TDI Infracorp (India) Ltd., New Delhi V. DCIT, Central Circle- 27 , New Delhi

ITA 5929/DEL/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7009 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 13-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘G’, NEW DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND DR. BRR KUMAR, ACCOUNTANT MEMBERR ITA No. 5929/Del/2018 Assessment Year: 2009-10 TDI Infracorp (India) Ltd., 9, Kasturba Gandhi Marg, New Delhi-1100 01 Vs. DCIT, Central Circle- 27, New Delhi. PAN :AACCT4122B (Appellant) (Respondent) ORDER PER SAKTIJIT DEY: JUDICIAL MEMBER: This is an appeal by the assessee assailing order dated 01.08.2015 of learned Commissioner of Income-Tax(Appeals)-29, New Delhi, confirming the penalty imposed under Section 271(1)(c) of the Income-Tax Act, 1961 for the assessment year 2009-10. 2. Briefly the facts are, the assessee is a resident company. For the assessment year under dispute, assessee filed its return of income on 30.09.2009 declaring loss of Rs.1,69,11,257. Appellant by Shri Madhur Agarwal, Adv. Respondent by Shri Umesh Takyar, Sr. DR Date of hearing 02.03.2022 Date of pronouncement 11.03.2022 2 ITA Nos.5929/Del.2018 3. Subsequently, assessee filed a revised return of income declaring loss of Rs.39,87,771. Assessee filed due more revised return of income on 02.09.2010 declaring loss of Rs.28,61,39,925. After examining the latest revised return of 02.09.2010, the Assessing Officer noticed that the assessee has made additional claim for expenses for Rs.28,21,52,164 towards interest, which according to the assessee, was inadvertently not claimed on accrual basis while filing the return of income. After examining the claim of the assessee, the Assessing Officer disallowed the expenses claimed on account of interest and brokerage amounting to Rs.28,21,52,154. Further, he made a fresh addition of Rs.82,28,800, being payment of salary not recorded in the books of accounts. As a result, the income was determined at Rs.31,64,971 and after adjusting the brought forward losses of earlier years, the total income was determined at nil. However, based on the disallowance of expenditure claimed and the addition made on account of salary expenses not recorded in the books of accounts, the Assessing Officer initiated proceedings for imposition of penalty under Section 271(1)(c) of the Act. In course of penalty proceedings, Assessing Officer noticed that out of the addition of Rs.82,28,800, learned Commissioner (Appeals) sustained addition to the extent of 3 ITA Nos.5929/Del.2018 Rs.20,95,200 and deleted the balance amount. Thus, on the addition sustained by the learned Commissioner (Appeals) amounting to Rs.20,95,200, the Assessing Officer proceeded to impose penalty of Rs.6,47,417 under Section 271(1)(c) of the Act alleging concealment of income. The penalty so imposed was also upheld by learned Commissioner (Appeals). 4. Learned counsel for the assessee submitted, in the show-cause- notice issued under Section 274 read with Section 271(1)(c) of the Act, the Assessing Officer has not specified the specific charge for which he intended to impose penalty, thus, he submitted, the penalty order passed without application of mind is invalid. In support of such contention, he relied upon the following decisions: i) Principal CIT Vs. Sahara India Life Insurance Co. Ltd. (2021) 432 ITR 84 (Delhi) (HC); ii) Silicon Graphic System Indi Pvt. Ltd. vs. CCIT – ITA No. 2978/Del/2013 Dated 10.03.2021; 5. As regards, the merits of the case, learned counsel for the assessee submitted that neither the assessee has concealed any income nor furnished inaccurate particulars of income. Therefore, there is no justifiable reason for imposing penalty. 4 ITA Nos.5929/Del.2018 6. Learned Departmental Representative submitted, Assessing Officer has clearly recorded his satisfaction for imposition of penalty and has also specified the charge for which he intended to impose penalty under Section 271(1)(c) of the Act. Thus, he submitted, assessee’s contention is not acceptable. 7. We have considered rival submissions and perused the material available on record. As could be seen the addition based on which the Assessing Officer initiated proceeding for imposition of penalty under Section 271(1)(c) of the Act is the unaccounted expenditure of Rs.82,28,800. 8. Undisputedly, the aforesaid addition has been substantially scaled down to Rs.20,95,200 by the first appellate authority. Now, coming to the satisfaction recorded by the Assessing Officer in the Assessment Order, it is observed that Assessing Officer has stated that assessee has furnished inaccurate particulars of his income by concealing the true particulars of his income. Whereas, in the show-cause-notice issued under Section 274 read with Section 271(1)(c) of the Act on 31.12.2010, the Assessing Officer has not specified the charge for which he intended to impose penalty under Section 271(1)(c) of the Act by striking off the inappropriate words. Moreover, on a reading of satisfaction recorded in the assessment 5 ITA Nos.5929/Del.2018 order of the Assessing Officer and the observations in the penalty order passed under Section 271(1)(c) of the Act, it is evident that the Assessing Officer himself was not sure what is the exact offence committed by the assessee. Thus, the ambiguity in the satisfaction recorded as well as the reasons on which the Assessing Officer imposed penalty coupled with the fact that the show-cause-notice issued in the printed format does not specify the exact charge for which penalty under Section 271(1)(c) of the Act was imposed, it has to be held that the order imposing penalty is not valid. This view of ours is supported by a catena of judicial precedents, including the decision of Hon’ble Bombay High Court in case of Mohd. Farhan A Shaikh Vs. DCIT (2021) 125 taxmann.com 253. Accordingly, we delete the penalty imposed under Section 271(1)(c) of the Act. 9. In the result, the appeal is allowed. Order pronounced in the open court on 11 th March, 2022 Sd/- Sd/- (DR. BRR KUMAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 11 th March, 2022. Mohan Lal 6 ITA Nos.5929/Del.2018 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Sl. No. Particulars Date 1. Date of dictation (Order drafted through Dragon software): 07.03.2022 2. Date on which the draft of order is placed before the Dictating Member: 3. Date on which the draft of order is placed before the other Member: 07.03.2022 4. Date on which the approved draft of order comes to the Sr. PS/PS: 07.03.2022 5. Date of which the fair order is placed before the Dictating Member for pronouncement: 6. Date on which the final order received after having been singed/pronounced by the Members: 7. Date on which the final order is uploaded on the website of ITAT: 11.03.2022 8. Date on which the file goes to the Bench Clerk 11.03.2022 9. Date on which files goes to the Head Clerk: 10. Date on which file goes to the Assistant Registrar for signature on the order: 11. Date of dispatch of order: