ACIT, New Delhi V. M/s Krishko International, Punjab

ITA 3575/DEL/2011

• Counselvise Citation: 357520114 RSA 2011
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 1992-1993
• Appeal Filed On: 18-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: P N SHASTI ARS
• Keywords: Peak credit
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI D BENC H BEFORE SHRI C.L. SETHI, JM & SHRI A.N. PAHUJA, AM ITA NO.3575/DEL/2011 ITA NO.3575/DEL/2011 ITA NO.3575/DEL/2011 ITA NO.3575/DEL/2011 ASSESSMENT YEAR:1992-93 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE- 29(1),ROOM NO. 107,DRUM SHAPE BUILDING, IP ESTATE, NEW DELHI V/S V/S V/S V/S. M/S KRISHKO INTERNATIONAL C/O SH. KRISHAN KUMAR GUPTA, H.NO.1, STREET NO.2, FEROZPUR CANTT., PUNJAB [PAN:AAHFK 2469 E] [PAN:AAHFK 2469 E] [PAN:AAHFK 2469 E] [PAN:AAHFK 2469 E] (APPELLANT) .. (RESPONDENT) ASSESSEE BY S/SHRI M.P. RASTOGI & P.N. SHASTI, ARS REVENUE BY SH.SALIL MISHRA, DR DATE OF HEARING 20-09-2011 DATE OF PRONOUNCEMENT 20-09-2011 O R D E R O R D E R O R D E R O R D E R A.N.PAHUJA: A.N.PAHUJA: A.N.PAHUJA: A.N.PAHUJA:- -- -THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 1 2 TH MAY,2011 OF THE LEARNED CIT(A)-XXV, NEW DELHI, RAISE S THE FOLLOWING GROUNDS:- 1 .ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE PENALTY IMPOSED U/S 271(1)(C) AMOUNTING TO `6,58,613/- IGNORING THE FACTS THAT THE DEPARTMENT I S IN APPEAL BEFORE THE HONBLE HIGH COURT OF DELHI AN D, THEREFORE, THE ORDER PASSED BY THE HONBLE TRIBUNAL I S NOT FINAL. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE CANCELLING OF ASSESSMENT ORDER BARELY ON TECHNICAL GROUNDS AUTOMATICALLY MAKES THE PENALTY ORDER INEFFECTIVE. 3. THAT THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD, ALTER OR FORGO ANY ITA NO. 3575/DEL./2011 2 GROUNDS AT THE TIME BEFORE OR DURING THE OF HEARING OF THIS APPEAL. 2. AT THE OUTSET, CONSIDERING THE NATURE OF ISSUE, THE BENCH REJECTED THE REQUEST FOR ADJOURNMENT ON BEHALF OF THE REVENUE AND PROCEEDED TO HEAR THE APPEAL. 3. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT OR IGINAL ASSESSMENT IN THIS CASE WAS COMPLETED ON 27.03.1995 U/S 143 (3) OF THE INCOME-TAX ACT,1961[HEREINAFTER REFERRED TO AS T HE ACT], DETERMINING INCOME OF `29,89,079/- IN PURSUANCE TO R ETURN DECLARING INCOME OF `21,387/- FILED ON 23 RD OCTOBER, 1992 BY THE ASSESSEE. ON APPEAL, THE LEARNED CIT(A) DISMISSED THE APPEAL. ON F URTHER APPEAL, THE ITAT VIDE THEIR ORDER DATED 21ST SEPTEMBER, 2001 IN I.T.A. NO.2727/D/1996 DIRECTED THE ASSESSING OFFICER (AO IN SHORT) TO COMPLETE THE ASSESSMENT DE NOVO. IN PURSUANCE TO THE SAI D DIRECTIONS OF THE ITAT, THE ASSESSMENT WAS AGAIN COMPLETED ON 29.03 .1995 U/S 143(3)/254 OF THE ACT, DETERMINING INCOME OF `29,89 ,073/-,.INTER ALIA, AN AMOUNT OF `30,26,842/- WAS ADDED ON ACCOUNT OF UN EXPLAINED INVESTMENT, REPRESENTING PEAK CREDIT IN THE BANK ACCO UNT OF THE ASSESSEE BESIDE AN AMOUNT OF `6,81,719/- ON ACCOUNT OF U NEXPLAINED INVESTMENT IN STOCK OF BRASS SCRAP AND CONSEQUENTLY, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. IT MAY BE WORTH MENTIONING THAT IN THIS CASE A SEARCH WAS CONDUCTED BY THE ECONOMIC INTELLIGENCE BUREAU IN THE BUSINESS PREMISES OF THE ASSESSEE AND RESIDENTIAL PREMISES OF THE PARTNER, WHEREIN A NUMBER OF DOCUMENTS AND BOOKS OF ACCOUNTS WERE SEIZED. 4. ON APPEAL, THE LEARNED CIT(A) UPHELD THE ADDITIO NS MADE BY THE AO. 5. ON RECEIPT OF ORDER OF THE CIT(A), THE AO ISSUED A SHOW CAUSE NOTICE DATED 5 TH JUNE, 2008 BEFORE LEVYING THE PENALTY. AFTER ITA NO. 3575/DEL./2011 3 CONSIDERING THE REPLY OF THE ASSESSEE, THE AO IMPOSED A P ENALTY OF `6,58,613/- @100% OF THE TAX SOUGHT TO BE EVADED ON THE INCOME OF `37,08,560/- ON THE GROUND THAT THE ASSESSEE DELIBERATE LY CONCEALED PARTICULARS OF THEIR INCOME. 6. ON APPEAL, THE LEARNED CIT(A) CANCELLED THE PENA LTY ON THE GROUND THAT THE ITAT VIDE THEIR ORDER DATED 9 TH OCTOBER, 2009 IN I.T.A. NO.420/DEL./2008 CANCELLED THE FRESH ASSESSMENT FRAMED B Y THE AO VIDE ORDER DATED 29 TH MARCH, 2005. 7. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF LEARNED CIT(A).WHILE INVITING OUR ATTENT ION TO GROUNDS OF APPEAL, THE LEARNED DR SUPPORTED THE LEVY OF PENALTY BY THE AO. TO A QUERY BY THE BENCH, THE LD. DR ADMITTED THAT ASSESSMENT ORDER DATED 29 TH MARCH, 2005 HAS BEEN QUASHED BY THE ITAT VIDE THEIR ORDER DATED 9 TH OCTOBER, 2009 AND THE REVENUE IS IN APPEAL BEFORE T HE HONBLE HIGH COURT. ON THE OTHER HAND, LEARNED AR SUPPORTED THE F INDINGS OF LEARNED CIT(A) IN THE LIGHT OF AFORESAID DECISION DATED 9 TH OCTOBER, 2009 OF THE ITAT IN THE QUANTUM APPEAL. 8. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE FACTS OF THE CASE AS ALSO THE AFORESAID ORDER OF THE ITAT IN QUA NTUM APPEAL. WE FIND THAT THE ITAT VIDE THEIR SAID ORDER DATED 9 TH OCTOBER, 2009 CANCELLED THE FRESH ASSESSMENT FRAMED BY THE AO IN PURSUA NCE TO DIRECTIONS OF THE ITAT IN THEIR ORDER DATED 21ST SEPT EMBER, 2001 IN I.T.A. NO.2727/DEL./1996 IN THE FOLLOWING TERMS:- WE HAVE CAREFULLY CONSIDERED THE RELEVANT FACTS, A RGUMENTS ADVANCED AND VARIOUS CASE LAWS CITED. THERE WAS NO DISPUTE TO THE FACT THAT THE ORDER OF TRIBUNAL IN ITA NO.2727/DEL/1996 DATED 21. 9.2001 SETTING ASIDE THE MATTER TO THE ASSESSING OFFICER WAS PASSE D ON 21.9.200I. AS PER THE RECORD MAINTAINED BY THE TRIBUNAL AND AS DU LY CERTIFIED BY THE ASSISTANT REGISTRAR BY HIS LETTER DATED 131H APRIL, 2007, THE ORDERS WERE SENT AND WERE RECEIVED ON 16.10.2001. THE NOTI NG OF THE INSPECTOR IS THAT 4 ORDERS INCLUDING THE ORDER OF T RIBUNAL IN ITA NO.2727/DEI/96 DATED 21.9.2001 WAS NOT RECEIVED. H OWEVER, THE SAME WAS DULY SENT. THE PERSON RECEIVING HAS NO BUS INESS TO REFUSE ITA NO. 3575/DEL./2011 4 THE RECEIPT OF ANY ORDER. IN SUCH A SITUATION, IT C AN BE HELD THAT THE PERSON DEPUTED FOR RECEIPT OF ORDER HAS REFUSED SER VICE. IN SUCH A CASE AS HELD BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF HAR PRASAD & OTHERS (SUPRA), IT CAN BE HELD THAT REFUSA L TO RECEIVE WILL AMOUNT TO PRESUMPTIVE PROOF OF SERVICE. AS PER THE ACKNOWLEDGMENT GIVEN BY THE DEPARTMENTAL OFFICIAL, THE ORDER WAS S ERVED ON 16. 10.2001. THE ORDER WAS A COMMON ORDER ALONG WITH 2 OTHER APPEALS IN ITA NOS. 2723/DEI/96 AND 2724/DEL/96. NO DISPUTE IS RAISED ABOUT THE SERVICE OF ORDER IN THE CASE OF SHRI KRISHAN KUMAR GUPTA AND SMT. PUSHPA GUPTA IN ITA NOS.2723 & SERVED ON THE APPELL ANT AS THEY HAD COME BACK UNSERVED ON THE ALLEGED REFUSAL BY THE AP PELLANT TO ACCEPT THEM', AGAIN, IN V. RAJA KUMARI VS. P. SUBBARAMA NA IDU, AIR 2005 SC 109 IT HAS BEEN HELD THAT THE PRINCIPLE INCORPORATE D IN SECTION 27 OF THE GENERAL CLAUSES ACT CAN PROFITABLY BE IMPORTED IN A CASE WHERE THE SENDER HAS DISPATCHED THE NOTICE BY POST WITH THE C ORRECT ADDRESS WRITTEN ON IT. THEN IT CAN BE DEEMED TO HAVE BEEN S ERVED ON THE SENDEE UNLESS HE PROVES THAT IT IS NOT REALLY SERVE D AND THAT HE WAS RESPONSIBLE FOR SUCH NON-SERVICE. ON THE BASIS OF ABOVE DECISIONS, THE LEARNED DR SUB MITTED THAT IN THE INSTANT CASE UNDER CONSIDERATION, THERE IS NO EVIDE NCE THAT SERVICE WAS REFUSED BY THE REVENUE AND THUS THE CONTENTION OF T HE LEARNED AR THAT SERVICE WAS REFUSED BY THE DEPARTMENT HAS NO RIGHT AND DESERVES TO BE REJECTED. THERE IS NO NOTING OF THE PERSON ON RECOR D, WHO SERVED THE REMAINING 142 ORDERS ON THE DEPARTMENT AS WELL AS O F THE PERSON WHO RECEIVED THE ORDERS AS TO WHY HE IS NOT RECEIVING T HE 4 ORDERS INCLUDING THAT OF THE ASSESSEE. 8.1 SINCE THE ASSESSMENT ITSELF HAS BEEN CANCELLED, PENAL TY IMPOSED U/S 271(1)(C) OF THE ACT DOES NOT SURVIVE. HONBLE SU PREME COURT IN THE CASE OF K.C.BUILDERS VS. ACIT,265 ITR 562(S C) HELD THAT ORDINARILY, PENALTY CANNOT STAND IF THE ASSESS MENT ITSELF IS SET ASIDE. WHERE AN ORDER OF ASSESSMENT OR REASS ESSMENT ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED ON TH E ASSESSEE, HAS ITSELF BEEN FINALLY SET ASIDE OR CANC ELLED BY THE TRIBUNAL OR OTHERWISE, THE PENALTY CANNOT STAND BY ITSELF AND THE SAME IS LIABLE TO BE CANCELLED. HONBLE DELHI H IGH COURT IN THE CASE OF CIT VS. R.DALMIA,(1992)107 TAXATION 107, HELD THAT NO PENALTY SURVIVES AFTER DELETION OF ADDITION S, FORMING THE BASIS FOR THE LEVY OF PENALTY. SIMILAR VIEW WA S TAKEN IN ADDL. COMMISSIONER OF INCOME-TAX V. BADRI KASHI PRA SAD (1993] 200 ITR 206 (ALL) AND PRABHAT OIL TRADERS V. INCOME- TAX OFFICER (NO. 3) (1996) 218 ITR (A.T.) 39 (ITAT, ITA NO. 3575/DEL./2011 5 AHMEDABAD), CITY DRY FISH COMPANY V. COMMISSIONER O F INCOME-TAX (1999) 238 ITR 63 (A.P.) , CIT VS. MOHD. BUX SOKAT ALI (2004) 265 ITR 326 (RAJ)AND ACIT VS. VIP INDUSTRIES (2009) 122 TTJ 289 (MUM). 8.2 SINCE THE VERY BASIS UPON WHICH THE PENALTY HAS BEEN IMPOSED ON THE AMOUNT OF RS.37,08,560/- ADDED BY T HE AO, DOES NOT EXIST IN VIEW OF THE AFORESAID ORDER DATE D 9-10- 2009 OF THE ITAT IN QUANTUM APPEAL IN ITA NO. 420/ DEL/2008, WE ARE OF THE OPINION THAT PENALTY LEVIED IN RELATI ON TO THE SAID AMOUNT HAS RIGHTLY BEEN CANCELLED BY THE LD. CIT(A). THEREFORE, GROUND NOS. 1 & 2 IN THE APPEAL ARE DISMISSE D. 9. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.3 IN THE APPEAL, ACCORDINGLY, TH IS GROUND IS DISMISSED. 10. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT SD/- SD/- (C.L. SETHI) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 29(1), NE W DELHI. 2. M/S KRISHKO INTERNATIONAL, C/O SHRI KRISHAN KUMA R GUPTA, H.NO.1, STREET NO.2, FEROZPUR CANTT., PUNJAB. 3. ACIT (APPEALS),CIRCLE-29(1), NEW DELHI 4. THE CIT CONCERNED. 5. THE DR, ITAT,D BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY/ // /ASSTT.REGISTRAR ITAT, DELHI