Gautam Thadani, New Delhi V. Income Tax Officer, Ward-12(2), New Delhi

ITA 6899/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2308 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 16-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K BATRA
• Keywords: Unexplained cash credit; Question of law
• Section: 271(1)(c); 143(3); 274; 73

Judgement Text

1 ITA NO. 6899/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I(2) + SM C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEM BER, AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 6899/DEL/2017 ( A.Y 2004-05) GAUTAM THADANI C-31, MAY FAIR GARDEN NEW DELHI DELHI PIN: 110016 PAN AADPT6360P (APPELLANT) VS ITO WARD-12(2) NEW DELHI (RESPONDENT) APPELLANT BY SH. A. K. BATRA, CA RESPONDENT BY SH. PRADEEP SINGH GAUTAM, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 05/09/2017 PASSED BY CIT(A)-12 FOR ASSESSMENT YEAR 2004-05 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS WRONG IN LEVYING PENALTY U/S 271(1)(C) OF THE INCOME TAX AC T. 2. THAT THE ASSESSEE DID NOT FILE ANY INACCURATE PARTI CULARS OF INCOME OR CONCEALED PARTICULARS OF INCOME, THE PENALTY LEVIED BY THE INCOME TAX OFFICER WAS AGAINST THE LAW AND FACTS OF THE CASE AND THE COMMI SSIONER (APPEALS) IS WRONG IN CONFIRMING THE SAME. 3. THE ASSESSMENT U/S 143(3) WAS COMPLETED ON 29/1 2/2006 DETERMINING DATE OF HEARING 03.03.2020 DATE OF PRONOUNCEMENT 19.03.2020 2 ITA NO. 6899/DEL/2017 THE TOTAL TAXABLE INCOME OF RS. 30,45,125/- AS AGAI NST RETURN INCOME OF RS. 23,85,514/-. THE PENALTY PROCEEDINGS U/S 271 (1)(C ) OF THE INCOME TAX ACT, 1961 WAS INITIATED THE PENALTY OF RS. 2,89,190/- WA S IMPOSED ON THE ADDITION ON ACCOUNT OF SALE OF SHARES AND UNEXPLAINED CREDIT . 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE NOTICES U/S 274 RE AD WITH SECTION 271 DATED HAS NOT STRIKE OF THE PARTICULAR LIMB UPON WH ICH THE PENALTY WAS IMPOSED. THE LD. AR FURTHER SUBMITTED THAT FROM TH E ASSESSMENT ORDER ALSO. THE PARTICULARS LIMB OF INITIATION OF PENALTY HAS N OT BEEN MENTIONED. THE PENALTY ORDER IS ALSO HARPING THAT ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREBY THE CONSOLE ITS I NCOME FOR THE YEAR UNDER CONSIDERATION. THUS, THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER WAS NOT SPECIFIC WHETHER THE ASSESSEE FURNISHES INACCURATE PARTICULARS OF INCOME OR CONSOLED ITS INCOME. THEREFORE, AT THE THRESHOLD I TSELF THE PENALTY HAS TO BE DELETED. THE LD. AR RELIED UPON THE DECISION OF TH E HONBLE KARNATAKA HIGH COURT IN CASE OF CIT(A) VS. M/S MANJUNATHA AND GINN I FACTORY AND ORS 359 ITR 565. THE ABOVE PRINCIPAL WAS FURTHER AFFIRMED BY T HE APEX COURT IN CASE OF CIT(A) VS. M/S SSA EMERALD MEADOWS. 6. THE LD. DR RELIED UPON THE DECISION OF THE HON'B LE HIGH COURT IN THE CASE OF NEW HOLLAND TRACTORS INDIA PVT. LTD. VS. CIT(A) 49 TAXMAN.COM 573. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THERE IS NO CONCEALMENT IN THE PRESENT CA SE. THE ASSESSEE HAS ALSO FILED ALL THE DETAILS DURING THE REGULAR ASSESSMENT PROCEEDINGS. FROM THE NOTICES DATED 23.12.2011 AND 15.03.2016 PRODUCED B Y THE LD. AR DURING THE HEARING, IT CAN BE SEEN THAT THE ASSESSING OFFICER WAS NOT SURE UNDER WHICH PROVISIONS OF SECTION 271 OF THE INCOME TAX ACT, 19 61, THE ASSESSEE IS LIABLE FOR 3 ITA NO. 6899/DEL/2017 PENALTY. THE ISSUE IS SQUARELY COVERED BY THE DECIS ION OF THE HON'BLE SUPREME COURT IN CASE OF M/S SSA EMERALD MEADOWS. THE EXTR ACT OF THE HONBLE KARNATAKA HIGH COURT IN M/S. SSA EMERALD MEADOWS A RE AS UNDER WHICH WAS CONFIRMED BY THE HONBLE APEX COURT: 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY TH E ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SE CTION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHE R FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE , HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDER ED IN THE CASE OF COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON A ND GINNING FACTORY (2013) 359 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDG MENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBS TANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COU RT. THE APPEAL IS ACCORDINGLY DISMISSED. SINCE IN THE INSTANT CASE ALSO THE INAPPROPRIATE WO RDS IN THE PENALTY NOTICE HAS NOT BEEN STRUCK OFF AND THE NOTICE DOES NOT SPECIFY AS TO UNDER WHICH LIMB OF THE PROVISIONS, THE PENALTY U/S 271(1)(C) HAS BEEN INITIATED, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY LEVIED U/S 271(1)(C) IS NOT SUSTAINABLE AND HAS TO BE DELETED. ALTHOUGH THE LD. DR SUBMITT ED THAT MERE NON-STRIKING OFF OF THE INAPPROPRIATE WORDS WILL NOT INVALIDATE THE PENALTY PROCEEDINGS, HOWEVER, THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF SSAS EMERALD MEADOWS (SUPRA) WHERE THE SLP FILED BY THE REVENUE HAS BEEN DISMISSED IS DIRECTLY ON THE ISSUE CONTESTED HEREIN BY THE ASSESSEE. FURTHER, WHEN THE NOTICE IS NOT MENTIONING THE CONCEALMENT O R THE FURNISHING OF INACCURATE PARTICULARS, THE RATIO LAID DOWN BY THE HONBLE HIGH COURT IN CASE OF M/S. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPR A) WILL BE APPLICABLE IN THE PRESENT CASE. THE HONBLE DELHI HIGH COURT HELD AS UNDER: 4 ITA NO. 6899/DEL/2017 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT, WHICH W AS ACCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA HIGH COURT I N CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) AND OBSE RVED 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 PENALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIG H COURT HAD FOLLOWED THE ABOVE JUDGMENT IN THE SUBSEQUENT ORDER IN COMMISSIO NER OF INCOME TAX V. SSAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 241(KAR) , THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF INDIA I N SLP NO. 11485 OF 2016 BY ORDER DATED 5 TH 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. FURTHER, THE CASE LAW REFERRED BY THE LD. DR THAT O F NEW HOLLAND TRACTOR INDIA (SUPRA) WILL NOT BE APPLICABLE IN THE PRESENT CASE AS IN THAT CASE THE PARTICULAR CHARGE OF SECTION 271 (1)(C) THAT OF CON CEALMENT OF INCOME WAS MENTIONED, BUT IN PRESENT CASE THAT IS NOT THE CASE . THUS, NOTICE UNDER SECTION 271(1)(C) R.W.S. 274 OF THE ACT ITSELF IS BAD IN LA W. WE, THEREFORE, SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICE R TO CANCEL THE PENALTY SO LEVIED. 8. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH , 2020. SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/03/2020 R. NAHEED 5 ITA NO. 6899/DEL/2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 04.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 05.03.2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 1 9 .03.2020 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 9 .03.2020 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1 9 .03.2020 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER