ACIT, UDAIPUR V. M/s. Mateshwari Indrani Contractor Pvt. Ltd., UDAIPUR

ITA 504/JODH/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5251 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 504 / JODH /201 4 (ASST. YEAR : 200 8 - 0 9 ) AC IT, CIRCLE - 1, UDAIPUR . VS. M/S. MATESHWARI INDRANI CONTRACTORS PVT. LTD., BEHIND DEBARI PUMP, NEAQR AARA MACHINE, UDAIPUR. PAN NO. AAECM 2334 A (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE . DEPARTMENT BY : SHRI S.L. MOURYA - DR DATE OF HEARING : 09 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 09 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) , UDAIPUR , DATED 0 2/0 7 /201 4 . 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE PENALTY IMPOSED OF RS. 12,52,532/ - UNDER SEC. 271(1)(C) OF THE ACT. 3 . BRIEF FACTS OF THE CASE ARE THAT IN THE ASSESSMENT MADE UNDER SEC. 143(3) OF THE ACT ON 27/12/2010, THE ASSESSING OFFICER MADE THE ADDITION OF RS. 1,13,23,000/ - UNDER SEC. 68 OF THE ACT. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITI ON TO THE EXTENT OF RS. 36,85,000/ - MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SEC. 68 OF THE ACT. ON FURTHER APPEAL, THE TRIBUNAL CONFIRMED THE 2 ITA NO. 504 / JODH /201 4 ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). SUBSEQUENTLY, THE ASSESSING OFFICER LEVIED PENALTY U NDER SEC. 271(1)(C) OF THE ACT FOR FURNISHING THE INACCURATE PARTICULARS OF INCOME ON THE ADDITION OF RS.36,85,000/ - , WHICH WAS WORKED OUT AT RS. 12,52,532/ - . 4 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE LEVY OF PENALTY BY OBSERVING AS UNDER: - 2.4. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT VIS - A - VIS THE FINDINGS GIVEN BY THE A.O. IN THE PENALTY ORDER UNDER APPEAL. IT IS SEEN THAT EVEN DURING THE PENALTY PROCEEDINGS, THE APPELLANT HAS MADE AN ATTEMPT TO ESTABLISH THAT THE LOAN OF RS.35,00,000/ - TAKEN FROM RAJENDRA SINGH RANAWAT IS GENUINE. AS THE ISSUE OF GENUINENESS OF THE LOAN HAS BEEN CONSIDERED BY THE JURISDICTIONAL HONOURABLE ITAT, IT IS NOT CONSIDERED FIT TO DISCUSS THE ISSUE AT THIS STAGE. FROM THE PENALTY ORDER, IT IS SEEN THAT THAT THE HAS LEVIED THE PENALTY U/S.271(1)( C) OF RS.12,52,532/ - MERELY ON THE GROUND THAT THE ADDITION MADE U/S.68 BY THE A.O. TO THE EXTENT OF RS.36,85,000/ - HAS BEEN CONFIRMED BY THE HONOURABLE JURISDICTIONAL ITAT. IN THIS CONNECTION, IT MAY BE MENTIONED HERE THAT THERE ARE NUMBER OF JUDICIAL PRONOUNCEMENTS TO THE EFFECT THAT MERE CONFIRMATION OF A PARTICULAR ADDITION DOES NOT EMPOWER THE ASSESSING AUTHORITY TO IMPOSE PENALTY U/S.271 (1)(C) AS THERE MAY BE DIFFERENT REASONS FOR MAKING/CONFIRMING THE ADDITION AT THE ASSESSMENT STAGE AND APPELLATE STAGE. UNDISPUTEDLY, THOUGH THERE IS A LINK BETWEEN THE ASSESSMENT AND THE PENALTY PROCEEDINGS INITIATED AT THE TIME OF ASSESSMENT, THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE INDEPENDENT PROCEE DINGS AND THEREFORE, BEFORE IMPOSING PENALTY U/S.271(1)(C ) WHICH IS A QUASI CRIMINAL IN NATURE, SOME MATERIALS/EVIDENCES SHOULD HAVE BEEN BROUGHT ON RECORD TO ESTABLISH THAT THERE WAS A DELIBERATE ATTEMPT TO CONCEAL THE INCOME OR THE APPELLANT HAS DELIBERA TELY AND CONSCIOUSLY FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. MERE CONFIRMATION OF AN ADDITION MADE U/S.68 OF THE ACT DOES NOT MEAN THAT THE APPELLANT HAS CONCEALED SUCH INCOME AND THEREFORE PENALTY U/S.271 (1)( C) IS LEVIABLE ON THE APPELLANT. THIS VIEW IS SUPPORTED BY THE DECISION OF THE HONOURABLE ALLAHABAD HIGH COURT IN THE CASE OF ADDL.CIT VS. RAWALPINDI FLOUR MILLS LTD. - 125 ITR 243 WHEREIN IT WAS HELD THAT IF THE ASSESSEE FAILS TO PROVE THE GEN UINE NE SS OF THE LOANS IN THE ASSESSMENT PROCEEDINGS , THE ADDITION TO THE TOTAL INCOME U/S.68 CAN BE SAID TO BE JUSTIFIED BUT ON THAT G ROUND ALONE PENALTY U/S.271(1)( C) CANNOT BE IMPOSED. THIS DECISION IS CLEARLY APPLICABLE IN THE CASE OF THE APPELLANT AS IT APPEARS FROM THE PENALTY ORDER THAT THE A.O. HAS IMPOSED THE PENALTY MERELY ON THE GROUND THAT THE ADDITION MADE AT THE TIME OF ASSESSMENT HAS BEEN CONFIRMED BY THE HONOURABLE TRIBUNAL AND NO MATERIALS/EVIDENCES HAVE BEEN BROUGHT TO ESTABLISH THAT THE APPELLANT HAS DELIBERATELY CONCEALED THE INCOME TO THE EXTENT OF 3 ITA NO. 504 / JODH /201 4 ADDITION CONFIRMED BY THE HONOURABLE TRIBUNAL. IN VIEW OF THE DISCUSSIONS AND THE JUDICIAL PRONOUNCEMENTS REFERRED BY THE AP PELLANT IN HE SUBMISSIONS MENTIONED SUPRA WHICH ARE APPLICABLE IN THE CASE OF THE APPELLANT, IT IS HELD THAT THERE IS NO CASE FOR IMPOSITION OF PENALTY U/S.271(1)(C) OF THE ACT AND THE PENALTY IMPOSED BY THE A.O. AMOUNTING TO RS. 12,52,532/ - DESERVERS TO B E CANCELLED AND I ORDER ACCORDINGLY. 5. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHEREAS NONE APPEARED ON BEHALF OF THE ASSESSEE. 6 . WE FIND THAT THE DEPARTMENTAL REPRESENTATIVE SIMPLY RELIED ON THE ORDER OF THE ASSESSING OFFICER , BUT COULD POINT OUT ANY SPECIFIC DEFECT IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) . WE ALSO FIND THAT THE PENALTY UNDER SEC. 271(1)(C) OF THE ACT WAS LEVIED BY THE ASSESSING OFFICER ONLY ON THE GROUND THAT THE ADDITION UNDER SEC. 68 OF THE ACT FOR RS. 36,85,000/ - WAS CONFIRMED BY THE TRIBUNAL. NO MATERIAL WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING THE COURSE OF PENALTY PROCEEDINGS TO SHOW THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED SUCH INCOME WHICH IS ESSENTIAL REQUIREMENT BEFORE LEVY OF PENALTY UNDER SEC. 271(1)(C) OF THE ACT. HENCE, WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON WEDNESDAY , THE 0 9 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 0 9 TH MARCH , 201 6 . 4 ITA NO. 504 / JODH /201 4 VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY I.T.A.T., JODHPUR .