Sh. Satinder Pal Singh, New Delhi V. ACIT, New Delhi

ITA 6449/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8719 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 19-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 274; 73

Judgement Text

1 , , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI , ! #$ . % , ' ( BEFORE MS. SUSHMA CHOWLA, JM & DR. B.R.R. KUMAR, AM ) / ITA NOS.6449 TO 6452/DEL/2016 * * / ASSESSMENT YEARS 2006-07 TO 2009-10 SATINDER PAL SINGH, D-97, DEFENCE COLONY, NEW DELHI-110024. PAN-AAAPS4461K .......... +, /APPELLANT VS THE ACIT, CENTRAL CIRCLE-3, NEW DELHI. . -.+, / RESPONDENT +,/0 / APPELLANT BY : NONE -.+,/0 / RESPONDENT BY : SH. H.K.CHOUDHARY, CIT DR ) / ITA NOS.6457, 6459 TO 6462/DEL/2016 * * / ASSESSMENT YEARS 2007-08, 2009-10 TO 2012-13 SANDEEP SINGH MADHOK, D-97, DEFENCE COLONY, NEW DELHI-110024. PAN-AAAPS4457P .......... +, /APPELLANT VS THE ACIT, CENTRAL CIRCLE-3, NEW DELHI. . -.+, / RESPONDENT +,/0 / APPELLANT BY : NONE -.+,/0 / RESPONDENT BY : SH. H.K.CHOUDHARY, CIT DR ) / ITA NO.3918/DEL/2016 * * / ASSESSMENT YEAR 2007-08 THE INSTALLMENT SUPPLY LTD., 46, JANPATH, NEW DELHI-110001. PAN-AAACT0060G .......... +, /APPELLANT VS 2 THE ACIT, CIRCLE-25(1), NEW DELHI. . -.+, / RESPONDENT +,/0 / APPELLANT BY : SH.SHIVAM GARG, CA -.+,/0 / RESPONDENT BY : SH. SARAS KUMAR, SR. DR /1' / DATE OF HEARING : 07.01.2020 23 /1' / DATE OF PRONOUNCEMENT: 17 .01.2020 4 / ORDER PER SUSHMA CHOWLA, JM THE PRESENT BUNCH OF APPEALS ARE FILED BY DIFFERE NT ASSESSEES AGAINST THE SEPARATE ORDERS OF CIT(A)-25, NEW DELHI 30.09.2016 AGAINST PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) RELATING TO ASSESSMENT YEARS 2006-07 TO 2012-13 RES PECTIVELY. ONE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A )-33, NEW DELHI DATED 30.03.2016 AGAINST PENALTY LEVIED U/S 271(1)(C) OF THE ACT RELATING TO ASSESSMENT YEAR 2007-08. 2. THE ONLY ISSUE RAISED IN THE PRESENT BUNCH OF APPE ALS IS AGAINST THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT , 1961 (IN SHORT ACT). THE NOTICE OF HEARING WAS SENT AT THE ADDRESS OF TH E ASSESSEE FOR 30.10.2019 AND EVEN FOR THE APPOINTED DATE OF HEARI NG I.E 07.01.2020. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE ON BOTH DATES OF HEARING. SINCE THE ISSUE RAISED IN THE PRESENT APPE ALS STAND SQUARELY COVERED, WE PROCEED TO DECIDE THE PRESENT BUNCH OF APPEALS AFTER HEARING THE LD.DR FOR THE REVENUE. 3 3. THE ISSUE RAISED IN THE CASE OF SATINDER PAL SIN GH IN ITA NOS. 6449 TO 6452/DEL/2016 RELATING TO ASSESSMENT YEARS 2006- 07 TO 2009-10 AND SANDEEP SINGH MADHOK IN ITA NOS.6457, 6459 TO 6462/ DEL/2016 RELATING TO ASSESSMENT YEARS 2007-08, 2009-10 TO 2012-13 ARE IDENTICAL AND HENCE, WE PROCEED TO DECIDE THE PRESENT BUNCH OF AP PEALS VIDE THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 4. EVEN THE ISSUE RAISED IN THE CASE OF THE INSTALL MENT SUPPLY LTD. IN ITA NO.3918/DEL/2016 RELATING TO ASSESSMENT YEAR 20 07-08 IS AGAINST THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AND NON-RE CORDING OF SATISFACTION BY THE ASSESSING OFFICER WHILE INITIATING THE PENALTY PROCEEDINGS AND THE SAME IS ALSO BEING DECIDED ALONGWITH THIS BUNCH OF APPEA LS. 5. ON PERUSAL OF RECORD AND AFTER HEARING LD.DR FOR THE REVENUE IN THE BUNCH OF APPEALS, WE FIND THAT THE ISSUE RAISED IS AGAINST THE NON- RECORDING OF SATISFACTION WHILE INITIATING THE PENA LTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. IN THE BUNCH OF APPEALS, THE ASSESSEE IS ALSO AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER IN LEVYING AFORESAID PENALTY FOR CONCEALMENT, ALTHOUGH IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT, THE NON-RELEVANT PORTION WAS NOT STRUCK OF F. THE COPY OF THE SAID NOTICE IS FILED ALONGWITH MEMO OF APPEAL. 6. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AR E ATTRACTED WHERE THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR FURNISH ED INACCURATE PARTICULARS OF INCOME. FOR DEFAULT OF EITHER OF TH E LIMBS OF THE SAID SECTION, THE ASSESSEE CAN BE HELD LIABLE FOR LEVY OF PENALTY OF CONCEALMENT. HOWEVER, THE ASSESSING OFFICER WHILE INITIATING PEN ALTY PROCEEDINGS HAS TO 4 COME TO A FINDING IN THIS REGARD. THE AO WHILE COM PLETING THE ASSESSMENT HAS TO RECORD SATISFACTION IN THIS REGARD, IN ORDE R TO SHOW CAUSE THE ASSESSEE AS TO WHICH LIMB TO SECTION 271(1)(C) OF T HE ACT HAS NOT BEEN SATISFIED BY IT. THIS IS THE BASIC CONDITION OF TH E AFORESAID SECTION. ON PERUSAL OF THE ASSESSMENT ORDER PASSED FOR THE INST ANT ASSESSMENT YEAR REFLECTS NO PROPER SATISFACTION HAD BEEN RECORDED. IN THE ABSENCE OF THE SAME, THE ASSESSEE IS NOT IN A POSITION TO MEET THE REQUIREMENTS OF THE SECTION. MERELY, AN ORDER ISSUING NOTICE U/S 274 R .W.S 271(1)(C) OF THE ACT DO NOT MEET THE CONDITIONS OF THE SAID INITIATION O F PENALTY PROCEEDINGS. O N THE PERUSAL OF THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSING OFFICER HAS MADE THE AFORESAID ADDITION IN THE RESPECTIVE Y EARS AND AS WHILE MAKING THE AFORESAID ADDITION HAS OBSERVED AS UNDER :- PENALTY PROCEEDINGS, U/S 271(1)(C) OF THE INCOME T AX ACT, 1961 ARE SEPARATELY INITIATED. 7. EVEN IN THE CONCLUDING PARA, SIMILAR OBSERVATION WAS MADE BY THE ASSESSING OFFICER. IN THE ABSENCE OF THE ASSESSING OFFICER RECORDING A NY PROPER SATISFACTION, THERE IS NO MERIT IN THE PENAL TY ORDER PASSED IN THE CASE. IN THIS REGARD, WE FIND SUPPORT FROM THE RATI O LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM). WE HOLD THAT IN THE ABSENCE OF RECORD ING PROPER SATISFACTION, WHILE INITIATING THE PENALTY PROCEEDINGS U/S 271(1) (C) OF THE ACT, ORDER PASSED U/S 271(1)(C) OF THE ACT SUFFERS FROM INFIRM ITY. 8. NOW COMING TO THE SECOND ASPECT OF THE ISSUE WH ERE THE ASSESSING OFFICER WHILE ISSUING THE NOTICE U/S 274 R.W.S. 271 (1)(C) OF THE ACT HAS FAILED TO STRIKE OFF THE IRRELEVANT PORTION OF THE SAID NOTICE I.E. ASSESSING 5 OFFICER HAS FAILED TO SHOW-CAUSE THE ASSESSEE AS TO WHETHER HE WAS INITIATING THE PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 9. THE HONBLE DELHI HIGH COURT IN PR.CIT VS SAHARA INDIA LIFE INSURANCE COMPANY LTD. IN ITA NO.475/2019 HAVE LAID DOWN THAT NOTICE ISSUED FOR IMPOSING OF PENALTY WOULD BE BAD IN LAW, IF IT DOES NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, P ENALTY PROCEEDINGS HAD BEEN INITIATED I.E. WHETHER FOR CONCEALMENT OF INCO ME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THIS REGARD, R ELIANCE WAS PLACED ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN CIT VS MANJUNATHA COTTON GINNING FACTORY 359 ITR 565 (KARN.) AND IT WAS OBSE RVED THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, PENALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER FOR CONCEALMENT OF PAR TICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULAR OF INCOME; WHIC H WAS FOLLOWED IN THE SUBSEQUENT ORDER IN COMMISSIONER OF INCOME TAX VS S SAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 241 (KARN.). 10. APPLYING BOTH THE ABOVE SAID PROPOSITIONS TO TH E FACTS OF THE CASE, WE FIND NO MERIT IN THE LEVY OF PENALTY FOR CONCEAL MENT OF INCOME U/S 271(1)(C) OF THE ACT IN THE BUNCH OF APPEALS. ON TH IS PRELIMINARY GROUND ITSELF, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSES SEE. 11. IN ITA NO.3918/DEL/2016 RELATING TO ASSESSMENT YEAR 2007-08, THE ONLY ISSUE IS NOT RECORDING OF SATISFACTION WHILE I NITIATING THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. FOLLOWING TH E RATIO LAID DOWN IN SHRI 6 SAMSON PERINCHERY (SUPRA), WE HOLD THAT THE INITIA TION OF THE PENALTY PROCEEDINGS IN THE CASE SUFFERS FROM INFIRMITY AND HENCE, CONSEQUENT ORDER PASSED U/S 271(1)(C) DO NOT STAND. 12. IN THE RESULT, BUNCH OF APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY 2020. SD/- SD/- (B.R.R.KUMAR) (SUSH MA CHOWLA) ' /ACCOUNTANT MEMBER /JUDICIAL MEMBER / DATED : 17 TH JANUARY, 2020 * AMIT KUMAR * 4/-1567618 COPY OF THE ORDER IS FORWARDED TO : 1. +, / THE APPELLANT 2. -.+, / THE RESPONDENT 3. 91 : ; / THE CIT(A) 4. < 91 / THE PR. CIT 5. 6. 6=>-1 ? ? / DR, ITAT, DELHI >#*@8 GUARD FILE. 4 / BY ORDER , .61-1 // TRUE COPY // A B C , ? ASSISTANT REGISTRAR, ITAT, DELHI