M/s The Panipat Urban Co-operative Bank Ltd., Panipat V. DCIT, Panipat

ITA 5031/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3692 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 23-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHAUBHAGYA AGRAWAL
• Keywords: Wrong claim; Bad and doubtful debts

Judgement Text

1 ITA NO. 5031/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 5031/DEL/201 6 ( A.Y 2011-12) THE PANIPAT URBAN CO - OPERATIVE BANK LTD. G. T. ROAD PANIPAT AAALT0141K (APPELLANT) VS DCIT PANIPAT CIRCLE PANIPAT (RESPONDENT) APPELLANT BY SH. SHAUBHAGYA AGRAWAL, ADV RESPONDENT BY SH. ATIQ AHMAD SR. DR ORDER PER SUCHITRA KAMBLE THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 11/07/2016 PASSED BY CIT(A)-KARNAL. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. A.O IN LEVYING PENALTY OF RS.3,70,800/- AND THAT TOO WITHOUT ASSUMING JURI SDICTION AS PER LAW AND WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. A.O IN LEVYING PENALTY U/S 271(1)(C) IS BAD IN LAW DATE OF HEARING 03.01.2018 DATE OF PRONOUNCEMENT 08.02.2018 2 ITA NO. 5031/DEL/2016 AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE . 3 . THE ASSESSEE DERIVED INCOME FROM THE BANKING BUSINE SS AND HAD CLAIMED BAD DEBTS & DOUBTFUL RESERVES OF RS.12,00,000/- AS PER GUIDELINES ISSUED BY RBI I.E. GOVERNING BODY. THE ASSESSING OFFICER COMP LETED ASSESSMENT ON 17.01.2014 AT ASSESSED INCOME OF RS.3,11,30,860/-. AT THE TIME OF PENALTY PROCEEDINGS, THE ASSESSING OFFICER PROVIDED OPPORTU NITY TO THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY SHOULD NOT BE IMPOSED U/S 271(L)(C) OF THE INCOME TAX ACT,1961. AFTER CONSIDERING THE REPLY, THE ASSE SSING OFFICER IMPOSED PENALTY. THE ASSESSING OFFICER PRIMARILY OBSERVED T HAT SINCE THE ASSESSEE COULD NOT EXPLAIN WHY THIS BLATANTLY WRONG CLAIM HAD BEEN MADE EVEN THOUGH IT WAS NOT PERMISSIBLE AS PER THE INCOME TAX ACT, 1961, TH E CASE WAS FIT FOR IMPOSITION OF PENALTY. THE ASSESSING OFFICER FURTHE R OBSERVED THAT IT WAS ONLY ON ACCOUNT OF DETECTION OF THIS INACCURATE PARTICUL ARS THAT THIS FALSE CLAIM CAME TO LIGHT AND THIS AMOUNTED TO CONCEALMENT, FOR WHIC H PENALTY WAS ATTRACTED. 4. BEING AGGRIEVED BY THE PENALTY ORDER THE ASSESSE E FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASS ESSEE AND SUSTAIN THE PENALTY LEVIED BY THE ASSESSING OFFICER. 5. THE LD. AR SUBMITTED THAT THE CLAIM OF DEDUCTION WAS MADE AS PER THE RBI GUIDELINES WHICH DOES NOT AMOUNT TO FURNISHING OF THE INACCURATE RESULTS OR CONCEALMENT OF INCOME. 6. THE LD. DR RELIED UPON THE ORE OF THE CIT(A) AND PENALTY ORDER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE LD. ARS CONTENTION THAT THE ASSESSEE RELIED UPON THE CIRCULAR OF THE RBI GUIDELINES IS ACCEPTABLE AS FOR CLAIMING DE DUCTION, THE ASSESSEE HAS ALL THE RIGHTS TO TAKE THE BENEFIT OF LAW OF THE LAND A ND GOVERNMENT NOTIFICATIONS WHICH ARE HELPFUL FOR HIS RIGHTS. THE ASSESSING OF FICER CANNOT TOTALLY IGNORE THE 3 ITA NO. 5031/DEL/2016 RBI CIRCULAR AND CANNOT HELD THAT THE ASSESSEE FURN ISHED INACCURATE PARTICULARS AS THE CLAIM IS MADE IN RESPECT OF THE RBI CIRCULAR. THE DECISIONS CITED BY THE CIT(A) IN THE ORDER WILL NOT BE APPLIC ABLE IN THE PRESENT CASE AS THE RATIO IS APPLICABLE ONLY WHEN THERE IS CONCEALMENT OF INCOME OR INACCURATE FURNISHING OF DETAILS. THEREFORE, THE ORDER OF THE CIT(A) IS SET ASIDE. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 08TH FEBRUA RY, 2018 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 08/02/2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 4 ITA NO. 5031/DEL/2016 DATE 1. DRAFT DICTATED ON 03/01/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 03/01/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 8.02.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 8 .02.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 5 ITA NO. 5031/DEL/2016