M/s Silicon Graphics Systems (India) Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 2978/DEL/2013

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2663 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2003-2004
• Appeal Filed On: 14-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Assessee Lawyers: P KAUSHIK
• Keywords: Set aside
• Section: 271(1)(c); 143(3); 274; 73

Judgement Text

I.T.A.NO.2978/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER . . /. I.T.A NO.2978/DEL/2013 / ASSESSMENT YEAR: 2003-04 SILICON GRAPHICS SYSTEMS (INDIA) PVT. LTD. REGUS BUSINESS CENTRE, LEVEL 15, EROS CORPORATE TOWERS, NEHRU PLACE, NEW DELHI. VS. DCIT CIRCLE 8(1) NEW DELHI. PAN NO. AAACS4104N APPELLANT / RESPONDENT /ASSESSEE BY SHRI P. KAUSHIK, ADVOCATE /REVENUE BY SHRI PRAKASH DUBEY, SR. DR / DATE OF HEARING: 08.03.2021 /PRONOUNCEMENT ON 1 0 .03.2021 /O R D E R PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-XI, NEW DELHI DATED 18.02.2013 FOR AY 2003-04, CHALLENGING THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT RETURN DE CLARING NIL INCOME AFTER SETTING OFF THE BROUGHT FORWARD LOSS OF RS. 6 .45 CRORES WAS FILED ON 02.12.2003. THE ASSESSMENT WAS COMPLETED U/S 143(3 ) OF THE ACT VIDE ORDER DATED 21.03.2006 AT AN INCOME OF RS. 11,52,99 ,860/- MAKING VARIOUS ADDITIONS. THE PENALTY PROCEEDINGS WERE IN ITIATED IN THE ASSESSMENT ORDER. THE AO VIDE SEPARATE ORDER LEVIE D THE PENALTY U/S I.T.A.NO.2978/DEL/2013 2 271(1)(C) OF THE ACT WHICH IS CONFIRMED BY THE LD. CIT(A) BY DISMISSING THE APPEAL OF THE ASSESSEE. 3. LD. COUNSEL FOR ASSESSEE CONTENDED THAT THE AO I SSUED SHOW CAUSE NOTICE FOR LEVY OF THE PENALTY U/S 271(1)(C) OF THE ACT DATED 21.03.2006 FOR ASSESSMENT YEAR UNDER APPEAL IN WHICH THE AO HA S MENTIONED AS UNDER: HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME IN TERMS OF EXPLANATION 1, 2, 3, 4 AND 5. 4. HE HAS SUBMITTED THAT IN THE PENALTY NOTICE THE AO HAS MENTIONED BOTH THE INGREDIENTS OF SECTION 271(1)(C) OF THE AC T, THEREFORE, NOTICE IS INVALID AND BAD IN LAW AND, AS SUCH, PENALTY IS LIA BLE TO BE CANCELLED. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND HAS SUBMITTED THAT THIS POINT WAS NOT RAI SED BEFORE THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION AND PERU SED THE MATERIAL ON RECORD. 7. IN THIS CASE, AO PASSED THE ASSESSMENT ORDER U/S 143(3) DATED 21.03.2006 MAKING CERTAIN ADDITIONS TO THE RETURNED INCOME. THE AO AT THE END OF THE ORDER HAS MENTIONED I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED HIS INCOME AND FURNISHED INACCURATE PARTI CULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. ACCORDINGLY, PENALTY PROCEEDINGS U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT ARE INITIATED. THE AO ON THE SAME DAY ISSUED PENALTY NOTICE DATED 21.03.2006 IN WHICH THE AO HAS MENTIONED THE SAME FACTS (SUPRA). IT WO ULD, THEREFORE, SHOW THAT AO HAS MENTIONED BOTH THE LIMBS OF SECTION 271 (1)(C) OF THE ACT IN THE ASSESSMENT ORDER AS WELL AS IN THE NOTICE ISSUE D FOR LEVY OF THE PENALTY. IN THE CASE OF CIT VS. M/S SSAS EMERALD MEADOWS REPORTED IN 73 TAXMANN.COM 241, THE HONBLE KARNATAKA HIGH COUR T CONFIRM THE I.T.A.NO.2978/DEL/2013 3 ORDER OF THE TRIBUNAL IN WHICH THE TRIBUNAL HELD TH AT THE NOTICE ISSUED BY THE AO U/S 274 READ WITH SECTION 271(1)(C) OF THE A CT TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E. WHETHER FOR CON CEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE DEPARTMENTAL APPEAL WAS ACCORDINGLY DISMISSED. JUDGMENT OF THE KARNATAKA HIGH COURT HAS BEEN CONFIRMED BY THE HON BLE SUPREME COURT BY DISMISSING THE SLP OF THE DEPARTMENT REPORTED IN 73 TAXMANN.COM 248. THE HONBLE DELHI HIGH COURT FOLLOWING THE AB OVE DECISION OF KARNATAKA HIGH COURT IN THE CASE OF CIT VS. M/S SAH ARA INDIA LIFE INSURANCE COMPANY LIMITED (2019) (8-TMI-409) ALSO D ISMISSED THE DEPARTMENTAL APPEAL. 8. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE NOTIC E ISSUED BY THE AO FOR LEVY OF THE PENALTY WAS BAD IN LAW AND, AS SUCH, VI TIATED THE ENTIRE PENALTY PROCEEDINGS AND, AS SUCH, NO PENALTY COULD BE IMPOSED AGAINST THE ASSESSEE. SINCE, IT IS A LEGAL ISSUE ARISING O N THE BASIS OF THE FACTS MENTIONED IN THE ASSESSMENT ORDER AND ISSUE OF NOTI CE BY THE AO, THEREFORE, ASSESSEE COULD RAISE SUCH POINT AT ANY S TAGE WHICH BEING LEGAL IN NATURE. THE CONTENTION OF LD. DR IS, THEREFORE, REJECTED. 9. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY. 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 10/03/2021 SD/- SD/- (B.R.R. KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10.03.2021 * KAVITA ARORA, SR. P.S. I.T.A.NO.2978/DEL/2013 4 COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR, ITAT: DELHI BENCHES-DELHI