Action Construction Equipment Ltd., Faridabad V. DCIT, Central Circle- 1, Faridabad

ITA 641/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3066 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 29-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ALKA GAUTAM
• Assessee Lawyers: P S KASHYAP
• Section: 271(1)(c); 274; 80IC; 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI G.S. PANNU, HONBLE PRESIDENT & SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.641/DEL/2018 ASSESSMENT YEAR : 2009-10 M/S ACTION CONSTRUCTION EQUIPMENT LTD.KASHYAP & CO. CHARTERED ACCOUNTANTS, 214, CITI CENTRE, BEGUM BRIDGE ROAD, MEERUT, (U.P.)-250001 VS DCIT, CENTRAL CIRCLE-1, COMPLEX, NH-IV, NIT, FARIDABAD. PAN-AAACA6189P APPELLANT RESPONDENT APPELLANT BY SH. P.S.KASHYAP, CA RESPONDENT BY MRS. ALKA GAUTAM SR. DR DATE OF HEARING 13.10.2021 DATE OF PRONOUNCEMENT 25.10.2021 ORDER PER KUL BHARAT, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30.11.2017 OF THE LEARNED CIT(A)-3, GURGAON, RELATING TO ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED F OLLOWING GROUNDS OF APPEAL:- 1. THAT ON FACTS AND IN LAW IMPOSITION OF PENALTY UNDE R SECTION 271 (1)(C) FOR RS.5,42,648/- IS WITHOUT ANY BASIS, TOTALLY WRONG, UNJUSTIFIED, ILLEGAL AND UNWARRANTED. THE AP PELLANT IS NOT LIABLE TO PENALTY U/S 271(1) (C) ON THE FOLLOWI NG GROUNDS: ITA NO.641/DEL/2018 2 | P A GE I) THAT THE LD CIT (A) HAS NOT CONSIDERED THE VARIOUS FACTS BEFORE PASSING THE ORDER. II) THAT ADDITION WAS MADE ON THE BASIS OF CERTAIN EXPENDITURE WRITTEN IN A NOTE PAD WHICH DOES NOT BELONG TO THE APPELLANT. THERE WAS NO MATERIAL AVAILABLE TO ASSUME THAT EXPE NDITURE WAS INCURRED BY THE APPELLANT AND NO PENALTY CAN BE IMPOSED ON AD HOC ADDITIONS. III) THAT THE LD A.O HAS IMPOSED PENALTY WITHOUT SP ECIFYING IN THE SHOW CAUSE NOTICE DATED 18.03.2015 THAT PENALTY IS IMPOSED FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS. THEREFORE THE BASIS TAKEN AND METHOD ADOPTED BY THE ASSESSING OFFICER FOR IMPOSING PENALTY U/S 271 (1)( C) FOR RS. 5,42,648/- AND CONFIRMED BY CIT(A)-3 IS TOTALLY WRO NG, UNJUSTIFIED AND UNWARRANTED AND THE SAME DESERVES T O BE DELETED IN FULL. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSMENT U/ S 153A(1) OF THE INCOME TAX ACT (HEREINAFTER REFERRED TO THE ACT) WAS COMPLETED ON 26.12.2011 AT ASSESSED INCOME OF RS.32,88,91,470/- BY THE ACIT CENTRAL CIRCLE-I, FAR IDABAD. IT IS NOTED BY THE ASSESSING OFFICER (AO) THAT THE ISSU E RELATED TO DEDUCTION 80IC OF THE ACT WAS SET-ASIDE BACK TO THE FILE OF THE ASSESSING OFFICER. IT IS FURTHER OBSERVED BY ASSES SING OFFICER THAT, IN RESPECT OF ADDITION OF RS.15,96,494/- MADE DURING THE COURSE OF ASSESSMENT ON ACCOUNT OF UNACCOUNTED RECEIPT/EXPENDITURE AS NOTED IN SARASWATI NOTE PAD WHICH WAS FOUND AND SEIZED FROM THE PREMISES OF THE ASSESSEE COMPANY, THE ASSESSEE DID NOT FILE ANY APPEAL. THE ASSESSIN G OFFICER ITA NO.641/DEL/2018 3 | P A GE INITIATED PENALTY PROCEEDINGS ON THIS ADDITION AND SUBSEQUENTLY BY THE IMPUGNED ORDER DATED 29.09.2015 IMPOSED PENA LTY U/S 271(1)(C) OF THE ACT OF RS.5,42,648/-. 3. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO SUSTAINED THE PENALTY AN D NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE GRIEVANCE OF THE ASSESSEE AGAINST IMPOSITION OF THE PENALTY ARE THAT THE LD. CIT(A) FAILED TO APPRECIATED THE FACTS THAT THE ADDITION WAS MADE ON THE BASIS OF CERTAIN FIGURES NOTED IN NOTE PAD WHICH DID NOT BELONG TO THE ASSESSEE, THERE WA S NO MATERIAL TO ASSUME THAT THE EXPENDITURE WAS INCURRE D BY THE ASSESSEE. HENCE, NO PENALTY COULD BE IMPOSED ON SUC H AD-HOC ADDITION. MOREOVER, THE PENALTY HAS BEEN IMPOSED W ITHOUT SPECIFYING SPECIFIC CHARGE IN THE NOTICE ISSUED U/S 274 OF THE ACT. THEREFORE, ASSUMPTION OF JURISDICTION WAS CON TRARY TO THE SETTLED PROPOSITION OF LAW. FURTHER, THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE FACTS WERE IDENTICAL IN THE ASSESSMENT YEAR UNDER APPEAL AND ASSESSMENT YEAR 20 10-11 INTERESTINGLY, THE ASSESSING OFFICER IN THE ASSESSM ENT YEAR ITA NO.641/DEL/2018 4 | P A GE 2010-11, DROPPED THE PENALTY PROCEEDINGS, HOWEVER I MPOSED IN THE ASSESSMENT YEAR UNDER APPEAL IN ARBITRARY AND U NJUSTIFIED MANNER. HE FURTHER SUBMITTED THAT EVEN OTHERWISE A LSO THIS PENALTY CANNOT BE SUSTAINED AS THE SAME HAS BEEN IM POSED WITHOUT SPECIFYING THE CHARGE. IN SUPPORT OF THIS CONTENTION, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF PCIT VS SAHARA LIFE INSURANCE COMPANY LTD. REPORTED IN 432 ITR 84. 5. PER CONTRA, THE LD. SR. DR OPPOSED THE SUBMISSI ONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL SUBMISSION, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE O RDERS OF THE AUTHORITIES BELOW. THE REVENUE HAS NOT CONTROVERTED THE FACT THAT THE FACTS ARE IDENTICAL AS WERE IN THE ASSESSM ENT YEAR 2010-11 AND THE PENALTY PROCEEDING PERTAINING OF TH IS YEAR WAS DROPPED. THE ASSESSEE HAS PLACED ON RECORD THE ORDE R OF THE ASSESSING OFFICER PERTAINING TO THE ASSESSMENT YEAR 2010-11 DATED 29.09.2015, WHEREIN, THE ASSESSING OFFICER HA D HIMSELF DROPPED THE PENALTY PROCEEDINGS. HOWEVER, IN THE A SSESSMENT ITA NO.641/DEL/2018 5 | P A GE YEAR UNDER APPEAL, THE ASSESSING OFFICER IMPOSED PE NALTY BY OBSERVING AS UNDER:- THE SUBMISSION OF THE ASSESSEE HAS BEEN DULY CONSIDERED BUT NOT FOUND CONVINCING. CITATIONS GIV EN BY THE ASSESSEE ARE NOT RELATED TO THE INSTANT CASE. ADDITIONS WERE MADE ON THE BASIS OF ALL MATERIAL AN D FACTS FOUND DURING THE COURSE OF SEARCH OPERATION A ND ALSO FAILED THE ASSESSEE TO JUSTIFY DURING THE COURSE OF SEARCH OPERATION AND ALSO FAILED THE ASSESSEE TO JUSTIFY D URING THE ASSESSMENT PROCEEDINGS. NON FILING OF APPEAL A GAINST THE SAID ADDITION IS ALSO STRENGTHENING THE VIEW TA KEN BY THE DEPARTMENT AND ACCEPTANCE OF FURNISHING/CONCEAL ING INCOME TO THE TUNE OF RS.15,96,494/- BY THE ASSESSE E. FROM THE ABOVE, IT IS CRYSTAL CLEAR THAT ALL THE CO NDITIONS FOR LEVYING OF PENALTY U/S 271(1)(C) OF THE ACT ARE APPLICABLE IN THE CASE OF THE ASSESSEE. THEREFORE, ASSESSEE IS IN DEFAULT AND PENALTY IS LEVIABLE ON T HE ADDITIONS OF RS.15,96,494/- AS I AM FULLY SATISFIED THAT ASSESSEE HAS CONCEALED PARTICULARS OF INCOME TO THE EXTENT OF RS.15,96,494/-. 7. THE ASSESSING OFFICER HAS NOT GIVEN ANY REASON AS TO WHY HE DROPPED THE PENALTY IN ASSESSMENT YEAR 2010- 11 AND SUSTAINED THE IMPOSITION OF PENALTY FOR ASSESSMENT YEAR 2009- 10 UNDER THE SAME SET OF FACTS. MOREOVER, IN THE IMPUGNED PENALTY ORDER, THE ASSESSING OFFICER HAS STATED THA T NON-FILING OF APPEAL GOES TO DEMONSTRATE THE ACCEPTANCE BY THE AS SESSEE OF FURNISHING/CONCEALING OF INCOME TO THE TUNE OF RS.1 5,96,494/-. THIS OBSERVATION GOES TO DEMONSTRATE THAT THE ASSES SING OFFICER HAD NOT SPECIFIED THE CHARGE, WHETHER IT WAS FAR FU RNISHING OF ITA NO.641/DEL/2018 6 | P A GE INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THEREFORE, LOOKING INTO THE FACTS WHERE THE ASSESSI NG OFFICER UNDER THE SAME SET OF FACTS HAS DROPPED THE PENALTY IN ASSESSMENT YEAR 2010-11, THEREFORE, THE PENALTY IN THIS YEAR ALSO CANNOT BE SUSTAINED, HENCE, DELETED. GROUNDS R AISED IN THE APPEAL ARE ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER WAS PRONOUNCED IN OPEN COURT ON 25 TH OCTOBER, 2021. SD/- SD/- (G.S. PANNU) (KUL BHAR AT) PRESIDENT JUDICIAL MEMBER DELHI; DATED: 25 / 1 0/2021. F{X~{T F{X~{T F{X~{T F{X~{T COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI