M/s. Havells India Ltd., Delhi V. DCIT (LTU), New Delhi

ITA 6193/DEL/2015

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4788 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 23-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Assessee Lawyers: ROHIT JAIN
• Keywords: Question of law
• Section: 271(1)(c); 274; 73; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 6193/DEL/2015 : ASSTT. YEAR : 2008-09 M/S HAVELLS INDIA LIMITED. I, RAJ NARAIN MARG, CIVIL LINES, DELHI-110054 VS DEPUTY COMMISSIONER OF INCOME TAX (L.T.U.), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. ASSESSEE BY : SH. ROHIT JAIN, ADV. REVENUE BY : SH. PRAKASH DUBEY, SR. DR DATE OF HEARING: 18.01.2021 DATE OF PRONOUNCEMENT: 10.02.2021 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-LTU, NEW DELHI DATED 03 .07.2012. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT THE IMPUGNED ORDER OF LD. CIT (A), LTU, NE W DELHI IS BAD IN LAW AND WRONG ON THE FACTS AND IN T HE CIRCUMSTANCES OF THE CASE AND LEGAL POSITION. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND THE LEGAL POSITION, THE LD. CIT (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C ) IN RESPECT OF ADDITION ON ACCOUNT OF EXCHANGE LOSS AMOUNTING TO RS.3,99,821/- RELATED TO CAPITAL COST ON IMPORT OF MACHINERY. ITA NO. 6193/DEL/2015 HAVELLS INDIA LTD. 2 3. THE ASSESSING OFFICER LEVIED PENALTY OF RS.3,99, 000/- IN RESPECT OF ADDITION ON ACCOUNT OF EXCHANGE RELATED TO CAPITAL COST ON IMPORT OF MACHINERY. 4. AT THE OUTSET, THE LD. AR REFERRED TO PAGE NO. 5 9 OF THE PAPER BOOK SHOWING THE PENALTY NOTICE ISSUED U/S 274 R.W.S. 27 1 AND SUBMITTED THAT THE PENALTY LEVIED IS NOT SUSTAINABLE IN VIEW OF TH E DEFECT IN THE NOTICE OF PENALTY WHICH IS AS UNDER: ITA NO. 6193/DEL/2015 HAVELLS INDIA LTD. 3 5. WE HAVE GONE THROUGH THE RECORD BEFORE US. WE HA VE GONE THROUGH THE FACTS OF THE CASE AND FIND THAT THE ASSESSING O FFICER HAS NOT MADE IT CLEAR UNDER WHICH LIMB OF THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT, THE PENALTY IS BEING LEVIED. THERE IS GLARING DISCR EPANCY BETWEEN INITIATION OF THE PENALTY AND LEVY OF PENALTY. THIS IS A JURIS DICTIONAL ISSUE ARISING OUT OF THE PENALTY ORDER BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE HEAVILY RELIE D ON THE JUDGMENT OF SUNDARAM FINANCE LTD. VS CIT (2018) 403 ITR 407 (MADRAS) AND ARGUED THAT THE HONBLE HIGH COURT HELD THAT WHERE NOTICE DID NOT SHOW THE NATURE OF DEFAULT, IT WAS A QUESTION OF FACT. T HE ASSESSEE HAS UNDERSTOOD PURPORT AND IMPORT OF THE NOTICE, HENCE, NO PREJUDICE WAS CAUSED TO THE ASSESSEE. 7. THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SAHARA INDIA LIFE INSURANCE COMPANY LTD. IN ITA NO. 426/2019 DATED 02.08.2019 WHEREIN THE HONBLE HIGH COURT HELD AS U NDER: 21 THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF THE PENALTY IMPOSED UNDER SECTION 271(1) (C) OF THE ACT, WHICH WAS ACCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA HIGH COURT IN CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) AND OBSERVED THAT THE NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) THE PEN ALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER FOR CONCEALME NT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIGH COURT HAD FOLLOWED THE ABOVE JUDGMEN T IN THE SUBSEQUENT ORDER IN COMMISSIONER OF INCOME TAX V. S SAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 241 (KAR), THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF INDIA IN SLP NO. 11485 OF 2016 BY ORDER DATED 5TH AUGUST, 2016. 22. ON THIS ISSUE AGAIN THIS COURT IS UNABLE TO FIN D ANY ERROR HAVING BEEN COMMITTED BY THE ITAT. NO SUBSTANTIAL QUESTION OF LAW ARISES. 8. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE SUPRE ME COURT IN THE CASE OF SSAS EMERALD MEADOWS (CC NO.11485/2016). ITA NO. 6193/DEL/2015 HAVELLS INDIA LTD. 4 9. HENCE, RESPECTFULLY FOLLOWING THE JUDGMENT OF TH E HONBLE JURISDICTIONAL HIGH COURT AND HONBLE APEX COURT, W E HEREBY HOLD THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER CANNOT BE H ELD TO BE LEGALLY VALID IN THE EYES OF LAW. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/02/2021. SD/- SD/- (BHAVNESH SAINI) (DR. B. R. R. KUMA R) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10/02/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR