M/s. Carissa Investment (P) Ltd., New Delhi V. ITO, New Delhi

ITA 5123/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3034 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 17-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KR SHARMA
• Keywords: Bonafide belief
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 5123/DEL/2014 ASSESSMENT YEAR: 2007-08 M/S CARISSA INVESTMENT (P) LTD., VS. DCIT, CIRCL E 3(2), C/O MR. RAJESH DUREJA, ADV. NEW DELHI 890, DR. MUKHERJEE NAGAR, DELHI 110 009 (PAN: AAACC3277A) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. RAJESH DUREJA, ADV. REVENUE BY :SH. ANIL KR. SHARMA, SR. DR ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDE R DATED 17.7.2014 PASSED BY THE LD. CIT(A)-VI, NEW DELHI RE LATING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- 1. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW A ND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE 2 PENALTY OF RS. 34,500/- IMPOSED BY THE DCIT, CIRCLE3(1), NEW DELHI U/S. 271(1)(C) OF THE ACT. 3. THAT THE LD. CIT(A) WHILE UPHOLDING THE IMPOSITI ON OF PENALTY U/S. 271((1)(C) HAS FAILED TO APPRECIATE TH E PROVISIONS OF SECTION 68 ON THE BASIS OF WHICH THE IMPUGNED PENALTY WAS IMPOSED. 4. THAT IN ANY CASE AND IN VIEW OF THE MATTER, ORDE R OF LD. CIT(A) IN CONFIRMING THE ACTION OF AO IS BAD IN LAW AND UNJUSTIFIED. 5. THAT THE APPELLANT CRAVES THE LAVE TO ADD, MODIF Y, AMEND OR DELETE ANY OF THE GROUNDS OF THE APPEAL AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF INVESTMENT AND TRADING I N SHARES. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 30.1 0.2007 DECLARING INCOME OF RS. 27,78,790/-. THE RETURN WA S PROCESSED UNDER SECTION 143(1) OF THE I.T. ACT, 1961. SUBSEQ UENTLY THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS MADE ON RS. 51,48,76,850 AFTER MAKING VARIOUS ADDITIONS. BEING AGGRIEVED WITH THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE LD. CIT(A), WHO VIDE HIS ORDER DATED 09.6.2011 CO NFIRMED THE ADDITION ON ACCOUNT OF UNEXPLAINED LIABILITIES / D EPOSITED TO THE TUNE 3 OF RS. 1,02,280/-. THE AO FOLLOWING THE DECISION OF THE LD. CIT(A) INITIATED THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T. ACT, 1961 AND LEVIED PENALTY AMOUNTING TO RS. 34,500/-. BEING AGGRIEVED FROM THE PENALTY OF RS. 34,500/- U/S. 271(1)(C) OF THE I .T. ACT, 1961 THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE H IS IMPUGNED ORDER DATED 17.7.2014 HAS CONFIRMED THE PENALTY IMP OSED BY THE AO. 4. AGAINST THE ABOVE ORDER OF THE LD. CIT(A) DATED 17.7.2014, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE HEARING, LD. COUNSEL OF THE ASSESSE E HAS SUBMITTED THAT LD. CIT(A) WHILE UPHOLDING THE IMPOS ITION OF PENALTY U/S. 271(1)(C) HAS FAILED TO APPRECIATE THE PROVISI ONS OF SECTION 68 OF THE I.T. ACT, 1961 ON THE BASIS OF WHICH THE IMP UGNED PENALTY WAS IMPOSED. HE FURTHER STATED THAT DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FULLY DISCLOSE D ALL THE INFORMATION ASKED FOR AND HAS NOWHERE FURNISHED ANY INACCURATE PARTICULARS. IT WAS THE FURTHER CONTENTION THAT NOW HERE IN THE ASSESSMENT ORDER, IT HAS BEEN RECORDED THAT THE ASS ESSEE FURNISHED INACCURATE PARTICULARS OF INCOME. THEREFORE, HE STA TED THAT NO PENALTY CAN BE LEVIED IN THIS CASE AS IT CANNOT BE SAID THAT THERE WAS ANY ATTEMPT BY THE ASSESSEE TO CONCEAL PARTICULARS OF INCOME. IN THIS BEHALF, HE FILED A COPY OF THE DECISION RENDER ED BY THE HONBLE 4 SUPREME COURT OF INDIA IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. REPORTED IN (2010) 322 ITR 158 (SC) AND STATED THAT THE PRESENT CASE IS FULLY COVERED B Y SAID DECISION AND ACCORDINGLY, REQUESTED THAT THE PENALTY IN DISP UTE MAY BE DELETED. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND STATED THAT THE LD. CIT(A) HA S PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE , HENCE, THE SAME MAY BE AFFIRMED. 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES. FROM THE RECORD S, IT REVEALS THAT THE AO LEVIED PENALTY OF RS. 34,500/- PASSED U/S. 271(1)(C) OF THE I.T. ACT, 1961 VIDE ORDER DATED 26.3.2013. WE FURTHER NOTE THAT THE ASSESSEE FULLY DISCLOSED ALL THE INFORMATION AS KED FOR AND HAS NOWHERE FURNISHED ANY INACCURATE PARTICULARS. HOWEV ER, NOWHERE IN THE ASSESSMENT ORDER, IT HAS BEEN RECORDED THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME. WE FIND THAT THERE IS NO CONCLUSIVE PROOF THAT THE ASSESSEE CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE AO HAS NOT BR OUGHT ENOUGH INCRIMINATING MATERIAL FOR CONCEALMENT AND THERE IS NO MATERIAL FOR ESTABLISHING THE CONCEALMENT INDEPENDENTLY IN THE G IVEN FACTS AND CIRCUMSTANCES OF THE PENALTY IS NOT LEVIABLE, BECAU SE ALL THE 5 DOCUMENTS SUBMITTED BY THE ASSESSEE WERE NEITHER RE JECTED BY THE AO AS FALSE OR INCORRECT FACTS NOR AO HAD CLINCHING ANY FURTHER EVIDENCE OF CONCEALMENT OF FACTS. 7.1 WE ALSO FIND THAT SECTION 271(1)(C) POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AN D CONCEALMENT OF INCOME. ON THE FACTS AND CIRCUMSTANCES OF THIS CAS E THE ASSESSEES CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF PENALTY. 7.2 IN THIS REGARD, WE FIND THAT ASSESSEES COUNS EL RELIANCE FROM THE HONBLE APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010 IS SQUARELY APPLICABLE IN THE PRESENT CASE OF THE ASSE SSEE. IN THIS CASE VIDE ORDER DATED 17.3.2010 IT HAS BEEN HELD THAT TH E LAW LAID DOWN IN THE DILIP SHEROFF CASE 291 ITR 519 (SC) AS TO TH E MEANING OF WORD CONCEALMENT AND INACCURATE CONTINUES TO B E A GOOD LAW BECAUSE WHAT WAS OVERRULED IN THE DHARMENDER TEXTI LE CASE WAS ONLY THAT PART IN DILIP SHEROFF CASE WHERE IT WAS H ELD THAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PENALTY U/S 271(1)(C ). THE HONBLE APEX COURT ALSO OBSERVED THAT IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLA IM IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL 6 INVITE THE PENALTY U/S 271(1)(C). THIS IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. 7.3 WE FURTHER PLACE RELIANCE FROM THE APEX COURT DECISION RENDERED BY A LARGER BENCH COMPRISING OF THREE OF THEIR LORDSHIPS IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 WHEREIN IT WAS HELD THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS, AND PENALTY WILL NOT ORDINARILY BE IMP OSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACT ED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHO ULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE P ENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT, OR WHER E THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIA BLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND PRECEDENTS, WE FIND THAT THE LEVY OF PENALTY IN TH IS CASE IS NOT 7 JUSTIFIED. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY IN DISPUTE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/06/2017 . SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 05/06/2017 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