M/s. Millenium Automation & System Ltd., New Delhi V. DCIT, New Delhi

ITA 5698/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4024 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 08-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P GUPTA
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SH. N.K.SAINI, ACCOUNTANT MEMBER AND SH.K.N.CHARY, JUDICIAL MEMBER ITA NO. 5698/DEL/2015 (ASSESSMENT YEAR: 2 011-12) APPELLANT BY SH. A JAY WADHWA, ADV. RESPONDENT BY SH. S.P.GUPTA, SR.DR DATE OF HEARING 14 .0 9 .2017 DATE OF PRONOUNCEMENT 1 0 . 1 0.2017 ORDER PER K.N.CHARY, JUDICIAL MEMBER THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 31.08.2015 IN APPEAL NO.499/14-15 PASSING BY THE CO MMISSIONER OF INCOME TAX (APPEAL) [IN SHORT CIT(A)]-6, DELHI FOR 2011-12 ASSESSMENT YEAR WHERE LD.CIT(A) CONFIRMED THE PENALTY OF RS.5,55,000/- LEVIED BY TH E AO. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A COMPANY, ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF COMPUTER & ACCESSO RIES AND HAVE WAS ALSO DERIVING RENTAL INCOME. FOR AY 2011-12, THE ASSESS EE FILED RETURN OF INCOME ON 28.09.2011 DECLARING A TOTAL INCOME OF RS.2,54,77,9 81/- AND DURING THE COURSE OF SCRUTINY ASSESSMENT U/S 143(3) OF THE INCOME TAX AC T, 1961 (IN SHORT ACT), THE AO OBSERVED THAT THE ASSESSEE HAD DECLARED INCOME FROM HOUSE PROPERTY IN RESPECT OF RENT RECEIPT OF RS.1,20,28,152/- AND CLAIMED ELIGIB LE DEDUCTION U/S 24 OF THE ACT MILLENNIUM AUTOMATION & SYSTEMS LTD., E-48/09, OKHLA INDUSTRIAL AREA, PHASE-II, NEW DELHI-110020. PAN-AACCM4538N VS DCIT , CIRCLE-6(1), NEW DELHI. (APPELLANT) (RESPONDENT) ITA NO. 5698/DEL/2005 PG. 2 BESIDES DEPRECIATION IN RESPECT OF THE BUILDING. T HE AO DISALLOWED DEPRECIATION OF RS.16,27,486/- AND ADDED BACK TO THE INCOME OF THE ASSESSEE. SIMULTANEOUSLY, AO INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT AND CONCLUDED THEM BY ORDER DATED 21.08.2014 WITH THE LEVY OF PENALTY OF RS.5,55,00 0/-. APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSED BY THE LD.CIT(A). HENCE, TH E ASSESSEE FILED THIS APPEAL CHALLENGING THE LEVY OF PENALTY AS CONFIRMED BY THE LD.CIT(A), BOTH ON THE QUESTIONS OF LAW AND FACTS. 3. AT THE OUTSET, IT IS THE ARGUMENTS OF THE LD. CO UNSEL FOR THE ASSESSEE THAT NOTICE ISSUED U/S 274 R.W.S. 271 OF THE ACT DOES NO T SPEAK OF ANY SPECIFIC LIMB OF SECTION 271(1)(C) OF THE ACT I.E. WHETHER IT IS A C ONCEALMENT OF INCOME OR FURNISH INACCURATE PARTICULARS THEREOF. RELIANCE IS PLACED ON CIT VS SSAS EMERALD MEADOWS 73 TAXMANN 248 [2016]; CIT VS SSAS EMERALD MEADOWS 73 TAXMANN 241 [2016]; CHINTELS INDIA LTD. VS ACIT 49 CCH 134 (DEL . TRIB.) [2017]; M.G. CONTRACTORS PVT. LTD. VS DCIT ITA NO.7034 TO 7038/DEL/2014 DATE D 19.09.2016 (DEL. TRIB.); AND SMT. PARMESHWARI DEVI VS ITO ITA NO.2284/DEL/2015 D ATED 15.02.2016. [DEL. TRIB.]. 4. IN SO FAR AS THE TECHNICAL GROUND IS CONCERNED, IN CIT VS SSAS EMERALD MEADOWS 73 TAXMANN 248 [2016] THE HONBLE KARNATAKA HIGH COURT HELD AS FOLLOWS:- 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY TH E ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 R EAD WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) TO BE BA D IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY P ROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDER ED IN THE CASE OF CIT VS MANJUNATHA COTTON & GINNING FACTORY [2013] 359 ITR 565/218 TAX MAN 423/35 TAXMANN.COM 250 (KAR.). 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDG EMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL Q UESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE APPEAL IS ACC ORDINGLY DISMISSED. ITA NO. 5698/DEL/2005 PG. 3 5. THE SLP FILED AGAINST THE DECISION OF THE HONBL E KARNATAKA HIGH COURT WAS DISMISSED BY THE HONBLE APEX COURT IN CIT VS SSAS EMERALD MEADOWS [2016] 73 TAXMANN.COM 248 (SC). THESE DECISIONS ARE FOLLOWED BY A CO-ORDINATE BENCH OF THIS TRIBUNAL IN A NUMBER OF CASES. 6. NOW, COMING TO THE FACTS OF THIS CASE, VIDE PAGE NO.1 OF THE PAPER BOOK, THE ASSESSEE PRODUCED THE COPY OF NOTICE U/S 274 OF THE ACT WHEREIN BOTH THE LIMBS OF SECTION 271(1)(C) OF THE ACT NAMELY CONCEALMENT OF PARTICULARS OF THE INCOME OR FURNISHING OF INACCURATE PARTICULARS THEREOF, ARE M ENTIONED AND THIS NOTE DOES NOT SPECIFY UNDER WHICH LIMB, THE ASSESSEE IS CHARGED, DEFEND THEMSELVES. THE DECISIONS RELIED UPON BY THE ASSESSEE, THEREFORE, A RE APPLICABLE TO THE FACTS OF THE CASE AND THE PROCEEDINGS U/S 271(1)(C) OF THE ACT, ARE BAD FOR WANT OF VALID NOTICE. 7. EVEN OTHERWISE, THE PENALTY PROCEEDINGS ARE INIT IATED CONSEQUENT TO THE DISALLOWANCE OF DEPRECIATION ON THE GROUND THAT THE ASSESSEE CLAIMED THE ELIGIBLE DEDUCTION U/S 24 OF THE ACT AND ALSO THE DEPRECIATI ON IN RESPECT OF THE VERY SAME PROPERTY. HOWEVER, THE ORDER DATED 09.11.2015 PASS ED U/S 154/143(3) OF THE ACT PASSED BY THE AO IN THIS MATTER CLEARLY SHOWS THAT THE AO HAD CONSIDERED DIFFERENT PROPERTIES AS SUCH THE DISALLOWANCE WAS DELETED TO AN EXTENT OF RS.8,13,742/-. IT SHOWS THAT THERE WAS MISTAKEN IDENTITY OF THE PROPE RTY AT THE TIME OF THE ASSESSMENT PROCEEDINGS. FURTHER, MERE DISALLOWANCE OF DEPRECIATION IN THIS PECULIAR SET OF FACTS AND CIRCUMSTANCES DOES NOT IN VITE THE PROCEEDINGS U/S 271(1)(C) OF THE ACT. RATIO OF THE HONBLE APEX CO URT IN CIT VS RELIANCE PETRO PRODUCTS P.LTD. [2010] 322 ITR 158 [SC] APPLIES TO THE FACTS OF THIS CASE AT HAND AND RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE AO T O DELETE THE PENALTY. ITA NO. 5698/DEL/2005 PG. 4 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2017. SD/- SD/- (N.K.SAINI) (K.N.CHAR Y) ACCOUNTANT MEMBER JUDICIAL MEMBER *AMIT KUMAR* DATE:-10.10.2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI