Rihim Pharma Consultancy (P) Ltd., Delhi V. ITO, Ward- 21(2), New Delhi

ITA 6103/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3048 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 28-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K TIWARI
• Section: 143(3)

Judgement Text

1 ITA NO. 6103/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI R. S. SYAL, VICE PRES IDENT AND MS SUCHITRA KAMBLE, JUD ICIAL MEMBER ITA NO. 6103/DEL/201 7 ( A.Y 2013-14) RIHIM PHARMA CONSULTANCY (P) LTD. 518-519, 5 TH FLOOR, RING ROAD MALL, MANGLAM PLACE, SECTOR-3, ROHINI, NEW DELHI AAECR7581C (APPELLANT) VS ITO WARD-21(2) NEW DELHI (RESPONDENT) APPELLANT BY SH. PRAMOD JAIN, CA RESPONDENT BY SH. V. K. TIWARI, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 11/07/2017 PASSED BY CIT (A) 7, NEW DELHI FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE ID. A.O. AND CIT(A) IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 2. THAT THE ID. AO ERRED IN INITIATING PENALTY PROCEE DINGS, NOT AWARE / FORMING OPINION THAT WHETHER IT IS CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME.3 3. THAT THE ID. AO ERRED IN IMPOSING PENALTY, NOT CRY STALLIZING THAT WHETHER IT IS CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. 4. THAT THE LD.CIT(A) ERRED IN SUSTAINING PENALTY OF RS. 1,10,298/- U/S 271(L)(C) OF THE INCOME TAX ACT. DATE OF HEARING 22.03.2018 DATE OF PRONOUNCEMENT 23.03.2018 2 ITA NO. 6103/DEL/2017 5. THAT THE ID. A.O. ALSO ERRED IN NOT FOLLOWING VARI OUS JUDGMENTS OF JURISDICTIONAL HIGH COURT AND ITAT. 6. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO AD D, ALTER, MODIFY OR DELETE ANY OF THE GROUND OF APPEAL. 3. THE ASSESSEE IS THE COMPANY INCORPORATED UNDER T HE COMPANIES ACT, 1956 AND FILED ITS INCOME TAX RETURN OF AY 2013-14 ON 01/10/2013 DECLARING TAXABLE INCOME OF RS. 15,03,110/- CONSISTING OF INC OME FROM BUSINESS AND PROFESSION. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE WAS SENT UNDER SECTION 143(2). THE CASE WAS ASSESSED UNDER SECTION 143(3) AFTER MAKING ADDITION ON OF RS.358994/ ON FOLLOWING GROUNDS: A) DISALLOWANCE OF LOSS ON SALE OF ASSET OF RS. 35489 8/-. B) DISALLOWANCE OF INTEREST EXPENSE OF RS. 4096/- ON ACCOUNT OF LATE PAYMENT OF SERVICE TAX AND TDS. THE ASSESSEE COMPANY SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE COMPANY MADE A BONAFIDE AND INADVERTENT ER ROR BY NOT ADDING THE LOSS ON SALE OF ASSET TO THE COMPUTATION OF INCOME AMOUNTING TO RS.3,54,898/-. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271 (L)(C) AND LEVIED PENALTY OF RS. 110928/- ON THE ASSESSEE COMPANY. 6. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE FIL ED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASS ESSEE. 7. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS NOT SPECIFIED AS TO WHETHER THERE IS A CONCEALMENT OF PARTICULARS OF INCOME OR THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F INCOME. THUS, THE NOTICE ISSUED U/S 274 READ WITH SECTION 271 OF THE ACT ITS ELF IS NOT PROPER AND THE PENALTY ORDER SHOULD BE SET ASIDE. THE ASSESSEE COM PANY SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE COMPANY MADE A BONAFIDE AND INADVERTENT ERROR BY NOT ADDING THE LOSS ON SALE OF ASSET TO TH E COMPUTATION OF INCOME AMOUNTING TO RS.3,54,898/-. 3 ITA NO. 6103/DEL/2017 8. THE LD. DR RELIED UPON THE ORDER OF THE PENALTY ORDER AND CIT (A)S ORDER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER WHILE ISSUING NOTICE HAS NOT SPECIFIED AS TO WHETHER THERE IS A CONCEALMENT OF PARTICULARS OF IN COME OR THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THUS, THE NOTICE ISSUED U/S 274 READ WITH SECTION 271 OF THE ACT ITSELF IS DEFECTIV E. IT IS PERTINENT TO NOTE THAT THE CIT (A) HAS NOT LOOKED INTO THE ASPECT OF INVAL IDATION OF THE NOTICE ISSUED U/S 274 READ WITH SECTION 271 OF THE ACT. THERE WA S NO SPECIFIC PENALTY GIVEN BY THE ASSESSING OFFICER. THE INITIATION OF THE PE NALTY IS NOT AS PER THE PENALTY PROVISIONS PRESCRIBED UNDER THE INCOME TAX ACT, 196 1. THEREFORE, THE ORDER OF CIT(A) IS SET ASIDE. 8. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23RD MARCH , 2018 . SD/- SD/- (R. S. SYAL) (SUCHITRA KAMBLE) VICE PRESIDENT JUDI CIAL MEMBER DATED: 23/03/2018 R.N COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 4 ITA NO. 6103/DEL/2017 DATE 1. DRAFT DICTATED ON 2 2 /03/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 2 2 /03/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 23.03.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 3 .03.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.