Sh. Prem Prakash Choudhary, New Delhi V. DCIT, New Delhi

ITA 5203/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7140 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 24-08-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 23-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Unexplained cash credit; Gift; Principle of natural justice
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-3 NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 5203/DEL/2014 ASSESSMENT YEAR: 2002-03 PREM PRAKASH CHOUDHARY, VS. DCIT, CC-23, C/O RRA TAXINDIA, NEW DELHI D-28, SOUTH EXTENSION, PART-I, NEW DELHI 110 049 (PAN: ADHPC7018G) (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPTA, ADV. & SH. SOMIL AGGARWAL, ADV. REVENUE BY : SHRI FR MEENA, SR. DR DATE OF HEARING ON : 24/08/2016 ORDER PRONOUNCED ON : 14/09/20 16 ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 12.8.2014 PASSED BY THE LD. CIT(A)-VI, NEW DELHI RE LATING TO ASSESSMENT YEAR 2002-03 ON THE FOLLOWING GROUNDS:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CLT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE ACTION OF LD. AO IN NOT DELETING THE PENALTY OF RS.7,60,5L2/- AS LEVIED BY LD. AO AND THAT TOO WITH OUT ASSUMING JURISDICTION AS PER LAW AND WITHOUT CONSID ERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE IMP UGNED PENALTY ORDER BEING ILLEGAL AND VOID AB INITIO . 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN NOT QUASHING THE PENALTY ORDER FRAMED BY LD. AO IS BEYOND JURISDICTION AND WITHOUT CONSIDERING T HE FACTS AND CIRCUMSTANCES OF THE CASE AND THE IMPUGNED PENA LTY ORDER BEING ILLEGAL AND VOID AB INITIO AND THE IMPU GNED 2 PENALTY ORDER HAS BEEN FRAMED WITHOUT CONSIDERING T HE SUBMISSIONS/EVIDENCES OF THE ASSESSEE AND WITHOUT PROVIDING ANY ADVERSE MATERIAL ON RECORD. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CLT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN PASSING THE IMPU GNED PENALTY ORDER BEING CONTRARY TO LAW AS THE ASSESSME NT ORDER FRAMED UNDER SECTION L53A DATED 20-12-2007 A ND ADDITIONS MADE THEREIN WERE ALSO ILLEGAL, BEYOND JURISDICTION AND VOID AB INITIO. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE ACTION OF LD. AO IN LEVYING PENALTY U/S 271(1)( C) ON THE ADDITIONS MADE IN THE ASSESSMENT ORDER U/S 153A DAT ED 20-12-2007 AS THESE ADDITIONS ARE ALSO CONTRARY TO LAW AND FACTS. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE ACTION OF LD. AO IN LEVYING PENALTY U/S 271(1)( C) IS BAD IN LAW BEING BEYOND JURISDICTION AND BARRED BY LIMI TATION AND CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE A ND HAS BEEN PASSED BY RECORDING INCORRECT FACTS AND FINDIN GS AND WITHOUT GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE AND WITHOUT CONSIDERING THE SUBMISSIONS/EVIDENCES OF TH E ASSESSEE AND WITHOUT PROVIDING ANY ADVERSE MATERIAL ON RECORD AND THE SAME IS NOT SUSTAINABLE ON VARIOUS L EGAL AND FACTUAL GROUNDS. 6. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN N OT QUASHING THE IMPUGNED PENALTY ORDER FRAMED BY LD. A O THAT TOO WITHOUT RECORDING MANDATORY 'SATISFACTION' AS PER LAW. 7. THAT THE ASSESSEE CRAVES THE LEAVE TO ADD, ALTER OR AMEND THE GROUNDS OF APPEAL AT ANY STAGE AND ALL THE GROU NDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS MENT IN THIS CASE WAS COMPLETED VIDE ORDER DATED 20.12.2007 PASSED U/ S. 143(3) OF THE I.T. ACT, 1961 AT AN INCOME OF RS. 26,18,700/- AS AGAINST DECLARED INCOME OF RS. 72,000/-. THE DIFFERENCE BETWEEN THE ASSESSED INCOME 3 AND RETURNED INCOME WAS ON ACCOUNT OF THE ADDITION OF RS.25,00,000/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT (GIFT) AND RS. 46,700/- ON ACCOUNT OF LOW WITHDRAWAL. PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T. ACT, 1961 WERE INITIATED AT THE TIME OF ASSESSMENT. AO OBSERVED THAT THE ADDITION OF RS. 25,00,000/- WA S CONFIRMED BY THE LD. CIT(A), AS THERE ARE SUFFICIENT FACTS / EVI DENCES ON THE RECORD TO ESTABLISH THAT THE ASSESSEE HAD CONCEALED HIS INCOM E AND ALSO FURNISHED INACCURATE PARTICULARS TO THE EXTENT OF A DDITION OF RS. 25 LASC, HENCE, THE PENALTY OF RS. 7,60,512/- WAS LEVI ED U/S. 271(1)(C) OF THE I.T. ACT, 1961 VIDE ORDER DATED 29.3.2010. 3. AGAINST THE ABOVE PENALTY ORDER DATED 29.3.2010 PASSED BY THE ASSESSING OFFICER, ASSESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 12.8.2014 DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGAINST THE ABOVE ORDER OF THE LD. CIT(A) DATED 12.8.2014, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AS PER THE ASSESSEES COUNSEL CONTENTION, THERE WAS NO SATISFACTION FOR CONCEALMENT WAS RECORDED BY THE AO . THEREFORE, THE AMOUNT OF RS. 7,60,512/- DOES NOT ATTRACT ANY PENAL TY. IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (201 0) TAXMAN 322. 6. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND REQUESTED THAT THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW, I FIND THAT IN THIS CASE NO SATISFACTION FOR CONCEALMENT WAS RECORDED FOR PENAL TY OF RS.7,60,512/- 4 I FURTHER NOTE THE AO OBSERVED THAT ASSESSEE FURNIS HED INACCURATE PARTICULARS OF ITS INCOME AND IS LIABLE FOR PENALTY U/S 271(1)(C), WHICH DID NOT ESTABLISH FROM THE FACTS AND CIRCUMSTANCES OF THE CASE THAT HOW THE ASSESSEE HAS FURNISHED INACCURATE PARTICULA RS OF ITS INCOME. SECTION 271(1)(C) POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. IN THIS REGARD, I DRAW MY SUPPORT FROM THE DECISION OF THE HON'BLE AP EX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2 010) 322 ITR-158 (SC) WHEREIN THE HON'BLE SUPREME COURT HAS HELD TH AT 'WHERE THERE IS NO FINDINGS THAT ANY DETAILS SUPPLIED BY THE ASSESS EE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE, THERE IS NO QUESTION OF INVITING THE PENALTY U/SEC. 271(1)(C) OF THE ACT. A MERE MAKING A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NO T AMOUNT OF FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING A IN ACCURATE PARTICULARS OF INCOME. AS THE ASSESSEE HAS FURNISHED ALL THE DE TAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COU LD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. MERELY, BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WA S NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINI ON, ATTRACT THE PENALTY U/SEC. 271(1)(C). IF WE ACCEPT THE CONTENTION OF TH E REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTE D BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PE NALTY U/SEC. 271(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLAT URE'. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENT, I AM OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS OF INCOME AND THERE ARE NO F INDINGS OF THE ASSESSING OFFICER AND THE CIT (APPEALS) THAT THE DE TAILS FURNISHED BY THE ASSESSEE IN HIS RETURN ARE FOUND TO BE INACCURA TE OR ERRONEOUS OR 5 FALSE. UNDER THESE CIRCUMSTANCES, IN OUR VIEW THE P ENALTY IN DISPUTE IS TOTALLY UNWARRANTED AND DESERVE TO BE DELETED. ACC ORDINGLY, I DELETE THE PENALTY OF RS. 7,60,512/- MADE U/S. 271(1)(C) O F THE I.T. ACT AND CANCEL THE ORDERS OF THE AUTHORITIES BELOW ON THE I SSUE IN DISPUTE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/09/2016 . SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 14/09/2016 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