Seema Verma, New Delhi V. ITO, New Delhi

ITA 6728/DEL/2015

• Counselvise Citation: [2018] 130 COUNSELVISE.COM (IT) 0026 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 21-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT JAIN SENIOR
• Keywords: Opportunity of being heard; Non-deduction of tax
• Section: 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.6728/DEL./2015 (ASSESSMENT YEAR : 2008-09) MS. SEEMA VERMA, VS. ITO, A 77, VIJAY PARK, WARD 43 (1), NAJAFGARH, (ERSTWHILE WARD 25(4)), NEW DELHI 110 043. NEW DELHI. (PAN : ADGPV5942B) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI AMIT JAIN, SENIOR DR DATE OF HEARING : 06.12.2017 DATE OF ORDER : 19.01.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, MS. SEEMA VERMA (HEREINAFTER REFERR ED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 13.10.2015 PASSED BY THE COMMI SSIONER OF INCOME-TAX (APPEALS)-15, NEW DELHI, AFFIRMING THE P ENALTY ORDER DATED 12.03.2014 PASSED U/S 271(1)(C) OF THE INCOM E-TAX ACT, 1961 (FOR SHORT THE ACT), QUA THE ASSESSMENT YEAR 2008 -09 ON THE GROUNDS INTER ALIA THAT :- ITA NO.6728/DEL/2015 2 1. THE IMPUGNED ORDER PASSED BY THE LD. COMMISSI ONER OF INCOME TAX (APPEALS)-XVII [HEREAFTER THE LD. CIT (A )] IS BAD IN LAW AND NOT MAINTAINABLE INTER ALIA BECAUSE: (A) THE LD. CIT (A) FAILED TO PROVIDE PROPER AND ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE; (B) THE LD. CIT (A) SUMMARILY DISMISSED THE APPEAL FOR NON-APPEARANCE, WITHOUT CONSIDERING AND DISPOSING OFF ALL THE GROUNDS OF APPEAL; (C) THE IMPUGNED ORDER IS NON-SPEAKING .. 2 THE LD. CIT (A) AS WELL AS THE LD. INCOME TAX OF FICER, WARD - 25(4), NEW DELHI (HEREAFTER THE LD. ITO) FAI LED TO APPRECIATE THAT THE PENALTY NOTICE ISSUED U/S 271 O F THE INCOME TAX ACT, 1961 READ WITH SECTION 274, DOES NOT STATE / POINT OUT THE SPECIFIC CHARGE BUT COMPREHENDS ALL POSSIBLE GROUND S ON WHICH A PENALTY CAN BE IMPOSED THAT IS FOR CONCEALMENT OF I NCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME, AND ME NTIONS ALL THE CLAUSES OF THE EXPLANATION. 3 THE LD. CIT (A) AS WELL AS THE LD. ITO FAILED TO APPRECIATE THAT THE PENALTY HAS BEEN IMPOSED FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME, WHEREAS THE ADDITION IS ONLY BY DISALLOWING THE EXPENSES. 3.1 THE LD. CIT (A) AS WELL AS THE LD. ITO FAILED TO APPRECIATE THAT THE DISALLOWANCE OF THE COMMISSION PAID OF RS. 86,94,227 IS DUE TO NON-DEDUCTION OF TAX AT SOURCE, FOR WHICH PE NALTY IS NOT IMPOSABLE, AS HELD IN THE CASES OF: (A) TANUSHREE B ASU VS. ACIT, ITA NO.2922/MUM/2012 DECIDED ON 22.05.2013; AND (B) ACIT VS. MAZDA LTD., (2012) 33 CCH 47 (AHD). 3.2 THE LD. CIT (A) AS WELL AS THE LD. ITO FAILED T O APPRECIATE THAT PENALTY IS NOT IMPOSABLE ON THE DISALLOWANCES OF THE EXPENSES LIKE TELEPHONE, SALARY; PARTICULARLY WHEN THE DISALLOWANCE IS AD HOC. 4 THE LD. CIT (A) AS WELL AS THE LD. ITO FAILED TO - APPRECIATE THAT THE DISALLOWANCES MADE DESERVES TO BE DELETED AND THEREFORE, PENALTY ON SUCH DISALLOWANCES IS NOT LEVIABLE. 5 THE LD. CIT (A) ERRED IN CONFIRMING THE PENALTY OF RS. 36,92,003/- IMPOSED U/S 271(1)(C) OF THE ACT. 6 THE LD. ITO FAILED TO PROVIDE PROPER AND ADEQUAT E OPPORTUNITY OF HEARING TO THE ASSESSEE AND PASSED T HE PENALTY ORDER O-N A DAY, WHEN THE CASE WAS NOT FIXED. ITA NO.6728/DEL/2015 3 7 THE ORDERS OF THE LOWER AUTHORITIES AND THE OBSE RVATIONS THEREIN ARE AGAINST THE FACTS OF THE CASE AS WELL A S LAW. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF ASSESSMEN T ORDER COMPLETED UNDER SECTION 143 (3) OF THE ACT, PENALTY PROCEEDINGS WERE INITIATED FOR FURNISHING THE INACCURATE PARTIC ULARS OF HER INCOME QUA CAPITAL GAIN EXPENSES DETAILS, COMMISSIO N PAYABLE, TELEPHONE EXPENSES AND PROOF OF SERVICE TAX PAYMENT , EXPENSES MADE TOWARDS REPAIR AND MACHINERY ETC. AND CONSEQUE NTLY, THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED BY THE ASSESSI NG OFFICER U/S 145 OF THE ACT. DURING THE PENALTY PROCEEDINGS, ON FAILURE OF THE ASSESSEE TO APPEAR, PENALTY TO THE TUNE OF RS.36,92 ,003/- HAS BEEN LEVIED FOR FURNISHING THE INACCURATE PARTICULARS OF INCOME U/S 271(1)(C) OF THE ACT. 3. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS AFFIRMED THE PENALTY BY DIS MISSING THE PARTLY UPHELD THE ASSESSMENT ORDER BY PARTLY ALLOWI NG THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY CHALLENGING THE IMPUGNED ORDER PASSED BY LD. CIT (A ) . 4. ASSESSEE HAS NOT PREFERRED TO PUT IN APPEARANCE DESPITE ISSUANCE OF THE NOTICE AND CONSEQUENTLY, WE PROCEED ED TO DECIDE ITA NO.6728/DEL/2015 4 THE PRESENT APPEAL WITH THE ASSISTANCE OF THE LD. D R AS WELL AS ON THE BASIS OF DOCUMENTS AVAILABLE ON THE FILE. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. AT THE VERY OUTSET, IT IS BROUGHT ON OUR NOTICE THAT QUANTUM PROCEEDINGS, PENALTY PROCEEDINGS AS WELL AS APPELLA TE PROCEEDINGS U/S 271(1)(C) OF THE ACT HAVE BEEN DECIDED IN THE A BSENCE OF ASSESSEE. LD. CIT (A) IN PARA 5 OF THE IMPUGNED OR DER CATEGORICALLY MENTIONED THAT THE ASSESSEE HAS FAILE D TO PLACE ON RECORD THE EVIDENCE IN SUPPORT OF HER APPEAL NOR FI LED ANY WRITTEN SUBMISSIONS AND DECIDED THE APPEAL EX-PARTE WITHOUT GOING INTO THE MERITS OF THIS CASE RATHER DECIDED THE PENALTY PROC EEDINGS ON THE BASIS OF QUANTUM PROCEEDINGS WHICH ARE OTHERWISE RE QUIRED TO BE DECIDED INDEPENDENTLY FROM THAT OF THE PENALTY PROC EEDINGS. 7. NO DOUBT, ONE SHRI SANJAY KUMAR GUPTA, ADVOCATE INITIALLY APPEARED ON BEHALF OF THE ASSESSEE BUT FAILED TO AP PEAR SUBSEQUENTLY AND IN THAT EVENTUALITIES, IT WAS MAND ATORY FOR THE LD. CIT (A) BEING A QUASI-JUDICIAL AUTHORITY TO ISSUE A NOTICE TO THE ASSESSEE IN ORDER TO PROVIDE HER ADEQUATE OPPORTUNI TY OF BEING HEARD BECAUSE ONCE THE ADVOCATE HAS BEEN ENGAGED, I T IS THE DUTY ITA NO.6728/DEL/2015 5 OF THE ADVOCATE TO DEFEND THE CASE ON HER BEHALF OR TO BRING ON RECORD THAT ATTORNEY BY THE ASSESSEE IN HIS FAVOUR HAS SINCE BEEN REVOKED. SO, WE ARE OF THE CONSIDERED VIEW THAT IN THE INTEREST OF JUSTICE, EFFECTIVE OPPORTUNITY IS REQUIRED TO BE PR OVIDED TO THE ASSESSEE TO DEFEND HERSELF. SO, WE SET ASIDE THE I MPUGNED ORDER TO THE FILE OF THE LD. CIT (A) TO DECIDE AFRESH ON MER ITS AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. CON SEQUENTLY, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 19 TH DAY OF JANUARY, 2018. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 19 TH DAY OF JANUARY, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-15, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.