ACIT, New Delhi V. Prashant Srivastava, New Delhi

ITA 5102/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7452 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 30-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 01-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Agreed addition
• Section: 143(3)

Judgement Text

ITA NO. 5102/ DEL/ 2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N O. 5 102 /DEL/201 2 A.Y. 2008 - 09 A CIT, CIRCLE - 38 (1), NEW DELHI VS. PRASHANT SRIVASTAVA, G - 1/48 - 49, SECTOR - 16, ROHINI, DELHI 110 085 (PAN: AWOPS3691M) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. VIKRAM SAHAY, SR. DR ASSESSEE BY : NONE DATE OF HEARING : 30 - 1 2 - 2014 DATE OF ORDER : 31 - 1 2 - 2014 ORDER PER H.S. SIDHU, JM TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS - XXVIII ) NEW DELHI P ERTAINING TO ASSESSMENT YEAR 2008 - 09 2. THE GROUNDS RAISED READ AS UNDER: - 1. THE LD. CIT(A) DELETED THE PENALTY OF RS. 16.60 LACS IMPOSED BY THE AO U/S. 271(1)(C) OF THE I.T. ACT BY NOT APPRECIATING THE FACT THAT THE ASSESEE FAILED TO PRODUCE ANY SUPPORTING BILLS OR VOUCHERS DESPITE ITA NO. 5102/ DEL/ 2012 2 BEING GIVEN SUFFICIENT OPPORTUNITY TO DO SO AND THEREFORE, AGREED TO ASSESSMENT OF NP @5%. 2. THAT LD. CIT(A) ERRED IN NOT CONSIDERING THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT WHICH ALSO PROVIDE THAT WHERE A PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONAFIDE, THE AMOUNT ADDED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON SHALL BE DEEMED TO REPRESENT INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 3. THE LD. CIT(A) ERRED IN ACCEPTING THE EXPLANATION OF THE ASSESSEE AT FACE VALUE THAT HIS ACCOUNTANT HAD MISPLACED THE BILLS AND VOUCHERS WHICH LED TO THEIR NON PRODUCTION BEFORE THE ASSESSING OFFICER. 4. THE LD. CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT SINCE THE ASSESEE FAILED TO FILE ANY EVIDENCE DURING THE PENALTY PROCEEDINGS TO SUBSTANTIATE THE CLAIMED EXPENSES BY PRODUCING BILLS / VOUCHERS, THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT ARE ATTRACTED. 5. THAT THE GROUNDS OF APPEAL ARE WI THOUT PREJUDICE TO EACH OTHER. 6. THE APPELLANT CRAVE LEAVE TO ADD, AMEND OR MODIFY ANY/ ALL THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF THE APPEAL. IT IS PRAYED THAT THE ORDER OF THE CIT(A) IS CONTRARY TO THE FACTS ON RECORD AND THE SETTLED POS ITION OF LAW; AND THE ORDER OF THE AO DESERVES TO BE RESTORED. ITA NO. 5102/ DEL/ 2012 3 3. THE AFORESAID APPEAL CAME UP FOR HEARING BEFORE THE BENCH ON 09.5.2013 AND 18.12.2014. IN SPITE OF NOTICE TO THE ASSESSEE, NON APPEARED ON BEHALF OF THE ASSESSEE AND THE BENCH ADJOURNED TH E CASE FOR 30.12.2014 WITH THE DIRECTION TO ISSUE NOTICE THROUGH THE DEPARTMENTAL REPRESENTATIVE WHICH WAS SERVED UPON TO THE ASSESSEE ON 17.11.2014 BY THE DEPARTMENTAL REPRESENTATIVE AND THE SAME WAS INTIMATED TO THE TRIBUNAL VIDE DCIT, CIRCLE - 62(1), NEW DELHI LETTER DATED 27.11.2014. BUT AGAIN ON 30.12.2014 NEITHER THE ASSESSEE APPEARED NOR HIS AUTHORISED REPRESENTATIVE WAS APPEARED TO REPRESENT THE CASE. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT NO USEFUL PUR POSE WOULD BE SERVED BY AGAIN AND AGAIN SENDING THE NOTICE TO THE ASSESSEE AND THEREFORE, WE ARE DECIDING THE ISSUE IN DISPUTE EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR. 4 . THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE ASSESSMENT WAS COMP LETED ON 30.12.2010, ASSESSING THE INCOME AT RS. 80,55,870/ - AS AGAINST THE DECLARED INCOME OF RS. 32,00,692/ - IN THE RETURN OF INCOME BY TAKING THE NET PROFIT @ 5% OF THE GROSS TURNOVER, AFTER THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNTS AND OTHER SUPPORTING VOUCHERS, BILLS ETC. EVEN AFTER BEING AFFORDED NUMEROUS OPPORTUNITIES. SIMULTANEOUSLY, PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T. ACT, 1961 WERE ALSO INITIATED AND PENALTY OF RS. 16,60,000/ - WAS IMPOSED UPON THE ASSESSEE VIDE ORDER DATED 22.6.2011. 5 . AGAINST THE PENALTY ORDER OF THE ASSESSING OFFICER, ASSEESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER 09 . 7 .201 2 HAS ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE PENALTY IMPOSED BY THE ASSESSING OFFICER. ITA NO. 5102/ DEL/ 2012 4 6 . AGGRIEVED BY THE AFORESAID ORDER DATED 09 . 7 .201 2 , REVENUE IS IN APPEAL BEFORE US. 7 . AT THE TIME OF HEARING LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND REITE RATED ON THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED BY THE REVENUE. 8 . WE HAVE HEARD LD. DR AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER DATED 09.7.2012, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS DELETE D THE PENALTY IN DISPUTE BY HOLDING THAT THE AO HAS PASSED THE ASSESSMENT ORDER U/S. 143(3) ON THE BASIS OF THE AGREED ADDITIONS IN THE NET PROFIT RATIO @5% ON ESTIMATE BASIS AS THE ASSESSEE COULD NOT PRODUCE THE RELEVANT DETAILS ASKED FOR, DURING T HE COURSE OF ASSESSMENT PROCEEDINGS DUE TO THE FACT THAT THEY WERE MISPLACED BY THE ACCOUNTANT. AS IT WAS AN AGREED ASSESSMENT, NO APPEAL WAS PREFERRED AGAINST THE SAID ASSESSMENT ORDER WITH THE BELIEF THAT PENALTY WOULD NOT BE INITIATED OR IMPOSED U/S. 271(1)(C) OF THE I.T. ACT. LD. CIT(A) IN HIS ORDER HAS MENTIONED THAT IT IS A SETTLED PROPOSITION OF LAW THAT NO PENALTY U/S. 271(1)(C) CAN BE IMPOSED MERELY ON THE BASIS OF THE ASSESSMENT ORDER AND IN THIS BEHALF HE CITED THE HON BLE DELHI HIGH COUR T DECISION IN THE CASE OF CIT VS. JK SYNTHETIC LTD. 219 ITR 627 (DEL) WHEREIN IT WAS HELD WHEN THE CONCEALMENT PROCEEDINGS U/S. 271(1)(C) IN A CASE IS PURELY BASED ON ASSESSMENT ORDER PENALTY CANNOT BE LEVIED. HE FURTHER STATED THAT THERE ARE JUDICIAL PR ONOUNCEMENTS THAT MERE FACT THAT CERTAIN ADDITION / DISALLOWANCE DOES NOT NECESSARILY LEAD TO THE CONCLUSION THAT THERE WAS CONCEALMENT OF INCOME. IN SUPPORT OF HIS CONTENTION HE REFERRED THE JUDGMENT OF THE HON BLE SUPREME COURT OF INDIA IN THE CASE OF C IT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) , HE STATED THAT PENALTY BASED MERELY ON THE FINDING GIVEN IN ASSESSMENT ORDER IS NOT VALID. LD. CIT(A) HAS CITED VARIOUS DECISION RENDERED BY THE HON BLE SUPREME COURT AS ITA NO. 5102/ DEL/ 2012 5 WELL AS THE HON B LE HIGH COURTS IN SUPPORT OF HIS CONTENTION AND ACCORDINGLY FIND THAT NO PENALTY U/S. 271(1)(C) WAS LEVIABLE ON MERIT AGAINST THE ASSESSEE AND THEREFORE, DELETED THE PENALTY OF RS. 16,60,000/ - AND ALLOWED THE APPEAL OF THE ASSESSEE. 8 .1 WE ALSO FIND THAT SECTION 271(1)(C) POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. ON THE FACTS AND CIRCUMSTANCES OF THIS CASE THE ASSESSEE S CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARR ANT LEVY OF PENALTY. 8 .2 IN THIS REGARD, WE FIND LD. CIT(A) HAS RIGHTLY APPLIED THE DECISION OF THE HON BLE APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010 WHICH IS SQUARELY APPLICABLE IN THE PRESENT CASE OF THE ASSESSEE. IN THIS CASE VIDE ORDER DATED 17.3.2010 IT HAS BEEN HELD THAT THE LAW LAID DOWN IN THE DILIP SHEROFF CASE 291 ITR 519 (SC) AS TO THE MEANING OF WORD CONCEALMENT AND INACCURATE CONTINUES TO BE A GOOD LAW BECAUSE WHAT WAS OVERRULED IN THE DHARMENDER TEXTILE CASE WAS ONLY THAT PART IN DILIP SHEROFF CASE WHERE IT WAS HELD THAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PENALTY U/S 271(1)(C). THE HON BLE APEX COURT ALSO OBSERVED THAT IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLAIM IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE THE PENALTY U/S 271(1)(C). THIS IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. 8.3 WE ALSO FIND LD. CIT(A) HAS ALSO RIGHTLY APPLIED THE DECISION OF THE HON BLE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS. JK SYNTHETIC LTD. 219 ITR 627 (DEL) WHEREIN IT WAS HELD WHEN THE CONCEALMENT PROCEEDINGS U/S. 271(1)(C) IN A CASE IS PURELY BASED ON ASSESSMENT ORDER PENALTY CANNOT BE LEVIED. ITA NO. 5102/ DEL/ 2012 6 9 . IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE FIND THAT THE LEVY OF PENALTY IN THIS CASE IS NOT JUSTIFIED PARTICULARLY WHEN THE ASSESSMENT WAS FRAMED ON THE INCOME DETERMINED ON ESTIMATE BASIS AND WITHOUT BRINGING ANY MATERIA L ON RECORD TO SUBSTANTIATE THAT THE ASSESSEE WILLFULLY AND INTENTIONALLY CONCEALED THE INCOME OR FURNISHED THE INACCURATE PARTICULARS OF THE INCOME, HENCE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A), ACCORDINGLY, WE UPHOLD THE SAME AND DECIDE THE ISSUE AGAINST THE REVENUE. 10 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 31 / 1 2 /20 1 4 . SD/ - SD/ - [ N.K. SAINI ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 31 / 1 2 /201 4 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES