DCIT, Sonepat V. M/s. Atlas Cycles Haryana Ltd., Sonepat

ITA 3014/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6972 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN SENIOR
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3014/DEL./2014 (ASSESSMENT YEAR : 2009-10) DCIT, SONEPAT CIRCLE, VS. M/S. ATLAS CYCLES (HARYAN A) LTD., SONEPAT. ATLAS ROAD, SONEPAT. (PAN : AABCA8412C) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI SALIL AGARWAL AND SHAILESH GUPTA, ADVOCATE REVENUE BY : SHRI S.K. JAIN, SENIOR DR DATE OF HEARING : 18.01.2017 DATE OF ORDER : 24.01.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DEPUTY COMMISSIONER OF INCOME-TAX, SONEPAT CIRCLE, SONEPAT (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SE T ASIDE THE IMPUGNED ORDER DATED 10.03.2014, PASSED BY THE COMM ISSIONER OF INCOME-TAX (APPEALS), ROHTAK QUA THE ASSESSMENT YEAR 2009- 10 DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) ON THE GROUNDS INTE R ALIA THAT :- ITA NO.3014/DEL./2014 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE PENALTY OF RS.20,97,666/- WHICH WAS IMPOSED BY THE AO U/S 271(1)(C) OF THE ACT AS THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS IN IT S RETURN OF INCOME AND WAS THEREFORE LIABLE FOR PENALTY AS PER PROVISIONS OF IT ACT. THE LD. CIT (A) HAS DELETED THE PENALTY WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE HAD MADE A DEFAULT UNDE R THE PROVISION OF SECTION 271(1)(C) OF THE IT ACT. 2. THAT THE APPELLANT CRAVES FOR PERMISSION TO ADD, DELETE OR AMEND THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2. BRIEFLY STATED FACTS OF THIS CASE ARE : ON THE B ASIS OF ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE AC T AT RS.4,97,16,424/-, PENALTY PROCEEDINGS WERE INITIATE D AGAINST THE ASSESSEE U/S 271(1)(C) OF THE ACT ON THE GROUND THA T ADDITION OF RS.61,71,421/- U/S 14A OF THE ACT WAS MADE AGAINST THE ASSESSEE WHICH WAS CONFIRMED BY LD. CIT (A). ASSESSEE CHALL ENGED THE PENALTY PROCEEDINGS ON THE GROUND THAT SECTION 271( 1)(C) OF THE ACT APPLIES ONLY WHERE THE ASSESSEE HAS CONCEALED THE P ARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND IN THE INSTANT CASE, NO SUCH CONCEALMENT OF INCOME HAS BEEN MADE NOR ANY INFORMATION GIVEN IN THE RETURN OF INCOME WAS F OUND TO BE INCORRECT OR INACCURATE. FINDING THE SUBMISSIONS M ADE BY THE ASSESSEE NOT SATISFACTORY, AO CAME TO THE CONCLUSIO N THAT ASSESSEE HAS INVESTED IN INTEREST BEARING FUNDS IN MUTUAL FU NDS AND SHARES ITA NO.3014/DEL./2014 3 AND THE INCOME OF THE SAME WAS EXEMPT AS PER INCOME -TAX ACT, WHICH IS CLEAR CASE OF FURNISHING OF WRONG PARTICUL ARS OF INCOME AS PER SECTION 271(1)(C) OF THE ACT AND THEREBY IMPOSE D THE PENALTY TO THE TUNE OF RS.20,97,666/-. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING THE APPEAL WHO HAS ALLOWED THE APPEAL. FEEL ING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL 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 R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. LD. DR FOR THE REVENUE CONTENDED THAT SINCE THE QUANTUM IN THIS CASE HAS ALREADY BEEN CONFIRMED HAVING NOT BEE N CHALLENGED BY THE ASSESSEE, THE REVENUE IS JUSTIFIED IN IMPOSI NG THE PENALTY AND RELIED UPON THE PENALTY ORDER. 6. HOWEVER, ON THE OTHER HAND, LD. AR FOR THE ASSES SEE TO REPEL THE ARGUMENTS ADDRESSED BY LD. DR CONTENDED THAT DI SALLOWANCE MADE BY THE AO U/S 14A OF THE ACT IS A LEGAL DISALL OWANCE AND DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICU LARS OF INCOME NOR IT IS A CASE OF CONCEALMENT OF INCOME AND RELIE D UPON THE ITA NO.3014/DEL./2014 4 DECISION RENDERED BY HONBLE SUPREME COURT IN THE C ASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) . 7. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, THE SOLE QUESTION ARISES FOR DETERMINATIO N IN THIS CASE IS:- AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING ASSESSMENT PROCEEDINGS? 10. HONBLE SUPREME COURT IN A CASE CITED AS CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) WHILE INTERPRETING THE PROVISIONS CONTAINED U/S 271(1)(C) DECIDED THE IDEN TICAL ISSUE IN FAVOUR OF THE ASSESSEE. OPERATIVE PART OF WHICH IS REPRODUCED FOR READY REFERENCE AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUS T HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MAD E. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SU CH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPL IED IN ITA NO.3014/DEL./2014 5 THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRE CT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 11. BARE PERUSAL OF THE PENALTY ORDER AND ORDER PAS SED BY LD. CIT (A) IN QUANTUM PROCEEDINGS APPARENTLY GO TO PROVE T HAT AO HAS MADE AN ADDITION ON THE BASIS OF THE FACT THAT THE ASSESSEE HAS INVESTED ITS INTEREST BEARING FUNDS IN THE MUTUAL F UNDS AND SHARES AND INCOME OF THE SAME IS EXEMPT UNDER THE ACT WHIC H AMOUNTS TO FURNISHING OF WRONG PARTICULARS OF INCOME. TO OUR MIND, WHEN THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.61,71,421/- U/ S 14A OF THE ACT AND HAS NOT CONCEALED ANYTHING AND IN CASE THE DEDUCTION HAS BEEN DISALLOWED BY THE AO AND ASSESSMENT ORDER HAS BEEN CONFIRMED BY THE CIT (A) IT DOES NOT AMOUNT TO CONC EALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS . 12. IN THE JUDGMENT IN CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA), HONBLE SUPREME COURT HELD THAT, MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REG ARDING THE ITA NO.3014/DEL./2014 6 INCOME OF THE ASSESSEE . MOREOVER, THE PURPOSE OF SCRUTINY PROCEEDINGS INITIATED AGAINST THE ASSESSEE IS TO EX AMINE THE SUSTAINABILITY OF THE CLAIM MADE BY THE ASSESSEE IN ITS RETURN OF INCOME. SO, WHEN COMPLETE FACTS AND FIGURES REGARD ING INCOME AND DEDUCTIONS CLAIMED HAVE BEEN BROUGHT BEFORE AO BY THE ASSESSEE, THE QUESTION OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS DOES NOT ARISE. 13. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, FINDI NG NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED B Y THE LD. CIT (A), THE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF JANUARY, 2017. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) VICE PRESIDENT JUDICIAL MEMBE R DATED THE 24 TH DAY OF JANUARY, 2017 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A), ROHTAK 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.