Ramjilal Construction Pvt. Ltd., New Delhi V. ITO, Ward- 21(1), New Delhi

ITA 4735/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9659 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 23-05-2019
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 271(1)(c); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘F’ NEW DELHI SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No. 4735/Del/2019 Assessment Years: 2019-20 M/s. Ramji Lal Construc- tion Pvt. Ltd., L-1/288A DDA Flats, Kalkaji, New Delhi PIN:1100 19 Vs. ITO, Ward 21(1), New Delhi PAN :AACCR0292G (Appellant) (Respondent) ORDER PER SAKTIJIT DEY, JUDICIAL MEMBER: This is an appeal by the assessee against order dated 04.04.2019 of learned Commissioner of Income-Tax (Appeals)-7, New Delhi Assessee by N o n e Department by Ms. Maimum Alam, Sr. DR Date of hearing 22.09.2022 Date of pronouncement 29.09.2022 2 ITA No.4735/Del./2019 confirming penalty imposed under Section 271(1)(c) of the Income- Tax Act,1961 for the assessment year 2011-12. 2. When the appeal was called for hearing, none appeared on behalf of the assessee to represent the case. There is not even a request from assessee’s side seeking adjournment. It is observed, on earlier occasions when the appeal was fixed for hearing, assessee remained absent. From the postal acknowledgement kept on record, it is evident that the notice of hearing issued to the assessee fixing the date of hearing to 21.09.2022 was duly served upon the assessee. The aforesaid facts clearly indicate that the assessee is not interested in pursuing the present appeal. Since, sufficient opportunity of being heard has been given to the assessee, we proceed to dispose of the appeal ex parte qua the assessee after hearing learned Departmental Representative and based on material available on record. 3. Briefly, the facts are that the assessee is a resident corporate entity. For the assessment year under dispute, assessee filed its return of income on 29.09.2011 declaring loss of Rs.9,21,008. 4. In course of scrutiny assessment proceedings, assessing officer called upon the assessee to furnish information/details on various 3 ITA No.4735/Del./2019 issues. After considering the details furnished by the assessee as well as submissions made, the assessing officer made the following additions: i) Disallowance under Section 40(ai)(a) of the Act on account of interest paid without deducting tax at source: Rs.23,57,967; ii) Disallowance on payment made to auditors due to non- deduction of tax at source: Rs.75,000; iii) Addition on account of under valuation of closing stock at Rs.1,40,194; iv) Unexplained cash credits: Rs.32,57,000; & v)Disallowance of expenses relating to rental income: Rs.8,10,560. 5. Against the additions so made, assessee preferred an appeal before learned Commissioner (Appeals). 6. While deciding assessee’s appeal, learned Commissioner (Appeals) deleted couple of additions completely. He upheld the additions of Rs.75,000 and Rs.1,40,194. Whereas, he granted partial relief in respect of addition made on account of unexplained cash credit by restricting such addition to Rs.13,13,000. Based on the additions sustained by learned Commissioner (Appeals), the assessing officer initiated proceeding for imposition of penalty under Section 4 ITA No.4735/Del./2019 271(1)(c) of the Act and ultimately passed an order imposing penalty of Rs.4,77,465 alleging furnishing of inaccurate particulars of income and concealment of income. Against the penalty order so passed, assessee preferred an appeal before the learned Commissioner (Appeals). After considering the submission of assessee, learned Commissioner (Appeals) deleted penalty qua the addition of Rs.75,000 made under Section 40(a)(ia) of the Act on account of non- deduction of tax at source on audit fee. However, he sustained the penalty on additions made on account of under valuation of closing stock and unexplained cash credit. 7. Being aggrieved, assessee is before us. 8. We have heard learned Departmental Representative and perused the material on record. 9. In course of hearing, learned Departmental Representative submitted that in the meanwhile, the quantum appeal filed by the assessee before the Tribunal has been disposed of restoring the issue relating to the addition of Rs.13,13,000 on account of unexplained cash credit to the assessing officer for fresh adjudication. 5 ITA No.4735/Del./2019 10. As regards, the addition of Rs.1,40,194 representing under valuation of closing stock, she submitted, the addition has been accepted by the assessee. 11. Having considered the submissions of learned Sr. DR, we find, penalty under Section 271(1)(c) of the Act survives on couple of additions, being addition of Rs.1,40,194 representing under valuation of closing stock and Rs.13,13,000 made on account of unexplained cash credit. In so far as addition of Rs.1,40,194 is concerned, the assessee has stated before the departmental authorities that the amount was voluntarily surrendered by the assessee as the quantitative details of stock were not available during audit due to health problem of the director of the company. On perusal of the observations of the departmental authorities in their respective orders, we find that this particular plea was not taken by the assessee in earlier stages of the proceedings. Thus, in our view, this explanation of the assessee requires to be considered. In so far as addition of Rs.13,13,000 on account of unexplained cash credit, it is an admitted fact, while deciding assessee’s quantum appeal in ITA No.6322/Del/2016 dated 15.11.2019, the Tribunal has restored the issue back to the assessing 6 ITA No.4735/Del./2019 officer for fresh adjudication. Thus, as on date, penalty under section 271(1)(c) of the Act on the addition of Rs.13,13,000 cannot survive. 12. In view of the aforesaid, we set aside the impugned order of learned Commissioner (Appeals) and restore the issue relating to imposition of penalty under Section 271(1)(c) of the Act to the assessing officer for fresh adjudication after carrying out the directions of the Tribunal in quantum proceeding. Grounds are allowed for statistical purposes. 13. In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 29 th September, 2022. Sd/- Sd/- (ANADEE NATH MISSHRA ) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 29 th September, 2022. Mohan Lal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 7 ITA No.4735/Del./2019 Sl. No. Particulars Date 1. Date of dictation (Order drafted through Dragon software): 27.09.2022 2. Date on which the draft of order is placed before the Dictating Member: 28.09.2022 3. Date on which the draft of order is placed before the other Member: 28.09.2022 4. Date on which the approved draft of order comes to the Sr. PS/PS: 29.09.2022 5. Date of which the fair order is placed before the Dictating Member for pronouncement: 29.09.2022 6. Date on which the final order received after having been singed/pronounced by the Members: 30.09.2022 7. Date on which the final order is uploaded on the website of ITAT: 30.09.2022 8. Date on which the file goes to the Bench Clerk 30.09.2022 9. Date on which files goes to the Head Clerk: 10. Date on which file goes to the Assistant Registrar for signature on the order: 11. Date of dispatch of order: