S. Gursanjit Singh Ahuja, New Delhi V. ACIT, Circle-61(1), New Delhi

ITA 5295/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3600 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 16-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI

Judgement Text

1 ITA.NO.5295/DEL./2017 SHRI S. GURSANJIT SINGH AHUJA, NEW DELHI. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.5295/DEL./2017 ASSESSMENT YEAR 2011-2012 SHRI S. GURSANJIT SINGH AHUJA, 3E/1, JHANDEWALAN EXTENSION, NEW DELHI. 110055 PAN AADPA2775M VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-61(1), NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI GAGAN KUMAR, ADVOCATE FOR REVENUE : SHRI KAUSHLENDRA TIWARI, SR. D.R. DATE OF HEARING : 24.01.2018 DATE OF PRONOUNCEMENT : 01.02.2018 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-20, NEW DELHI, DATED 23 RD JUNE, 2017, FOR THE A.Y. 2011-2012, CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT, 1961. 2. THE ASSESSEE FILED RETURN OF INCOME DECLARING I NCOME AT RS.21,38,807 ON 29 TH SEPTEMBER, 2011. THE A.O. PASSED THE ASSESSMENT ORDER US 13(3) DATED 16 TH JANUARY, 2014, THEREBY, MADE CERTAIN ADDITIONS. THE A.O. INITIATED THE PENA LTY 2 ITA.NO.5295/DEL./2017 SHRI S. GURSANJIT SINGH AHUJA, NEW DELHI. PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ON A LL THE ADDITIONS FOR CONCEALING THE PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. EVEN A FTER CONCLUSION OF THE ASSESSMENT ORDER, HE HAS AGAIN ME NTIONED THAT PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT, HAVE BEEN INITIATED SEPARATELY FOR CONCEALING THE PARTIC ULARS OF INCOME AND PROVIDING INACCURATE PARTICULARS OF INCO ME. THE A.O. VIDE SEPARATE ORDER, LEVIED PENALTY UNDER SECT ION 271(1)(C) OF THE I.T. ACT FOR CONCEALMENT OF INCOME AND FURNI SHING INACCURATE PARTICULARS OF INCOME. THE LD. CIT(A), P ARTLY ALLOWED THE APPEAL OF ASSESSEE BY CONFIRMING THE PENALTY ON THE ADDITION OF RS.6,30,000 FOR NON-DISCLOSURE OF PROVISIONAL RE CEIPTS IN THE RETURN OF INCOME. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED T O PAGE-1 OF THE PAPER BOOK WHICH IS SHOW CAUSE NOTICE BEFORE LEVY OF PENALTY DATED16TH JANUARY, 2014, IN WHICH THE A. O. HAS ASKED FOR EXPLANATION OF ASSESSEE BY MENTIONING HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISH ED INACCURATE PARTICULARS OF SUCH INCOME. LEARNED COUNSEL FOR THE ASSESSEE, 3 ITA.NO.5295/DEL./2017 SHRI S. GURSANJIT SINGH AHUJA, NEW DELHI. THEREFORE, SUBMITTED THAT A.O. WAS NOT SURE AS TO F OR WHICH LIMB OF SECTION 271(1)(C) OF THE I.T. ACT, PENALTY HAVE BEEN INITIATED OR LEVIED. THEREFORE, THE SHOW CAUSE NOTICE ITSELF IS VITIATED AND PENALTY IS LIABLE TO BE CANCELLED. IN SUPPORT OF HI S CONTENTION, THE LEARNED COUNSEL FOR THE ASSESSEE, RELIED UPON T HE ORDER OF THE ITAT, DELHI, G BENCH, IN THE CASE OF SUNSTAR EXPOSITION PVT. LTD., NEW DELHI VS. ITO, WARD-9(2), NEW DELHI, IN ITA.NO.4896/DEL./2012, DATED 12.04.2017, IN WHICH I N PARA-6 IT IS HELD AS UNDER : 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE GONE THROUGH ENTIRE MATERIAL ON RECORD AND WE FIND THAT THE ENTIRE PENALTY PROCEEDINGS INITIATED IN THE INSTANT CASE ARE VITIATED AS THE NOTICE ISSUED IS NOT IN ACCORDANCE WITH LAW, INASMUCH AS, THE SAID NOTICE NOWHERE SPECIFIED WHET HER THE PROCEEDINGS WERE BEING INITIATED FOR THE REASON OF CONCEALMENT OF PARTICULARS OF INCOME OR ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS THEREOF. EVEN THE SATISFACTION NOTE MADE IN THE ASSESSMENT ORDER OR T HE PENALTY ORDER ALSO DOES NOT INDICATE WHETHER IT WAS A CASE 4 ITA.NO.5295/DEL./2017 SHRI S. GURSANJIT SINGH AHUJA, NEW DELHI. OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS OF INCOME. THEREFORE, LAYING OUR HANDS ON THE DECISIONS OF GUJRAT HIGH COURT IN THE CASE OF MANU ENGINEERING, 122 ITR 306 AND DELHI HIGH COURT IN VI RGO MARKETING, 171 TAXMAN 156 WHERE IT HAS BEEN HELD TH AT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BEING UNCLEAR PENALTY IS NO T SUSTAINABLE, WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY IMPOSED IN THE INSTANCE CASE IS VOID AB INI TIO. SIMILAR VIEW HAS BEEN TAKEN BY HONBLE KARNATAKA HI GH COURT IN MANJUNATHAS CASE (SUPRA). WE, THEREFORE, CANCEL THE PENALTY IMPOSED U/S. 271(L)(C) OF THE ACT ON TH IS LEGAL ASPECT ITSELF AND HENCE, WE NEED NOT TO ENTER INTO OTHER GROUNDS OR REASONS FOR PENALTY AND THEIR EXPLANATIO NS EXTENDED BY THE ASSESSEE ON MERITS. 4. THE LD. D.R, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEE SURRENDERED THE AMOUNT OF RS.6,33,000 ON ACCOUNT OF PROFESSIONAL RECEIPT WHICH WERE NOT SHOWN IN THE OR IGINAL RETURN 5 ITA.NO.5295/DEL./2017 SHRI S. GURSANJIT SINGH AHUJA, NEW DELHI. OF INCOME. THE ASSESSEE HAS FILED REVISED PROFIT & LOSS A/C AND BALANCE SHEET. THEREFORE, MERE SURRENDER IS NOT ENO UGH. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. THE A.O. WHILE MAKING ADDIT ION OF RS.6,33,000 ON ACCOUNT OF SURRENDER OF PROFESSIONAL RECEIPTS, INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) OF THE ACT FOR CONCEALING THE PARTICULARS OF INCOME AND PR OVIDING INACCURATE PARTICULARS OF INCOME. SIMILARLY, LANGUA GE USED IN THE END OF THE ASSESSMENT ORDER AND EVEN WHILE LEVY ING THE PENALTY, THE A.O. MENTIONED THE SAME FACTS. SAME FA CTS ARE MENTIONED IN THE SHOW CAUSE NOTICE. THE SHOW CAUSE NOTICE ISSUED BY A.O. UNDER SECTION 274 R.W.S. 271(1)(C) O F THE I.T. ACT, IS BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF S ECTION 271(1)(C) OF THE I.T. ACT, THE PENALTY PROCEEDINGS HAD BEEN I NITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THEREF ORE, PENALTY IS LIABLE TO BE CANCELLED BECAUSE THE NOTICE ITSELF IS VITIATED. THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE O RDER OF ITAT, DELHI BENCH IN THE CASE OF SUNSTAR EXPOSITION PVT. LTD., NEW 6 ITA.NO.5295/DEL./2017 SHRI S. GURSANJIT SINGH AHUJA, NEW DELHI. DELHI (SUPRA). I, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 01 ST FEBRUARY, 2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES : DELHI.