OF THE CASE, IT IS CLEAR THAT IN ALL THE PROCEEDINGS, AS I NDICATED ABOVE, THE APPELLANT FAILED TO PROVE THE GENUINENESS OF THE AL LEGED TRANSACTIONS OF SHARE CAPITAL/ SHARE PREMIUM MONEY RECEIVED, DUR ING THE ASSESSMENT PROCEEDINGS, APPELLATE PROCEEDINGS, PENA LTY PROCEEDINGS AND ALSO IN THE APPELLATE PROCEEDINGS, AGAINST THE PENALTY ORDER U/S 271(1 )(C) OF THE ACT. IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED OPINIO N THAT THE APPELLANT HAS NOT ONLY CONCEALED INCOME, BUT HAS AL SO FURNISHED INACCURATE PARTICULARS OF INCOME DELIBERATELY BY. F ILING WRONG VERIFICATION IN THE RETURN OF INCOME, AS WELL AS IN VARIOUS INCOME TAX PROCEEDINGS AS INDICATED ABOVE. IN THESE FACTS AND CIRCUMSTANCES. 1 DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE A. O. IN THE PENALTY ORDER AND THEREFORE, THE SUBMISSIONS/ARGUMENTS OF T HE APPELLANT ARC NOT CORRECT AND SAME ARE HEREBY REJECTED. 4. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE IN SUPP ORT OF GROUND NO.1 FILED COPY OF NOTICE ISSUED BY THE ASSE SSING OFFICER WHILE INITIATING PENALTY PROCEEDINGS IN ALL THE THR EE ASSESSMENT YEARS AND SUBMITTED THAT THE ASSESSING OFFICER HAS NOWHERE SPECIFIED THAT THE PENALTY WAS EITHER FOR CONCEALME NT OF INCOME OR FOR FILING INACCURATE PARTICULARS OF INCOME. HE ALS O REFERRED TO THE ASSESSMENT ORDER AND PENALTY ORDER U/S 271(1)(C) OF THE ACT IN ALL THE THREE ASSESSMENT YEARS AND SUBMITTED IT WAS NOT SPECIFIED 5 ITA NO. 2648, 2649 & 2650/DEL/2017 THERE ALSO WHETHER PENALTY HAS BEEN LEVIED FOR CONC EALMENT OF INCOME OR FOR FILING INACCURATE PARTICULARS OF INCO ME. EXTRACT OF CHART FILED BY THE ASSESSEE FOR AY 2005-06 IS REPRO DUCED AS UNDER: INCOME TAX AUTHORITY FINDINGS PAGE NO. A.O. ORDER THE LD. AO HAS STATED THAT: I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF ITS INCOME AND FOR THAT DEFAULT PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ARE ALSO BEING INITIATED. PARA NO. 13 OF PAGE NO. 5 OF THE A.O. ORDER PENALTY NOTICE THE PENALTY NOTICE STATES THAT: WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE A.Y. 2005-06, IT APPEARS TO ME THAT YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME . PARA NO.1 OF NOTICE DATED 30.12.2011 PENALTY ORDER U/S 271(1)(C) THE A.O. HELD THAT: HAVING CONSIDERED THE VARIOUS ARGUMENTS PUT FORTH BY THE ASSESSEE, I HOLD THE ASSESSEE IN DEFAULT FOR CONCEALING ITS INCOME BY FURNISHING INACCURATE PARTICULARS OF ITS INCOME. ACCORDINGLY, PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT AMOUNTING TO RS. 41,23,947/- IS BEING IMPOSED. PARA NO. 13 OF PAGE NO. 6 OF THE PENALTY ORDER 5. THE LEARNED COUNSEL SUBMITTED THAT IN VIEW OF DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF SSA EMERALD ME ADOWS, (2016) 73 TAXMANN.COM 248 (SC) AND DECISION OF THE HONBLE 6 ITA NO. 2648, 2649 & 2650/DEL/2017 KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTT ON AND GINNING FACTORY (2013) 359 ITR 565 (KARNATAKA), PEN ALTY CANNOT BE SUSTAINED, IF THE GROUND FOR LEVY OF THE SAME IS NOT SPECIFIED IN THE NOTICE ISSUED FOR INITIATING THE PENALTY. ACCOR DINGLY, SUBMITTED THAT PENALTY LEVIED ON ALL THE THREE ASSESSMENT YEA RS MIGHT BE DELETED. 6. THE LEARNED DEPARTMENT REPRESENTATIVE, ON THE OTHE R HAND, RELIED ON THE ORDER OF THE LOWER AUTHORITIES AND SU BMITTED THAT GROUNDS OF LEVY OF PENALTY WAS QUITE APPARENT FROM THE ASSESSMENT ORDER, THEREFORE, THE RATIOS OF THE DECI SIONS RELIED UPON NOT APPLICABLE IN THE CASE OF THE ASSESSEE 7. WE HAVE HEARD RIVAL SUBMISSION AND PERUSED RELEVAN T MATERIAL ON RECORD. WE FIND THAT IN THE ASSESSMENT ORDER FOR ALL THE THREE YEARS THE PENALTY HAS BEEN INITIATED FOR CONCEALMENT OF INCOME WHEREAS IN THE NOTICES ISSUED FOR ALL THE TH REE YEARS, PENALTY HAS BEEN INITIATED FOR CONCEALING THE PARTI CULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF THE INCO ME. WE FIND THAT IN THE PENALTY ORDER THE ASSESSING OFFICER HAS HELD THE ASSESSEE WAS LIABLE FOR PENALTY FOR CONCEALING ITS INCOME BY FURNISHING INACCURATE PARTICULARS OF THE INCOME. THUS, IT IS E VIDENT THAT THE ASSESSING OFFICER IS NOT CERTAIN ON THE CHARGES THE PENALTY HAS BEEN LEVIED WHETHER IT IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE DICTIONARY ME ANING OF THE WORD CONCEAL IS TO HIDE, WITHDRAW OR REMOVE FROM OBSERVATION; COVER OR KEEP FROM SIGHT; TO AVOID DISCLOSING OR DIVULGING. THUS, CONCEALMENT OF PARTICULAR OF INCOME MEANS NON-DIS CLOSURE OF PARTICULARS OF INCOME. ON THE OTHER HAND, WHERE PAR TICULARS ARE DISCLOSED BUT SUCH DISCLOSURE IS NOT CORRECT, TRUE OR ACCURATE, IT 7 ITA NO. 2648, 2649 & 2650/DEL/2017 WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULA RS OF INCOME. THUS, THE TWO CHANGES OF LEVY OF PENALTY ARE DIFFER ENT. 8. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) HAS C ANCELLED THE PENALTY WHERE THE ASSESSING OFFICER FAILED TO S TRIKE OUT THE SPECIFIC REASON OF LEVY OF PENALTY IN THE NOTICE IS SUED. THE HONBLE SUPREME COURT IN THE CASE SSA EMERALD MEADOWS (SUPR A) HAS ALSO CANCELLED THE PENALTY U/S 271(1)(C) IN ABSENCE OF CHARGES OF LEVY NOT CLEAR IN THE NOTICE ISSUED. FURTHER, THE H ONBLE HIGH COURT RECENTLY IN THE CASE OF PR. CIT VS. M/S. SAHARA INDIA LIFE INSURANCE COMPANY LTD., 2019 (8) TMI 409 (DEL.), FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF M/ S. SSA EMERALD MEADOWS (SUPRA) CONFIRMED CANCELLATION OF P ENALTY. RESPECTFULLY FOLLOWING THE DECISIONS OF THE HONBLE KARNATAKA HIGH COURT, HONBLE SUPREME COURT AND HONBLE DELHI HIGH COURT REFERRED EARLIER, THE FINDING OF THE LD. CIT(A) IN ALL THE THREE ASSESSMENT YEARS ARE SET ASIDE AND THE PENALTY LEVI ED U/S 271(1)(C) OF THE ACT IN ALL THE THREE ASSESSMENT YE ARS ARE CANCELLED. 9. IN THE RESULT, ALL THE THREE APPEALS OF ASSESSEE A RE ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2020. SD/- SD/- (KULDIP SINGH) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 TH JANUARY, 2020. RK/-(D.T.D.) COPY FORWARDED TO: 1. APPELLANT 8 ITA NO. 2648, 2649 & 2650/DEL/2017 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI