Mr. Vijay Agarwal, Meerut V. DCIT, Faridabad

ITA 5433/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4916 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 20-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P S KASHYAP
• Keywords: Question of law
• Section: 271(1)(c); 80C; 250; 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES G, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 5432/DEL/2016 : ASSTT. YEAR : 2006-07 ITA NO. 5433/DEL/2016 : ASSTT. YEAR : 20 07-08 MR. VIJAY AGARWAL, C/O M/S KASHYAP & CO., CAS, 214, CITI CENTRE, BEGUM BRIDGE ROAD, MEERUT-250001 VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, FARIDABAD (APPELLANT) (RESPONDENT) PAN NO. AA ZPA6461C ASSESSEE BY : SH. P. S. KASHYAP, CA REVENUE BY : SH. N. K. BANSAL, SR. DR DATE OF HEAR ING: 26 . 08 .201 9 DATE OF PRONOUNCEMENT: 05 .1 1 .201 9 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSE E AGAINST THE ORDERS OF THE LD. CIT(A)-3, GURGAON DAT ED 16.08.2016. 2. SINCE, THE ISSUES INVOLVED IN BOTH THE APPEALS A RE COMMON, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY COMMON ORDER. 3. IN ITA NO. 5432/DEL/2016, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THAT ON FACTS AND IN LAW IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) FOR RS.42,910/- IS TOTALLY WRONG, UNJUSTIFIED AND ILLEGAL. THE APPELLANT IS NO T ITA NOS. 5432 & 5433/DEL/2016 VIJAY AGARWAL 2 LIABLE TO PENALTY U/S 271(1)(C) ON THE FOLLOWING GROUNDS: I) THAT THE LD. CIT (A) HAS NOT CONSIDERED THE VARIOUS FACTS BEFORE PASSING THE ORDER. II) THAT ASSESSEE HAD BONA FIDE REASONS FOR CLAIMING DEDUCTION U/S 24 AND SECTION 80C OF THE ACT. III) THAT THE LD. A.O. HAS NOT SPECIFIED THAT UNDER WHICH LIMB HE IS INITIATING THE PENALTY PROCEEDINGS I.E. FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, THE BASIS TAKEN AND METHOD ADOPTED BY TH E ASSESSING OFFICER FOR IMPOSING PENALTY U/S 271(1)(C ) FOR RS.42,910/- AND CONFIRMED BY CIT(A) IS TOTALLY WRONG, UNJUSTIFIED AND UNWARRANTED AND THE SAME DESERVES TO BE DELETED IN FULL. 4. THE MATTER INVOLVING THE SIMILAR ISSUE IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10 IN ITA NOS. 5434 /DEL/2016 AND 5435/DEL/2016 WAS ADJUDICATED BY THE CO-ORDINATE BENCH OF ITAT VIDE ORDER DATED 09.08.2009. THE APPEAL OF THE ASSE SSEE HAS BEEN DISMISSED AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AN D REFERRING THE JUDGMENTS OF THE HONBLE HIGH COURT OF KARNATAKA I N THE CASE OF MANJUNATHA COTTON & GINNING FACTORY AND THE DECISION OF THE SUPREME COURT IN THE CASE OF SSAS EMERALD MEADOWS. IT WAS HELD THAT THE PLEA PERTAINING TO SPECIFYING UNDER WHICH LIMB OF SECTION, TH E PENALTY PROCEEDINGS HAVE BEEN INITIATED HAS NEVER BEEN RAISED BEFORE THE FIRST APPELLATE AUTHORITY AND HAS BEEN RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL (PARA 16). FURTHER IT WAS HELD THAT NEITHE R THE ASSESSEE HAS MOVED IN AN APPLICATION FOR RAISING ANY ADDITIONAL G ROUND NOR HE HAS BEEN ABLE TO BRING OUT ANY QUESTION OF LAW WHICH CAN BE RAI SED BEFORE THE APPELLATE AUTHORITY FOR THE FIRST TIME (PARA 17). 5. DURING THE ARGUMENTS BEFORE US, THE ASSESSEE HAS TAKEN UP AT GROUND NO. 3 THAT THE ASSESSING OFFICER HAS NOT SPECIFIED T HAT UNDER WHICH ITA NOS. 5432 & 5433/DEL/2016 VIJAY AGARWAL 3 LIMB HE IS INITIATING THE PENALTY PROCEEDINGS I.E. FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS. FURTHER, THE LD.AR BROUGHT TO OUR NOTICE THAT THE CASE IS SQUARELY COVERED BY THE ORDER OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAHARA INDIA LIFE INSURANCE LTD IN ITA NO. 475/2019 DATED 02.08.2019. IT WAS AR GUED THAT THE DECISION OF THE KARNATAKA HIGH COURT IN CIT VS. MANJUN ATHA COTTON & GINNING FACTORY 359 ITR 565 HAS BEEN REITERATED IN TH E JUDGMENT OF THE JURISDICTIONAL HIGH COURT. THE HONBLE HIGH COURT WHIL E DEALING THIS ISSUE AT PARA NO. 21 HAS HELD AS UNDER: 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT, WHI CH WAS ACCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA HIGH COURT IN CIT VS. MANJUNATHA COTTON & GINNING FACT ORY 359 ITR 565 (KAR) AND OBSERVED THAT THE NOTICE ISSUED BY T HE ASSESSING OFFICER WOULD BE BAD IN LAW IF IT DID NOT SPEC IFY WHICH LIMB OF SECTION 271(1)(C) THE PENALTY PROCEEDINGS HAD B EEN INITIATED UNDER I.E. WHETHER FOR CONCEALMENT OF PARTI CULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCO ME. THE KARNATAKA HIGH COURT HAD FOLLOWED THE ABOVE JUDGMENT IN THE SUBSEQUENT ORDER IN COMMISSIONER OF INCOME TAX VS. SSAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 241 (KAR), THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF INDI A IN SLP NO. 11485 F 2016 BY ORDER DATED 5 TH AUGUST, 2016. 6. LD. DR RELIED ON THE JUDGMENTS IN THE CASE OF SUNDA RAM FINANCE LTD. VS. CIT [2018] 99 TAXMANN.COM 152 (SC), SUNDARAM FINANCE LTD. VS. CIT [2018] 93 TAXMANN.COM 250 (MADRAS)/[2018] 403 ITR 407 (MADRAS), CIT VS. SMT. KAUSHALYA [1994] 75 TAXMAN 549 (BOMBAY)/ [1995] 216 ITR 660 (BOMBAY) AND OTHER CASES FILED ALONG WITH THE WRIT TEN SUBMISSION. 7. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ITA NOS. 5432 & 5433/DEL/2016 VIJAY AGARWAL 4 8. WE FIND THAT, WHILE PASSING THE ASSESSMENT ORDER, THE ASSESSING OFFICER HELD AS UNDER: ISSUE REQUISITE DOCUMENTS. CHARGE INTEREST U/S 234A, B & C AS APPLICABLE. ISSUE PENALTY NOTICE U/S 271(1)(C). 9. IN THE NOTICE U/S 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961/271(1)(C) READ WITH EXPLANATION 5 OF THE I.T. A CT, 1961 ISSUED BY THE ASSESSING OFFICER ON 28.12.2011, THE ASSESSING OFFICER HAS NOT SPECIFIED UNDER WHICH LIMB THE PENALTY IS BEING PROPOSED. IT REA DS AS UNDER: *HAVE CONCEALED THE PARTICULARS OF YOUR INCOME ORFU RNISHED INACCURATE PARTICULARS OF SUCH INCOME. 10. IN THE PENALTY ORDER, THE ASSESSING OFFICER MENTIO NED AS UNDER: IN VIEW OF THE ABOVE, AND TAKING INTO CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS A FIT CASE FOR IMPOSITION OF PENALTY. I FIND IT REASONABLE TO IMPOSE A MINIMUM PE NALTY OF RS. 42,910/- BE 100% OF THE TAX SOUGHT TO BE EVADED AS PE R THE CALCULATION GIVEN BELOW. 11. THUS, WE FIND THAT THE ASSESSING OFFICER HAS NOT MENT IONED UNDER WHICH LIMB OF THE SECTION 271 (1)(C) THE PENALTY IS BEI NG INITIATED. IN THE NOTICE ISSUED U/S 274, THE ASSESSING OFFICER HAS NOT SPECIFI ED THAT UNDER WHICH LIMB HE IS INITIATING THE PENALTY PROCE EDINGS I.E. FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURA TE PARTICULARS OF INCOME. SIMILARLY EVEN THE PENALTY O RDER DO NOT SPECIFY UNDER WHICH LIMB THE PENALTY IS BEING LEVIED PENALTY ORDER. 12. KEEPING IN VIEW OF THE FACTS NARRATED ABOVE AND T HE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SAHARA INDIA LIFE INSURANCE LTD (SUPRA), WE HEREBY DIRECT THE PENALTY LEVIED B Y THE REVENUE BE OBLITERATED. ITA NOS. 5432 & 5433/DEL/2016 VIJAY AGARWAL 5 13. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/11/2019 SD/- SD/- (AMIT SHUKLA) (DR. B . R. R. KUMAR) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 05/11/2019 *KAVITA ARORA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR