ACIT, Chandigarh V. Sh. Balbir Singh, Chandigarh

ITA 418/CHANDI/2012

• Counselvise Citation: 41821514 RSA 2012
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 12-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 418/CHD/2012 ASSESSMENT YEAR: 2006-07 ACIT, CIRCLE 2(1), V SHRI BALBIR SINGH, CHANDIGARH. # 58, IND. AREA, PHASE 1, CHANDIGARH. PAN: ABGPS-6878K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA RESPONDENT : NONE DATE OF HEARING : 22.08.2012 DATE OF PRONOUNCEMENT : 29.08.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 03.01.2012 PASSED BY THE LD . CIT(A) U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'TH E ACT'). 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED IN DELE TING THE PENALTY AMOUNTING TO RS.3,65,937/- LEVIED U/S 271(1)(C). 2. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE CA NCELLED AND THAT OF THE AO MAY BE RESTORED. 3. THE APPELLANT CRAVES TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 3. THE AO LEVIED PENALTY OF RS.3,65,937/- U/S 271(1 )(C) OF THE ACT ON THE GROUND OF DISALLOWANCE OF CERTAIN EX PENSES. BEFORE CIT(A), THE AO PLACED RELIANCE ON THE DECISI ON OF THE 2 JURISDICTIONAL HIGH COURT IN THE CASE OF AJAIB SING H &CO., 253 ITR 630 AND RAVAIL SINGH & CO. 254 ITR 191. LD. CIT (A) DELETED THE PENALTY. THE RELEVANT FINDINGS OF THE CIT(A) ARE REPRODUCED HEREUNDER: 5. I HAVE CONSIDERED THE SUBMISSION OF THE LD. COU NSEL FOR THE APPELLANT. AS PER THE PROVISIONS OF SECTION 271(L)( C), PENALTY CAN BE LEVIED, IF THE ASSESSEE HAS CONCEALED PARTICULARS O F ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. FO R THE SAKE OF READY REFERENCE, EXPLANATION (1) BELOW SECTION 271(1) IS REPRODUCED BELOW 'EXPLANATION 1.-WHERE IN RESPECT OF ANY FACTS MATE RIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, - (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FA LSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT A BLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANA TION IS BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAM E AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE P URPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 5.1 THUS, WHEN THE ASSESSEE HAS CONCEALED PARTICULA RS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS, APPLICA BILITY OF CONDITIONS LAID DOWN IN EXPLANATION 1 (SUPRA) HAVE TO BE EXAMI NED. IT IS SEEN THAT ALL THE ADDITIONS MADE IN THIS CASE WERE ON AC COUNT OF DISALLOWANCE OF EXPENSES BECAUSE THE BILLS/VOUCHERS WERE EITHER NOT AVAILABLE OR INCOMPLETE. THE CONCEALMENT PENALTY HA S BEEN IMPOSED, BUT BEFORE IMPOSING PENALTY, THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY COGENT AND POSITIVE, MATERIAL TO SHOW TH AT THE APPELLANT HAD WILFULLY CONCEALED HIS INCOME! THERE IS NO FIND ING OF THE ASSESSING OFFICER THAT THE EXPLANATION OFFERED WAS FALSE AND THE APPELLANT HAD DELIBERATELY CONCEALED ANY PART OF THE INCOME. ON T HE FACTS OF THE CASE, THE RATIO OF DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF M/S AJAIB SINGH & CO. (SUPRA) IS SQUARELY A PPLICABLE. HENCE, IT 3 IS HELD THAT THE ASSESSING OFFICER WAS NOT RIGHT IN LEVYING PENALTY U/S 271(L)(C) OF THE ACT ON ANY OF THE ADDITIONS MADE A ND SO THE PENALTY LEVIED U/S 271(L)(C) IS CANCELLED. ALL THE GROUNDS OF APPEAL TAKEN BY THE APPELLANT ARE ALLOWED. 4. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS, FACTS OF THE CASE AND THE RELEVANT RECORD. THIS IS A CAS E WHERE THE AO HAS LEVIED PENALTY, MERELY ON THE GROUND OF SOME DISALLOWANCES OF CERTAIN EXPENSES AND THE TRAVELING EXPENSES WERE ESTIMATED AT 1/3 RD OF THE CLAIMED EXPENSES UNDER THIS HEAD BY THE AO. IN VIEW OF THIS, SOME DISALLOWANCE OF EXPENSES, DOES NOT WARRANT INVOCATI ON OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THEREF ORE, THE FINDINGS OF THE CIT(A)ARE UPHELD. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH AUG.,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH AUG.,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT ,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH