Vijay Kumar Gupta, Meerut V. ITO, Ward-2(4), Meerut

ITA 5570/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6170 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 28-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Section: 271(1)(c); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCHES (CAMP AT MEERUT) BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.5570/DEL./2018 (ASSESSMENT YEAR : 2013-14) SHRI VIJAY KUMAR GUPTA, VS. ITO, WARD 2 (4), C 61, DEVLOK COLONY, DELHI ROAD, MEERUT. MEERUT 250 002 (U.P.). (PAN : AJPPG2495M) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI S.S. RANA, CIT DR DATE OF HEARING : 10.01.2019 DATE OF ORDER : 24.01.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, SHRI VIJAY KUMAR GUPTA (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 26.06.2018 PASSED BY LD. CIT (APPEALS), MEERUT, BY ALLOWING THE PENALTY ORDER DA TED 26.03.2018 PASSED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 (F OR SHORT THE ACT), QUA THE ASSESSMENT YEAR 2013-14 ON THE GROUN DS INTER ALIA THAT :- ITA NO.5570/DEL./2018 2 1 THE LEARNED CIT (APPEAL) WAS NOT JUSTIFIED BY DISMISSING THE APPEAL. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN SUMMARILY REJECTING THE PLEA OF THE APPELL ANT WITH RESPECT TO FOLLOWING. A) THAT THE LEARNED ASSESSING OFFICER HAS ERRED BO TH ON FACTS AND IN LAW IMPOSING A PENALTY OF RS.8,30,5 00/- U/S 271(1)(C) OF THE IT ACT FOR ALLEGED CONCEALMENT OF INCOME AMOUNTING TO RS.28,68,750/- BEING THE ALLEGE D ADDITION UNDER SECTION 68 OF INCOME TAX ACT, 1961 B) THAT THE SEVERAL OBSERVATIONS AS MADE AND INFERENCES DRAWN ARE UNTENABLE, INCORRECT, UNWARRAN TED. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF COMPLETED ASSESSMENT UNDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 ( FOR SHORT THE ACT), PENALTY PROCEEDINGS HAVE BEEN INITIATED BY T HE ASSESSING OFFICER ON CONFIRMATION OF THE ADDITION BY THE LD. CIT (A) TO THE TUNE OF RS.28,68,750/- U/S 271(1)(C) OF THE ACT. D ECLINING THE CONTENTIONS RAISED BY THE ASSESSEE, AO PROCEEDED TO LEVY THE PENALTY OF RS.8,30,500/-. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (APPEALS) WHO HAS CONFIRMED THE PENALTY BY DISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME U P BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. ASSESSEE HAS NOT PREFERRED TO PUT IN APPEARANCE DESPITE ISSUANCE OF THE NOTICE AND CONSEQUENTLY, WE PROCEED ED TO DECIDE ITA NO.5570/DEL./2018 3 THE PRESENT APPEAL WITH THE ASSISTANCE OF THE LD. D R AS WELL AS ON THE BASIS OF DOCUMENTS AVAILABLE ON THE FILE. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. UNDISPUTEDLY, ADDITION MADE BY THE AO HAS BEEN CONF IRMED BY THE LD. CIT (A). IT IS ALSO NOT IN DISPUTE THAT PENALTY HAS BEEN IMPOSED ON THE BASIS OF THREE ADDITIONS MADE BY THE AO : ONE, DEDUCTION CLAIMED BY THE ASSESSEE ON ACCOUNT OF INT EREST OF RS.4,08,000/- U/S 36 (1)(III) OF THE ACT WAS DISALL OWED; TWO, THAT THE ASSESSEE HAS FAILED TO VERIFY THE SALES MADE IN THE JEWELLERY BUSINESS BY SEEKING CONFIRMATION OF DEBTOR AMOUNTIN G TO RS.15,20,750/-; AND THIRD, ADDITION OF RS.9,40,000/ - ON ACCOUNT OF LACK OF VERIFICATION OF PURCHASE OF JEWELLERY. IT IS ALSO NOT IN DISPUTE THAT DURING APPELLATE PROCEEDINGS, LD. CIT (A) HAS EXTENDED THE RELIEF OF RS.1,93,495/- TO THE ASSESSEE. 7. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, ORDER PASSED BY THE LOWER REVENUE AUTHORI TIES AND ARGUMENTS ADDRESSED BY THE LD. AR TO THE PARTIES, T HE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- ITA NO.5570/DEL./2018 4 AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING ASSESSMENT PROCEEDINGS WHILE INTERPRETING THE PROVISIONS CONTAINED U/S 271(1)(C) OF THE ACT? 8. FROM THE PERUSAL OF THE PENALTY ORDER PASSED BY THE AO, IT IS APPARENTLY CLEAR THAT THE PENALTY HAS BEEN LEVIED O N THE SOLE GROUND THAT THE ASSESSEE HAS MADE CLAIM OR DEDUCTIONS AND SALE & PURCHASE OF JEWELLERY WITHOUT SUPPORTING DOCUMENTS. HOWEVER , PENALTY ORDER SHOWS THAT AO WAS NOT SURE ENOUGH AS TO WHETH ER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING THE ASSESSM ENT PROCEEDINGS. 9. SO FAR AS CLAIM OF DEDUCTION ON ACCOUNT OF INTER EST OF RS.4,08,000/- U/S 36(1)(III) BY THE ASSESSEE IS CON CERNED, THE SAME HAS BEEN DISALLOWED BY HOLDING THAT LOAN ON WHICH I NTEREST WAS PAID WAS NOT UTILIZED FOR THE SHOP USED FOR THE BUS INESS EXCEPT ONE SHOP ABOUT WHICH INTEREST OF RS.30,000/- WAS ALLOWE D. THE ADDITION OF RS.15,20,750/- AND RS.9,40,000/- WAS ALSO MADE O N FAILURE OF THE ASSESSEE TO GET THE SALE AND PURCHASE OF JEWELL ERY VERIFIED. BUT AT NO POINT OF TIME, THE AO HAS COME UP WITH CATEGO RIC FINDING THAT THE ASSESSEE FILED INCORRECT OR ERRONEOUS OR FALSE DOCUMENTS TO MAKE THE CLAIM IN HIS INCOME-TAX RETURN. IT IS SET TLED PRINCIPLE OF ITA NO.5570/DEL./2018 5 LAW THAT MERE MAKING OF CLAIM WHICH IS NOT SUSTAINA BLE DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF I NCOME. 10. HONBLE SUPREME COURT IN A CASE CITED AS CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 158 (SC) . DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE. OPERATI VE PART OF WHICH IS REPRODUCED FOR READY REFERENCE AS UNDER :- A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT, 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUS T HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME . THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAIL OF THE CLAIM MAD E. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCUR ATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SU CH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPL IED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRE CT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A ME RE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH ITA NO.5570/DEL./2018 6 A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 11. HONBLE DELHI HIGH COURT IN CASE CITED AS CIT VS. IFCI LIMITED (2010) 328 ITR 611 (DELHI) WHILE DECIDING THE IDENTICAL ISSUE HELD THAT IN CASE, IF ANY CLAIM MADE BY THE A SSESSEE HAS NOT BEEN ACCEPTED IT WOULD NOT PER SE TANTAMOUNT TO FUR NISHING ANY ACCOUNT OF INACCURATE PARTICULARS TO ATTRACT THE PE NALTY PROCEEDINGS U/S 271(1)(C). OPERATIVE PART OF THE AFORESAID JUD GMENT IS EXTRACTED AS UNDER :- HELD; DISMISSING THE APPEAL, THAT THE ASSESSEE HAD FILED THE RETURN AND FURNISHED ALL PARTICULARS. THE ASSES SEE HAD EXPLAINED DURING THE PENALTY PROCEEDINGS THAT T HE INVESTMENTS WERE WRITTEN OFF IN THE BOOKS OF ACCOUN T AND WERE CLAIMED AS DEDUCTION ON ACCOUNT OF LOSS WH ICH OCCURRED TO THE ASSESSEE IN THE COMPUTATION OF TOTA L INCOME. THE TRIBUNAL ANALYSING THE FACTS HAD EXPRES SED THE VIEW THAT THERE HAD BEEN NO FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME AND THE ASSES SEE HAD DECLARED THE ENTIRE MATERIAL. IT WAS A CASE WHE RE A CLAIM PUT FORTH BY THE ASSESSEE AS REGARDS THE LOSS WAS NOT ACCEPTED BUT THAT WOULD NOT PER SE TANTAMOUNT T O FURNISHING ANY KIND OF INACCURATE PARTICULARS. THUS , THERE HAD BEEN NO CONCEALMENT OF INCOME OR FURNISHI NG OF INACCURATE PARTICULARS. HENCE, THE CANCELLATION OF PENALTY WAS VALID. 12. MOREOVER, THE AO BEFORE INITIATING THE PENALTY PROCEEDINGS HAS NOT RECORDED SATISFACTION IF THE ASSESSEE HAS C ONCEALED PARTICULARS OF INCOME OR HAS FURNISHED INACCURATE P ARTICULARS OF INCOME SO AS TO ATTRACT THE PROVISIONS OF SECTION 2 71(1)(C) OF THE ITA NO.5570/DEL./2018 7 ACT RATHER PROCEEDED TO LEVY THE PENALTY BY SPECIFI CALLY WRITING IN PARA 2 ON PAGE 3 OF THE PENALTY ORDER THAT THE RECO RD FILED BY THE ASSESSEE NOT FOUND TO BE CORRECT. THE LD. DR FOR T HE REVENUE BY RELIED UPON THE IMPUGNED ORDER PASSED BY THE LD. CI T (A) ALSO PLACED RELIANCE ON JUDGMENT CITED AS MAK DATA (P.) LTD. VS. CIT 358 ITR 593 AND 217 TIOL 2583-HC-DEL . HOWEVER, THE AFORESAID DECISIONS RELIED UPON BY THE LD. DR IS NO T APPLICATION TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 13. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT PENALTY LEVIED BY THE AO AND C ONFIRMED BY LD. CIT (A) IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE ORDERED TO BE DELETED. CONSEQUENTLY, APPEAL FILED BY THE ASSE SSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF JANUARY, 2019. SD/- SD/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 24 TH DAY OF JANUARY , 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.