Sigma Paradisw, Ghaziabad V. ACIT, Ghaziabad

ITA 5740/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3726 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 07-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMPOORANANAND
• Keywords: Question of law; Reasonable cause

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 5740/DEL/2017 A.Y. : 2013-14 M/S SIGMA PARADISE, VS. ACIT, GHAZIABAD CIRCLE KM-78, KAVI NAGAR, GHAZIABAD (PAN: AAZFS9643L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ALOK GUPTA, CA DEPARTMENT BY : SH. SAMPOORANANAND, SR. DR O R D E R PER H.S. SIDHU, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), GHAZIABD DATED 3 0.6.2017 PERTAINING TO ASSESSMENT YEAR 2013-14. 2. THE GROUNDS OF APPEAL RAISED IN THE ASSESSEES APPEAL READ AS UNDER:- GROUNDS OF APPEAL GROUND NO. 1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY LD. CTT (A) IS BAD IN LAW. GROUND NO.2 2 THAT LD. CTT (A) HAS ERRED IN CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICER AND THEREBY CONFIRMING THE PENALTY IMPOSED BY HIM U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. GROUND NO. 3.1 THAT THE LD. CIT (A) ERRED IN OBSERVING THAT THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE PURCHASE EXPENSES AMOUNTING RS. 15,68,789/-. GROUND NO. 3.2 THAT THE CIT (A) ERRED IN CONFIRMING THE PENALTY UNDER SECTION 271(1 )(C) IGNORING THE WELL SETTLED PRINCIPAL THAT DISALLOWANCE OF EXPENSE CANNOT PER SE AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. GROUND NO. 4.1 THAT THE LD. CIT (A) ERRED IN OBSERVING THAT THE ASSESSEE HAD CONCEALED THE INTEREST INCOME AMOUNTING RS. 1,03,562/-. IN FACT, THE ASSESSEE HAD EXPLAINED THE REASON SINCE IT WAS A CLERICAL ERROR, AND 3 ITSELF OFFERED INTEREST INCOME TO BE TAXED B-EFORE THE SAME WAS POINTED OUT BY ASSESSING OFFICER. GROUND NO. 4.2 THAT THE LD. CIT (A) ERRED IN CONFIRMING THE ORDER PASSED BY ASSESSING OFFICER, IN SPITE OF THE FACT THAT ASSESSING OFFICER HAD NOT RECORDED HIS SATISFACTION AS TO THE CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE IN THE ASSESSMENT ORDER. 3. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FO R THE SAKE OF BREVITY. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE HAS STATED THAT THE PENALTY PROCEEDINGS OUGHT TO FAIL, THE PENALTY W AS INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME. ALSO THE NOTICE FOR PENALTY U/S. 271 READ WITH SECTION 274 OF THE I. T. ACT, 1961 WAS AMBIGUOUS AND VAGUE IN AS MUCH AS IT IS STATED BOTH CONCEA LMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICUL ARS. FOR THE SAKE OF REFERENCE, THE COPY OF NOTICE DATED 29.12.2015 FOR IN ITIATION OF PENALTY PROCEEDINGS AND COPY OF PENALTY ORDER DATED 29.12.2015 WAS FILED BEFORE THE BENCH. HE FURTHER STATED THAT ENTIRE PENALTY PROCEE DINGS STAND VITIATED AS THE NOTICE ITSELF IS NOT IN ACCORDANCE WITH LAW AND IN ORDER TO SUPPORT HIS CONTENTION, HE PLACED THE RELIANCE ON THE FOLLOWING DE CISIONS:- 4 - HONBLE KARNATAKA HIGH COURT DECISION IN THE CASE OF C IT & ORS. VS. M/S MANJUNATHA COTTON AND GINNIG FACTORY & ORS. (2013) 359 ITR 565 - APEX COURT DECISION IN THE CASE OF CIT & ANR. VS. M/S SSAS EMERALD MEADOWS IN CC NO. 11485/2016 DATED 05.8.2016. IN VIEW OF ABOVE, HE REQUESTED THAT THE PENALTY IN D ISPUTE MAY BE CANCELLED AND APPEAL OF THE ASSESSEE MAY BE ALLOWED. 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORD ERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE RELEVANT RECORD AV AILABLE WITH US. FIRSTLY, I HAVE PERUSED THE NOTICE DATED 29.12.2015 ISSUED BY THE AO FOR INITIATING THE PENALTY PROCEEDINGS AND DIRECTING THE ASSESSEE TO APPE AR BEFORE HIM AT 11.30 AM ON 29/01/2016 AND ISSUED A SHOW CAUSE TO THE ASSESSEE STATING THEREIN THAT ..IT APPEARS THAT YOU:-.. ..*HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE U/S. 22(4)/23(2) OF THE IN DIAN INCOME TAX ACT, 1922 OR UNDER SECTION 142(1)/143(2) OF THE INCOME TAX ACT, 1961. 5 * HAVE CONCEALED THE PARTICULARS OF YOUR INCOME A ND HAVE FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 6.1 AFTER PERUSING THE NOTICE DATED 29.12.2015 ISSUED BY THE AO TO THE ASSESSEE, I AM OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCU RATE PARTICULARS OF INCOME AS WELL AS IN THE PENALTY ORDER DATED 29.6.201 6 HE HELD THAT THE ASSESSEE HAD WITHOUT REASONABLE CAUSE CONCEALED THE PARTICULA RS OF HIS INCOME, AND / OR FURNISHED INACCURATE PARTICULARS OF INCOME ASSESSED. THEREFORE, IN VIEW OF ABOVE, THE PENALTY IN DISPUTE IS NOT SUSTAINABLE IN THE EYES OF LAW AND NEEDS TO BE DELETED. MY AFORESAID VI EW IS FORTIFIED BY THE FOLLOWING DECISIONS:- I) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS 2015 (11) TMI 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE 6 TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- KARANATAKA HIGH COURT. THUS SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION N O SUBSTANTIAL QUESTION OF LAW ARISES DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS HONBLE SUPREME COURT OF INDIA REPORTED IN 2016 (8) TMI 1145 SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) TMI 1620 (SUPRA) KARNATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(1)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME DECIDED IN FAVOUR OF ASSESSEE. 7 7. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPE CTFULLY FOLLOWING THE PRECEDENTS, AS AFORESAID, I DELETE THE P ENALTY IN DISPUTE AND DECIDE THE ISSUE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED ON 02/02/2018. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 02/02/2018 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