Rani Devi Jain, Rohtak V. ITO, Rohtak

ITA 5380/DEL/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1673 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2006-2007
• Appeal Filed On: 01-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR V K CHADHA
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c); 274

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI !' !' !' !' # ## # # ## #' ' ' ' % % % % & & & & BEFORE MS. SUSHMA CHOWLA, JM & SH .R.K.PANDA, AM ' ' ' '# ## # / ITA NO.5380/DEL/2015 '' '' '' '' / ASSESSMENT YEAR: 2006-07 RANI DEVI JAIN, PROP. M/S. JAIN AGRO, JHAJJAR ROAD, ROHTAK-124001. PAN-AASPJ7596G. .......... () /APPELLANT VS THE ITO, WARD-2, AAYAKAR BHAWAN, ROHTAK-124001. . *+() / RESPONDENT (),- / APPELLANT BY : SH.SURESH KUMAR GUPTA, CA *+(),- / RESPONDENT BY : DR.V.K.CHADHA, SR.DR ,.% / DATE OF HEARING: 04.12.2019 /0,.% / DATE OF PRONOUNCEMENT: 11.12.2019 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY ASSESSEE IS AGA INST ORDER OF CIT(A), ROHTAK DATED 25.06.2015 RELATING TO ASSESSMENT YEAR 2006-07 AGAINST PENALTY LEVIED U/S SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). 2 ITA NO.5380/DEL/2015 ASSESS MENT YEAR: 2006-07 2. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 3. BRIEFLY IN THE FACTS OF THE CASE, THE ASSESSING OFFICER HAD MADE THE FOLLOWING ADDITIONS IN THE HANDS OF THE ASSESSEE:- ITEM NO. NATURE OF ADDITION ADDITIONS (IN RS.) (A). DISALLOWANCE OF EXPENSES ON ESTIMATES BASIS SUSTAINED IN APPEAL. 10,000/- (B). LOAN FROM S.K.GUPTA, ADDITIONS SUSTAINED 7,50,000/- (C). LOAN FROM NEELAM GUPTA, ADDITIONS DELETED 2,50,000/- (D). LOAN FROM LOVELEENA JAIN, ADDITIONS SUSTAINED 2,50,000/- 4. ON THE PERUSAL OF ASSESSMENT ORDER, WE FIND THAT THE PENALTY HAS BEEN INITIATED BY THE ASSESSING OFFICER ON THE GROU ND OF CONCEALING OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER HAD NOT IMPOSED PENALTY IN RESPECT OF ITEM NO.(C) I.E. ADDITION MADE ON ACCOUNT OF LOAN FROM SMT. NEELAM GUPTA OF RS.2, 00,000/-. THE ASSESSING OFFICER LEVIED PENALTY OF RS.3,38,568/- W HICH WAS UPHELD BY THE CIT(A); AGAINST WHICH THE ASSESSEE IS IN APPEAL BEF ORE US. 5. THE LD.AR FOR THE ASSESSEE POINTED OUT THAT THER E IS NO MERIT IN THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT, IN THE ABS ENCE OF PROPER SATISFACTION. 6. THE LD. DR PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 3 ITA NO.5380/DEL/2015 ASSESS MENT YEAR: 2006-07 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS LEVY OF PENALTY FOR CONCEALMENT OF INCOME U/S 271(1)(C) OF THE ACT. PENALTY FOR CO NCEALMENT IS LEVIABLE WHERE THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE AO WHILE COMPLETING THE ASSESSMENT HAS TO RECORD SATISFACTION IN THIS REGARD, IN ORDER TO SH OW CAUSE THE ASSESSEE AS TO WHICH LIMB TO SECTION 271(1)(C) OF THE ACT HAS NOT BEEN SATISFIED BY IT. THIS IS THE BASIC CONDITION OF THE AFORESAID SECTION. O N PERUSAL OF THE ASSESSMENT ORDER PASSED FOR THE INSTANT ASSESSMENT YEAR REFLECTS NO PROPER SATISFACTION HAD BEEN RECORDED. IN THE ABSENCE OF THE SAME, THE ASSESSEE IS NOT IN A POSITION TO MEET THE REQUIREMENTS OF THE S ECTION. MERELY, AN ORDER ISSUING NOTICE U/S 274 R.W.S 271(1)(C) OF THE ACT D O NOT MEET THE CONDITIONS OF THE SAID INITIATION OF PENALTY PROCEEDINGS. IN THE ABSENCE OF THE ASSESSING OFFICER RECORDING ANY PROPER SATISFACTION , THERE IS NO MERIT IN THE PENALTY ORDER PASSED IN THE CASE. IN THIS REGARD, W E FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM). WE HOLD THAT IN THE ABSENCE OF RECORDING PROPER SATISFACTION, WHILE INITIATING THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, ORDER PASSED U/S 271(1)(C) OF THE ACT SUFFERS FROM INFIRMITY. 8. IN THE FACTS OF THE PRESENT CASE, WE FIND THAT A S FAR AS THE DISALLOWANCE OF EXPENSES IS CONCERNED, NO SATISFACT ION WAS RECORDED BY THE ASSESSING OFFICER WHILE MAKING THE AFORESAID ADDITI ON. SIMILAR IS THE CASE 4 ITA NO.5380/DEL/2015 ASSESS MENT YEAR: 2006-07 IN RESPECT OF ADDITION IN ITEM NOS. (A) & (B). NOW COMING TO THE ITEM NO.(D) WHERE PENALTY WAS INITIATED BY RESORTING TO BOTH TH E LIMBS OF SECTION 271(1)(C) OF THE ACT. IN THESE CIRCUMSTANCES, WHER E THE ASSESSING OFFICER HAS FAILED TO RECORD PROPER SATISFACTION WHILE PENA LTY PROCEEDINGS IS INITIATED, WE FIND NO MERITS IN THE ORDERS OF THE A UTHORITIES BELOW. WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS AP PEAL ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DAY OF DECEMBER, 2019. SD/- SD/- (R.K.PANDA) (SUSHMA CHOWL A) % % % % /ACCOUNTANT MEMBER /JUDICIAL MEMBER / ' DATED : 11 TH DECEMBER, 2019 . * AMIT KUMAR * ,*.232.4 COPY OF THE ORDER IS FORWARDED TO : 1. () / THE APPELLANT 2. *+() / THE RESPONDENT 3. 5 6 7 / THE CIT(A) 4. 8 5 / THE PR. CIT 5. 6. 29:*. / DR, ITAT, DELHI :';4 GUARD FILE. / BY ORDER , +2.*. // TRUE COPY // => ? , ASSISTANT REGISTRAR, ITAT, DELHI