Sh. Chitranjan Aggarwal, Chandigarh V. ITO, W-2(1), Chandigarh

ITA 72/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1235 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 24-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR ALYA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHES A, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA,ACCOUNTANT MEMBER ITA NO. 72/CHD/2018 ASSESSMENT YEAR: 2012-13 SHRI CHITRANJAN AGGARWAL, V THE ITO, PLOT NO. 41, INDUSTRIAL AREA, WARD 2(1), PHASE-1, CHANDIGARH. CHANDIGARH. PAN : AANPA0943R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY : SHRI ANKUR ALYA, JCIT (DR) DATE OF HEARING : 07.08.2018 DATE OF PRONOUNCEMENT : 04.09.2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 19.12.2017 OF CIT(A)-1 CH ANDIGARH PERTAINING TO THE 2012-13 ASSESSMENT YEAR ON THE FOLLOWING GROUND S : 1. THAT THE ORDER PASSED UNDER SECTION 250(6) BY THE H ON'BLE COMMISSIONER OF INCOME TAX (APPEALS)-1.CHANDIGARH IN APPEAL NO. 169 /15-16 DATED 19.12.2017 IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) GRAVELLY ERRED IN UPHOLDING TH E PENALTY OF RS. 10,958/-LEVIED BY THE ID. ASSESSING OFFICER UNDER SECTION 271(1) (C ) OF THE INCOME TAX ACT, 1961. 2. THE LD. AR INVITING ATTENTION TO THE ASSESSMENT ORDER DATED 13.01.2015 SUBMITTED THAT THE ASSESSEE HAD DECLARED AN INCOME OF RS. 29,48,520/-. IT WAS SUBMITTED THAT IN THE YEAR UNDER CO NSIDERATION, ASSESSEE WAS PROPRIETOR OF KULDEEP PRAKASH & SONS W HO IS DISTRIBUTOR OF FINOLEX INDUSTRIES LTD IN PVC RESIN AND C&F OF MRF CORP- LTD AT 41, INDL, AREA, PHASE-1. CHANDIGARH. THE ASSESSEE IS ALS O PROPRIETOR OF TRUCK SUPPLIER CORPORATION WHICH IS RUNNING A PETROL PUMP AT CHANDIGARH. READING FROM THE ASSESSMENT ORDER, IT WAS SUBMITTED THAT CERTAIN DISCREPANCIES VIS-A-VIS 26AS AND ASSESSEE'S P&L ACC OUNT IN THE REIMBURSEMENT OF FREIGHT AND CARTAGE WERE NOTICED W HICH AMOUNTED TO RS. 35,462/-. IT WAS SUBMITTED THAT THE ASSESSEE WA S REQUIRED TO ITA 72/CHD/2018 A.Y.2012-13 PAGE 2 OF 3 RECONCILE THE SAME AND CONSIDERING THE RETURN FILED , THE ASSESSEE ACCEPTED THE SAID ADDITION AND AS A RESULT OF THIS ACCEPTANCE, IT WAS HIS SUBMISSION, PENALTY PROCEEDINGS U/S 271(1)(C) OF TH E ACT WERE INITIATED AND PENALTY TO THE TUNE OF RS. 10,958/- WAS IMPOSED MERELY ON THE GROUND THAT THE ASSESSEE HAS AGREED TO THE ADDITION . IT WAS HIS SUBMISSION, AS A RESULT OF THIS, THE CIT(A) HAS ALS O CONFIRMED THE PENALTY. IN THE SAID BACKGROUND, IT WAS HIS PRAYER THAT THE DECISION OF THE ASSESSEE AT THE ASSESSMENT STAGE NOT TO CONTEST THE DISCREPANCIES AS THE AMOUNT WAS VERY SMALL NOW IN HINDSIGHT HAS RESULTE D IN THE ASSESSEE FACING THE PENALTY PROCEEDINGS. IT WAS HIS SUBMISS ION THAT WHEN THE TOTAL FREIGHT OF THE ASSESSEE IS CONSIDERED AND THE TAXAB LE INCOME OF THE ASSESSEE, THE MINOR DISCREPANCY ACCEPTED FOR NOT WA STING TIME BY CONTESTING MINOR ADDITION BY ITSELF CANNOT BE A GRO UND FOR LEVY OF PENALTY. REFERRING TO THE ASSESSMENT ORDER, IT WAS SUBMITTED THAT THE EXPLANATION OFFERED IN THE PENALTY PROCEEDINGS THAT THE ADDITIO N WAS AGREED TO NOT BECAUSE RECONCILIATION WAS NOT POSSIBLE BUT ONLY ON THE GROUND THAT THE AMOUNT WAS VERY SMALL, THE SAID EXPLANATION CANNOT OUTRIGHTLY DISCARDED WITHOUT CONSIDERING THE FACTS. 3. THE LD. SR.DR RELIES UPON THE ORDER. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS SEEN THAT THE CIT(A) WHILE AFFIRMING THE ORDER HAS BEEN GUIDED BY THE LEGAL POSITION AS UNDERSTOOD BY HIM A S NOTED IN PARA 7.5 OF HIS ORDER NAMELY ; ONCE CONCEALMENT HAS BEEN ACCEPTED THE ASSESSEE CANNOT TURN AROUND AND GIVE ANOTHER EXPLANATION DURING THE PENALTY PROCEEDINGS. DURING THE PENALTY PROCEEDINGS THE AO HAS CONSIDERED THE EXPLANATION GIVEN BY THE ASSESSEE AND ON SOUND REASON ING HAS NOT ACCEPTED THE SAME. WE ARE OF THE VIEW THAT THE AFORESAID LEGAL PROPOSITION UNDERSTOOD BY THE CIT(A) IS IN CONFLICT WITH THE WELL SETTLED LEGAL POSITION NAMELY THAT THE ASSESSMENT PROCEEDIN GS AND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT AND MERELY BE CAUSE THE ADDITION HAS BEEN ACCEPTED OR CONFIRMED IN THE QUANTUM PROCE EDINGS BY ITSELF, CANNOT LEAD TO THE LEVY OF PENALTY AUTOMATICALLY. THE EXPLANATION OFFERED IN THE PENALTY PROCEEDINGS HAS TO BE SEPARATELY CON SIDERED IN THE LIGHT OF THE LEGAL REQUIREMENTS TO SUPPORT THE LEVY OF PENAL TY. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE CONSIDERING T HE RETURNED INCOME OF THE ASSESSEE, WE FIND THAT THE DECISION TO ACCEPT T HE ADDITION AS A RESULT OF DISCREPANCIES QUA 26AS FORM, LOOKING AT THE RETU RNED INCOME OF RS. ITA 72/CHD/2018 A.Y.2012-13 PAGE 3 OF 3 29,48,520/-AND THE DISCREPANCY NOTICED AND ACCEPTED TO THE TUNE OF RS. 35,462/- DOES NOT INVITE PENAL ACTION. AS FAR AS T HE STAND OF THE ASSESSEE IS CONCERNED, THE DISCREPANCY, IF NOT ADDRESSED, IS SUFFICIENT GROUND TO CONFIRM THE ADDITION BUT AS FAR AS PENALTY PROCEEDI NGS ARE CONCERNED, THE SUBMISSIONS AND FACTS NEED TO BE APPRECIATED. ON C ONSIDERING THE FACTS AND SUBMISSIONS, WE ARE OF THE VIEW THAT IN THE PEC ULIAR FACTS OF THE PRESENT CASE, PENALTY U/S 271(1)(C) OF THE ACT WAS NOT ATTRACTED. ACCORDINGLY, THE ORDER IS DIRECTED TO BE QUASHED. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 04.09. 2018. SD/- SD/- (ANNAPURNA GUPTA) ( DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRA R ITAT,CHANDIGARH