Sh. Mohd. Aquil, New Delhi V. ITO, New Delhi

ITA 5029/DEL/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3603 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 23-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VK SABHARWAL
• Keywords: Difference of opinion
• Section: 271(1)(c); 274; 68

Judgement Text

1 | P A GE THE INCOME TAX APPELLATE TRIBUNAL DELHI SMC-2 BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.5029/DEL/2016 ASSESSMENT YEAR : 2007-08 MOHD. AQUIL, A-25, NIZAMUDDIN WEST, NEW DELHI-110013. PAN-ACDPA4685N VS ITO, WARD-6(3), NEW DELHI. APPELLANT RESPONDENT APPELLANT BY SH. V.K.SABHARWAL, ADV. RESPONDENT BY SH. R.K.GUPTA, SR.DR DATE OF HEARING 25.05.2021 DATE OF PRONOUNCEMENT 0 8 .06.2021 ORDER PER KUL BHARAT, JM : THIS APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-3 5, NEW DELHI DATED 15.07.2016. THE ASSESSEE HAS RAISED FOLLOWING GROU NDS OF APPEAL:- 1. THAT THE PENALTY ORDER PASSED U/S 271 (1)(C) OF THE ACT, FOR THE ASSESSMENT YEAR 2007-08 AS UPHELD BY THE LD. CIT(A) -35, ARE PERVERSE TO THE LAW AND TO THE FACTS OF THE CASE, AS THE ASSESS ING OFFICER HAS WRONGLY INFER THAT THE ENTIRE CASH DEPOSITS IN HIS BANK ACC OUNT PERTAINS TO HIS INCOME U/S 68 OF THE ACT, FOR THE SAID YEAR. 2. THAT THE PENALTY LEVIED U/S 271(1)(C) HE ACT, I S FURTHER NOT CORRECT UNDER THE LAW AS THE ASSESSEE S ALREADY FILED APPEA L BEFORE ITAT AGAINST THE QUANTUM OF ADDITIONS MADE WHILE PASSING ORDER A ND THE SAME IS STILL PENDING FOR ADJUDICATION AS SUCH, WHICH THE LD. CIT (A)-35 AILED TO APPRECIATE WHILE PASSING THE APPELLATE ORDER ON 15. 07.2016. 2 | P A GE 3. THAT ON THE FACTS OF THE CASE THE PENALTY LEVIED IS FURTHER WRONG AS NOT TENABLE BECAUSE THE CASH DEPOSITS IN THE BANK A CCOUNT DECLARED, DOES NOT PERTAINS I COVER UNDER THE AMBIT OF THE PROVISI ONS OF LAW CONTAINED U/S 68 OF THE INCOME TAX ACT, 1961, AS THE APPELLANT WA S HAVING SUFFICIENT CASH IN HAND, WHICH HAS ALREADY BEEN DECLARED AND A CCEPTED BY THE ASSESSING OFFICER IN THE PRECEDING YEARS. 4. THAT THE PENALTY IMPOSED IS FURTHER WRONG ON LAW AND TO THE FACTS OF THE CASE, BECAUSE THE ASSESSING OFFICER HAS NEVER S AID THAT THE ASSESSEE EVER FAILED TO OFFER AN EXPLANATION WITH REGARD TO THE DEPOSIT OF CASH IN HIS BANK ACCOUNT OR THE EXPLANATION GIVEN FOUND TO BE F ALSE AS CONTAINED UNDER EXPLANATION-1 OF SECTION 271 (1 )(C) OF THE A CT. 5. THAT THE ORDERS PASSED ARE ALSO WRONG BECAUSE TH E ASSESSING OFFICER HAS NEVER APPRECIATED NOR AFFORDED PROPER A ND REASONABLE OPPORTUNITY TO THE APPELLANT AND TO ADJUDICATE THE MATERIAL PRODUCED, FILED AND PLACED UPON RECORDED LAWFULLY, WHICH DOES NOT I NFER ABOUT THE FURNISHING OF INACCURATE PARTICULARS OF HIS INCOME, PRIOR TO HOLD HIM LIABLE U/S 271(1)(C) OF THE ACT. 6. THAT THE PENALTY IMPOSED U/S 271(1)(C) OF THE AC T, IS ALSO NOT TENABLE BECAUSE THE ADDITIONS MADE U/S 68 ARE ITSELF NOT LI ABLE TO BE SUSTAINED UNDER THE LAW AND TO THE FACTS OF THE CASE. 7. THAT PENALTY ORDER PASSED ARE FURTHER NOT TENABL E IN THE EYES OF LAW, BECAUSE OF THE DIFFERENCE OF OPINION INFER BY THE A SSESSING OFFICER AND NOT SPECIFIC WHETHER THE ASSESSEE HAS CONCEALED HIS INC OME OR EVER FURNISHED ITS INACCURATE PARTICULARS THEREOF UNDER THE LAW FO R HE HOLD LIABLE U/S 271 (1)(C) OF THE ACT. 8. THAT THE PENALTY ORDER PASSED IS ILLEGAL UNDER T HE LAW AS BEING UNCONSTITUTIONAL ALSO, THEREFORE, THE SAME COULD NO T BE UPHELD. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE PENALTY ORDER AND THE PENALTY NOTICE AS ISSUED BY THE ASSES SING OFFICER ARE BAD IN LAW. HE CONTENDED THAT ON PERUSAL OF THE NOTICE ISSUED B Y THE REVENUE DID NOT 3 | P A GE SPECIFY SPECIFIC CHARGE. HE THEREFORE, CONTENDED T HAT PENALTY DESERVES TO BE DELETED ON THIS GROUND ALONE. HE DREW OUR ATTENTIO N TO THE NOTICE DATED 22.12.2009 ISSUED U/S 271(1)(C) R.W.S. 274 OF THE I NCOME TAX ACT, 1961 (THE ACT) TO BUTTRESS HIS CONTENTION. LD. COUNSEL FOR THE ASSESSEE IN SUPPORT OF THE CONTENTION RELIED UPON THE DECISION OF THIS TRIBUNA L RENDERED IN THE CASE OF M/S. M.G. CONTRACTORS PVT.LTD. VS DCIT IN ITA NO.70 34 TO 7038/DEL/2014 VIDE ORDER DATED 19.09.2016 AND THE JUDGEMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) AND THE ORDER OF HONBLE APEX COURT IN THE CASE OF CIT & ANR. VS M/S. SSAS EMERALD MEADOWS VIDE SLP NO.11485 OF 2016 BY ORDER DATED 5TH AUGUST, 2016 . 3. PER CONTRA, LD. SR. DR OPPOSED THESE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE ASSESSEE HAS NOT RAISED SUCH GROUND BEFORE THE AUTHORITIES BELOW. 4. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. I FIND MERIT INTO THE CONTENTION OF THE L D. COUNSEL FOR THE ASSESSEE THAT THE PENALTY NOTICE U/S 271(1)(C) R.W.S. 274 OF THE ACT DOES NOT SPECIFY THE SPECIFIC CHARGE AS THE NOTICE HAS BEEN ISSUED IN A TENTATIVE FORMAT AND THE RELEVANT CLAUSE IS NOT STUCK DOWN, EVEN IN THE PENA LTY ORDER, IT IS NOTICED THAT THE ASSESSING OFFICER HAD RECORDED THAT THE ASSESSE E CONCEALED/FURNISHED PARTICULARS OF ITS INCOME TO THE EXTENT OF RS.10,5 0,000/- FOR WHICH IT HAS NOTHING TO OFFER EXPLANATION. THE DIVISION BENCH OF THIS TRIBUNAL AFTER CONSIDERING THE VARIOUS BINDING PRECEDENTS IN THE C ASE OF M/S. M.G. CONTRACTORS PVT.LTD. VS DCIT (SUPRA) WHEREIN THE TRIBUNAL HELD AS UNDER:- 4 | P A GE IT IS CLEAR FROM THE AFORESAID DECISION THAT ON TH E FACTS OF THE PRESENT CASE THAT THE SHOW CAUSE NOTICE U/S. 274 OF THE ACT IS D EFECTIVE AS IT DOES NOT SPELL OUT THE GROUNDS ON WHICH THE PENALTY IS SOUGH T TO BE IMPOSED. EVEN THE ASSESSMENT ORDER IS ALSO SILENT ON THIS ASPECT. THEREFORE IN THE COMPLETE ASSESSMENT PROCEEDINGS AS WELL AS PENALTY PROCEEDINGS AGAINST THE ASSESSEE THAT WHETHER IT HAS FURNISHED INACCURA TE PARTICULARS OF INCOME OR HAS CONCEALED PARTICULARS OF INCOME. THE PROVISIONS OF PENALTY PROCEEDINGS CANNOT BE DISTINCTLY APPLIED IN ASSESSM ENTS RELATED TO SEARCH AND OTHER REGULAR ASSESSMENT. THEREFORE THE PRINCIP LES LAID DOWN BY THE DECISION OF HON'BLE KARNATAKA HIGH COURT ALSO SQUAR ELY APPLIES TO THE FACTS OF THE PRESENT CASE EVEN THOUGH EXPLORATION 5 A OF SECTION 27L(L)(C) IS INVOKED. SIMILAR VIEW HAS BEEN TAKEN BY OTHER COORD INATE BENCHES IN FOLLOWING DECISIONS:- 1) DCIT CENTRAL CIRCLE VERSUS SHAYM SUNDAR DHANUKA 1869 - 1870/KOL/2013 2) SMT. CHAMPA GOEL VS ACIT ITA NO 696/CHD/20L2 3) NISHEETH KUMAR JAIN VERSUS ACIT ITA 961 964/KO L/2013 4) HARISHKUMAR SAROGI V DCIT ITA NO 1222-1226/KO1L 2011 & 1496-1499/KOL/2011 FOLLOWING THE DECISION OF THE HON'BLE KARNATAKA HIG H COURT, WE HOLD THAT THE ORDERS IMPOSING PENALTY IN ALL THE ASSESSM ENT YEARS HAVE TO BE HELD AS INVALID AND CONSEQUENTLY PENALTY IMPOSED IS CANCELLED. 5. FOLLOWING THE DECISION OF DIVISION BENCH OF THIS TRIBUNAL, THE PENALTY NOTICE ISSUED BY THE ASSESSING OFFICER AND THEREBY, THE PENALTY ORDER PASSED IS BAD IN LAW. THEREFORE, THE PENALTY ORDER IS HEREBY QUASHED AND THE PENALTY LEVIED U/S 271(1)(C) R.W.S 274 OF THE ACT, IS HEREB Y DELETED. 5 | P A GE 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIR TUAL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 08 TH JUNE, 2021. SD/- (KUL BHARAT) JUDICIAL MEMBER * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI