M/s. Havells India Ltd., Delhi V. ACIT (LTU), New Delhi

ITA 5060/DEL/2013

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1602 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-05-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 02-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV DUDEJA
• Assessee Lawyers: ROHIT JAIN
• Section: 271(1)(c); 80HHC; 201; 274; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 5060/DEL/2013 : ASSTT. YEAR : 2004-05 M/S HAVELLS INDIA LTD. 1, RAJ NARAIN MARG, CIVIL LINES, DELHI-110054 VS ACIT-LTU, NBCC PLAZA, SECTOR-4, PUSHP VIHAR, SAKET, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAACT0351E ASSESSEE BY : SH. ROHIT JAIN, CA REVENUE BY : SH. GAURAV DUDEJA, SR. DR DATE OF HEAR ING: 11 . 1 1 .20 20 DATE OF PRONOUNCEMENT: 19 .11 .20 20 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-LTU, NEW DELHI DATED 17 .07.2013. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT THE IMPUGNED ORDER OF CIT (APPEALS), LTU, NEW DELHI IS BAD IN LAW AND WRONG ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE AND LEGAL POSITION. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND THE LEGAL POSITION, THE LEARNED CIT (APPEALS) H AS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(L)('C) IN RESPECT OF ADDITION ON ACCOUNT OF INTEREST PAID TO SYNDICATE B ANK AMOUNTING TO RS.2,80,276/-. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND THE LEGAL POSITION, THE LEARNED CIT (APPEALS) H AS ERRED ITA NO. 5060/DEL/2013 HAVELLS INDIA LTD. 2 IN CONFIRMING THE PENALTY LEVIED U/S 271 (1)(' C) I N RESPECT ADDITION ON ACCOUNT OF NON COMPETE FEE PAID AMOUNTI NG TO RS. 5,00,000/-. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND THE LEGAL POSITION, THE LEARNED CIT (APPEALS) H AS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(L)('C) IN RESPECT OF LESS DEDUCTION U/S 80HHC ALLOWED AMOUNTING TORS.64, 007/-. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND THE LEGAL POSITION, THE LEARNED CIT (APPEALS) H AS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) IN R ESPECT OF ADDITION ON ACCOUNT OF MISCELLANEOUS EXPENDITURE IN CURRED FOR INCREASE IN AUTHORIZED CAPITAL AMOUNTING TO RS. 41,012/-. 6. THAT THE APPELLANT, CRAVES, LEAVE TO ADD/ALTER/DELETE/AMEND ANY GROUND(S) OF APPEAL BEFO RE OR AT THE TIME OF HEARING. 3. ON GOING THROUGH THE RECORD, WE FIND THAT THE PE NALTY HAS BEEN LEVIED U/S 271(1)(C) IN RESPECT OF DISALLOWANC E ON ACCOUNT OF NON COMPETE FEE, EXPENDITURE INCURRED FOR INCREA SE IN AUTHORIZED CAPITAL AND WRONG DEDUCTION CLAIMED U/S 80HHC ON ACCOUNT OF INTEREST EARNED. 4. AT THE OUTSET, THE LD. AR ARGUED THAT THE NOTICE ISSUED WAS BAD IN LAW AND VOID AB INITIO AS THE NOTICE PRIMA FACIE DID NOT SATISFY THE CONDITION AS TO WHICH LIMB OF SECTION 2 71(1)(C) THE PENALTY HAS BEEN LEVIED EITHER CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IT WAS ARGUED T HAT THAT IT IS ELEMENTARY THAT FOR ASSUMING VALID JURISDICTION TO IMPOSE PENALTY, THE ASSESSING OFFICER MUST, FIRST BE SATISFIED, THOUGH PRIMA FACIE, THAT THE ITA NO. 5060/DEL/2013 HAVELLS INDIA LTD. 3 ASSESSEE HAS EITHER CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME AND ON THE BASIS OF SUCH SAT ISFACTION A SHOW CAUSE NOTICE HAS TO BE ISSUED UNDER SECTION 274 OF THE AC T TO THE ASSESSEE SPECIFYING THE ADDITION/ DISALLOWANCE IN RESPECT OF WHICH PENALTY IS SOUGHT TO BE IMPOSED AND ALSO THE PRECISE CHARGE/ GROUND O N WHICH PENALTY IS PROPOSED TO BE IMPOSED THEREON. IT WAS ARGUED THAT NOTICE ISSUED UNDER SECTION 274 SHOULD SPECIFICALLY STATE THE GROUNDS M ENTIONED IN SECTION 271(1)(C), I.E., WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORRECT PARTICULARS OF INCOME. SENDING PRINTE D FORM, WHERE BOTH THE GROUNDS MENTIONED IN SECTION 271 OF THE ACT ARE MEN TIONED, DOES NOT SATISFY REQUIREMENT OF LAW. 5. LD. DR ARGUED THAT THE ASSESSED WAS WELL AWARE O F THE REASON OF LEVY OF PENALTY AND HAS INDEED REPLIED TO THE SHOW CAUSE NOTICE. 6. WE HAVE GONE THROUGH THE PENALTY NOTICE ISSUED B Y THE ASSESSING OFFICER AND FIND THAT THE PENALTY NOTICE DOES NOT SPECIFY WHETHER THE PENALTY WAS PROPOSED FOR CONCEA LMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME IN TERMS OF PROVISIONS OF SECTION 271(1 )(C). 7. THE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY: 359 ITR 565 HELD THAT NOTICE U NDER SECTION 274 ITA NO. 5060/DEL/2013 HAVELLS INDIA LTD. 4 SHOULD SPECIFICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C) OF THE ACT, I.E., WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORRECT PARTICULARS OF INCOME. SENDING PRINTED FO RM WHERE ALL THE GROUNDS MENTIONED IN SECTION 271 ARE MENTIONED WOUL D NOT SATISFY REQUIREMENT OF LAW. 8. THE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF PCIT VS. SAHARA INDIA LIFE INSURANCE CO. LTD. IN ITA NO. 475 OF 201 9, REITERATED THAT NOTICE UNDER SECTION 274 SHOULD SPECIFICALLY STATE THE GRO UNDS ON WHICH PENALTY WAS SOUGHT TO BE IMPOSED AS THE ASSESSEE SHOULD KNO W THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. 9. THE AFORESAID PRINCIPLE HAS BEEN REITERATED IN THE IN THE CASE OF CIT VS. SSA'S EMERALD MEADOWS: 73 TAXMANN.COM 241 (KAR) [RE VENUES SLP DISMISSED IN 242 TAXMAN 180] 10. IN THE PRESENT CASE, TOO, IN NOTICE DATED 29.12 .2006 AND ON 23.12.2011 ISSUED UNDER SECTION 274 READ WITH SECTI ON 271 OF THE ACT, INITIATED PENALTY AGAINST THE APPELLANT FOR ALLEGED CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INC OME, THAT IS TO SAY, THE SPECIFIC DEFAULT WAS NOT SPECIFIED BY THE ASSESSING OFFICER IN THE NOTICE ISSUED. 11. HENCE, RESPECTFULLY FOLLOWING THE ORDER OF THE JURISDICTIONAL HIGH COURT, SINCE THE NOTICE U/S 274 HAS NOT BEEN S PECIFIED AS ITA NO. 5060/DEL/2013 HAVELLS INDIA LTD. 5 TO WHETHER PENALTY IS PROPOSED FOR ALLEGED CONCEAL MENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH IN COME , THE PENALTY LEVIED IS HEREBY OBLITERATED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/11/2020. SD/- SD/- (AMIT SHUKLA) ( DR. B. R. R. KUMAR) JUDICIAL MEMBER AC COUNTANT MEMBER DATED: 19/11/2020 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DICTATED BY MEMBER 18 .11.2020 PS 2. DRAFT PLACED BEFORE AUTHOR 18.11.2020 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 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. 11. DATE OF UPLOADING