Ashok Arora, Faridabad V. ITO, Faridabad

ITA 3275/DEL/2009

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3415 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 30-03-2017
• Assessment Year: 1997-1998
• Appeal Filed On: 20-07-2009
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: KAPIL GOYAL
• Keywords: Period of limitation; Question of law; Reasonable cause
• Section: 143(3); 142(1); 27; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER & SHRI K.N. CHARRY, JUDICIAL MEMBER ITA NO.-3275/DEL/2009 ( ASSESSMENT YEAR: 1997-98) ASHOK ARORA PROP. SAPNA LOTTERY AGENCY H.NO. 1081, SECTOR-10, FARIDABAD. ADLPA1355L VS ITO WARD II(2) FARIDABAD ASSESSEE BY SH. KAPIL GOYAL, ADV. REVENUE BY SH. S.K. JAIN, DR ORDER PER K. NARSIMHA CHARRY, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 05.05.2009 IN APPEAL NO. 32/2008-09 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-FARIDABAD, WHE RE UNDER THE LD. CIT (A) CONFIRMED THE PENALTY OF RS. 5,78,1 98/- IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT. DATE OF HEARING 30.03.2017 DATE OF PRONOUNCEMENT 21.04.2017 2 ITA NO. 3275/DEL/2009 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALE AND PURCHASE OF LOTTERY T ICKETS, HE FAILED TO FILE THE RETURN OF INCOME FOR THE AY 1997-98 AS SUCH NOTICE DATED 22.03.2004 WAS ISSUED U/S 143 OF THE ACT IN R ESPONSE TO WHICH THE ASSESSEE FILED HIS RETURN OF INCOME ON 23 .04.2004 DECLARING A TOTAL INCOME OF RS. 1,64,164/-. DURING THE ASSESSMENT U/S 143(3) OF THE ACT THE AO MADE A TOTAL ADDITION OF RS. 1,43,22,540/- OUT OF WHICH, IN APPEAL NO. 81/2005-0 6, THE COMMISSIONER OF INCOME TAX (APPEALS) FARIDABAD VI DE ORDER DATED 11.05.2006 DELETED THE ADDITION TO A TUNE OF RS. 1,25,76,000/- AND CONFIRMED THE REST. WHILE MAKING ADDITIONS THE AO INITIATED PROCEEDINGS UNDER EXPLANATION 3 TO SEC TION 271(1)(C) OF THE ACT AND CONCLUDED THEM BY WAY OF ORDER DATED 31.03.2008 BY IMPOSING A PENALTY OF RS. 5,78,198/-. APPEAL PR EFERRED BY THE ASSESSEE AGAINST THIS PENALTY WAS DISMISSED BY THE LD. CIT (A) BY WAY OF THE IMPUGNED ORDER. 3. THE ASSESSEE IS THEREFORE, IN APPEAL BEFORE US O N THE GROUND THAT THE LD. CIT (A) ERRED IN SUSTAINING THE PENALT Y CONSIDERING THE 3 ITA NO. 3275/DEL/2009 ASSESSEE AS THE ASSESSEE IS IN DEFAULT FOR CONCEALI NG OR FURNISHING ALL INACCURATE PARTICULARS OF INCOME. 4. IT IS THE ARGUMENT OF THE LD. AR IS THAT DUE TO THE DECOITY IN THE BUSINESS PREMISES OF THE ASSESSEE BEFORE THE DU E DATE, THE ASSESSEE COULD NOT FILE THE RETURN OF INCOME. FURT HER ACCORDING TO HIM THE LAW ALL ALONG HAS BEEN THAT MERE FAILURE TO FILE A RETURN OF INCOME DOES NOT TANTAMOUNT TO CONCEALMENT OF PARTIC ULARS OF INCOME, BUT THE INTRODUCTION OF EXPLN. 3 TO S. 271( 1) W.E.F. 1ST APRIL, 1976, HAS CHANGED THE LAW ON THIS POINT IN C ERTAIN CASES INASMUCH AS, AS PER EXPLN. 3, IF A PERSON WHO HAS N OT HITHERTO BEEN ASSESSED TO TAX UNDER THE ACT DOES NOT FILE A RETURN FOR AN ASSESSMENT YEAR VOLUNTARILY WITHIN THE NORMAL PERIO D OF LIMITATION AND NO NOTICE UNDER S. 142(1) OR 148 IS ISSUED TO H IM TILL THE EXPIRY OF THE SAID PERIOD, HE IS TO BE DEEMED TO HAVE CONC EALED HIS INCOME AND PENALTY IS LEVIABLE ON HIM IF HE IS LATER FOUND TO HAVE TAXABLE INCOME IN THAT YEAR. HE SUBMITTED THAT FOR THE PUR POSE OF INVOKING THE PROVISIONS OF EXPLN. 3 TO S. 271(1), THE CONDIT IONS ENUMERATED THEREIN ARE REQUIRED TO BE SATISFIED CUMULATIVELY A ND IF ANY OF THE SAID CONDITIONS IS NOT SATISFIED, THE PROVISIONS OF EXPLN. 3 WOULD 4 ITA NO. 3275/DEL/2009 NOT BE APPLICABLE. HE FURTHER SUBMITTED THAT NEW G ROUNDS BASING ON LAW COULD BE TAKEN FOR THE FIRST TIME IN APPEAL OR IF THEY ARE BASEDON THE FACTS ALREADY AVAILABLE BEFORE THE LOWE R AUTHORITIES. PER CONTRA IT IS THE ARGUMENT OF THE LD. DR THAT SU FFICIENT TIME WAS AVAILABLE TO THE ASSESSEE TO FILE THE RETURN OF INC OME BEFORE THE ALLEGED DATE OF DACOITY AS SUCH ITS NOT A GROUND F OR THE ASSESSEE TO TAKE SHELTER FOR HIS NOT FILING THE RETURN OF INCOM E BEFORE DUE DATE. HE VEHEMENTLY RELIED UPON THE ORDERS OF THE AUTHORI TIES BELOW. 5. SO FAR AS THE FACTS ARE CONCERNED, THOSE ARE BOR NE OUT OF RECORD. THIS IS A CASE OF THE A.Y. 1997-98. ACCOR DING TO THE ORIGINAL ASSESSMENT ORDER VIDE LAST PARAGRAPH THE O BSERVATIONS OF THE AR ARE AS FOLLOWS: ASSESSEE HAS FAILED TO FURNISH HIS RETURN OF INCOM E U/S 139(1) OF THE INCOME TAX ACT, 1961 WHICH WAS DUE ON 31.10.1997 AND THE RETURN OF INCOME HAS BEEN FILED ON 23.04.2004 IN PURSUANCE OF NOTICE U/S 148, HENCE, PENALTY PROCEEDINGS UNDER EXPLANATION 3 TO SECTION 271(1)(C) HAVE BEEN INITIATED AS WHOLE OF THE INCOME ASSESSED IS HIS CONCEALED INCOME. 6. THE ALLEGED DACOIT TOOK PLACE IN THE BUSINESS PR EMISES OF THE ASSESSEE ON 06.10.1997 I.E. BEFORE 31.10.1997 AS RE FERRED TO IN THE ORDER OF THE AO. NOTICE U/S 148 OF THE ACT WAS ISS UED ON 5 ITA NO. 3275/DEL/2009 22.03.2004, RETURN WAS FILED ON 23.04.2004 AND THE ASSESSMENT WAS COMPLETED BY 24.03.2005. IN THIS BACKDROP OF T HE FACTS AND CONTENTIONS RAISED ON EITHER SIDE THE QUESTION THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE FAILURE OF THE ASSESSE E TO FURNISH THE RETURN OF INCOME BEFORE THE DUE DATE COULD BE DEEME D TO BE CONCEALMENT OF PARTICULARS OF INCOME. 7. INSOFAR AS THE ARGUMENT OF THE LD. AR THAT THE P OWERS OF THE TRIBUNAL IN DEALING WITH THE APPEALS ARE EXPRESSED IN THE WIDEST POSSIBLE TERMS AND IT HAS JURISDICTION TO EXAMINE T HE QUESTION OF LAW WHICH ARISES FROM THE FACTS AVAILABLE BEFORE LO WER AUTHORITIES AND WHICH HAS A BEARING ON THE LIABILITY OF THE ASS ESSEE, EVEN IF SUCH QUESTION HAS NOT BEEN RAISED BEFORE THE LOWER AUTHORITIES, IS CONCERNED, HE IS FORTIFIED IN HIS SUBMISSION BY TH E JUDGEMENTS OF THE APEX COURT IN IN JUTE CORPORATION OF INDIA LIMI TED VS. CIT 187 ITR 688 NATIONAL THERMAL POWER CORPORATION LTD. VS. CIT (1998) 229 ITR 383 (SC). 8. ON THE ASPECT OF APPLICABILITY OF EXPLANATION 3 TO SECTION 271(1), IT IS THE SUBMISSION OF THE LD. COUNSEL THA T THE PROVISION OF LAW AS IT STOOD ON THE RELEVANT DATE FOR THE AY 199 7-98 WAS 6 ITA NO. 3275/DEL/2009 DISCUSSED BY THE HONBLE GUJARAT HIGH COURT IN CHHA GANLAL SUTERIYA VS. INCOME TAX OFFICER & ANR (2011) 337 IT R 0350, WHEREIN WHILE REFERRING TO THE SECTION AS IT STOOD THEN WAS, IT WAS HELD AS FOLLOWS: 9. IN THIS REGARD, IT MAY BE GERMANE TO REFER TO S. 27 1 OF THE ACT AS IT STOOD AT THE RELEVANT TIME, WHICH INS OFAR AS THE SAME IS RELEVANT FOR THE PURPOSE OF THE PRESENT PETITION, READS AS UNDER : '271. (1) IF THE AO OR THE DY. CIT(A) OR THE CIT(A) IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFI ED THAT ANY PERSON (A) (..........) (B) HAS FAILED TO COMPLY WITH A NOTICE UNDER SUB-S. ( 1) OF S. 142 OR SUB-S. (2) OF S. 143 OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER SUB-S. (2A) OF S. 142, OR (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, (I) (..........) (II) IN THE CASES REFERRED TO IN CL. (B), IN ADDITIO N TO ANY TAX PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN ONE THOUSAND RUPEES BUT WHICH MAY EXTEND TO TWENTY-FIVE THOUSAND RUPEES FOR EACH SUCH FAILURE; (III) IN THE CASES REFERRED TO IN CL. (C), IN ADDITI ON TO ANY TAX PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF 7 ITA NO. 3275/DEL/2009 PARTICULARS OF HIS INCOME OR THE FURNISHING OF INAC CURATE PARTICULARS OF SUCH INCOME : EXPLANATION. 1..... EXPLANATION 2...... EXPLANATION 3.WHERE ANY PERSON WHO HAS NOT PREVIOU SLY BEEN ASSESSED UNDER THIS ACT, FAILS, WITHOUT REASONAB LE CAUSE, TO FURNISH WITHIN THE PERIOD SPECIFIED IN SUB- S. (1) OF S. 153, A RETURN OF HIS INCOME WHICH HE IS REQUIRED TO FURNISH UNDER S. 139 IN RESPECT OF ANY ASSESSMENT Y EAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL 1989, A ND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BE EN ISSUED TO HIM UNDER CL. (I) OF SUB-S. (1) OF S. 142 OR S. 148 AND THE AO OR THE DY. CIT(A) OR THE CIT(A) IS SATIS FIED THAT IN RESPECT OF SUCH ASSESSMENT YEAR SUCH PERSON HAS TAXABLE INCOME, THEN, SUCH PERSON SHALL, FOR THE PU RPOSES OF CL. (C) OF THIS SUB-SECTION, BE DEEMED TO HAVE CON CEALED THE PARTICULARS OF HIS INCOME IN RESPECT OF SUCH AS SESSMENT YEAR, NOTWITHSTANDING THAT SUCH PERSON FURNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY OF THE P ERIOD AFORESAID IN PURSUANCE OF A NOTICE UNDER S. 148.' 10. A PLAIN READING OF S. 271(1) OF THE ACT SHOWS THAT IF THE AO OR ANY OF THE OFFICERS SPECIFIED UNDER THE SAID S UB- SECTION, IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT IS SATISFIED THAT ANY PERSON HAS CONCEALED PARTICULARS O F HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF HIS IN COME, HE MAY DIRECT THAT SUCH PERSON SHALL PAY PENALTY IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. IN THE F ACTS OF THE PRESENT CASE, THE FAILURE ON THE PART OF THE PE TITIONER IS NON-FURNISHING OF RETURN OF INCOME FOR THE ASSESSME NT YEAR UNDER CONSIDERATION. AS TO WHETHER FAILURE TO FURNIS H RETURN OF INCOME PER SE AMOUNTS TO CONCEALMENT OF INCOME, THE LAW ALL ALONG HAS BEEN THAT MERE FAILURE TO FILE A RETURN OF INCOME IS NOT TANTAMOUNT TO CONCEALMENT OF PARTICUL ARS OF INCOME. IN S. NARAYANAPPA & BROS. VS. CIT (1961) 41 ITR 125 (MYS) THE QUESTION AROSE AS TO WHETHER THE ITO COULD LEVY A PENALTY UNDER S. 28(1)(B) OF THE ACT WHERE TH E ASSESSEE FAILED TO SUBMIT A RETURN IN RESPONSE TO A NOTICE UNDER S. 22(2) AND FURTHER FAILED TO PRODUCE HIS BOOKS OF 8 ITA NO. 3275/DEL/2009 ACCOUNT WHEN CALLED UPON TO DO SO UNDER S. 22(4). THA T WAS A CASE WHERE THERE WAS A TOTAL FAILURE TO SUBMI T A RETURN. THE MYSORE HIGH COURT HELD THAT FOR LEVY OF MAXIMUM PENALTY UNDER S. 28(1)(B) OF THE IT ACT, 192 2, THE INDISPENSABLE CONDITION PRECEDENT IS THAT THE ASSES SEE SHOULD HAVE FURNISHED HIS RETURN. THE MADRAS HIGH COU RT IN THE CASE OF S. SANTHOSA NADAR VS. FIRST ADDL. ITO & ANR. (1962) 46 ITR 411 (MAD) WHILE DEALING WITH A CASE W HERE A VOLUNTARY RETURN WAS FILED AFTER A PERIOD OF FOUR Y EARS FROM THE CLOSE OF THE ASSESSMENT YEAR AND AS SUCH, W AS NOT A VALID RETURN, HELD THAT SUCH A CASE SHOULD BE REGARDED AS IF NO RETURN HAD BEEN FILED AT ALL. THE CO URT HELD THAT IT COULD NOT BE SAID IN SUCH A CASE THAT THERE HAD BEEN A CONCEALMENT OF THE PARTICULARS OF INCOME OR DELIBERATE FURNISHING OF INACCURATE PARTICULARS AND S. 28(1)(C) OF THE INDIAN IT ACT, 1922, WOULD NOT BE AP PLICABLE, AND THAT THE CASE WOULD COME ONLY WITHIN THE SCOPE O F S. 28(1)(A) OF THE SAID ACT. THE ALLAHABAD HIGH COURT, IN THE CASE OF CIT VS. U.P. STATE HANDLOOM CORPORATION (200 9) 310 ITR 54 (ALL) HELD THAT MERE FAILURE TO FILE A RE TURN OF INCOME DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR PARTICULARS OF INCOME. 11. THUS, THE LEGAL POSITION THAT EMERGES IS THAT MERE FAILURE TO FURNISH A RETURN OF INCOME DOES NOT TANTA MOUNT TO CONCEALMENT UNDER S. 271(1)(C) OF THE ACT. IN THE CIRCUMSTANCES, THE CONTENTION RAISED ON BEHALF OF T HE REVENUE THAT NON-FILING OF THE RETURN OF INCOME PER SE AMOUNTS TO CONCEALMENT WITHIN THE MEANING OF S. 271 (1)(C) OF THE ACT, BEING CONTRARY TO THE SETTLED LEGAL POSI TION, DOES NOT MERIT ACCEPTANCE. 12. BUT THE INTRODUCTION OF EXPLN. 3 TO S. 271(1) W.E.F . 1ST APRIL, 1976 HAS CHANGED THE LAW ON THE POINT IN CERT AIN CASES. EXPLANATION 3 PROVIDES THAT IF A PERSON, WHO HAS NOT HITHERTO BEEN ASSESSED TO TAX UNDER THE IT ACT, 1961 DOES NOT FILE A RETURN OF INCOME FOR AN ASSESSMENT Y EAR VOLUNTARILY WITHIN THE NORMAL PERIOD OF LIMITATION A ND NO NOTICE UNDER S. 142(1) OR 148 IS ISSUED TO HIM TILL THE EXPIRY OF THE SAID PERIOD, HE WILL BE TREATED TO HAVE CONCEA LED HIS INCOME AND PENALTY WILL BE LEVIABLE ON HIM ACCORDING LY IF HE IS LATER FOUND TO HAVE HAD TAXABLE INCOME IN THAT YEAR. 9 ITA NO. 3275/DEL/2009 THUS, FOR THE PURPOSE OF FALLING WITHIN THE PURVIEW OF EXPLN. 3, FIRSTLY, A PERSON SHOULD NOT HAVE BEEN PR EVIOUSLY ASSESSED (THAT IS, A NEW ASSESSEE); SECONDLY, HE SHOU LD HAVE FAILED WITHOUT REASONABLE CAUSE, TO FURNISH RET URN OF INCOME FOR ASST. YR. 1989-90 OR ANY YEAR SUBSEQUENT THERETO WITHIN TWO YEARS FROM THE END OF THE ASSESSM ENT YEAR CONCERNED; THIRDLY, THAT NO NOTICE SHOULD HAVE BE EN ISSUED TO HIM UNDER S. 142(1) OR S. 148 OF THE ACT T ILL THE EXPIRY OF THE TWO YEAR PERIOD; AND LASTLY, THE CONCE RNED OFFICER IS SATISFIED THAT IN RESPECT OF SUCH ASSESS MENT YEAR, SUCH PERSON HAD TAXABLE INCOME. IN SUCH CASES, EXPL N. 3 PROVIDES THAT SUCH PERSON SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME WITHIN THE M EANING OF CL. (C) OF S. 271(1) OF THE ACT FOR SUCH ASSESSM ENT YEAR. IN SUCH AN EVENTUALITY, EVEN IF THE PERSON CONCERNED FI LES A RETURN AFTER THE EXPIRY OF THE SAID PERIOD OF TWO YEA RS IN PURSUANCE OF A NOTICE UNDER S. 148 OF THE ACT, THE DEEMING PROVISION OF EXPLN. 3 SHALL STILL HAVE APPLICATION. 13. THOUGH IT HAS BEEN CONTENDED ON BEHALF OF THE RESPONDENTS THAT IN THE PRESENT CASE EXPLN. 3 HAS N OT BEEN APPLIED; AS NOTICED EARLIER MERE NON-FURNISHING OF A RETURN PER SE IS NOT TANTAMOUNT TO CONCEALMENT WITHIN THE MEANING OF S. 271(1)(C) OF THE ACT. THE ONLY EVENTU ALITY UNDER WHICH NON-FURNISHING OF RETURN OF INCOME AMOUN TS TO CONCEALMENT IS AS PROVIDED UNDER EXPLN. 3 TO SUB-S. (1) OF S. 271 OF THE ACT. HENCE, UNLESS EXPLN. 3 OF S. 271 (1) OF THE ACT IS ATTRACTED, THERE CAN BE NO CONCEALMENT AS ENV ISAGED UNDER S. 271(1)(C) OF THE ACT. IN THE CIRCUMSTANCES, IT IS REQUIRED TO BE EXAMINED AS TO WHETHER THE PROVISIONS OF EXPLN. 3 TO S. 271(1) COULD HAVE BEEN INVOKED IN THE PRESENT CASE. FOR THE PURPOSE OF INVOKING THE PROVI SIONS OF EXPLN. 3 TO S. 271(1) OF THE ACT, THE CONDITIONS EN UMERATED HEREINBEFORE ARE REQUIRED TO BE SATISFIED. IF ANY OF THE SAID CONDITIONS IS NOT SATISFIED, THE PROVISIONS OF EXPLN . 3 TO S. 271(1) OF THE ACT WOULD NOT BE APPLICABLE. 14. IN THE PRESENT CASE ADMITTEDLY THE PETITIONER HAD NOT BEEN PREVIOUSLY ASSESSED UNDER THE PROVISIONS OF THE ACT, HENCE, THE FIRST REQUIREMENT OF EXPLN. 3 IS DULY SA TISFIED. THE PETITIONER HAD NOT FILED HIS RETURN OF INCOME WIT HIN THE PERIOD SPECIFIED UNDER SUB-S. (1) OF S. 153 OF THE ACT AND AS 10 ITA NO. 3275/DEL/2009 SUCH, THE SECOND CONDITION IS ALSO SATISFIED. HOWEVER , AS NOTED EARLIER, IN THE PRESENT CASE A NOTICE HAD BEEN ISSUED TO THE PETITIONER UNDER S. 148 OF THE ACT ON 10TH MA RCH, 1997 WHICH WAS WITHIN THE PERIOD SPECIFIED UNDER S. 153(1) OF THE ACT. IN THE CIRCUMSTANCES, THE THIRD CONDITION NAMELY, THAT NO NOTICE UNDER S. 142(1) OR S. 148 OF THE ACT SHOULD HAVE BEEN ISSUED WITHIN THE PERIOD SPECIFIED UND ER SUB-S. (1) OF S. 153 OF THE ACT IS CLEARLY NOT SATI SFIED. AS DISCUSSED EARLIER, THE CONDITIONS FOR APPLICABILITY OF EXPLN. 3 TO S. 271(1) ARE CUMULATIVE AND EACH OF THE CONDIT IONS HAS TO BE ESTABLISHED FOR THE PURPOSE OF INVOKING TH E SAID PROVISION. IN THE PRESENT CASE, ALL THE CONDITIONS ARE NOT CUMULATIVELY SATISFIED. THE FAILURE ON THE PART OF T HE PETITIONER TO FURNISH RETURN OF INCOME WITHIN THE S PECIFIED PERIOD, THEREFORE, CANNOT BE DEEMED TO BE CONCEALMEN T WITHIN THE MEANING OF THE EXPLN. 3 TO S. 271(1)(C) OF THE ACT. 15. IN THE LIGHT OF THE AFORESAID, IT IS APPARENT THAT THE CASE OF THE PETITIONER DOES NOT FALL WITHIN THE AMBI T OF EXPLN. 3 TO S. 271(1) OF THE ACT AND AS SUCH, NO PE NALTY COULD BE LEVIED ON THE PETITIONER UNDER S. 271(1)(C) OF THE ACT FOR CONCEALMENT OF PARTICULARS OF HIS INCOME ON THE GROUND THAT THE PETITIONER HAD FAILED TO FURNISH RETUR N OF INCOME FOR THE YEAR UNDER CONSIDERATION. THE IMPUGN ED ORDER, THEREFORE, BEING CONTRARY TO THE PROVISIONS OF THE ACT, CANNOT BE SUSTAINED. 9. IN THE PRESENT CASE, ADMITTEDLY THE PETITIONER H AD BEEN PREVIOUSLY ASSESSED UNDER THE PROVISIONS OF THE ACT , HENCE, THE FIRST REQUIREMENT OF EXPLN. 3 IS NOT DULY SATISFIED . ON A CAREFUL READING OF SECTION 271(1) EXPLANATION 3 AND THE ABO VE DECISION, WE ARE OF THE CONSIDERED OPINION THAT SINCE THE ASSESS EE WAS NOT A PERSON WHO HAS NOT PREVIOUSLY BEEN ASSESSED UNDER T HIS ACT EXPLANATION 3 OF SECTION 271(1) IS NOT APPLICABLE T O HIM AND HE 11 ITA NO. 3275/DEL/2009 CANNOT BE DEEMED IT TO HAVE CONCEALED THE PARTICULA RS OF HIS INCOME. WE, THEREFORE, HOLD THAT THE PENALTY PROCE EDINGS ARE WITHOUT JURISDICTION AND ON CONSEQUENTIALLY THEY CA NNOT BE SUSTAINED. THE ORDERS OF THE AUTHORITIES BELOW ARE QUASHED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.04.2017 SD/- SD/- (S.V. MEHROTRA) (K. NARSIMHA CHARRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21.04.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 12 ITA NO. 3275/DEL/2009 DRAFT DICTATED ON 20.04.2017 DRAFT PLACED BEFORE AUTHOR DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 21.04.2017 KEPT FOR PRONOUNCEMENT ON 21.04.2017 FILE SENT TO THE BENCH CLERK 21.04.2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.