M/s. Vanesa Herbals Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 6547/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4009 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 03-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO. 6547/DEL/2014 ASSESSMENT YEAR: 2009-10 M/S VANESA HERBALS PVT. LTD. VS. ACIT, CIRCLE 17 (1), 116, MODEL BASTI, NEW DELHI DELHI 110 005 (PAN: AABCV4678D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SHAILESH GUPTA, CA REVENUE BY : SH. S.N. BHATIA, SR. DR ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 17.10.2014 PASSED BY THE LD. CIT(A)-19, NEW DELHI R ELATING TO ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 1. THAT LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY ORDER PASSED U/S. 271(1)(C) OF THE I.T. ACT, 1961 BY THE ACIT, CIRCLE 17(1), NEW DELHI FOR THE ASSESSMENT YEAR 2009-10 PENALTY OF RS. 1,01,948/- CONFIRMED BY CIT(A). 2. THAT THE LD. CIT(A) HAS NOT CONSIDERED THE ADDITION AL EVIDENCES FILED UNDER RULE 46AB OF THE IT ACT, 1961 . 3. THAT THE LD. CIT(A) HAS NOT CONSIDERED THE WRITTE N SUBMISSIONS SUBMITTED IN SUPPORT OF GROUNDS OF APPE AL AGAINST THE ORDER OF CIT, CIRCLE 17(1), DATED 25.6 .2012 U/S. 271(1)(C) OF THE ACT. 4. THAT APPELLANT RESERVES THE RIGHT TO ADD, ALTER, A MEND OR DELETE ANY GROUND OF THE APPEAL AT THE TIME OF HEAR ING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS MENT IN THIS CASE WAS COMPLETED VIDE ORDER DATED 27.12.2011 PASSED U/ S. 143(3) OF THE I.T. ACT, 1961 AT AN INCOME OF RS. 56,18,330/- AS AGAINST DECLARED 2 INCOME OF RS. 52,88,398/-. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS THE FOLLOWING ADDITIONS WERE MADE:- A) ON A/C OF ADVERTISEMENT EXPENSES : RS. 3,28,653 /- B) ON A/C OF DISALLOWANCE U/S. 14A : RS. 1, 275/- RS. 3,29,928/- 2.1 PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT F OR FURNISHING / CONCEALING INACCURATE PARTICULARS OF ITS INCOME WER E INITIATED AT THE TIME OF ASSESSMENT PROCEEDINGS AND NOTICES ISSUED T O THE ASSESSEE FROM TIME TO TIME. THE ASSESSE HAS NOT FILED FURTH ER APPEAL AGAINST THE ADDITIONS. IN RESPONSE TO NOTICE U/S. 271(1)(C) THE ASSESSEE FILED ITS REPLY. THE CONTENTION RAISED BY THE ASSESSEE WAS R EJECTED AND PENALTY U/S. 271(1)(C) OF THE ACT FOR FURNISHING / CONCEALI NG INACCURATE PARTICULARS OF ITS INCOME ARE IMPOSED. THE AO HEL D THAT IT IS ESTABLISHED THAT THE ASSESSEE HAS CONCEALED THE PAR TICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME AND LIABLE TO PENALTY U/S. 271(1)(C) OF THE ACT IN RESPECT OF ADDITION OF RS.32,29,928/- MADE IN THE RETURNED INCOME OF THE A SSESSEE AND MADE THE PENALTY OF RS. 1,01,948/- U/S. 271(C) OF THE I.T. ACT, 1961 VIDE ORDER DATED 25.6.2012. 3. AGAINST THE ABOVE PENALTY ORDER DATED 25.6.2012 PASSED BY THE ASSESSING OFFICER, ASSESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 17.10.2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGAINST THE ABOVE ORDER OF THE LD. CIT(A) DATED 17.10.2014, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 5. AS PER THE ASSESSEES COUNSEL CONTENTION, THERE WAS NO SATISFACTION FOR CONCEALMENT OF INCOME OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME AND AO HAS NOT POINTED OUT TH AT HOW THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH SOME AND HOW MUCH OF INCOME HAS BEEN CONCEALED. IT WAS FURTHER SUBMITTED THAT AO HA S NOT CONSIDERED ANY REPLY. THEREFORE, THE AMOUNT OF RS. 1,01,948/- DOES NOT ATTRACT ANY PENALTY. IN SUPPORT OF HIS CONTENTION, HE RELI ED UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. RE LIANCE PETRO PRODUCTS (2010) TAXMAN 322. 6. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND REQUESTED THAT THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT IN THIS CASE NO SATISFACTION FOR CONCEALMENT OF INCOME OR FURNI SHING OF INACCURATE PARTICULARS WAS RECORDED FOR PENALTY OF RS.7,60,512 /- U/S. 271(1)(C) OF THE ACT. WE FURTHER NOTE THAT AO HAS NOT POINTED OUT THAT HOW THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH SOME AND HOW MUCH OF INCOME HAS BEEN CONCEALED. WE FURTHER NOTE THE AO OBSERVED THA T ASSESSEE FURNISHED INACCURATE PARTICULARS AND CONCEALMENT O F ITS INCOME AND IS LIABLE FOR PENALTY U/S 271(1)(C), WHICH DID NOT ESTABLISH FROM THE 4 FACTS AND CIRCUMSTANCES OF THE CASE THAT HOW THE AS SESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME AND CONCEALMENT OF INCOME. HOWEVER, SECTION 271(1)(C) POSTULATES IMP OSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCE ALMENT OF INCOME. IN THIS REGARD, WE DRAW MY SUPPORT FROM THE DECISI ON OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRO DUCTS PVT. LTD. (2010) 322 ITR-158 (SC) WHEREIN THE HON'BLE SUPREM E COURT HAS HELD THAT 'WHERE THERE IS NO FINDINGS THAT ANY DETAILS SUPPLI ED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE, THERE IS NO QUESTION OF INVITING THE PENALTY U/SEC. 271(1)(C) OF THE ACT. A MERE MAKING A CLAIM, WHICH IS NOT SUSTAINABLE IN LA W, BY ITSELF, WILL NOT AMOUNT OF FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOU NT TO FURNISHING A INACCURATE PARTICULARS OF INCOME. AS THE ASSESSEE H AS FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. MERELY, BECA USE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPT ED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT , IN OUR OPINION, ATTRACT THE PENALTY U/SEC. 271(1)(C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAI M MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, T HE ASSESSEE WILL 5 INVITE PENALTY U/SEC. 271(1)(C). THAT IS CLEARLY NO T THE INTENDMENT OF THE LEGISLATURE'. 8. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND PRECEDENT, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME AND THERE ARE NO FINDINGS OF THE ASSESSING OFFICER AND THE CI T (APPEALS) THAT THE DETAILS FURNISHED BY THE ASSESSEE IN HIS RETURN ARE FOUND TO BE INACCURATE OR ERRONEOUS OR FALSE. UNDER THESE CIRC UMSTANCES, IN OUR VIEW THE PENALTY IN DISPUTE IS TOTALLY UNWARRANTED AND DESERVE TO BE DELETED. ACCORDINGLY, WE DELETE THE PENALTY OF RS. 1,01,948/- MADE U/S. 271(1)(C) OF THE I.T. ACT AND CANCEL THE ORDE RS OF THE AUTHORITIES BELOW ON THE ISSUE IN DISPUTE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/10/2017 . SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 10/10/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES