Hazorilal & Sons Jewellers P. Ltd., New Delhi V. DCIT, New Delhi

ITA 4062/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6681 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 18-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST S DATED PASSED
• Keywords: Depreciation; Principle of natural justice; Bonafide belief; Wrong claim; Revised return; Reassessment proceedings
• Section: 153A; 148; 139

Judgement Text

1 ITA NOS. 4060,4061 & 4062/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C N EW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMB ER AND SMT SUCHITRA KAMBLE, JUDIC IAL MEMBER I.T.A .NO.-4060/DEL/2014 (A.Y 2007-08) I.T.A .NO.-4061/DEL/2014 (A.Y 2008-09) I.T.A .NO.-4062/DEL/2014 (A.Y 2009-10) HAZORILAL & SONS JEWELL ERS P. LTD. M-44, GREATER KAILASH-1 (MARKET) NEW DELHI AABCH0480R (APPELLANT) VS DCIT CENTRAL CIRCLE-22 NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDERS DATED 19/05/2014, PASSED BY CIT(A)-III, NEW DELHI FOR TH E ASSESSMENT YEAR 2007- 08, 2008-09 & 2009-10. 2. THE GROUNDS OF APPEAL ARE COMMON IN ALL THREE AP PEALS AS TO WHETHER THE CIT(A) WAS RIGHT IN UPHOLDING LEVY OF PENALTY ON TH E APPELLANT U/S 271(1)(C). APPELLANT BY SH. ANIL JAIN, C.A RESPONDENT BY SH. A. K. SAROHA, CIT DR DATE OF HEARING 13.02.2017 DATE OF PRONOUNCEMENT 27.02.2017 2 ITA NOS. 4060,4061 & 4062/DEL/2014 3. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS NOT F ILED APPEAL AGAINST THE QUANTUM AND PAID THE TAXES. THE LD. AR FURTHER SUB MITTED THAT IF THE MATTER WAS CONTESTED IT WOULD HAVE BEEN COVERED BY KABUL C HAWLAS JUDGMENT. 4. THE BRIEF FACTS OF THE CASE ARE AS UNDER: APPELLANT IS IN THE BUSINESS OF TRADING IN JWELLERY . ON 11/11/2000 A SEARCH OPERATION WAS CARRIED IN APPELLANT GROUP. NOTHING I NCRIMINATING WAS FOUND HOWEVER A SETTLEMENT TOOK PLACE BETWEEN APPELLANTS DIRECTORS AND DEPARTMENTAL REPRESENTATIVE AND THE SEARCH WAS CONC LUDED. ASSESSMENT UNDER CONSIDERATION WAS MADE IN PURSUANCE TO NOTICE U/S 1 53C. ASSESSMENT FOR THE CAPTIONED YEARS WERE COMPLETED ALMOST ON RETURNED I NCOME. THERE WAS NO ADDITION ON ACCOUNT OF ANY CONCEALED INCOME, OR CLA IM OF ANY BOGUS EXPENDITURE. BUT THERE WERE SMALL ADDITIONS OF PRIM A FACIE DISALLOWANCES AS STATED BELOW: PARTICULARS A.Y A.Y A.Y 2007-08 2008-09 2009-10 1. LOSS-SALE OF FIXED ASSETS 1,04,032/- - 20,50 2/- 2. DONATION - - 10,500/- 3. INTEREST ON I TAX & TDS - 2,91,212/- 462/- 4. TOTAL ADDITION IN ASST. 1,04,032/- 2,91,212/- 31,464/- 5. PENALTY LEVIED 35,018/- 98,983/- 10,694 /- 6. RETURNED INCOME 1,32,13,890/- 2,78,39,050/- 3 ,85,11,530/- 7. DISALLOWANCE % OF RI 0.78% 1.04% 0. 08% DISALLOWABLE EXPENDITURE/LOSS WERE DISCLOSED IN THE P & L A/C AS A SEPARATE ITEM. 5. THE PENALTY PROCEEDINGS WERE TAKEN OUT BY THE AS SESSING OFFICER AND 3 ITA NOS. 4060,4061 & 4062/DEL/2014 IMPOSED PENALTY FOR FURNISHING INACCURATE PARTICULA RS. AGGRIEVED BY THE SAID, THE ASSESSEE FILED APPEALS BEFORE THE CIT(A). THE C IT(A) DID NOT GAVE ADEQUATE OPPORTUNITY AS VERY SHORT DATES WERE GIVEN BY HIM A ND ADJOURNMENT SOUGHT ON ACCOUNT OF HOSPITALIZATION OF THE COUNSEL WAS DENI ED. IN HIS EX PARTE ORDER HE WENT ON TO UPHOLD LEVY OF PENALTY RELYING ON DELHI HIGH COURT DECISION IN THE CASE OF CIT V ESCORT FINANCE LTD (2010) 328 ITR 44 (DEL) AND CIT V ZOOM COMMUNICATION PVT. LTD. (2010) 327 ITR 510 (DE L), ON THE PREMISE THAT DISALLOWANCE OF BOGUS CLAIM WILL ATTRACT PENAL TY AS DEPARTMENT TAKE VERY MEAGER CASES FOR SCRUTINY ASSESSMENT AND IF SUCH CA SE WOULD NOT HAVE TAKEN UP FOR SCRUTINY ASSESSEE WOULD HAVE GOT AWAY WITH T HE DISALLOWABLE CLAIM AND EVEN IF CAUGHT IN SCRUTINY ASSESSEE WOULD GET AWAY BY PAYING TAX ON THE SAME WHICH IN ANY CASE IT WOULD HAVE PAID AS SELF ASSESS MENT TAX. 6. THE LD. AR SUBMITTED THAT THE EXPENDITURES WERE NOT CONCEALED UNDER ANY OTHER HEAD SO THAT AO MIGHT HAVE TO MAKE EFFORT TO DIG THEM OUT. NOTHING WRONG WAS FOUND IN DISCLOSURE OF THEIR PARTICULARS NOR THE HEAD OF ACCOUNT UNDER WHICH THEY WERE DECLARED, NOR THERE WAS ANY D ISPUTE WITH RESPECT TO ITS AMOUNT. CONSEQUENTLY THERE CANNOT BE ANY CHARGE OF FURNISHING INACCURATE PARTICULARS OF INCOME. RELIANCE IS PLACED IN THIS R EGARD ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS P LTD 322 ITR 158 (SC). LOSS ON SALE OF FIXED ASSETS BEING CAPITAL EXPENDIT URE SHOULD HAVE BEEN DISCLOSED IN TAX AUDIT REPORT (TAR ) IN COLUMN NO. 17(A), (F) OF FORM NO. 3CD. THE SAME WAS NOT DISCLOSED THEREFO RE NO DISALLOWANCE ON THIS ACCOUNT WAS CONSIDERED WHILE PREPARING COMPUTA TION OF INCOME FOR AY 2007-08 & 2009-10. IT WAS UNDER WRONG PRESUMPTION T HAT NO FURTHER ADJUSTMENT ON THIS ACCOUNT IS REQUIRED ONCE THE SAM E HAS BEEN CONSIDERED IN DEPRECIATION CHART. 7. THE LD. AR SUBMITTED THAT THERE IS NO CHARGE OF ANY FALSE CLAIM BY APPELLANT ON THE ABOVE DISALLOWANCES. HOWEVER IN PE NALTY PROCEEDINGS AO HELD THAT ASSESSEE HAS ACCEPTED ITS MISTAKE BUT IT HAD N OT RECTIFIED ITS MISTAKE BY 4 ITA NOS. 4060,4061 & 4062/DEL/2014 FILING REVISED RETURN CONSEQUENTLY THE MISTAKE WAS NOT BONAFIDE BUT WAS DONE WITH A VIEW TO AVOID TAX. 8. THE LD. AR SUBMITTED THAT IT IS A TRITE LAW THAT PENALTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE DIFFERENT AND IT IS NOT NECESSARY THAT WHATEVER IS DISALLOWED/ADDED IN THE ASSESSABLE INCOME WOULD ATT RACT PENALTY. RELIANCE IS PLACED FOR THIS PROPOSITION ON THE SUPREME COURT CA SE IN CIT V RELIANCE PETROPRODUCTS P LTD 322 ITR 158 (SC). THE LD. AR FURTHER SUBMITTED THAT THE CIT(A) CONFIRMED THE PENALTY LEVIED BY AO RELYING ON THE PREMISE THAT HAD APPELLANT CASE NOT TAKEN UP FOR SCRUTINY IT WOU LD HAVE GOT AWAY WITH THE CLAIM OF PRIMA FACIE DISALLOWABLE CLAIM AND SINCE N OW IT IS CAUGHT IT WILL GET AWAY BY PAYING THE DUE TAX, THEREFORE CLAIM WAS DEL IBERATELY MADE. THE LD. AR SUBMITS THAT THE DELHI HIGH COURT DECISION IN ZOOM COMMUNICATION DOES NOT APPLY IN THE CASE OF APPELLANT. THE SAID DECISION A PPLIES IN CASES WHERE RETURN IS FILED U/S 139 AND IT DOES NOT APPLIES TO CASES W HERE RETURN IS FILED IN RESPONSE TO NOTICE U/S 148 OR SECTION 153A, 153C I. E. CASES OF REASSESSMENT AND SEARCH CASE. AS PER SCRUTINY GUIDELINES FOR FY 2004-05 ISSUED BY NOTIFICATION NO. 10/2004, DATED 20.09.2004. GUIDELI NES HAVE BEEN PROVIDED FOR COMPULSORY SCRUTINY THESE GUIDELINES ALWAYS INCLUDE D CASES WHERE SEARCH, SURVEY OR REASSESSMENT PROCEEDINGS HAVE BEEN INITIA TED HAVE TO BE COMPULSORY SELECTED FOR SCRUTINY. SIMILAR GUIDELINES HAVE BEEN ISSUED IN 27.09.2010 & 14- 09-2011 BY NOTIFICATION NO. F.NO. 225/93/2009/ITA.I I). THEREFORE WHILE FILING ITS RETURN OF INCOME IT WAS KNOWN TO APPELLANT THAT ITS CASE WOULD BE SELECTED FOR SCRUTINY AND NO FALSE CLAIM WAS MADE BY TAKING A CHANCE AND RETURN WAS FILED WITH BONAFIDE BELIEF THAT IT WAS TRUE AND COR RECT AND NO BOGUS CLAIM IS THERE. THE TESTIMONY TO THIS FACT IS THAT THERE WER E NO ADDITIONS TO THE RETURNED INCOME BUT FOR THESE SMALL INADVERTENT ERRORS. 9. THE LD. AR FURTHER RELIED UPON THE SUPREME COURT DECISION IN CASE OF PRICE WATERHOUSE COOPERS V CIT 348 ITR 306(SC). IN THIS CASE RETURN OF INCOME WAS FILED DECLARING INCOME OF RS 24.42 CRORE S. IT WAS A CASE OF 5 ITA NOS. 4060,4061 & 4062/DEL/2014 INTERNATIONALLY ACCLAIMED CONSULTANCY COMPANY. IN T HE RETURN OF INCOME PROVISION MADE FOR GRATUITY WAS NOT ADDED BACK. IN THE TAX AUDIT REPORT, THE AUDITOR HAS POINTED OUT SUCH DISALLOWANCE. THE SAM E WAS NOT DISALLOWED IN THE RETURN OF INCOME. WHEN A COMPANY OF SUCH A STAT URE CAN COMMIT AN INADVERTENT ERROR WHY COMMITMENT OF INADVERTENT ERR OR IN APPELLANT CASE BECOMES UNBELIEVABLE AND A MALAFIDE ERROR. THE LD. AR FURTHER SUBMITTED THAT THE TAX CONSULTANT AND TAX AUDITOR OF THE APPELLANT COMPANY WAS THE SAME PERSON. WHATEVER OMISSIONS HAVE OCCURRED IN PREPARA TION OF TAX AUDIT REPORT HAS CREPT INTO THE PREPARATION OF COMPUTATION OF IN COME. MISTAKE OCCURRED DUE TO MIS-APPRECIATION OF LEGAL PROVISIONS BY THE TAX CONSULTANT. THERE IS NOTHING FALSE ABOUT THE CLAIM MADE BY APPELLANT EXCEPT THAT IT WAS WRONGLY MADE. APPELLANT HAD TAKEN ADVICE FROM TAX CONSULTANT AS I T WAS NOT CONVERSED WITH THE COMPLEX PROVISIONS OF I. TAX ACT. 10. THE LD. AR FURTHER SUBMITTED THAT THE AO OBSERV ED THAT NO EFFORT WAS MADE TO REVISE RETURN OF INCOME IS NOT JUST AND PRO PER, AS THE ASSESSMENT WAS COMPLETED WITHIN ONE MONTH OF FILING RETURN OF INCO ME. THERE WAS NO TIME TO THINK. ASSESSMENTS OF OTHER ASSESSEES OF THE GROUP WERE GOING ON. 11. THE LD. AR SUBMITTED THAT NO PENALTY CAN BE LEV IED EVEN IF QUANTUM IS NOT CHALLENGED AS PER THE VARIOUS DECISIONS OF THE VARIOUS HONBLE HIGH COURTS AND ITAT. THE LD. AR RELIED UPON FOLLOWING DECISION S: CIT VS MANJUNATHA COTTON AND GINNING FACTORY 359 IT R 565 (KAR) RAI INDUSTRIAL POWER PVT. LTD. VS DCIT (ITA 4862/DE L/2013) 12. THE LD. AR FURTHER SUBMITTED THAT ALL THE ADDIT IONS MADE IN THE ASSESSMENT WERE ROUTINE ASSESSMENT AND HAS NOT BEEN MADE IN PURSUANCE OF ANY MATERIAL FOUND CONSEQUENTLY THESE TYPE OF ADDIT IONS CANNOT BE MADE IN ASSESSMENT MADE UNDER U/S 153C/153A. THE LD. AR REL IED THE UNDER MENTIONED DECISIONS: 6 ITA NOS. 4060,4061 & 4062/DEL/2014 KABUL CHAWLA V CIT (2016) 380 ITR 573 (DEL) ALL CARGO GLOBAL LOGISTICS LTD V DCIT (2012) 18 ITR (TRIB) 106 (MUM)(SB). JAI STEEL INDIA V ACIT 259 CTR (RAJ) 281. 13. THE LD. AR FURTHER SUBMITTED THAT IN THE PRESEN T CASE TWO VERY SHORT DATES WERE GIVEN BY THE CIT(A). APPELLANT FORWARDED THE NOTICE OF HEARING TO ITS REGULAR COUNSEL ON 12/05/2014 WHO DULY ATTENDED THE HEARING REQUESTING FOR ADJOURNMENT AS THEIR COUNSEL WHO HANDLES THE APPEAL S HAS UNDERGONE A BIG OPERATION. UNFORTUNATELY NO ADJOURNMENT WAS ALLOWED AND CASE WAS DECIDED EX-PARTE HOLDING THAT NONE ATTENDED. THERE WAS NO U RGENCY OF DISPOSAL AS NO QUANTUM DEMAND WAS PENDING AGAINST APPELLANT AND PE NALTY AMOUNT DUE WAS ALSO NOT LARGE. IN ANY CASE THE CIT (A) SHOULD HAVE ALLOWED SOMETIME TO APPELLANT TO FIND SOME NEW COUNSEL. THE APPELLATE O RDER IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THE ACTION OF THE CI T (A) WAS UNJUSTIFIED AND DESERVED TO BE SET ASIDE. THE LD. AR RELIED UPON TH E DECISION OF THE SUPREME COURT IN THE CASE OF TIN BOX CO. VS. COMMISSIONER O F INCOME TAX (2001) 249 ITR 216(SC). 14. THE LD. DR. SUBMITTED THAT THE QUANTUM ADDITION IS FOR UNSUSTAINABLE CLAIM OF DEDUCTION. THE LD. DR FURTHER SUBMITTED TH AT THE ASSESSEE HAD NO EXPLANATION AS TO HOW THIS CLAIM IS ADMISSIBLE. AS FAR AS QUANTUM ADDITIONS ARE CONCERNED, ASSESSEE HAD NO CASE, THEREFORE, NO APPEAL HAS BEEN PREFERRED AGAINST QUANTUM ADDITIONS. AS FAR AS DEFENSE REGARD ING ATTRACTING 271(L)(C) IS CONCERNED, THE ASSESSEE IS CONTENDING THAT THE TAX AUDITOR DID NOT POINT OUT THE SAME IN THE TAX AUDIT REPORT. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE'S CASE IS COVERED UNDER CLAUSE (A) OF EXPL ANATION 1 APPENDED TO SECTION 271(1). THE LD. DR FURTHER SUBMITTED THIS C LAUSE IS NOT CONCERNED WITH QUESTION OF BONA-FIDE, AT ALL (IN FACT QUESTION OF BONA-FIDE IS RELEVANT ONLY IN 7 ITA NOS. 4060,4061 & 4062/DEL/2014 CASE COVERED BY CLAUSE (B) OF EXPLANATION 1.) THE RATIO OF HON'BLE DELHI HC IN THE CASE OF CIT VS ESCORT FINANCE LIMITED [2009] 18 3 TAXMAN 453 (DELHI) IS SQUARELY APPLICABLE. THE HON'BLE HC HAS HELD THAT I F CLAIM MADE IN RETURN OF INCOME APPEARS TO BE EX FACIE BOGUS, IT WOULD BE TR EATED AS A CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS AND PENALTY PROCEEDING WOULD BE JUSTIFIED. THE LD. DR FURTHER SUBMITTED THAT A LTHOUGH THE ORDER OF THE CIT(A) EXPRESSLY RELIED UPON THE RATIO OF HON'BLE D ELHI HC IN THE CASE OF CIT VS ESCORT FINANCE LIMITED(SUPRA), HOWEVER, THE AR HAS NOT SHOWN AS TO HOW THIS CASE WOULD ESCAPE FROM APPLICABILITY OF THE SAID RA TIO. 15. THE LD. DR FURTHER SUBMITTED THAT ALTHOUGH THE ORDER OF THE CIT(A) EXPRESSLY RELIED UPON THE RATIO OF HON'BLE DELHI HC IN THE CASE OF CIT VS ZOOM COMMUNICATION PVT. LTD.(SUPRA), HOWEVER, THE AR HAS NOT SHOWN AS TO HOW THIS CASE WOULD ESCAPE FROM APPLICABILITY OF THE SA ID RATIO EXCEPT SIMPLY SAYING THAT THIS CASE BEING A OF SEARCH WAS A CASE OF COMP ULSORY SCRUTINY WHICH DOES NOT HELP BECAUSE IN RESPONSE TO THE NOTICES U/S 153 A RWS 153C, THE ASSESSEE JUST FILED A LETTER SAYING THAT THE EARLIER FILED R ETURNS U/S 139 (FILED IN REGULAR COURSE AND NOT SUBJECTED TO SCRUTINY) MAY BE DEEMED TO HAVE BEEN FILED IN RESPONSE TO THE NOTICES U/S 153A RWS 153C. IN ANY C ASE THE IDEA UNDERLINED BY THE HON'BIE HC IS STILL HITTING THE ASSESSEE, IN TH E FACTS AND CIRCUMSTANCES OF THE CASE. 16. THE LD. DR FURTHER SUBMITTED THAT THE CASE OF R ELIANCE PETRO PRODUCTS PVT. LTD. [2010] 322 ITR 158 (SC) 2010-TIOL- 21-SC- JT DOES NOT HELP THE CASE OF THE ASSESSEE. THE FACTS OF THE RELIANCE PETRO PR ODUCTS PVT. LTD. ARE NOT APPLICABLE TO THE FACTS OF THE CASE UNDER CONSIDERA TION. IN THE MATTER OF THE RELIANCE PETRO PRODUCTS PVT. LTD., THE ASSESSEE HAD MADE A CLAIM OF DEDUCTION U/S. 36(L)(III) OF THE ACT IN RESPECT OF INTEREST. THIS DEDUCTION HAD ALSO BEEN CLAIMED BY THE ASSESSEE IN THE EARLIER YEAR AND THE FIRST APPELLATE AUTHORITY(FAA) HAD ALLOWED THE DEDUCTION, WHILE THE ITAT HAD RESTORED THE ISSUE BACK TO THE FILE OF THE AO. DECIDING THE APPE AL TRIBUNAL HELD THAT THE 8 ITA NOS. 4060,4061 & 4062/DEL/2014 ASSESSEE HAD DULY FILED AN EXPLANATION GIVING THE R EASONS FOR MAKING A CLAIM, THAT ONCE THE ASSESSEE OFFERED AN EXPLANATION THE O NUS WOULD SHIFT ON THE REVENUE TO PROVE THAT THE EXPLANATION OFFERED BY TH E ASSESSEE WAS FALSE, THAT BONA FIDES OF THE EXPLANATION WERE CLEARLY PROVED, THAT NO MATERIAL OR EVIDENCE WAS BROUGHT ON RECORD OR POINTED OUT BY THE DR PROV ING THAT THE REVENUE HAD DISCHARGED ITS ONUS FOR PROVING THE FALSENESS OF EX PLANATION OF THE ASSESSEE, THAT THE ASSESSEE HAD ALSO DULY DISCHARGED ITS ONUS WHICH WAS CAST ON THE ASSESSEE. HOWEVER, IN THE PRESENT CASE, IT IS NOT A DEBATABLE CLAIM BUT THE CLAIM IS EX-FACIE BOGUS. 17. THE LD. DR FURTHER SUBMITTED THAT THE RATIO OF PRICE WATERHOUSE COOPERS VS. CIT. 348 ITR 305 {SC} IS NOT APPLICABLE IN THE PRESENT CASE. IN THAT CASE THE ADDITION UNDER CONSIDERATION WAS 'INADVERTENTLY' MI SSED TO BE INCLUDED IN THE COMPUTATION OF INCOME AND THE PWC 'S CONDUCT ON DET ECTION OF THE 'ERROR' WAS SUPPORTIVE OF BONA-FIDE OF PWC. 18. THUS THE LD. DR PRAYED THAT IN ANY CASE NONE OF THE CASES CITED BY THE ASSESSEE, WHEREIN APPLICABILITY OF PROVISIONS OF CL AUSE (A) OF EXPLANATION 1 APPENDED TO SECTION 271(1) WAS SUBJECT MATTER. THE REFORE, THESE CANNOT BE MADE APPLICABLE AND APPEALS OF THE ASSESSEE BE DISM ISSED. 19. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS INCLUDING THE JUDGMENTS RELIED UPON BY THE LD. AR AND LD. DR. IN AY 2009-10 INTEREST WAS PAID ON SHORTFALL IN PAYMENT OF ADVANCE TAX, AND IT WAS ERRONEOUSLY CONSIDERED AS NORMAL INTEREST EXPENSE FOR USE OF MONEY, AND OF DIFFERENT NATURE VIS-A VIS TAXES PAID. REGARDING DISALLOWANCE OF DONATION OF R S 10500/-, THE SAME WAS RIGHTLY CLAIMED AND THE SAME STOOD DISALLOWED ON AC COUNT OF NON AVAILABILITY OF DONATION RECEIPT AT THE TIME OF ASSESSMENT. THE CLA IM WAS NOT WRONGLY MADE. DURING PENALTY PROCEEDINGS EXPLANATION OF THE SAME WAS FURNISHED BUT ASSESSING OFFICER HELD THAT ASSESSEE IS TRYING TO S HIFT BLAME ON TAX AUDITOR. THE ASSESSING OFFICER FURTHER HELD THAT IT COULD NO T BE BELIEVED THAT ASSESSEE 9 ITA NOS. 4060,4061 & 4062/DEL/2014 DID NOT HAVE QUALIFIED STAFF. THERE IS NO QUESTION OF ANY PRESUMPTION AS ENTIRE SALARY EXPENDITURE WAS EXAMINED BY HIM DURING ASSES SMENT PROCEEDINGS. THE EXPENDITURES WERE NOT CONCEALED UNDER ANY OTHER HEA D. NOTHING WRONG WAS FOUND IN DISCLOSURE OF ITS PARTICULARS NOR THE HEAD OF ACCOUNT UNDER WHICH THEY WERE DECLARED, NOR THERE WAS ANY DISPUTE WITH RESPE CT TO THEIR AMOUNT. IN FACT THE PRESENT CASE IS FULLY COVERED BY JUDGMENT OF RE LIANCE PETRO CHEMICALS 322 ITR 158 AND PRICE WATER HOUSE 348 ITR 306. IT IS NO T THE CASE OF REVENUE THAT THE INTENTION OF THE ASSESSEE WAS NOT PROPER. PENA LTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE DIFFERENT AND IT IS NOT NECESSARY THAT WHATEVER IS DISALLOWED/ADDED IN THE ASSESSABLE INCOME WOULD ATT RACT PENALTY. IN-FACT ALL THE RELEVANT PARTICULARS AND DOCUMENTS WERE FILED D URING THE ASSESSMENT PROCEEDINGS ITSELF. THE ASSESSEE IN-FACT HAS FILED RETURN IN EACH YEAR FOR MORE THAN ONE CRORE, MERELY FOR A FEW THOUSAND OR LAKHS IT CANNOT BE STATED THAT PENALTY WILL BE ATTRACTED. THE LD. DRS SUBMISSION THAT NONE OF THE CASES CITED BY THE ASSESSEE ARE RELATED TO APPLICABILITY OF PRO VISIONS OF CLAUSE (A) OF EXPLANATION 1 APPENDED TO SECTION 271(1) IS NOT COR RECT. THE DELHI HIGH COURT DECISION IN ZOOM COMMUNICATION DOES NOT APPLY IN TH E PRESENT CASE OF APPELLANT. THE SAID DECISION APPLIES IN CASES WHERE RETURN IS FILED U/S 139 AND IT DOES NOT APPLIES TO CASES WHERE RETURN IS FILED IN RESPONSE TO NOTICE U/S 148 OR SECTION 153A, 153C I.E. CASES OF REASSESSMENT AN D SEARCH CASE. THE PRESENT CASE THEREFORE IS COVERED BY THE RATIO LAID DOWN BY THE HONBLE APEX COURT AND HIGH COURT IN CASES OF RELIANCE PETRO CHEMICALS 322 ITR 158 AND PRICE WATER HOUSE 348 ITR 306. THE CIT(A) HAS TOTALLY IGNORED T HESE JUDGMENTS. 20. IN RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH FEBRUARY, 2017. SD/- SD/- (R.K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 27/02/2017 10 ITA NOS. 4060,4061 & 4062/DEL/2014 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 13/02/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 14/02/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 11 ITA NOS. 4060,4061 & 4062/DEL/2014 5. APPROVED DRAFT COMES TO THE SR.PS/PS 27.02.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 27.02.2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.