ACIT, New Delhi V. M/s. Radial International, New Delhi

ITA 5367/DEL/2013

• Counselvise Citation: 536720114 RSA 2013
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 04-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Difference of opinion
• Section: 143(3)

Judgement Text

ITA NO. 5367/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A.NO. 5 367 /DEL/201 3 A.Y. : 200 6 - 0 7 ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 27 (1), ROOM NO. 1805, 18 TH FLOOR, E - 2, BLOCK, CIVIC CENTRE, NEW DELHI VS. M/S RADIAL INTERNATIONAL 80/1, BLOCK - II, WHS, KIRTI NAGAR, NEW DELHI (PA N: AAAFR0154J) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. VIKRAM SAHAY, SR. DR ASSESSEE BY : SH. RAKESH NANDA, FCA DATE OF HEARING : 04 - 0 2 - 201 5 DATE OF ORDER : 04 - 0 2 - 201 5 ORDER PER H.S. SIDHU : J M THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 18 / 7 /20 1 3 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XXIV, NEW DELHI ON THE FOLLOWING GROUNDS: - 1. DELETING THE PENALTY OF RS. 12,78,171/ - IMPOSED BY THE AO U/S. 271(1)(C) OF THE I.T. ACT WHERE THE ASSESSEE HAS WILLFULLY TREATED HIS INCOME IN SUCH A MANNER THAT LEAD TO LOSS OF REVENUE AND TANTAMOUNT OF FU RNISHING THE INACCURATE PARTICULARS. ITA NO. 5367/ DEL/ 2013 2 2. IN STATING THAT EXPLANATION 1 OF SECTION 271(1)(C) OF THE I.T. ACT IS SQUARELY NOT COVERED WHEREAS IT IS SQUARELY COVERED. 3. NOT CONSIDERING THE FACT THAT THE ASSESSEE HAS SHOWN ITS DIFFERENT HEAD OF INCOME TO AVOID TH TAX LIABILITY. 4. THE APPELLANT CRAVES THE RIGHT TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH PARTIES, THEREFORE, NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. T HE AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 ON 30.12.2008 AND MADE THE ADDITION IN DISPUTE. AGGRIEVED BY THE ORDER OF THE AO U/S. 143(3) OF THE I.T. ACT, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) - XXIV, NEW DELHI ON 28. 1.2009. LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. THE ASSESSEE PREFERRED APPEAL BEFORE THE ITAT, DELHI. THE ITAT IN ITA NO. 1368/DEL/2010, VIDE ORDER DATED 16.12.2011 CONFIRMED THE ADDITION MADE BY THE AO AND DISMISSED THE APPEAL FILED BY THE A SSESSEE. THEREAFTER, AO HAS IMPOSED PENALTY OF RS. 12,78,171/ - U/S. 271(1)(C) OF THE I.T. ACT VIDE HIS ORDER DATED 26.9.2012 FOR FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. 3. AGAINST THE PENALTY ORDER DATED 26.9.2012, THE ASSESSEE FILE D AN APPEAL BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER HAS DELETED THE PENALTY MADE BY THE AO U/S. 271(1)(C) OF THE I.T. ACT VIDE HIS ORDER DATED 18.7.2013. 4. AGAINST THE ABOVE ORDER PASSED BY THE LD. CIT(A), REVENUE HAS FILED THE APPEAL BEFORE THE T RIBUNAL. ITA NO. 5367/ DEL/ 2013 3 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE MADE A STATEMENT THAT THE ADDITION HAS BEEN DELETED BY THE HON BLE JURISDICTIONAL HIGH COURT, THEREFORE, THE PENALTY IS NOT SUSTAINABLE IN THE EYES OF LAW. HE REQUESTED THAT THE APPEAL FILED BY THE REVENUE MAY BE DISMISSED. LD. COUNSEL OF THE ASSESSEE HAS FILED A COPY OF THE JUDGMENT DATED 25.4.2014 PASSED BY THE HON BLE HIGH COURT OF DELHI IN ITA NO. 485/2012 IN THE CASE OF RADIALS INTERNATIONAL VS. ACIT, IN THE QUANTUM APPEAL OF ASSE SSEE S OWN CASE WHEREIN THE HON BLE HIGH COURT HAS HELD AS UNDER: - THIS COURT IS THUS OF THE OPINION THAT THE LD. ITAT ERRED IN HOLDING THE TRANSACTIONS TO BE INCOME FROM BUSINESS AND PROFESSION. THE ORDER OF THE ITAT IS CONSEQUENTLY SET ASIDE AND THE APPEAL IS ANSWERED IN FAVOR OF THE ASSESSEE. 6. LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN ITS PRESENT APPEAL. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED AND CONSIDERED THE RELEVANT RECORDS AVAILABLE WITH US, SPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES; COPY OF THE JUDGMENT OF THE HON BLE HIGH COURT DATED 25.4.2014 PASSED IN ITA NO. 485/2012 IN THE CASE OF RADIALS INTERNATIONAL VS. ACIT, IN THE QUANTUM APPEAL OF ASSESSEE S OWN CASE . W E FIND THAT LD. CIT(A) HAS ADJUDICATED AND SUMMARIZED THE ISSUE AS UNDER VI DE PARA NO. 5.8 TO 5.11 FROM PAGES 14 TO 15 OF THE IMPUGNED ORDER DATED 18.7.2013 AS UNDER: - 5.8 TO SUMMARIZE, NONE OF THE CONDITIONS OF THE EXPLANATION 1 ARE APPLICABLE TO THE FACTS OF THE PRESENT CASE, AS THE APPELLANT HAS BEEN FORTH COMING IN ITA NO. 5367/ DEL/ 2013 4 DISCLO SING ALL FACTS THAT ARE RELEVANT FOR THE COMPUTATION OF ITS INCOME. THEREFORE, THE APPELLANT HAS CLEARLY DISCHARGED THE ONUS / BURDEN CAST UPON IT TO PROVE THAT NONE OF THE THREE CONDITIONS OF THE EXPLANATION 1 ARE MET. 5.9 HERE IT IS RELEVANT TO REITER ATE THAT THE ADDITION MADE BY THE AO IS NOT ON ACCOUNT OF ANY INCONSISTENCY IN THE FACTS FURNISHED BY THE APPELLANT BUT IS PURELY ON ACCOUNT OF A DIFFERENCE OF OPINION AS REGARDS THE INTERPRETATION OF LAW ON THE SAME SET OF FACTS AS HAVE BEEN FURNISHED BY THE APPELLANT. 5.10 IT IS ALSO WORTHWHILE TO MENTION THAT PENALTY PROCEEDINGS ARE SEPARATE PROCEEDINGS FROM THE ASSESSMENT PROCEEDINGS AND MERELY BECAUSE THE QUANTUM ADDITION HAS BEEN CONFIRMED BY THE HIGH AUTHORITY IT DOES NOT NECESSARILY MEAN THAT PENALTY IS ALSO LEVIABL E U/S. 271(1) OF THE I.T. ACT. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF UOI VS. DHARMENDRA TEXTILE PROCESSORS REPORTED IN 306 ITR 277 WHEREIN IT HAS BEEN HELD THAT: - MERELY BECAUSE THE ADDITION IS C ONFIRMED DOES NOT IPSO FACTO ITA NO. 5367/ DEL/ 2013 5 ATTRACT THE PENALTY PROVISION. IN THE PENALTY PROCEEDINGS, THE WHOLE MATTER HAS TO BE SEEN IN A DIFFERENT PERSPECTIVE IRRESPECTIVE OF THE FACT THAT THE ADDITION HAS BEEN CONFIRMED BY HIGHER AUTHORITIES. 5.11 IN THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES AND FOR THE CUMULATIVE REASONS STATED ABOVE, I AM OF THE CONSIDERED OPINION THAT THE DISCLOSURES MADE BY THE APPELLANT IN THIS REGARD WERE BONA FIDE AND WERE NOT FALSE OR FANCIFUL. THE APPELLANT DID NOT FILE INACCURATE PAR TICULARS OF INCOME IN CLAIMING DEDUCTION OF THE AFORESAID AMOUNT. THEREFORE, THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT IS HEREBY DELETED. 7.1 WE ALSO FIND THE HON BLE HIGH COURT VIDE ITS JUDGMENT DATED 25.4.2014 PA SSED IN ITA NO. 485/2012 IN THE QUANTUM APPEAL OF ASSESSEE S OWN CASE HAS HELD THAT ITAT ERRED IN HOLDING THE TRANSACTIONS TO BE INCOME FROM BUSINESS AND PROFESSION. ACCORDINGLY, THE ORDER OF THE ITAT WAS CONSEQUENTLY SET ASIDE AND THE APPEAL WAS ANSWERED IN FAVOR OF THE ASSESSEE. 8. WE FIND THAT THAT AS THE HON BLE HIGH COURT OF DELHI HAS ALREADY SET ASIDE THE ORDER OF THE TRIBUNAL, AS AFORESAID AND DECIDED THE ISSUE IN FAVOR OF THE ASSESSEE, IN THE QUANTUM APPEAL AS WELL AS ITA NO. 5367/ DEL/ 2013 6 LD. CIT(A) HELD THAT BECAUSE T HE QUANTUM ADDITION HAS BEEN CONFIRMED BY THE HIGH ER AUTHORITY IT DOES NOT MEAN THAT PENALTY IS ALSO LEVIABLE U/S. 271(1) (C) OF THE I.T. ACT. WE FIND THAT IN THIS REGARD LD. CIT(A) PLACED RELIANCE ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF UOI VS. DHARMENDRA TEXTILE PROCESSORS REPORTED IN 306 ITR 277 WHEREIN IT HAS BEEN HELD THAT: - MERELY BECAUSE THE ADDITION IS CONFIRMED DOES NOT IPSO FACTO ATTRACT THE PENALTY PROVISION. IN THE PENALTY PROCEEDINGS, THE WHOLE MATTER HAS TO BE SEEN IN A DIFFERENT PERSPECTIVE IRRESPECTIVE OF THE FACT THAT THE ADDITION HAS BEEN CONFIRMED BY HIGHER AUTHORITIES. 9. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE FIND THAT LD. CIT(A) HAS RIGHTLY HELD THAT THE DISCLOSURES MADE BY THE A SSES SEE IN THIS REGARD WERE BONA FIDE AND WERE NOT FALSE OR FANCIFUL. WE FIND THAT LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE DID NOT FILE INACCURATE PARTICULARS OF INCOME IN CLAIMING DEDUCTION OF THE AFORESAID AMOUNT. T HEREFORE, THE PENALTY LEVIED BY TH E ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT WAS RIGHTLY DELETED BY THE LD. CIT(A). IN VIEW OF THE ABOVE, WE ARE OF THE VIEW ITA NO. 5367/ DEL/ 2013 7 THAT NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A), HENCE, WE UPHOLD THE SAME. 10 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 04 / 0 2 /20 1 5 . SD/ - SD/ - [ R.S. SYAL ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 04 / 0 2 /201 5 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 ITA NO. 5367/ DEL/ 2013 8