Sanjiv Gupta, New Delhi V. ACIT, Circle- 30, New Delhi

ITA 2671/DEL/2018

AI Insights

The case involves appeals by Sanjiv Gupta against penalty orders issued by the Assessing Officer for the assessment years 2009-10 and 2010-11, related to undisclosed investments in watches. The penalties were imposed under Section 271(1)(c) of the Income Tax Act, 1961, which deals with penalties for concealment of income or furnishing inaccurate particulars of income. The main contention in the appeals was the lack of specific charges in the show cause notices issued for the penalties, which allegedly prevented the assessee from making a suitable response. The Tribunal examined the procedural compliance of the Assessing Officer in issuing these penalties and found significant lapses, leading to the cancellation of the penalties.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122189 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-06-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 15-04-2018
• Other Referred Cases: A to Z Maintenance and Engineering Services Ltd. ITA No. 2631/DEL/2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI ‘G’ BENCH, DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI YOGESH KUMAR US, JUDICIAL MEMBER आयकर अपील सं./I . T . A . N os. 2 671 & 2 67 2 /D E L/ 2 01 8 ( नधा रण वष / A s s e s s m e n t Y e a rs : 2 0 0 9 - 1 0 & 2 0 1 0 - 1 1 ) Sa n j i v G u p t a 5 6 A / 1 , N e w F ri e n d s C o l o n y ( E ) , N e w D e l h i . बनाम/ V s . A C I T, C e n tr al C i r c le -3 0 , N e w D e l hi . थायी लेखा सं./जीआइआर सं./P A N / G IR N o . : A B V PG 5 6 5 3 P (अपीलाथ /Appellant) . . ( यथ / Respondent) अपीलाथ ओर से /Appellant by : Shri Gaurav Jain, Adv. Shri V.K. Garg, Adv. & Shri Sudarshan Roy, Adv. यथ क ओर से/Respondent by : S h r i S a n j a y K u m a r, S r . D R स ु नवाई क तार ख / D a te o f H e a r i ng 27/06/2023 घोषणा क तार ख /D a te o f P r o n o u nc e me n t 27/06/2023 आदेश/O R D E R PER PRADIP KUMAR KEDIA - AM: T he c apt i o ne d a p p e a l s h a ve b ee n f i le d by th e as s e s see a g a i ns t t he r es p ec t i v e or d e r s o f th e C o m mi s s i one r o f I nc o me Ta x (A pp e a ls ) , (‘ C IT (A )’ i n s h ort ) fo r t h e a s s es s m en t y e a rs 2 00 9- 10 an d 2 01 0 -1 1 bo t h da t e d 1 2. 03. 2 0 1 8 a r is i ng f r o m r e s pe c t i v e p en alt y o r de rs pa s s e d by t he A s s es s i ng O ffi c e r u n d er s . 2 7 1( 1 )( c ) o f t h e I nc o m e Ta x A c t , 19 61 (t he A ct ). 2. A s pe r t he c a p t i o n ed ap pe a l s , th e as s e s s ee s e ek s to ch al l en ge t he i m p os i t i o n o f pe na l t y o n un di s cl os e d i n ve s t me n t o f I T A N o s . 2 6 7 1 & 2 6 7 2 / D E L / 2 0 1 8 A . Y s . 2 0 0 9 - 1 0 & 2 0 1 0 - 1 1 - 2 - Rs . 3, 43 , 000 / - a n d Rs . 90 , 800 / - o n a c c o u nt o f pu rc h ase o f w a tc he s for a s s es s men t ye a rs 200 9-1 0 a n d 2 0 10 - 1 1 r es pe c ti ve l y. 3. Wh en th e m at t er w a s c al l e d f or h e a ri ng, t h e Ld . C ou ns e l fo r t he as s e s s ee s t ra ig ht w a y a dve rt e d ou r a tt e n ti on to th e f a c t t h a t t he A s s es s i ng O f fi ce r w h il e fr a mi n g t h e a s s e ss m e n t o rd er h as n o t re c or d e d a ny ‘s a ti s fa c ti on ’ t ow a r ds t h e n a t ur e o f de fa ul t as re qu ir e d u/ s 271 (1 B) o f t he A c t . 4. T he L d. C ou n s el po i n t s o ut t h at as r e ga rd s t he al l eg ed un di s cl os e d i n ve s t m e n t, t h e A s s es s i ng O ff i c e r w hi l e fr a mi n g t h e a s s es s men t or de r ha s me re l y r e c o r d ed “pe n al ty pr o c e e di ngs u/ s 27 1(1 ) ( c ) o f t he A c t i s be i n g i ni t ia te d s e par a t e l y o n t hi s ac c o u nt ” . T he L d . C ou ns el t hu s s ub m i tt e d t h a t t h e s at i s fa ct i on t o w a rd s t h e na t ur e o f de fa u l t c o mmi t t e d by t he a s s ess e e f or s u ch a dd i t i ons i s c le a r l y a bs e nt i n c o nt ra di c t io n o f t h e pro v is i on s of S e c t i on 2 71 ( 1 B) o f th e A c t. T he L d. Co uns e l t h u s c o n te nds t h a t in t he a bs en ce o f s a ti s fa c ti on t ow a r ds t he n a t u r e o f de fa ul t i n t h e co u rs e o f a s s es s men t, t he co ns e qu e n t i a l pe na l t y p r o c e e d i n gs st a n d v i t i a t e d . T he L d . C ou n se l t h e re a ft e r a dv e rt e d t o n ot ic e is s u ed u/ s 27 4 r. w . s. 27 1(1 ) ( c ) o f t h e A c t fo r t he i r r es p ec t iv e as s e s s me nt ye a rs a n d po i n t e d o ut t h a t th e a fo re s ai d s h ow c au s e no t i c e s pr o pos i ng i mp os it i o n o f pe n a l t y u / s 27 1 (1 )(c ) o f th e A ct i s yet a g ai n ber e f t o f a ny s p e c i fi c c ha rg e a ga i n s t th e a s s e sse e . Th e A O has not c a re d to s t ik e o f f t h e i r r el e v a nt p or t i on i n t he s h ow c a us e n ot ic e s t o m ak e t h e a s s es s e e aw a re a s t o w h et h e r th e al l eg at i o n ag a i ns t hi m i s o n a cc ou n t o f ‘c on c e al me n t o f p a r ti c u l ar s o f i nc o me ’ or t o w a r d s ‘ fu rn is h i n g i n a c c u r a te p a r t i c u l a rs o f i nc o m e’ . H a vi ng r eg a r d to s uc h va gu e no t i c e, t h e a s s e ss e e is p r ev e n t e d fr o m ma k i n g s u i t a b l e re s po ns e. I n t hi s r e ga rd, t h e L d. Co u ns el r e f e rs to th e d ec i s i on o f t he c oor d i n a t e be nc h i n t he c as e o f A t o Z Ma i nt e na nc e an d E n gi n e er i ng Se r vi c es L t d. IT A No. 2 6 31/ D e l/ 20 1 8 d a ted 28. 03 . 2 02 3 I T A N o s . 2 6 7 1 & 2 6 7 2 / D E L / 2 0 1 8 A . Y s . 2 0 0 9 - 1 0 & 2 0 1 0 - 1 1 - 3 - a nd pl et ho r a o f o t h e r d ec i s i on s . T h e L d. C o uns e l thus s ub m it s t ha t t he o b se rv at i o ns ma de i n t h e a s s es s m en t p roc e e d i ng s a re q u it e va g u e a n d n on -d es c ri pt fo r t h e p u rp o s es o f i ni ti a tion o f p e n a l ty pr o c e e d i n gs un d e r s ec t io n 2 71 (1 ) (c ) o f t h e A ct . A s s t a te d, t he a s s es s e e i s e nt i t l e d i n l aw t o d e fe nd t he s h ow c a use n ot i ce b a se d o n e xa ct na t ur e o f de f a ul t a l l e ge d l y c o m m it t e d . T he Ld . C ou n s el t hu s s ub mi ts t ha t i n t h e a bs e nc e o f an y s a t is fa c t i on t owa r d s th e ex ac t na t ur e o f c ha r ge , t he i mp o s it i o n o f p en a l t y u / s 27 1( 1)( c ) i s w it h o u t s a nc t i o n o f l aw an d th us re q ue s t t o b e qua s h e d. 5. T he L d. D R o f t h e Re ve n ue , o n t he ot he r ha n d, r eli e s up on t h e a ct i o n o f th e l ow e r au t ho ri ti e s . 6. We ha ve c a r e f u l ly c o ns i d e re d th e r i va l s ub mi s s ions . T h e i mp os it i o n o f p ena l ty u /s 27 1 ( 1) ( c ) o f t he A c t i s in i s s ue i n b ot h t h e c ap ti on e d a p pe a l s . A s no te d i n pr e c e d i ng p a r as , the L d. Co uns e l fo r t he as s e s s ee h as s uf fi ci e nt ly de mo n s tr at e d t he t o t al ab se nc e o f a n y s a ti s fa c ti on r e c o rd e d i n t h e a ss e s s me n t o r de r as w el l as s how c a us e no t i c e fo r i mp os i ti on o f p en a l ty . S ec t io n 27 1 ( 1) ( c) r. w . s . 271( 1B ) re q u i r es th at t he A s s es si ng O ff ic e r m us t b e s a t is f ie d t o w a rd s t he e xa ct na t u r e o f d e f au l t al l e ge d l y c o mm i t t ed b y t he as s e s s e be fo re t ak in g r e c ou rs e t o i ss u an c e o f s how ca us e no t i c e . T h e A s s ess i ng O ff ic e r i n t h e i ns t a nt ca s e h as m is e r a bl y fa i le d t o de m o ns t r a t e t he s a ti s fa c ti on a s c o n t e mp la t e d u /s 2 7 1 (1 ) (c ) r. w . s . 27 1( 1 B ) o f t h e A c t . Cl e ar ly t h e i n g re di en ts o f S e c ti on 27 1 (1) ( c ) a r e not s a t i s f ie d in t he i ns t a n t ca s e . W it ho u t r e p e a t i ng t he p le a r a i s e d o n b e ha l f o f t he a s s es s e e, w e ar e i n c li ne d to a gr e e . He nc e , t he a cti o n o f t he CI T (A ) i s s e t a s i d e an d t he pe na l ty i mp o s ed b y t he A O i s can ce l l e d in bo th t he c a p t i o ne d ap pe a l s . I T A N o s . 2 6 7 1 & 2 6 7 2 / D E L / 2 0 1 8 A . Y s . 2 0 0 9 - 1 0 & 2 0 1 0 - 1 1 - 4 - 7. In th e re s ul t , b ot h th e a p pe al s o f t h e as s e s s e e a re a l l ow ed. Sd/- Sd/- (YOGESH K UMAR U S) (PR ADI P KUM AR KEDIA) JUDI CI AL M EMBER ACCOUNTANT M EMBER D e l h i : D a t e d 2 7 / 0 6 / 2 0 2 3 True Copy *Kavita Arora आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. राज व / Revenue 2. आवेदक / Assessee 3. संबं*धत आयकर आय ु ,त / Concerned CIT 4. आयकर आय ु ,त- अपील / CIT (A) 5. 0वभागीय 3त3न*ध, आयकर अपील य अ*धकरण, DELHI / DR, ITAT, DELHI 6. गाड7 फाइल / Guard file. By order, ASSISTANT REGISTRAR ITAT, Delhi This Order was pronounced in Open Court on 27/06/2023