Suresh M. Bajaj, New Delhi V. ITO, New Delhi

ITA 6101/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6977 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 18-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 13-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL SENIOR
• Assessee Lawyers: S C MALHOTRA
• Section: 27; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC-I : NEW DELHI) BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER ITA NO.6101/DEL./2015 (ASSESSMENT YEAR : 2005-06) SHRI SURESH M. BAJAJ, VS. ITO, WARD 33 (4), R 289C, GREATER KAILASH I, NEW DELHI. NEW DELHI 110 048. (PAN : AADPB7622G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.C. MALHOTRA, CA REVENUE BY : SHRI ROBIN RAWAL, SENIOR DR DATE OF HEARING : 18.02.2016 DATE OF PRONOUNCEMENT : 19.02.2016 O R D E R THE ONLY ISSUE INVOLVED IN THIS APPEAL AGAINST THE ORDER OF THE CIT (APPEALS) DATED 01.09.2015 IS LEVY OF THE PENALTY A MOUNTING TO RS.94,607/- U/S 271(1)(C) OF THE INCOME-TAX ACT, 19 61 (HEREINAFTER THE ACT). 2. I HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONS IDERED THE SAME. I NOTED THAT IN THIS CASE, THE AO LEVIED THE PENALTY ON THE ASSESSEE ON THE SUM OF RS.2,47,468/- WHICH HE ADDED IN THE INCOME O F THE ASSESSEE IN PASSING AN ORDER U/S 144 AS, ACCORDING TO HIM, THE ASSESSEE DID NOT OFFER ANY EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITUR E EVEN THOUGH THESE ITA NO.6101/DEL./2015 2 EXPENSES HAVE BEEN INCURRED THROUGH THE CREDIT CARD . I NOTED THAT THE AO LEVIED THE PENALTY U/S 271(1)(C) IN THE FOLLOWING M ANNER :- 7. IN THE LIGHT OF ABOVE DISCUSSION, THE UNDERSIGN ED IS SATISFIED THAT THE ASSESSEE HAS CONCEALED THE INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME AND IT IS A FIT CASE FOR LEVY OF PENALTY U/S 271(1) OF THE INCOME TAX ACT, 1961 READ WITH EXPLANATION 1 TO SECTION 27 1(1). 8. THE COMPUTATION OF PENALTY IS AS FOLLOWS :- INCOME CONCEALED/INCOME IN RESPECT OF WHICH : RS.2, 47,468/- INACCURATE PARTICULARS FURNISHED TAX ON ABOVE INCOME : RS. 94,607/- I.E. TAX SOUGHT TO BE EVADED MINIMUM PENALTY LEVIABLE @ 100% : RS. 94,607/- MAXIMUM PENALTY LEVIABLE @ 300% : RS.2,83,821/- FROM THE SAID PARAGRAPH OF THE AO LEVYING THE PENAL TY, IT IS APPARENT THAT THE PENALTY HAS BEEN LEVIED BY THE AO WITHOUT SPECI FYING A PARTICULAR CHARGE AGAINST THE ASSESSEE. THE CIT (A) CONFIRMED THE ORDER OF THE AO. FROM THE PROVISIONS OF SECTION 271(1)(C), IT IS APP ARENT THAT THE PENALTY U/S 271(1)(C) CAN BE LEVIED IF THE AO IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THUS, THERE MUST BE A SPECIFIC CHARGE AND THE CHARGE LEVIED MUS T BE EITHER CONCEALMENT OF THE PARTICULARS OF INCOME OR FURNISHING OF INACC URATE PARTICULARS OF INCOME. EXPLANATION 1 IS APPLICABLE IN THE CASE OF CONCEALMENT OF THE PARTICULARS OF INCOME. IT CANNOT BE APPLIED IN CAS E OF FILING OF THE INACCURATE PARTICULARS OF INCOME. IN THE CASE OF C ONCEALMENT OF PARTICULARS ITA NO.6101/DEL./2015 3 OF INCOME, THERE IS A DEEMED CONCEALMENT OF THE PAR TICULARS OF THE INCOME IN VIEW OF THE EXPLANATION 1 AND THE ONUS IS ON THE ASSESSEE TO PROVE THAT HE HAS NOT CONCEALED THE PARTICULARS OF THE INCOME WHILE IN THE CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME, THE ONUS IS ON THE REVENUE TO PROVE THAT THE ASSESSEE HAS FURNISHED THE INACCU RATE PARTICULARS OF INCOME. MERELY MAKING A CLAIM WHICH MAY NOT BE ALL OWABLE BY AO CANNOT BE REGARDED THAT THE ASSESSEE HAS FURNISHED THE INACCURATE PARTICULARS OF INCOME. I AM OF THE VIEW THAT UNTIL AND UNLESS, A SPECIFIC CHARGE IS LEVIED, THE PENALTY LEVIED BY THE AO CANN OT BE SURVIVED IN THE EYES OF LAW. IN THIS CASE, THE AO SIMPLY OBSERVED THAT THE ASSESSEE MADE HIMSELF LIABLE FOR THE LEVY OF THE PENALTY U/S 271( 1)(C) BUT IN THE SUBSEQUENT PARAGRAPH, HE IMPOSED THE PENALTY FOR TH E DEFAULT OF CONCEALMENT OF THE PARTICULARS OF INCOME AND FURNIS HING OF INACCURATE PARTICULARS OF SUCH INCOME. THIS ITSELF PROVES THA T THE AO IS NOT SURE WHAT FAULT HAS BEEN COMMITTED BY THE ASSESSEE. HONBLE GUJARAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. V. CIT [20 06] 282 ITR 642 (GUJ) HAS CLEARLY LAID DOWN THAT IT IS INCUMBENT UP ON THE AO TO STATE WHETHER PENALTY IS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME OR WHETHER ANY INACCURATE PARTICULARS OF INCOME HAD BE EN FURNISHED BY THE ASSESSEE. IN THE ABSENCE OF CLEAR-CUT FINDING BEIN G GIVEN BY THE AO, HONBLE HIGH COURT DECLARED THE ORDER PASSED FOR LE VYING THE PENALTY TO BE INVALID. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBL E KARNATAKA HIGH ITA NO.6101/DEL./2015 4 COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 565. NO CONTRARY DECISION WAS BROUGHT TO MY KN OWLEDGE BY THE LD. DR. ON THIS BASIS ITSELF, THE PENALTY IS LIABLE TO BE DELETED. I, THEREFORE SET ASIDE THE ORDER OF THE CIT (A) AND DELETED THE PENA LTY LEVIED U/S 271(1)(C) OF THE ACT. 3. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 19 TH DAY OF FEBRUARY, 2016. SD/- (P.K. BANSAL) ACCOUNTANT MEMBER DATED THE 19 TH DAY OF FEBRUARY, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-18, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.