Sh. Ashok Kumar Chordia, New Delhi V. DCIT, New Delhi

ITA 5790/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3177 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 29-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Keywords: Question of law
• Section: 153A

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NOS. 5788, 5789 & 5790/DEL/2014 A.YRS. : 2007-08, 2008-09 & 2009-10 MR. ASHOK KUMAR CHORDIA, VS. DCIT, CENTRAL CIRCLE-1 B-5, 1 ST FLOOR, CAPTAIN GAUR MARG, NEW DELHI EAST OF KAILASH, NEW DELHI 110 065 (PAN: ADMPC6791P)) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SATISH AGGARWAL, CA DEPARTMENT BY : SMT. APARNA KARAN, CIT(DR) ORDER PER H.S. SIDHU, JM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE RESP ECTIVE ORDERS, ALL DATED 11.9.2014 OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-III, NEW DELHI PERTAINING TO ASSESSMENT YEAR 2007-08, 2008-09 AND 2009-10 RESPECTIVELY. SINCE THE ISSUES INVOLVED IN TH ESE APPEALS ARE IDENTICAL AND COMMON, HENCE, THE APPEALS WERE HEARD TOG ETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE, BY DEALING WITH ITA NO. 5788/DEL/2014 (AY 2007-08). 2. THE GROUNDS OF APPEAL RAISED IN THE ASSESSEES APPEAL NO. ITA NO. 5788/DEL/2014 (AY 2007-08) READ AS UNDER:- 2 1. THAT THE ORDER OF LD. CIT(A) IS ARBITRARY, BIASE D AND BAD IN LAW AND ON FACTS OF THE CASE. 2. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 3,51,693/- UNDER SECTION 271(1)(C) OF THE ACT IGNORING THE FACT THAT THERE W AS NO DIFFERENCE BETWEEN RETURNED AND ASSESSED INCOME. 3. THAT THE LD. CIT(A) HAS GROSSLY ERRED I IN CONFIRMIN G THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE A CT BY IGNORING THE FACT THAT THE APPELLANT HAD NEITHER FU RNISHED INACCURATE PARTICULARS OF HIS INCOME NOR CONCEALED HIS INCOME. 4. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 2712(1)(C) OF THE A CT BY SUMMARILY BRUSHING ASIDE THE SUBMISSIONS OF THE APPELLANT . THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, OR W ITHDRAW ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HE ARING OF THIS APPEAL. 2.1 IN OTHER 02 APPEALS, IDENTICAL ISSUES ARE INVOLVED AND SIMILAR GROUNDS HAVE BEEN RAISED, THE ONLY DIFFERENCE IS IN THE FIGURE S INVOLVED. 3 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH ACTION WAS CARRIED OUT ON THE ASSESSEE ON 21.9.2010. DURING THE COURSE OF SEARCH CERTA IN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. ON CONFRONTING THESE IN CRIMINATING DOCUMENTS THE ASSESSEE IN HIS STATEMENT RECORDED UNDER SE CTION 132(4) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) SURRENDERED A SUM OF RS. 1 CRORE AS HIS ADDITIONAL INCOME COMPRISING FO R DIFFERENT ASSESSMENT YEARS RANGING FROM ASSESSMENT YEAR 2007-08 TILL ASSESSMENT YEAR 2011-12. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE DECLARED A SUM OF RS. 10,00,000/- AS AN ADDITIONAL INCOME. SINCE IN THE RETURN OF INCOME FILED UNDER SECTION 153A OF THE ACT, THE ASSESSEE DISCLOSED THIS ADDITIONAL INCOME OVER AND ABOVE THE INCOME DECLARED I N THE RETURN OF INCOME FILED UNDER SECTION 139(1) OF THE ACT, HENCE, THE AO HELD THAT ON ADDITIONAL INCOME OF RS. 10,00,000/- THE PENALTY WAS L EVIABLE UNDER SECTION 271(1) READ WITH EXPLANATION 5A AND ACCORDINGLY, AO IMPOSED THE PENALTY OF RS. 3,51,693/- U/S. 271(1) OF THE ACT VIDE ORDER DATED 30.9.2013. 4. AGAINST THE PENALTY ORDER THE ASSESSEE APPEALED BEFOR E THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 11.9.2014 HAS DISMIS SED THE APPEAL OF THE ASSESSEE BY CONFIRMING THE PENALTY IN DISPUTE. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE H AS STATED THAT THE PENALTY PROCEEDINGS OUGHT TO FAIL, THE PENALTY WAS IN ITIATED FOR CONCEALMENT OF INCOME. HOWEVER, THE NOTICE DATED 26.3.2013 FOR LEV Y OF PENALTY U/S. 271 READ WITH SECTION 274 OF THE I. T. ACT, 1961 WAS AMBIG UOUS AND VAGUE IN AS 4 MUCH AS IT IS STATED BOTH CONCEALMENT OF PARTICULARS O F INCOME OR FURNISHING OF INACCURATE PARTICULARS. FOR THE SAKE OF REFERENCE, T HE COPY OF NOTICE DATED 26.3.2013 FOR INITIATION OF PENALTY PROCEEDING S AND COPY OF PENALTY ORDER DATED 30.9.2013 WERE FILED BEFORE THE BENCH. HE FURTHER STATED THAT ENTIRE PENALTY PROCEEDINGS STAND VITIATED AS THE NOTIC E ITSELF IS NOT IN ACCORDANCE WITH LAW AND IN ORDER TO SUPPORT HIS CONTENTIO N, HE PLACED THE RELIANCE ON THE FOLLOWING DECISIONS, BY FILING THE COPIE S THEREOF. - 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. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORD ERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE RELEVANT RECORDS AV AILABLE WITH US. FIRSTLY, WE HAVE PERUSED THE NOTICE DATED 26.3.2013 ISSUED BY TH E AO FOR INITIATING THE PENALTY AND DIRECTING THE ASSESSEE TO APPEAR BEFORE HIM AT 11.30 AM ON 26/04/2013 AND ISSUED A SHOW CAUSE TO THE ASSESSEE STATING THEREIN THAT 5 .. YOU HAVE CONCEALED THE PARTICULARS OF YOUR INCOME O R FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. AFTER PERUSING THE NOTICE DATED 26.3.2013 ISSUED BY THE AO TO THE ASSESSEE, WE ARE OF THE VIEW THAT THE AO HAS INITIATED THE PENALTY FOR FURNISHING INACCU RATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME AS WELL AS IN THE PENAL TY ORDER DATED 30.9.2013 AO HAS STATED THAT HE IS SATISFIED THAT THE A SSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME, WHICH IS CONTRARY TO LAW. IN V IEW OF ABOVE, THE PENALTY IS NOT SUSTAINABLE IN THE EYES OF LAW. OUR AF ORESAID VIEW 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 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 6 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. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPE CTFULLY FOLLOWING THE PRECEDENTS, WE DELETE THE PENALTY IN D ISPUTE AND DECIDE THE ISSUE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. 7 9. AS REGARDS THE OTHER TWO APPEALS ARE CONCERNED, FOL LOWING THE CONSISTENT VIEW AS TAKEN IN ITA 5788/DEL/2014 (AY 2007- 08), AS AFORESAID, WE DELETE THE PENALTY IN DISPUTE IN OTHER TWO APPEAL S ALSO BEING ITA NOS. 5789 & 5790/DEL/2014 (AYRS. 2008-09 & 2009-10) AND A LLOW THE GROUNDS RAISED BY THE ASSESSEE. 10. IN THE RESULT, ALL THE THREE APPEALS FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED ON 05/12/2017. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 05/12/2017 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