M/s. Quality Enabled Remote Solutions (P) Ltd., New Delhi V. ACIT, New Delhi

ITA 291/DEL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1694 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 18-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL SENIOR
• Keywords: Bogus Share capital; Gift; Set aside
• Section: 271(1)(c); 147; 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE HONBLE VICE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.291/DEL./2017 (ASSESSMENT YEAR : 2005-06) M/S. QUALITY ENABLED REMOTE SOLUTIONS VS. ACIT, (P) LTD., CENTRAL CIRCLE 30, 515, TOLSTOY MARG, NEW DELHI. NEW DELHI. (PAN : AAACQ0881A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SOMIL AGARWAL, ADVOCATE REVENUE BY : SHRI SURENDER PAL, SENIOR DR DATE OF HEARING : 12.06.2019 DATE OF ORDER : 13.06.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. QUALITY ENABLED REMOTE SOLUTIONS (P ) LTD. (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILI NG THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 15.11. 2016 PASSED BY LD. COMMISSIONER OF INCOME-TAX (APPEALS)-30, NEW DELHI QUA THE ASSESSMENT YEAR 2005-06 CONFIRMING THE PENALTY LEVI ED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) ON T HE GROUNDS INTER ALIA THAT:- ITA NO.291/DEL./2017 2 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN IMPOSING PENALTY OF RS.7,31,850/- AND THAT TOO WITHOUT ASSUMING JURISDI CTION AS PER LAW AND WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN IMPOSING PENALTY OF RS.7,31,850/- U/S 271(1)(C) IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE . 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN IMPOSING PENALTY U/S 271(1)(C) IN AS MUCH AS THE IMPUGNED REASSESSMENT O RDER U/S 147 DATED 20.03.2013 IS ALSO CONTRARY TO LAW AN D FACTS, VOID AB INITIO AND NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GROUNDS. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF ASSESSMEN T COMPLETED UNDER SECTION 147 OF THE ACT, PENALTY PROCEEDINGS WERE IN ITIATED IN THIS CASE ON THE GROUND THAT ADDITION ON ACCOUNT OF UNDISCLOSED INCOME OF RS.20,00,000/- IN THE GARB OF SHARE APPLICATION MON EY/BOGUS TRANSACTION/ GIFTS THROUGH M/S. GEEFCEE FINANCE LTD. WAS MADE U/ S 68 OF THE ACT AND CONSEQUENTLY, AO PROCEEDED TO INITIATE PENALTY PROC EEDINGS U/S 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME WITH REGARD TO THE BOGUS SHARE APPLICATION MONEY STATED TO HAVE BEEN RECEIVE D BY THE ASSESSEE. DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE, A O PROCEEDED TO LEVY ITA NO.291/DEL./2017 3 THE PENALTY OF RS.7,31,849/- @ 100% OF THE TAX SOUG HT TO BE EVADED U/S 271(1)(C) OF THE ACT. 3. ASSESSEE CARRIED THE MATTER BY WAY OF APPEAL BEF ORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALTY BY DISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIB UNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 5. AT THE VERY OUTSET, IT IS BROUGHT TO OUR NOTICE BY THE LD. AR FOR THE ASSESSEE THAT ADDITION MADE IN THE CASE U/S 68 OF T HE ACT HAS SINCE BEEN DELETED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.929/DEL/2015 VIDE ORDER DATED 08.09.2016 AND AS SUCH, PENALTY LEVIED IS NOT SUSTAINABLE AND BROUGHT ON RECORD THE COPY OF THE O RDER OF THE TRIBUNAL DATED 08.09.2016 (SUPRA). 6. UNDISPUTEDLY, COORDINATE BENCH OF THE TRIBUNAL V IDE ORDER DATED 08.09.2016 (SUPRA) DELETED THE ADDITION MADE U/S 6 8 OF THE ACT. IN THESE CIRCUMSTANCES, THE PENALTY LEVIED BY THE AO A ND CONFIRMED BY LD. CIT (A) IS NOT SUSTAINABLE IN VIEW OF THE LAW LAID DOWN BY THE HONBLE APEX COURT IN CASE CITED AS K.C. BUILDERS & ANR VS. ACIT 265 ITR 562 (SC) BECAUSE WHEN THE ADDITION MADE IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIE D HAVE BEEN DELETED ITA NO.291/DEL./2017 4 THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENAL TY FOR CONCEALMENT AND IN SUCH CASE, NO PENALTY CAN SURVIVE AND THE PENALT Y IS LIABLE TO BE CANCELLED. SO, IN VIEW OF THE MATTER, PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. CIT (A) IS ORDERED TO BE DELET ED. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 13 TH DAY OF JUNE, 2019. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH ) VICE PRESIDENT JUDICIAL MEMBER DATED THE 13 TH DAY OF JUNE, 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-30, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.