Smt. Manju Sharma, New Delhi V. Addl.CIT, Noida

ITA 3654/DEL/2014

• Counselvise Citation: 365420114 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 07-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 19-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Section: 143(3)

Judgement Text

ITA NO. 3654/DEL/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - 2 , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 3654 /DEL/201 4 A.Y. : 2006 - 07 SMT. MANJU SHARMA, C /O DEV RAJ SHARMA, ADVOCATE, TA - 121, 2 ND FLOOR, TUGHLAKABAD EXTN., MAIN OKHLA ROAD, NEW DELHI - 110 019 (PAN: ALRPS6501N) VS. ADDL. COMMISSIONER OF INCOME TAX, NOIDA RANGE, NOIDA (APPELLANT ) (RESPONDENT ) ASSESSEE BY : SH. DEV RAJ SHARMA, ADV. DEPARTMENT BY : SH. ROBIN RAWAL, SR. DR DATE OF HEARING: 07 - 7 - 201 5 DATE OF ORDER : 20 - 7 - 201 5 ORDER PER H.S. SIDHU, J M THIS APPEAL BY THE ASSESSEE IS DIRECTED A G AINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , NOIDA DATED 7 . 3 .201 4 PERTAINING TO ASSESSMENT YEAR 2006 - 07 ON THE FOLLOWING GROUNDS: - 1. THAT THE LD. CIT(A), NOIDA HAS ERRED IN LAW AND ON FACTS IN DISMISSING THE APPEAL OF THE APPELLANT VIDE HIS ORDER DATED 3.3.2014 CONFIRMING THE PENALTY LEVIED OF RS. 285,840/ - U/S. 271(1)(C) ON INCORRECT BASIS. 2. THE CIT( A), NOIDA HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY LEVIED OF RS. 285,840/ - U/S. ITA NO. 3654/DEL/2014 2 271(1)(C) WITHOUT PROPER APPRECIATION OF THE PROVISIONS OF THE ACT AND THE SUBMISSIONS FORWARDED BY THE APPELLANT. 3. THE ORDER PASSED BY THE CIT(A), NOIDA IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 4. THE APPELLANT CRAVES YOUR KIND ATTENTION TO ADD, AMEND OR ALTER ANY OR MORE GROUNDS OF APPEAL BEFORE HEARING. FOR THE FOREGOING IT IS MOST RESPECTFULLY PRAYED YOUR GOODSELF MAY KINDLY ALLOW THE APPEAL IN THE INTEREST OF JUSTICE, EQUITY AND GOOD CONSCIENCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONTRACT. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2006 - 07 ON 30.10.2007 DECLARING INCOME OF RS. 6,45,884/ - . THE CASE WAS SELECTED FOR SCRUTI NY AND ASSESSMENT WAS COMPLETED VIDE ORDER DATED 30.12.2008 U/S. 143(3) OF THE I.T. ACT ON TOTAL INCOME OF RS. 14,95,080/ - BY MAKING AN ADDITION OF RS. 8,49,200/ - TO THE RETURN INCOME OF THE ASSESSEE. BASED ON ABOVE ADDITIONS THE AO INITIATED PENALTY PR OCEEDINGS U/S. 271(1)(C) AND AFTER DUE CONSIDERATION OF ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE THE AO IMPOSED PENALTY OF RS. 2,85,840/ - U/S. 271(1)(C) VIDE HIS ORDER DATED 14.5.2009. 3 . AGAINST THE ABOVE PENALTY ORDER DATED 14 . 5 . 20 09 PASSED BY THE AS SESSING OFFICER, ASSESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 7 . 4 .201 4 DISMISSED THE APPEAL OF THE ASSESSEE. ITA NO. 3654/DEL/2014 3 4 . AGAINST THE ABOVE ORDER OF THE LD. CIT(A) DATED 7 . 3 .201 4 , ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5 . LD. COUNSEL OF THE ASSESSEE IN ORDER TO SUPPORT HIS CONTENTION REITERATED THE GROUNDS OF APPEAL . HE SUBMITTED THAT IT IS WELL SETTLED LAW THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT AS HELD BY THE HON BLE SUPREME COURT IN THE CASE OF ANATHARAM VEERASINGHAIAH & CO. VS. CIT 123 ITR 457. HE FURTHER SUBMITTED THAT CONDITION FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT IS FORMATION OF OPINION AND RECORDING OF SATISFACTION BEFORE CONCLUSION OF THE PROCEEDINGS AND NOT AT THE TIME OF ISSUANCE OF NOTICE OR INTIMATION OF PENALTY PROCEEDINGS. WHEREAS IN THE PRESENT C ASE, THE ASSESSING OFFICER DID NOT RECORD HIS SATISFACTION FOR INITIATING PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER. FOR THIS PROPOSITION, HE PLACED RELIANCE UPON THE CASES OF DILIP N. SHROFF VIS JCIT, MUMBAI & ANR, 291 ITR (SC) 519; 291 ITR 340; 212 C TR 250; 277 ITR 337. LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT THE PRESENT CASE IS NOT CASE OF CONCEALMENT OF INCOME. AS REGARDS THE FURNISHING OF INACCURATE PARTICULARS, NO INFORMATION GIVEN IN THE RETURN IS WAS FOUND TO BE INCORRECT OR INACCURAT E. IN THIS REGARD, HE PLACED R ELIANCE ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE CIT VS. RELIANCE PETRO P RODUCTS LTD. IN VIEW OF ABOVE, H E PRAYED THAT THE APPEAL OF THE ASSESSEE MAY KINDLY BE ALLOWED IN THE INTEREST OF JUSTICE. 6. LD. DEPARTM ENTAL REPRESENTATIVE CONTROVERTED THE ARGUMENTS ADVANCED BY THE LD. COUNSEL OF THE ASSESSEE AND HE RELIED UPON THE ORDER S OF THE REVENUE AUTHORITIES. 7. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES . I FIND THAT TH E WORDS 'FURNISHING INACCURATE ITA NO. 3654/DEL/2014 4 PARTICULARS OF INCOME' REFER TO THE PARTICULARS WHICH HAVE BEEN FURNISHED BY AN ASSESSEE OF HIS INCOME AND THE REQUIREMENTS OF CONCEALMENT OF INCOME IS THAT INCOME HAS NOT BEEN DECLARED AT ALL OR IS NOT EVEN RECO RDED IN THE BOOKS OF ACCOUNTS. THE TWO PHRASES ARE ALTOGETHER DIFFERENT IN MEANING AND SENSE AND THEREFORE THE PENALTY IMPOSED IN THE PRESENT CASE DESERVED TO BE DELETED. IN THIS REGARD, THE RELIANCE PLACED IN THE CASE OF CIT VS. LAKHDHIR LALJI, 85 ITR 7 7 AND SAJIV VOHRA V / S INCOME TAX. OFFICER, ITA NO.228 - 234 / 2014 IS RELEVANT. I ALSO FIND THAT THE RE LIANCE OF LD. COUNSEL OF THE ASSESSEE ALSO SUPPORTS THE CASE OF THE ASSESSEE IN THE MATTER OF NEW SORATHIA ENGINEERING CO. V / S CIT(2006) 282 ITR 642 (GU J) WHEREIN IT WAS HELD THAT THE ORDER OF THE PENALTY MUST STATE WHETHER IT IS LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS BY THE ASSESSEE. IN ABSENCE OF SUCH CLEAR CUT FINDING, THE ORDER OF PENALTY COULD NOT BE SUSTAINED AND A CCORDINGLY IT WAS HELD INVALID . I FURTHER FIND THAT AT THE T HRESHOLD CONDITION FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT IS FORMATION OF OPINION AND RECORDING OF SATISFACTION BEFORE CONCLUSION OF THE PROCEEDINGS AND NOT AT THE TIME OF ISSUANCE OF NOTICE OR INTIMATION OF PENALTY PROCEEDINGS. WHEREAS IN THE PRESENT CASE, THE ASSESSING AUTHORITY DID NOT RECORD HIS SATISFACTION FOR INITIATING PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER. IN THIS REGARD, I PLACE R ELIANCE IN THE CASE OF DILIP N. SHROFF VI S JCIT, MUMBAI & ANR, 291 ITR (SC) 519; 291 ITR 340; 212 CTR 250; 277 ITR 337. AS REGARDS THE FURNISHING OF INACCURATE PARTICULARS, NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. I FURTHER FIND THAT SECTION 271(1)(C) POSTULATE S IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. ON THE FACTS AND CIRCUMSTANCES OF THIS ITA NO. 3654/DEL/2014 5 CASE THE ASSESSEE S CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF PENALTY. 7.1 IN THIS REGARD , I FIND THAT HON BLE APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010 IS SQUARELY APPLICABLE IN THE PRESENT CASE OF THE ASSESSEE WHEREIN IT WAS HELD AS UNDER: - 'A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITUR E, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER S. 271(1)(C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCE PTED BY AO FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER S. 271 (1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE.' ITA NO. 3654/DEL/2014 6 8 . IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENT S , I FIND THAT THE LEVY OF PENALTY IN THIS CASE IS NOT JUSTIFIED. ACCORDINGLY, I QUASH THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY OF RS. 2,85,840/ - PASSED U/S. 271(1)(C) OF THE I.T. ACT, 1961 BY THE AO AND CONFIRMED BY THE LD. CIT(A). 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 / 7 /20 1 5 . SD/ - [H.S. SIDHU] JUDICIAL MEMBER SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 3654/DEL/2014 7