ITO, Muzaffarnagar V. M/s Rana Enterprises, Muzaffarnagar

ITA 6154/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3618 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 19-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SMT BEENA PILLAI, JUDICIAL MEMBER ITA NO.6154/DEL/2015 ASSESSMENT YEAR: 2010-11 ITO, KHATAULI, MUZAFFARNAGAR. VS. RANA ENTERPRISES, KANDHLA ROAD, BUDHANA, MUZAFFARNAGAR. PAN: AAKPR0269C (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI ATIQ AHMAD, SR. DR DATE OF HEARING : 15.11.2017 DATE OF PRONOUNCEMENT : 16.11.2017 ORDER PER R.S. SYAL, VP: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER PASSED BY THE CIT(A) ON 14.08.2015 CONFIRMING THE P ENALTY OF RS.14 LAC IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF T HE INCOME-TAX ACT, ITA NO.6154/DEL/2015 2 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATIO N TO THE ASSESSMENT YEAR 2010-11. 2. THE FACTS LEADING TO THE IMPOSITION OF PENALT Y ARE THAT THE ASSESSEE MADE CERTAIN PURCHASES FOR WHICH PAYMENTS WERE MADE IN VIOLATION OF SECTION 40A(3) OF THE ACT. THE ASSESSING OFFICER M ADE DISALLOWANCE UNDER THE RESPECTIVE PROVISION AND, THEREAFTER, IMP OSED PENALTY IN RESPECT OF SUCH DISALLOWANCE. THE LD. CIT(A) DELET ED THE PENALTY BY RELYING ON AN ORDER PASSED BY THE TRIBUNAL IN THE C ASE OF SAURABH GARG. THE REVENUE IS AGGRIEVED AGAINST THE DELETION OF PE NALTY. 3. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE NE CESSARY RECORD. THERE IS NO APPEARANCE FROM THE SIDE OF THE ASSESSE E DESPITE NOTICE. AS SUCH, WE ARE PROCEEDING TO DISPOSE OFF THE APPEAL EX PARTE QUA THE ASSESSEE. PENALTY IN THIS CASE WAS IMPOSED WITH REF ERENCE TO THE DISALLOWANCE MADE U/S 40A(3) OF THE ACT. 4. IT IS SEEN THAT THE ONLY BASIS FOR IMPOSITI ON OF PENALTY BY THE ASSESSING OFFICER IS DISALLOWANCE U/S 40A(3) OF THE ACT. MERE DISALLOWANCE OF AN EXPENDITURE U/S 40A(3) CANNOT BE EQUATED WITH ITA NO.6154/DEL/2015 3 CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME WARRANTING PENALTY U/S 271(1)(C) OF THE ACT. 5. THE HON'BLE SUPREME COURT IN THE CASE CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) HAS HELD THAT SIMPLY FOR THE REASON THAT THE ASSESSING OFFICER DID NOT FIND THE CLAIM OF THE ASSESSEE TO BE SUSTAINABLE IN LAW UP TO A CERTAIN EXTENT, CANNO T BE A CASE FOR PENALTY U/S. 271(1)(C), MORE SO, WHEN THE PARTICULARS FUR NISHED BY THE ASSESSEE WERE NOT INACCURATE. RATIO DECIDENDI OF THE JUDGMENT IS FULLY APPLICABLE TO THE INSTANT CASE AS WELL. IN VIEW OF THE FOREGOI NG DISCUSSION, WE UPHOLD THE IMPUGNED ORDER DELETING THE PENALTY IMPO SED U/S 271(1)(C) OF THE ACT. THE LD. CIT(A), IN OUR CONSIDERED OPINION , RIGHTLY RELIED ON THE TRIBUNAL ORDER PASSED IN THE CASE OF SAURABH GARG F OR DELETING THE PENALTY. WE, THEREFORE, UPHOLD THE SAME AND APPROV E THE DELETION OF PENALTY. ITA NO.6154/DEL/2015 4 6. IN THE RESULT, THE APPEAL IS DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 6 TH NOVEMBER, 2017. SD/- SD/- [BEENA PILLAI] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 16 TH NOVEMBER, 2017. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.