Carrymore Hoists Pvt. Ltd., Faridabad V. ACIT, Faridabad

ITA 4374/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7037 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARAS KUMAR
• Assessee Lawyers: RAJNEESH BEHARI MATHUR
• Keywords: Question of law
• Section: 271(1)(c); 143(3); 274; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. H. S. SIDHU, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 4374/DEL/2016 : ASSTT. YEAR : 2009-10 CARRYMORE HOISTS PVT. LTD., PLOT NO. 256, SECTOR-24, FARIDABAD VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-II, FARIDABAD (APPELLANT) (RESPONDENT) PAN NO. AAACC6652K ASSESSEE BY : SH. RAJNEESH BEHARI MATHUR, CA REVENUE BY : SH. SARAS KUMAR, SR. DR DATE OF HEARING: 19.12.2019 DATE OF PRONOUNCEMENT: 04.02.2020 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT (A), FARIDABAD DATED 26.05.201 6. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS), FARIDABAD WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY U/S 271(1)(C) O F THE INCOME TAX ACT, 1961 OF RS.1,50,660/-. 3. THE ASSESSEE FURTHER FILED REVISED GROUNDS OF AP PEAL WHICH ARE AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE IMPOSITION OF PENALTY OF RS.1,50,660/- IS BAD IN LA W AS THE NOTICE FOR IMPOSITION OF PENALTY DATED 09-02-2015 W ITH REFERENCE TO WHICH THE PENALTY WAS IMPOSED DID NOT SPECIFY THE 'CHARGE AGAINST THE ASSESSEE' I.E. WHETHER THE PENA LTY WAS PROPOSED TO BE LEVIED FOR 'FURNISHING OF INACCURATE PARTICULARS' OR FOR 'CONCEALMENT OF INCOME'. FURTHER EVEN THE FI RST NOTICE OF PENALTY DATED 29-12-2011 WHICH WAS ISSUED AT THE TI ME OF THE ITA NO. 4374/DEL/2016 CARRYMORE HOISTS PVT. LTD. 2 FRAMING OF THE ASSESSMENT ORDER WAS ILLEGAL AS IT P ROPOSED TO LEVY THE PENALTY UNDER SECTION 271(1)(C) FOR BOTH T HE LIMBS OF THE SECTION 271(1)(C) I.E. FOR HAVING CONCEALED THE PARTICULARS OF INCOME AND ALSO FOR FURNISHING OF INACCURATE PAR TICULARS OF INCOME. 2. WITHOUT PREJUDICE TO THE GROUND NO.1 EVEN ON MER ITS THE ASSESSING OFFICER WAS NOT JUSTIFIED IN IMPOSING THE PENALTY UNDER SECTION 271(1)(C) AS THE ASSESSEE NEITHER CON CEALED ANY PARTICULAR OF ITS INCOME NOR FURNISHED INACCURATE P ARTICULARS THEREOF TO WARRANT THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C). 4. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL ON RECORD. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLA NT FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,09, 38,181/-. AS PER ORDER U/S 143(3) OF THE ACT DATED 29.12.2011, T HE INCOME WAS ASSESSED AT RS.1,99,41,790/- AFTER MAKING ADDIT ION ON ACCOUNT OF SUNDRY CREDITOR. WE FIND THAT AT THE CON CLUSION OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS H ELD AT PARA 7 THAT PENALTY PROCEEDINGS U/S 271(1)(C) HAVE BEEN INITIATED AND PENALTY NOTICE IS ISSUED SEPARATELY WHICH IS EN CLOSED. 6. WE ALSO FIND THAT THE PENALTY NOTICE ISSUED ON 0 9.02.2015 BY THE ACIT, CIRCLE-II, FARIDABAD IN CONNECTION WIT H THE PROCEEDINGS U/S 271(1)(C) OF THE ACT R.W.S. 274 OF THE ACT FOR RELEVANT ASSESSMENT YEAR HAS NOT SPECIFIED UNDER WH ICH LIMB OF THE PROVISION U/S 271(1)(C) OF THE ACT, THE PENALTY IS BEING INITIATED. FOR READY REFERENCE, THE RELEVANT PORTIO N OF THE NOTICE ISSUED U/S 274 IS REPRODUCED AS UNDER: ITA NO. 4374/DEL/2016 CARRYMORE HOISTS PVT. LTD. 3 GOVERNMENT OF INDIA INCOME TAX DEPARTMENT OFFICE OF THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-II, NEW CGO COMPLEX, NH IV, FARIDABAD - 1210 01 (0129)2415300(DIRECT) F.NO. ACIT/C-II/FBD./14-L 5/728/5611 DATED: 09.02.2015 TO, THE PRINCIPAL OFFICER, M/S CARRYMORE HOISTS PVT. LTD., PLOTNO.256, SECTOR- 24, FARIDABAD SIR / MADAM, SUB: PENALTY PROCEEDINGUNDER SECTION 271(L)(C) OF T HE I.T. ACT FOR THE ASSESSMENT YEAR 2009-10 - OPPORTUNITY OF BEING HEAR D UNDER THE PROVISIONS OF SECTION 275 (1)(A) OF THE ACT - REGARDING. ************** PLEASE REFER TO THE ASSESSMENT ORDER PASSED U/S 143 (3) OF THE I.T. ACT, 1961 FOR THE CAPTIONED ASSESSMENT YEAR AND PENALTY PROCEEDINGS I NITIATED U/S 271(1)(C) THEREWITH, IN PURSUANCE TO YOUR SUBMISSIONS REGARDING FILING OF A PPEAL AGAINST THE ASSESSMENT ORDER WITH LD. CIT(A), FARIDABAD, THE PENALTY PROCEEDINGS INIT IATED WERE KEPT IN ABEYANCE TILL THE DISPOSAL OF APPEAL BY LD. C1T(A), FARIDABAD. THE LD . CIT(A), HAS SINCE ADJUDICATED UPON AND PASSED ORDER ON THE APPEAL FILED BY YOU IN APPE AL NO.300/2011-12 VIDE ORDER DATED 16.01.2014. 2. THE LD. CIT(A), FARIDABAD HAS PARTLY ALLOWED / D ISMISSED THE APPEAL FILED BY YOU IN APPEAL NO.300/2011-12 VIDE ORDER DATED 16.01.2014 . IN VIE W OF THE ABOVE YOU ARE HEREBY PROVIDED A ANOTHER OPPORTUNITY TO SHOW CAUSE AS TO HOW THE PEN ALTY U/S 271(L)(C) FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME / CONCEALMENT OF INC OME MAY NOT BE LEVIED ON YOU. IN THIS REGARD THE HEARING IS FIXED IN THE OFFICE OF UNDERS IGNED AT 12.15 P.M. ON 17.02.2015. IT IS REQUESTED THAT; I) YOU MAY EITHER ATTEND PERSONALLY OR THROUGH AN AUTH ORIZED REPRESENTATIVE AND FILE A WRITTEN REPLY / EXPLANATION / EVIDENCE IN THIS REGA RD IN THIS OFFICE ON OR BEFORE THE SAID DATE. II) IF YOU HAVE ALREADY FILED ANY REPLY, PLEASE FILE A COPY OF THE SAME. III) PLEASE NOTE THAT LIMITATION IS INVOLVED IN THE PROC EEDINGS AND IT WILL NOT BE POSSIBLE TO ALLOW ANY FURTHER ADJOURNMENT OR OPPORTUNITY, AND IV) IN CASE NO RESPONSE IS RECEIVED ON OR BEFORE THE DA TE FIXED, THE PROCEEDINGS WILL BE FINALIZED ON MERITS ON THE BASIS OF MATERIAL AVAILA BLE ON RECORD. YOURS FAITHFULLY, SD/- (NIRMAL NANGIA) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-II, FARIDABAD ITA NO. 4374/DEL/2016 CARRYMORE HOISTS PVT. LTD. 4 7. FURTHER, WHILE LEVYING PENALTY U/S 271(1)(C), TH E ASSESSING OFFICER AT PARA NO. 7 HELD THAT I IMPOSE MINIMUM PENALTY OF R S.1,50,660/- UPON THE ASSESSEE U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 . 8. THE LD. AR BROUGHT TO OUR NOTICE, THE JUDGMENT O F THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SAHARA IND IA LIFE INSURANCE COMPANY LTD. IN ITA NO. 426/2019 DATED 02.08.2019 W HEREIN THE HONBLE HIGH COURT HELD AS UNDER: 21 THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF T HE PENALTY IMPOSED UNDER SECTION 271(1) (C) OF THE ACT, WHICH WAS ACCEP TED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA HIGH COURT IN C IT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) AND OBSERV ED THAT THE NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT S PECIFY WHICH LIMB OF SECTION 271(1)(C) THE PENALTY PROCEEDINGS HAD BEEN I NITIATED UNDER I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIGH COURT HAD FOLLOWED THE ABOVE JUDGMENT IN THE SUBSEQUENT ORDER IN COMMISSIONER OF INCOME TAX V. SSAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 241 (KAR) , THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF I NDIA IN SLP NO. 11485 OF 2016 BY ORDER DATED 5TH AUGUST, 2016. 22. ON THIS ISSUE AGAIN THIS COURT IS UNABLE TO FIND ANY ERROR HAVING BEEN COMMITTED BY THE ITAT. NO SUBSTANTIAL QUESTION OF LAW ARISES. 9. HE ALSO RELIED ON THE JUDGMENT OF SSAS EMERALD MEADOWS 73 TAXMAN 248. 10. AGAINST THE ARGUMENTS OF THE LD. AR, THE DEPART MENTAL REPRESENTATIVE HEAVILY RELIED ON THE JUDGMENT OF SU NDARAM FINANCE LTD. VS CIT (2018) 403 ITR 407 (MADRAS) AND ARGUED THAT THE HONBLE HIGH COURT HELD THAT WHERE NOTICE DID NOT SHOW THE NATUR E OF DEFAULT, IT WAS A QUESTION OF FACT. THE ASSESSEE HAS UNDERSTOOD PURPO RT AND IMPORT OF THE NOTICE, HENCE, NO PREJUDICE WAS CAUSED TO THE ASSES SEE. 11. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND FIND THAT THE ASSESSING OFFICER HAS NOT MADE IT CLEAR UNDER WHICH LIMB OF THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT, THE PENALTY IS BEI NG LEVIED. THERE IS ITA NO. 4374/DEL/2016 CARRYMORE HOISTS PVT. LTD. 5 GLARING DISCREPANCY BETWEEN INITIATION OF THE PENAL TY AND LEVY OF PENALTY. HENCE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE H ONBLE JURISDICTIONAL HIGH COURT, WE HEREBY HOLD THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER CANNOT BE HELD BE VALID IN THE EYES OF LAW. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/02/2020. SD/- SD/- (H. S. SIDHU) (DR . B. R. R. KUMAR) JUDICIAL MEMBER ACCOUNT ANT MEMBER DATED: 04/02/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR