DCIT, New Delhi V. M/s Control & Switchgear Contractors Ltd., Delhi

ITA 2734/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7337 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-09-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C BHALLA
• Assessee Lawyers: DR SUDHA KUMARI
• Keywords: Wrong claim; Difference of opinion

Judgement Text

ITA NO. 2734/D EL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B , NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N O. 2734/DEL/2013 A.Y. : 2004 - 05 DCIT, CIRCLE 3(1), NEW DELHI VS. M/S CONTROL & SWITCHGEAR CONTRACTORS LTD. 222, OKHLA INDUSTRIAL ESTATE, PHASE - III, NEW DELHI (PAN:AAACT0682J) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. JC BHALLA, CA ASSESSEE BY : DR. SUDHA KUMARI, CIT(DR) DATE OF HEARING : 09 - 09 - 2014 DATE OF ORDER : 26 - 09 - 2014 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - VI, NEW DELHI DATED 28.2.2013 P ERTAINING TO ASSESSMENT YEAR 2004 - 05 . 2. THE GROUNDS RAISED READ AS UNDER: - ITA NO. 2734/D EL/ 2013 2 1. WHETHER THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY U/S. 271(1)(C) AMOUNTING TO RS. 4,34,87,312/ - IGNORING THE FAC TTHAT THE ASSESSEE DELIBERATELY WRONG CLAIMS FOR DEDUCTION TO BE UNLAWFULLY B ENEFITTED THEREBY ESCAPING THE BURDEN OF TAX. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. THE FACTS OF THE CASE ARE NOT IN DISPUTE BY BOTH THE PARTIES, THEREFORE, NEED NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 4. DURING THE TIME OF HEARING LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDERS OF THE LD. CIT(A) AND REQUESTED THAT THE SAME MAY BE UPHELD. ON THE OTHER HAN D, LD. DEPARTMENTAL REPRESENTATIVE HAD RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 5. LD. COUNSEL OF THE ASSESSEE IN SUPPORT OF HIS CLAIM FILED A PAPER BOOK CONTAINING PAGES 1 TO 508 HAVING THE RECORDS OF THE LOWER AUTHORITIES AND COPIES OF THE SEV ERAL DECISIONS OF THE HON BLE HIGH COURT AS WELL AS ITAT. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT LD. CIT(A) IN HIS ORDER HAS REFERRED A CBDT CIRCULAR NO. 204 THAT EXPLAINS THE SCOPE AND EFFECT OF THE EXPLANATION 1 TO SE CTION 271(1)(C) OF THE ACT, WHICH READS AS UNDER: - NEW EXPLANATION 1 PROVIDES THAT WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME, AN ASSESSEE FAILS TO OFFER ANY EXPLANATION OR IS UNABLE TO SUBSTANTIATE AN EXPLANATION OFFE RED BY HIM OR OFFERS AN EXPLANATION WHICH IS FOUND TO BE FALSE, THE AMOUNT ADDED OR ITA NO. 2734/D EL/ 2013 3 DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF WILL BE TREATED AS HIS CONCELAED INCOME. IF HOWEVER, THE EXPLANATION OFFERED BY THE ASSESSEE IS BONAFIDE AND ALL THE FACTS RELATING TO THE EXPLANATION AND MATERIAL TO THE COMPUTATION OF TOTAL ICNOME HAS BEEN DISCLOSED BY THE ASSESSEE, EXPLANATION 1 WILL NOT BE APPLICABLE. 6 .1 IN VIEW OF THE AFORESAID CIRCULAR, WE FIND THAT LD. CIT(A) HAS OBSE RVED THAT EXPLANATION 1 IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE, AS THE ASSESSEE HAS BEEN FORTH COMING IN DISCLOSING ALL FACTS THAT ARE RELEVANT FOR THE COMPUTATION OF ITS INCOME. THEREFORE, THE ASSESSEE HAS CLEARLY DISCHARGED THE ONUS/BURDEN CAST UPON IT TO PROVE THAT NONE OF THE CONDITIOINS OF THE EXPLANATION 1 ARE MET. WE ALSO FIND THAT LD. CIT(A) REITERATING THAT THE ADDITION MADE BY THE AO IS NOT ON ACCOUNT OF INCONSISTENCY IN THE FACTS FURNISHED BY THE ASSESSEE BUT IS PURELY ON ACCOU NT OF DIFFERENCE OF OPINION AS REGARDS THE INTERPRETATION LAW ON THE SAME SET OF FACTS AS HAVE BEEN FURNISHED BY THE ASSESSEE. WE ALSO FIND THAT LD. CIT(A) HAS OBSERVED THAT PENALTY PROCEEDINGS ARE SEPARATE PROCEEDINGS FROM THE ASSESSMENT PROCEEDINGS A ND MERLEY BECAUSE THE QUANTUM ADDITION HAS BEEN CONFIRMED BY THE HIGH AUTHORITY IT DOES NOT NECESSARILY MEAN THAT PENALTY IS ALSO LEVIABLE U/S. 271(1)(C) OF THE I.T. ACT. IN THIS BEHALF, HE PLACED RELIANCE ON THE DECISION OF THE HON BLE SUPREME COURT IN TH E CASE OF UOI VS. DHARMENDRA TEXTILE PROCESSORS REPORTED IN 306 ITR 227 WHEREIN IT HAS BEEN HELD THAT: - MERELY BECAUSE THE ADDITION IS CONFIRMED DOES NOT IPSO FACTO ATTRACT THE PENALTY PROVISION. IN THE PENALTY PROCEEDINGS, THE WHOLE MATTER HAS TO BE SEEN IN A DIFFERENT PERSPECTIVE IRRESPECTIVE OF THE ITA NO. 2734/D EL/ 2013 4 FACT THAT THE ADDITION HAS BEEN CONFIRMED BY THE HIGHER AUTHORITIES. 6 .2 IN VIEW OF THE FACTS STATED ABOVE, LD. CIT(A) HAS CORRECTLY HELD THAT THE DISCLOSURES MADE BY THE ASSESSEE IN THIS REGARD WERE BONAFIDE AND WERE NOT FALSE OR FANCIFUL. THE ASSESEE DID NOT FILE INACCURATE PARTICULARS OF INCOME IN CLAI MING DEDUCTION OF THE AFORESAID AMOUNT. THEREFORE, THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT IS HEREBY DELETED. 6 .3 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENT, WE FIND NO INFIRMITY IN THE ORDER OF TH E LD. CIT(A) AND THEREFORE, THE SAME DOES NOT NEED ANY INTEREFRENCE, HENCE, WE UPHOLD THE SAME. 7 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 26 / 09 /20 1 4 . SD/ - SD/ - [ G.D. AGRAWAL ] [ H.S. SIDHU ] VICE PRESIDENT JUDICIAL MEMBER DATE 26 / 09 /201 4 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 ITA NO. 2734/D EL/ 2013 5