Oriental Structural Engineers Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 3116/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4352 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 271(1)(c); 250; 113

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO.3116/DEL./2017 ASSESSMENT YEAR: 2008-09 M/S. ORIENTAL STRUCTURAL ENGINEERS PVT. LTD., OSE COMMERCIAL BLOCK, HOTEL ALOFT, ASSET 5B, AERO CITY, HOSPITALITY DISTRICT, IGI AIRPORT, NEW DELHI VS. ACIT, CENTRAL CIRCLE-26, NEW DELHI PAN :AAAC0054F (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 15/02/2017 PASSED BY THE LEARNED CIT(APPEALS)-31, N EW DELHI, [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 200 8-09, IN RELATION TO PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE IN COME-TAX ACT, 1961 (IN SHORT THE ACT). THE GROUNDS RAISED BY TH E ASSESSEE ARE REPRODUCED AS UNDER: 1. THE LD. CIT(A) GROSSLY ERRED IN CONFIRMING PENAL TY OF RS.24,74,317/- WHICH WERE LEVIED U/S 271(1)(C) OF T HE ACT BY APPELLANT BY SHRI K.V.S.R. KRISHNA, CA RESPONDENT BY MS. RAKHI VIMAL, SR.DR DATE OF HEARING 22.01.2020 DATE OF PRONOUNCEMENT 26.02.2020 2 ITA NO. 3116/DEL./2017 ASSESSING OFFICER ON AD-HOC ADDITION OF RS.72,79,54 5/- MADE IN ASSESSMENT @ 0.25% OF SUB-CONTRACT PAYMENT OF RS.2,91,18,17,989/- MADE BY APPELLANT FOR ITS BUSIN ESS DURING THE ASSESSMENT YEAR. 2. THE APPELLANT PRAYS TO ADD, AMEND OR MODIFY THE GROUNDS OF APPEAL AT ANY TIME. 2. THE ASSESSEE ALSO RAISED ADDITIONAL GROUND IN HIS APPLICATION DATED 09/11/2019, WHICH IS REPRODUCED AS UNDER: WHETHER THE PENALTY IS FOR CONCEALMENT OF INCOME O R FURNISHING OF INACCURATE PARTICULARS OF INCOME IS NOT EVIDENT FRO M THE NOTICE NOR FROM THE PENALTY ORDER. PENALTY PROVISIONS BEING QU ASI-JUDICIAL, UNLESS THERE IS SPECIFIC CHARGE, THERE CANNOT BE AN Y LEVY OF PENALTY. THEREFORE, THE ORDER LEVYING PENALTY IS WRONG AND B AD IN LAW. 2.1 AFTER HEARING THE PARTIES, IN VIEW OF THE SETTLED PRINCIPLE THAT THE ISSUE BEING LEGAL IN NATURE AND NO INVESTIGATIO N OF THE FRESH FACTS WAS REQUIRED, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE WAS ADMITTED 3. THE ASSESSEE FILED A COPY OF THE NOTICE DATED 30/0 3/2016 INITIATING PENALTY UNDER SECTION 271(1)(C) OF THE A CT. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSIN G OFFICER HAS NOT SPECIFIED THE CHARGES FOR LEVY OF THE PENALTY I N THE SAID NOTICE. ACCORDING TO HIM, THE LEARNED ASSESSING OFFICER HAS NOT STRIKE OUT ANYONE OF THE CHARGE, OUT OF THE TWO CHARGES OF CON CEALMENT OF THE PARTICULAR OF THE INCOME OR FURNISHING INACCURA TE PARTICULARS OF INCOME. THE LEARNED COUNSEL OF THE ASSESSEE RELI ED ON THE ORDER DATED 17/10/2019 OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE IN ITA NO. 241 TO 244/DEL/2017 FOR ASSESSMENT YEAR 200 7-08, 2009-10, 2010-11 AND 2011-12 AND SUBMITTED THAT PEN ALTY UNDER SECTION 271(1)(C ) OF THE ACT HAS BEEN CANCEL LED IN IDENTICAL CIRCUMSTANCES AND ADDITIONAL GROUND RAISED BY THE A SSESSEE WAS ALLOWED. 3 ITA NO. 3116/DEL./2017 4. ON THE CONTRARY, LEARNED DR RELIED ON THE ORDER OF THE LOWER AUTHORITIES AND PLACED RELIANCE ON FOLLOWING DECISI ONS: I. SUNDARAM FINANCE LTD. VS. CIT [2018] 99 TAXMANN.COM 152 (SC) II. SUNDARAM FINANCE LTD. VS. CIT [2018] 93 TAXMANN.COM 250 (MADRAS)/[2018] 403 ITR 407 (MADRAS) III. CIT VS. SMT. KAUSHALYA [1994] 75 TAXMAN 549 (BOMBAY )/[1995] 216 ITR 660 (BOMBAY) IV. NEW HOLLAND TRACTORS (INDIA) (P.) LTD. VS. CIT [201 4] 49 TAXMANN.COM 573 (DELHI)/[2015] 228 TAXMAN 66 (DELHI )/[2015] 275 CTR 291 (DELHI) V. TRIMURTI ENGINEERING WORKS VS. ITO [2012] 25 TAXMAN N.COM 363 (DELHI)/[2012] 138 ITD 189 (DELHI)/[2012] 150 TTJ 1 95 (DELHI) VI. HYBRID RICE INTERNATIONAL PVT. LTD. VS. CIT (ITA NO . 285/2007) VII. EARTHMOVING EQUIPMENT SERVICE CORPORATION VS. DCIT {2017} 84 TAXMANN.COM 51 (MUMBAI TRIB.)/[2017] 166 ITD 113 (MUMBAI TRIB.)/[2017] 187 TTJ 233 (MUMBAI-TRIB.) VIII. DCIT VS. SHAH RUKH KHAN [2018] 93 TAXMANN.COM 320 ( MUMBAI- TRIB.) IX. DHANRAJ MILLS PVT. LTD. VS. ACIT, ITA NOS. 3830 & 3833/MUM./2009 5. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE INSTANT CASE, T HE LD. CIT(A) HAS UPHELD THE PENALTY FOLLOWING HIS OWN FINDING IN ASSESSMENT YEAR 2007-08, 2009-10, 2010-11 AND 2011-12. IN ASSE SSMENT YEARS 2007-08, 2009-10, 2010-11 & 2011-12, THE TRIB UNAL (SUPRA) HAS CANCELLED THE PENALTY IN VIEW OF NO SPE CIFIC CHARGES FOR LEVY OF THE PENALTY COMMUNICATED TO THE ASSESSEE. T HE RELEVANT FINDING OF THE TRIBUNAL IS REPRODUCED AS UNDER: 7. IT IS EVIDENT THAT THE ASSESSING OFFICER HAS NOT S PECIFIED FOR WHICH CHARGE, THE PENALTY WAS BEING PROPOSED FOR LE VY. WHILE INITIATING THE PENALTY PROCEEDINGS IN THE ASSESSMEN T ORDER ALSO, THE ASSESSING OFFICER DID NOT SPECIFY THE CHARGES AND S IMPLY MENTIONED THAT THE ASSESSEE HAS CONCEALED ITS INCOME AND/OR F ILED INACCURATE PARTICULARS OF ITS INCOME. IN VIEW OF THE ABOVE FAC TS AND CIRCUMSTANCES, PRIOR TO LEVY OF THE PENALTY, THE SP ECIFIC CHARGES WERE NOT COMMUNICATED TO THE ASSESSEE AND THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN PENALIZING THE ASSESSEE IN VIEW OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) AND THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F 4 ITA NO. 3116/DEL./2017 SSA'S EMERALD MEADOWS (SUPRA). ACCORDINGLY, THE ORDER OF THE LEARNED CIT(A) IN ALL THE SIX ASSESSMENT YEARS ARE SET ASIDE AND THE PENALTY LEVIED BY THE ASSESSING OFFICER IS CANCELLE D IN ALL THE SIX ASSESSMENT YEARS. THE ADDITIONAL GROUND RAISED BY T HE ASSESSEE IS ALLOWED. AS WE HAVE ALREADY CANCELLED THE PENALTY I N DISPUTE, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE NOT REQUIRED TO BE ADJUDICATED. 6. AS IDENTICAL ISSUE INVOLVED IN THE YEAR UNDER CONS IDERATION, RESPECTFULLY FOLLOWING THE FINDING OF THE TRIBUNAL (SUPRA), IN ABSENCE OF SPECIFIC MENTION OF THE CHARGE EITHER OF THE CONCEALMENT OF THE INCOME OR FILING OF INACCURATE P ARTICULARS OF THE INCOME IN THE NOTICE ISSUED FOR LEVY OF PENALTY , THE PENALTY LEVIED BY THE ASSESSING OFFICER IS CANCELLED. 7. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS AC CORDINGLY ALLOWED. SINCE WE HAVE ALREADY ALLOWED THE ADDITION AL GROUND, THE GROUND RAISED IN THE APPEAL IS NOT ADJUDICATED BEIN G RENDERED ACADEMIC ONLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2020. SD/- SD/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 26 TH FEBRUARY, 2020. RK/- (D.T.D.S.) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI