M/s. Shoe Tecnik International Corporation Limited, Noida V. ITO, New Delhi

ITA 3228/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6755 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 07-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 26-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL SENIOR
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 43B; 143(3); 27; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NO.3228/DEL./2014 (ASSESSMENT YEAR : 2008-09) M/S. SHOE TECNIK INTERNATIONAL CORPORATION LTD., VS . ITO, WARD 8 (2), A 11 & A 18, SECTOR 8, NEW DELHI. NOIDA (UP) (PAN : AAECS4253L) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI SATISH KHOSLA, MANISH MALIK L.N. MALIK, ADVOCATES REVENUE BY : SMT. ANIMA BARNWAL, SENIOR DR O R D E R PER A.T. VARKEY, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (APPEALS)-XI, NEW DELHI DATED 07.04.2014 FOR ASSESS MENT YEAR 2008-09 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - 1 THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS )-XI GROSSLY ERRED ON FACTS AND IN LAW IN SUSTAINING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT IN RESPECT OF THE F OLLOWING DISALLOWANCE/ADDITIONS MADE BY THE ASSESSING OFFICE R AND THE CIT(A):- A) DISALLOWANCE ON ACCOUNT OF NON-PAYMENT OF EPF AM OUNTING TO RS. 2,52,427/- 2 ITA NO.3228/DEL./2014 B) DISALLOWANCE U/S 40(A)(IA) OF THE ACT AMOUNTING TO RS. 4,35,12,729/- 2 THAT THE LD. CIT(A) GROSSLY ERRED ON FACTS AND IN LAW IN SUSTAINING THE ABOVE PENALTY U/S 271(1)(C) OF THE A CT NOTWITHSTANDING THE FACT THAT THERE IS NO CONCEALMENT OF PARTICULAR S OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN R ESPECT OF THE ABOVE TWO CLAIMS WHICH IS THE PRIMARY REQUIREMENT FOR INI TIATION OF PENALTY PROCEEDINGS. 3 THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT IN LAW PENALTY CAN BE LEVIED U/S 271(1)(C) OF THE ACT ONLY WHEN TH ERE IS PROPER INITIATION OF PENALTY IN ASSESSMENT PROCEEDINGS AND MENSREA IS NOT ESTABLISHED IN PENALTY PROCEEDINGS. THE ASSESSMEN T ORDER U/S 143(3) IS BEREFT OF ANY PROPER FINDING FOR INITIATION OF P ENALTY AND MENSREA IS ALSO NOT ESTABLISHED IN PENALTY PROCEEDINGS. 4 THAT THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3. BRIEF FACTS ARE THAT THE ASSESSEE FILED RETURN D ECLARING NIL INCOME ON 30.09.2008. THE ASSESSMENT WAS COMPLETED U/S 143(3 ) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER THE ACT) VIDE ORDER DATED 28.12.2010 AT AN INCOME OF RS. 2,91,87,616/-, AFTER ADJUSTMENT OF BROUGHT F ORWARD LOSSES AND UNABSORBED DEPRECIATION. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, ADDITIONS/DISALLOWANCES WERE MADE ON THE FOLLOWING GROUNDS: I) RS. 79,591/- UNDER THE HEAD LABOUR EXPENSES; II) RS. 2,52,427/- ON ACCOUNT OF NON-PAYMENT OF EP F; III) RS. 1,06,147/- UNDER SECTION 43B(C) R.W.S. 36 (1)(II) IV) RS. 4,35,12,729/- ON ACCOUNT OF NON-DEPOSIT OF TDS REG. CONTRACTORS (DEDUCTED BUT NOT PAID). 3 ITA NO.3228/DEL./2014 4. AGGRIEVED WITH THE ORDER OF THE AO THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE CIT(A) CONFIRMED ALL THE AD DITIONS AND FURTHER ENHANCED THE INCOME OF THE ASSESSEE BY RS. 2,89,581 /- U/S 36(1)(II) OF THE ACT. THE AO THEREAFTER LEVIED PENALTY OF RS. 1,47, 98,870/- U/S 271(1)(C) OF THE ACT IN RESPECT OF THE DISALLOWANCES MADE UNDER THE FOLLOWING HEADS: SR. NO. PARTICULARS AMOUNT (RS.) I) ON ACCOUNT OF LABOUR EXPENSES 79,591 II) ON ACCOUNT OF NON PAYMENT OF EPF 2,52,427 III) UNDER SECTION 43B(C) READ WITH SECTION 36(1)(I I) 1,06,147 IV) ON ACCOUNT OF NON DEPOSIT OF TDS REG. CONTRACTO RS, DEDUCTED BUT NOT PAID 4,35,12,729 5. THE CIT(A) DELETED THE PENALTY IN RESPECT OF SUM S OF RS. 79,591/- AND RS. 1,06,147/- AND SUSTAINED THE PENALTY FOR ADDITI ON OF RS. 4,35,12,729/- MADE BY THE AO U/S 40(A)(IA) OF THE ACT AND ADDITIO N OF RS. 2,52,427/- MADE ON ACCOUNT OF NON-PAYMENT OF EPF. 6. BEFORE US THE LEARNED COUNSEL HAS CHALLENGED THE LEVY OF PENALTY ON THE GROUND THAT THERE IS NO CONCEALMENT OF PARTICUL ARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY T HE ASSESSEE COMPANY. THE LEARNED COUNSEL CONTENDED THAT GROUND 4 IS NOT PRES SED AND OUT OF GROUND 3 ONLY THE PORTION CHALLENGING THAT THE ASSESSMENT OR DER U/S 143(3) IS BEREFT OF ANY PROPER FINDING OF INITIATION OF PENALTY AND MEN SREA IS ALSO NOT ESTABLISHED IN PENALTY PROCEEDINGS IS BEING PRESSED . HE RELIED UPON THE 4 ITA NO.3228/DEL./2014 SUBMISSION BEFORE THE CIT(A) AND SUPPORTED THE PLEA THAT PENALTY LEVIED IS UNTENABLE. THE LD. DR RELIED UPON THE FINDINGS OF THE ASSESSING OFFICER AND THE CIT(A). 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL PLACED ON RECORD. WE NOTICE THAT PENALTY HAS BEEN SUSTAINED BY THE CIT(A) OF RS.2,52,427/- BY HOLDING AS UNDER: SO FAR AS THE DETAILS OF THE EPF PAYABLE IS CONCER NED, THERE IS NO DISPUTE THAT THE APPELLANT HAD FURNISHED THE COMPLE TE PARTICULARS OF SUCH EPF. THE SAME WAS TO BE PAID BEFORE THE DUE DATE-THE MAXIMUM PERIOD FOR SUCH PAYMENT WAS TILL THE DUE DA TE OF FILING OF RETURN. IT IS A FACT THAT THE APPELLANT COULD NOT DEPOSIT THE SAME BY DUE DATE OR TILL THE EXTENDED PERIOD PROVIDED IN TH E LAW. IT IS THIS DEFAULT ON THE PART OF THE APPELLANT THAT THE DISAL LOWANCE IN RESPECT OF SUCH EARMARKED AMOUNT WAS MADE IN APPELLANTS CLAIM . IT IS OBSERVED THAT AS PER COLUMN NO. 21(I) OF FORM 3CD, THE AUDITORS HAD POINTED OUT THE FACT THAT EPF LIABILITY WAS NOT PAI D BY THE APPELLANT. AT THE TIME OF FILING OF RETURN, THE APPELLANT WAS FULLY AWARE OF THIS FACT AND DESPITE THAT THE NECESSARY DISALLOWANCE WA S NOT MADE BY IT IN ITS COMPUTATION. SUCH ACTION ON THE PART OF THE APPELLANT TENTAMOUNTS TO DELIBERATE FURNISHING OF INACCURATE PARTICULARS OF INCOME, ON WHICH PENALTY U/S 271(1)(C) OF THE ACT I S DEFINITELY IMPOSABLE. THERE ARE PROVISIONS UNDER THE PF ACT ITSELF FOR PENALIZING THE APPELLANT FOR SUCH DEFAULT. EVEN TH E DEFAULTS IN CONTRIBUTION OF PF BY EMPLOYERS CAN BE CHARGED UNDE R SECTION 405 AND 420 OF THE INDIAN PENAL CODE AND CAN LEAD TO AT TACHMENT OF PROPERTY AS WELL AS ASSETS. SUCH OMISSION ON THE P ART OF THE APPELLANT IN THE I. T. ACT WOULD DEFINITELY MAKE HIM LIABLE F OR DISALLOWANCE OF SUCH AMOUNT IN THE RETURN AND SINCE THE MATTER WAS ALREADY BROUGHT TO THE KNOWLEDGE OF THE APPELLANT BY THE AUDITORS B EFORE FILING OF THE RETURN, THE ACTION ON THE PART OF THE APPELLANT WAS DELIBERATE. THE LEGAL ASPECT OF THE ISSUE IS DISCUSSED IN SUCCEEDIN G PARAS. THEREFORE, THE AOS ACTION IN IMPOSING PENALTY ON DISALLOWANCE OF EPF AMOUNT OF RS. 2,52,427/- IS JUSTIFIED. 5 ITA NO.3228/DEL./2014 8. LIKEWISE, THE PENALTY OF RS. 4,35,12,729/- HAS B EEN CONFIRMED BY HOLDING AS UNDER:- THE AMOUNT OF RS. 4,35,12,729/- WAS THE PAYMENTS M ADE TO THE CONTRACTORS ON WHICH TDS HAD BEEN DEDUCTED BUT NOT DEPOSITED IN THE GOVERNMENT ACCOUNT WITHIN THE STIPULATED TIME A S PROVIDED IN THE ACT. AS PER THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, THE CONTRACTUAL PAYMENTS ON WHICH TDS WAS DEDUCTIBLE BU T EITHER TDS WAS NOT DEDUCTED OR AFTER DEDUCTION SUCH AMOUNT WAS NOT PAID IN GOVERNMENT ACCOUNT BY DUE DATE, SUCH PAYMENTS SHALL BE DISALLOWED . THE PROVISIONS HAS BEEN INCORPORATED TO DISCOURA GE THE PAYMENTS MADE BY THE APPELLANT TO NON-EXISTENT/BOGU S ENTITIES. AS A RESPONSIBLE TAX PAYER, IT IS THE PIOUS DUTY OF THE APPELLANT TO NOT ONLY PAY TAXES HONESTLY BUT TO ENSURE THAT HIS HARD EARN ED MONEY IS NOT CONVERTED INTO UNACCOUNTED MONEY IN THE HANDS OF TH E PERSON WHO EITHER WORK FOR HIM TO PROVIDE SERVICES TO THE APPE LLANT. WITH THIS BACKGROUND AND INTENTION IN MIND, THE STATUTE HAS S UCH PROVISION OF DEDUCTION OF TAX AT SOURCE. IN THE PRESENT CASE TH E APPELLANT HAS DEDUCTED THE TAX FROM THE AMOUNTS PAID TO SUB CONTR ACTORS OR PROFESSIONAL BUT DID NOT DEPOSIT THE SAME IN THE GO VERNMENTS ACCOUNT. THE APPELLANT WAS FULLY AWARE OF THE FACT THAT THE TDS WHICH WAS MEANT TO BE DEPOSITED IN GOVERNMENT ACCOU NT WAS BEING UTILIZED BY IT AND THEREBY IT WAS VIOLATING THE EXP RESS PROVISIONS OF THE INCOME TAX ACT. AS PER COLUMN NO. 17(F) OF FOR M 3CD, IT IS MANDATORY ON THE PART OF THE AUDITORS TO DISCLOSE S UCH INFORMATION. THE AUDITORS HAVE POINTED OUT THIS FACT IN THEIR AU DIT REPORT BEFORE FILING OF THE RETURN AND DESPITE THAT THE APPELLANT HAS NOT ACTED UPON AND FURNISHING ITS RETURN INTENTIONALLY WITHOUT MAK ING DISALLOWANCE IN THIS RESPECT. THUS, THE APPELLANTS ACTION DEFI NITELY TENTAMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME . 9. THE CIT(A) HAS ALSO HELD AS UNDER :- THE APPELLANT HAS NOT FURNISHED ANY EXPLANATION FO R NOT FOLLOWING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AT T HE TIME OF FURNISHING OF ITS RETURN ALTHOUGH IT WAS VERY MUCH AWARE OF SU CH PROVISIONS WHICH WAS BROUGHT TO HIS KNOWLEDGE BY THE AUDITORS IN THE AUDIT REPORT . ALTERNATIVELY, SINCE THE APPELLANT WAS UTILIZING THOSE FUNDS WHICH WERE MEANT TO BE DEPOSITED IN GOVT. ACCOUNT, NOT MAKING THE CONSEQUENTIAL DISALLOWANCE IN THE INCOME TAX RETURN DEFINITELY SHOWS DELIBERATENESS ON THE PART OF THE APPELLANT. THUS, FURNISHING OF 6 ITA NO.3228/DEL./2014 INCORRECT RETURN DEFINITELY ARISES OUT OF APPELLANT S GREED OF MISAPPROPRIATING THE GOVT. MONEY WHICH TENTAMOUTNS NOT ONLY A CASE OF NEGLIGENCE BUT A CASE OF FRAUD. THE EXPLANATION OF SECTION 271(1)(C) CREATES THE LEGAL FICTION TO THE EFFECT T HAT THE ASSESSEE SHALL BE DEEMED TO HAVE CONCEALED PARTICULARS OF HIS INCO ME OR FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND THEREFORE THE ONUS IS ON THE ASSESSEE TO ESTABLISH THAT HIS FAILURE TO RETURN C ORRECT INCOME DID NOT ARISE FROM ANY FRAUD OR ANY GROSS OR WILLFUL NEGLEC T ON HIS PART. NO SUCH ONUS IS DISCHARGED BY THE APPELLANT. 10. HE HAS FINALLY CONCLUDED AS UNDER:- IN VIEW OF THE ABOVE, PENALTY U/S 271(1)(C) OF THE ACT IS DEFINITELY ATTRACTED ON THE ADDITION OF RS. 4,35,12,729./- MAD E BY THE AO U/S 40(A)(IA) OF THE ACT AND DISALLOWANCE OF RS. 2,52,4 27/- MADE BY THE AO ON ACCOUNT OF NON PAYMENT OF EPF. THE DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS 322 ITR 158 (SC), R ELIED UPON BY THE APPELLANT IS NOT APPLICABLE IN SUCH A SITUATION SINCE IT IS NOT A CLAIM OF THE APPELLANT WHICH HAS BEEN DENIED BY THE AO. RATHER IT IS THE RECOGNITION OF A DELIBERATE BREACH OF STATUTORY PROVISIONS OF THE LAW, THEREBY FURNISHING INACCURATE PARTICULARS OF I TS INCOME IN ITS RETURN OF INCOME. CONSEQUENTLY THE AO HAD TO MAKE ADDITIONS IN RESPECT OF SUCH OMISSIONS. THEREFORE PENALTY ON SU CH ADDITIONS IS JUSTIFIED AND THE SAME IS HEREBY CONFIRMED. 11. FROM THE ABOVE, IT IS APPARENT THAT THE COMPLET E PARTICULARS OF THE CLAIM HAVE BEEN DISCLOSED BY THE ASSESSEE WHICH PAR TICULARS HAVE ALSO NOT BEEN FOUND TO BE INCORRECT OR INACCURATE IN ANY MANNER. THE CIT(A) HOWEVER HAS STATED THAT DESPITE THE ABOVE POSITION THE PENALTY IS LEVIABLE ON THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION FOR NOT FOLLOWING THE PROVISIONS OF SECTION 40(A)(IA) OF TH E ACT OR SECTION 43B OF THE ACT, ALTHOUGH ASSESSEE WAS VERY MUCH AWARE OF SUCH PROVISIONS WHICH WAS BROUGHT TO HIS KNOWLEDGE BY THE AUDITORS IN THE AUD IT REPORT. HOWEVER TO OUR 7 ITA NO.3228/DEL./2014 MIND SUCH A CONCLUSION IS NOT JUSTIFIED, HAVING REG ARD TO THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF CIT V RELIANCE PE TRO PRODUCTS (P) LTD. 322 ITR 158 WHEREIN IT HAS BEEN HELD AS UNDER: 9. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH T HE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBST ER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS:- 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT'. WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTI CULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNC TION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT A CCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MU ST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DET AILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEO US OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVIT ING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. WE DO NOT AGREE, AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAI MED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENAL TY UNDER SECTION 271(1) (C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY ASSESSING O FFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER SECTION 271( 1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. 12. ALSO, IN THE CASE OF CIT V PRICE WATERHOUSE COO PERS (P) LTD. V. CIT 348 ITR 306 (SC) IT HAS BEEN HELD AS UNDER: 8 ITA NO.3228/DEL./2014 19. THE CONTENTS OF THE TAX AUDIT REPORT SUGGEST THAT THERE IS NO QUESTION OF THE ASSESSEE CONCEALING ITS INCOME. THE RE IS ALSO NO QUESTION OF THE ASSESSEE FURNISHING ANY INACCURATE PARTICULARS. IT APPEARS TO US THAT ALL THAT HAS HAPPENED IN THE PRESENT CASE IS THAT THROU GH A BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING IT S RETURN, FAILED TO ADD THE PROVISION FOR GRATUITY TO ITS TOTAL INCOME. THIS CA N ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ARE ALL PRONE TO MAKE. THE CAL IBRE AND EXPERTISE OF THE ASSESSEE HAS LITTLE OR NOTHING TO DO WITH THE I NADVERTENT ERROR. THAT THE ASSESSEE SHOULD HAVE BEEN CAREFUL CANNOT BE DOUBTED , BUT THE ABSENCE OF DUE CARE, IN A CASE SUCH AS THE PRESENT, DOES NOT M EAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME. 20. WE ARE OF THE OPINION, GIVEN THE PECULIAR FACTS OF THIS CASE, THAT THE IMPOSITION OF PENALTY ON THE ASSESSEE IS NOT JUSTIF IED. WE ARE SATISFIED THAT THE ASSESSEE HAD COMMITTED AN INADVERTENT AND BONA FIDE ERROR AND HAD NOT INTENDED TO OR ATTEMPTED TO EITHER CONCEAL ITS INCO ME OR FURNISH INACCURATE PARTICULARS. 13. HAVING REGARD TO THE ABOVE PRINCIPLES LAID DOWN , THE CLAIM OF THE ASSESSEE COULD NOT BE REGARDED EITHER AS FALSE OR NOT BONAFIDE SO AS TO CONCLUDE THAT ASSESSEE HAS FURNISHED INACCURATE PAR TICULARS OF INCOME. 14. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V DCM LIMITED 359 ITR 102 HAS HELD THAT MERELY BECAUSE A CLAIM IS MADE WHICH IS NOT FOUND SUSTAINABLE, LEVY OF PENALTY UNDER SECTION 27 1(1)(C) OF THE ACT IS UNSUSTAINABLE. THE RELEVANT PARA OF THE AFORESAID J UDGMENT IS REPRODUCED HEREIN BELOW: 10. LAW DOES NOT BAR OR PROHIBIT AN ASSESSEE FOR M AKING A CLAIM, WHICH HE BELIEVES MAY BE ACCEPTED OR IS PLAUSIBLE. WHEN SUCH A CLAIM IS MADE DURING THE COURSE OF REGULAR OR SCRUTINY ASSESSMENT, LIBER AL VIEW IS REQUIRED TO BE TAKEN AS NECESSARILY THE CLAIM IS BOUND TO BE CAREF ULLY SCRUTINIZED BOTH ON FACTS AND IN LAW. FULL PROBE AND APPRAISAL IS NATUR AL AND NORMAL. THREAT OF 9 ITA NO.3228/DEL./2014 PENALTY CANNOT BECOME A GAG AND/OR HAUNT AN ASSESSE E FOR MAKING A CLAIM WHICH MAY BE ERRONEOUS OR WRONG, WHEN IT IS MADE DU RING THE COURSE OF THE ASSESSMENT PROCEEDINGS. NORMALLY, PENALTY PROCEEDIN GS IN SUCH CASES SHOULD NOT BE INITIATED UNLESS THERE ARE VALID OR G OOD GROUNDS TO SHOW THAT FACTUAL CONCEALMENT HAS BEEN MADE OR INACCURATE PAR TICULARS ON FACTS WERE PROVIDED IN THE COMPUTATION. LAW DOES NOT BAR OR PR OHIBIT A PERSON FROM MAKING A CLAIM, WHEN HE KNOWS THE MATTER IS GOING T O BE EXAMINED BY THE ASSESSING OFFICER. THERE IS NO MERIT IN THE PRESENT APPEAL AND THE SAME HAS TO BE DISMISSED. 15. APPLYING THE RATIO LAID BY THE AFORESAID CASE-L AWS ON THE CASE IN HAND, PENALTY LEVIED IS THUS DELETED AND GROUNDS RAISED B Y THE ASSESSEE ARE ALLOWED. 16. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS DAY OF 2 6 TH FEBRUARY, 2016. SD/- SD/- (N.K. SAINI) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 26 TH DAY OF FEBRUARY, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.