Keyman Financial Services (P) Limited, New Delhi V. DCIT, Circle-14(2), New Delhi

ITA 7535/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9286 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 12-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: PULKIT VERMA
• Section: 27; 2; 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.7535/DEL/2019 Assessment Year 2009-10 M/s. Keyman Financial Services Pvt. Ltd., 403, Prabhat Kiran, 17, Rajendra Place, New Delhi. Deputy Commissioner of Income Tax, Circle-14(2), Delhi. TAN/PAN: AAACK3453G (Appellant) (Respondent) Appellant by: Shri Shri Pulkit Verma, Adv. Respondent by: Ms. Anupama Singla, Sr.DR Date of hearing: 02 06 2022 Date of pronouncement: 08 06 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The c apt io ne d ap p eal ha s be en f i le d at th e i ns ta nc e o f the ass es se e a ga in st t he or der of t he Co mmi s si on er of Inc o me Ta x (Ap pe al s) -V , Ne w Del hi ( ‘C IT (A )’ in sh or t) d at ed 26. 04 .2 01 9 pas se d un de r Se cti on 2 71( 1) (c ) of th e I nc o me Ta x Act, 19 6 1 ( th e Act ) co nc ern in g A Y 2 0 09- 10 . 2. As p er it s g ro un ds of appea l, t he a ss ess ee h as cha ll en g ed th e i mpo sit io n of pen alt y u nd er Se ct io n 27 1( 1)( c) on dis all ow an ce s sus ta in ed un de r S e cti on 14 A t o t he ext en t of R s. 10 ,0 0 0/- b y th e IT AT in q ua nt u m p roc ee di ng s i n IT A No. 4 04 3/ Del /2 01 4 ord er d ate d 15. 01 .2 01 8. 3. On pe ru sal of t he ord er s of t he a uth o rit ie s b el ow , w e ob ser ve I.T.A. No.7535/Del/2019 2 tha t t he d is al lo wa n ce w as ori gi na ll y c arr ie d ou t a t R s. 37, 22, 14 4/ - i n the l ig ht of th e pro vis io n of Se ct io n 1 4A r. w. R ule 8 D of th e I nc o me Tax Ru le s. Th e I T AT i n a pp ea l h ow e ver re str ic te d t he d isa ll ow an ce to Rs .1 0, 00 0/- as att ri bu ta ble to ea r nin g of ex e mpt in co me. T he CI T( A) ha s t he ref ore c onf ir me d the pe na lt y o n t he amou nt of dis al lo wa nc e s us ta i ned b y t h e I T AT. 4. W e st rai gh tw a y n ote t hat i n o rd er to att ra ct pe na lt y un der Sec ti on 2 71 (1 )( c) of the A ct, it i s nec es sa r y t ha t th e re mus t be con ce al me nt b y t he as se sse e of p art ic ula rs of h is inc o me or f urni sh in g of in ac cur at e pa rt ic ula rs the re of . Th e di sa ll ow anc e of cer ta in e xp en di tu re on e st i mate d b as i s on so me no tiona l ba si s is nei th er t he co nc e al men t of in co me par ti cul ar s of i nco me no r f urni sh in g of in ac c ura te p art ic ul ar s a s suc h. 5. Nee dl es s t o s a y, t o i nv oke S ect io n 2 71( 1) (c ), the en ti re t y of cir cu ms ta nc es mus t rea so na bl y po in t to th e co nc lu sio n th at t he dis pu te d a mo un t r e pre se nt s i nc o me a n d t he a ss es se e h as co nce al ed the p ar ti cul ar s or f urn is he d in ac cur at e part ic ul ars t he re of . The Co - ord in at e Be nc h of ITA T in th e in s tan t ca se h as re stric te d th e dis al lo wa nc e u nde r Sec ti on 14 A t o th e ex te nt of e xemp t inc o me o n the gr ou nd th at su c h di sa ll ow an ce can not ex ce ed th e ex e mp t in co me . It i s no t t he ca se of the R ev en ue Au tho ri ti es th at as se s see ha s, i n f act, i nc ur red an y e xpe ns es to e ar n th e exe mp t i nc ome an d con cea le d the f act s t he re on b e yo nd a n y do ub t. The R ev en ue Au th ori ti es ha ve det er mi ne d t he d is all ow an ce s o n t he bas is of de e ming p rov is io ns of co mp uta ti on of di sa llo wa nc es p ro vi de d und er R ule 8D of t he In co me Tax R ul es . 6. A c on sp ec tu s of E x pla na ti on -1 to S ec ti on 27 1( 1) (c ) of th e Act , ma kes i t c lea r tha t the s tat ut e v is ua li z es th e a ss es s men t p roc ee di ng s and pe na lt y pr oc ee din gs to be wh oll y dis ti nc t an d ind ep end en t of I.T.A. No.7535/Del/2019 3 eac h o th er. W h il e t he A ss es si ng Of f ic er ma y be ju stif i ed in mak in g est i mat ed di sa llo w anc e i n q ua nt u m p roc ee di ng s, su ch d isa ll ow an ce of exp en se s a nd th a t to o on es ti ma ted bas is an d f urth er su bst an ti al l y red uc ed in t he ap p ell at e pr oc ee di ng s, cou ld no t au to ma tic al l y f al l wit hi n t he mi sc hief of Sec ti on 2 71 (1 )( c) of th e A ct on t h e gr ou nd s of co nc eal me nt e tc. Wh il e the c la i m to war ds e xp en ditur e ma y n ot b e f ound a cce pt ab le i n q ua nt u m p ro cee d ing s, s uc h dis allo w anc e pe r s e can no t in vi te ri go r s of pe na lt y. W h er e a ll mat eri al f act s re le va nt to the i ss ue we re p lac ed on re co rd , mi ti gat in g cir cu mstan ce s t o dis pr ov e an y cu l pab il it y of an y sor t ag ai ns t th e ass es se e is est ab li sh ed b y i mp l ica ti on . Th e cl ai m of exp en dit ure to w ard s e xe mpt inc o me ma de, at b est , b e t ak en as er r one ou s c la i m by t h e as se ss ee . Su ch cla i m, a lt ho u gh, ma y no t b e ma int ai na bl e f or the pur po se s of qua nt u m p roc ee di n gs, h ow eve r wo ul d n ot in vi te pe na lt y in t he abs en ce of f al si t y p er se. 6. The Ho n’ ble Del hi Hig h Co ur t in t he case of C IT v s. N oki a Ind ia Pv t. Lt d. as rep or te d i n 3 43 I T R 4 34 (D el ) h eld t hat pe na lt y un der Se ct io n 27 1 (1) (c ) is no t le vi a ble f o r ad ho c di sal lo wa nc e ma de o n es ti ma te d bas is in t he a bs en c e of an y e le ment of f alsit y p er se. 7. In vi ew of t he af o r esa id d eli be ra ti on s, th e i mpugn ed or d er of the C IT( A) i s s et asi de an d the A ss ess in g Of f icer is dir ec te d t o del et e t he p en al t y i n q ue st io n. 8. In th e res ul t, t he ap pea l of th e as se ss ee is a llow ed. Order pronounced in the open Court on 08/06/2022. Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /06/2022 Prabhat