ACIT, Circle-7(1), V. Sandhar Locking Devices Ltd.,

ITA 4230/DEL/2005

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3726 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 15-06-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 02-11-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K CHAND SENIOR
• Keywords: Initiation of penalty proceedings; TDS; Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E, NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4230/DEL/2005 (ASSESSMENT YEAR : 2000-01) ACIT, CIRCLE 7 (1), VS. M/S. SANDHAR LOCKING DEVIC ES LTD., NEW DELHI. B 41, COMMERCIAL CENTRE, SAFDARJUNG ENCLAVE, NEW DELHI. (PAN : AAACS0512J) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI N.K. CHAND, SENIOR DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER : THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF CIT (APPEALS)- X, NEW DELHI DATED 7.4.2005 FOR THE ASSESSMENT YEAR 2000-01. THE GROUND OF APPEAL READS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT (A) ERRED IN CANCELING THE PENALTY OF RS.5,66,600/- IMPOSED BY THE A.O. U/S 271(1)(C) OF THE IT ACT AND IN HOLDING THAT A.O.S SATISFACTION REGARDING CANCELING THE PARTICULARS OF INCOME BY THE ASSESSEE WAS NOT RECORDED IN THE ASSESSMENT ORDER. 2. IN THE GROUND, THE REVENUE HAS PRAYED THAT THE CIT (A) DELETED THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT HOLDING THAT ASSESSING OFFICER HAS NOT RECORDED SATISFACTION IN THE ASSESS MENT ORDER. 3. LD. DR PLEADED THAT THE CIT (A) HAS GRANTED THE RELIEF ON THE BASIS OF DECISIONS OF HON'BLE DELHI HIGH COURT IN THE CASES OF CIT VS. RAM ITA NO.4230/DEL/2005 2 COMMERCIAL ENTERPRISES LTD. 246 ITR 568 AND DIWAN E NTERPRISES VS. CIT 246 ITR 571. HE SUBMITTED THAT HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. SANTOSH SHARMA, 166 TAXMAN 223 (DELHI) , HELD THAT WHERE THE RELIEF HAS BEEN GRANTED BY THE ITAT WHILE REACHING TO THE CONCLUSION THAT THE ASSESSING OFFICER HAS NOT RECORDED SATISFACTION ABO UT THE INITIATION OF PENALTY PROCEEDINGS THEN THE MATTER HAS BEEN SET AS IDE TO THE ITAT FOR DECIDING THE SAME ON MERITS. THIS CASE HAS ALSO TH E SIMILAR FACTS, THEREFORE, THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT I S APPLICABLE AND PLEADED TO SET ASIDE THE ORDER OF CIT (A) WITH A DIRECTION TO DECIDE THE ISSUE ON MERITS. 4. AFTER HEARING THE REVENUE AND GOING THROUGH THE CASE LAWS RELIED UPON, WE ARE OF THE VIEW THAT THE CIT (A) GRANTED T HE RELIEF MAINLY ON THE DECISIONS OF JURISDICTIONAL HIGH COURT IN THE CASES OF RAM COMMERCIAL ENTERPRISES LTD. AND DIWAN ENTERPRISES CITED SUPRA. BY INSERTING THE EXPLANATION (1B) BY THE FINANCE ACT, 2008 W.E.F. 1. 4.1989 THE DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) SHA LL BE DEEMED TO BE CONSTITUTED THE SATISFACTION OF THE ASSESSING OFFIC ER FOR INITIATING THE PENALTY PROCEEDINGS U/S 271(1)(C). ITAT COORDINATE BENCH H AD ALSO DECIDED IN ITA NO.212/DEL/2008 IN THE CASE OF ORIENTAL INSURANCE C O. LTD. VS. ACIT 2010-TIOL-02-ITAT-DEL. AS UNDER : 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A P ERUSAL OF THE ORDER OF THE A.O. PASSED ON 21.03.2000 WHEREIN THE CLAIM ITA NO.4230/DEL/2005 3 OF THE ASSESSEE IN RESPECT OF THE DEDUCTION OF TDS IN FOREIGN COUNTRIES IS SEEN, THE A.O. HAS AT THE END OF THE A SSESSMENT ORDER SPECIFICALLY STATED THAT PENALTY PROCEEDINGS ARE INITIATED SEPARATELY. IN VIEW OF THIS, AS ALSO IN VIEW OF TH E DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MA DHUSHREE GUPTA IT WOULD HAVE TO BE HELD THAT THE A.O. HAS RE CORDED HIS SATISFACTION. IN THESE CIRCUMSTANCES, THE CLAIM OF THE ASSESSEE THAT THERE IS NO SATISFACTION RECORDED IN THE ASSES SMENT ORDER FAILS. FURTHER, THE CIT (A) HAS ALSO NOT DECIDED THE ISSUE ON MERITS WITH A SPEAKING ORDER. THEREFORE, IN THE INTEREST OF JUSTICE, WE S ET ASIDE THE ORDER OF CIT (A) AND DIRECT TO DECIDE THE ISSUE AFRESH IN VIEW OF TH E EXPLANATION INSERTED WITH THE FINANCE ACT, 2008 W.E.F. 1.4.1989 AND ALSO ON T HE MERITS OF THE CASE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THE 18 TH DAY OF JUNE 2009. SD/- SD/- (C.L. SETHI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 18 TH DAY OF JUNE, 2010 TS COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT 4. CIT(A)-IX, NEW DELHI. 5. DR, ITAT. ASSTT.REGISTRAR ITAT, NEW DELHI.