Satesh Kumar Tyagi, Uttar Pradesh V. ACIT, Muzaffarnagar

ITA 801/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61632 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MOHANTY
• Assessee Lawyers: SATESH KUMAR TYAGI
• Keywords: Bonafide belief
• Section: 143(3)

Judgement Text

ITA NO. 801/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 801/DEL/2012 A.Y. : 2008-09 SH. SATESH KUMAR TYAGI, C/O LIC OF INDIA, GT ROAD KHATAULI, MUZZAFARNAGAR UP (PAN : ACGPT2378C) VS. ASSISTANT COMMISSIONER OF INCOME TAX , CIRCLE-2, MUZAFFARNAGAR 251002 UTTAR PRADESH (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. SATESH KUMAR TYAGI, ASSESSEE DEPARTMENT BY : S. MOHANTY, D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), MUZAFFARNAG AR DATED 16.11.2011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOM E TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY OF ` 82,0 00/- U/S. 271(1)(C). 3. IN THIS CASE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE IT ACT DETERMINING INCOME AT ` 10,13,000/- AS AGAINST THE RE TURNED INCOME AT ` 7,79,748/-. FOLLOWING ADDITIONS WERE MADE:- ITA NO. 801/DEL/2012 2 I) DISALLOWANCE OF FCA - ` 13,260/- II) HRA EXEMPTION - ` 1,432/- III) INCENTIVE BONUS - ` 2,10,060/- IV) OTHER SOURCES - ` 8,500/- THUS, TOTAL ADDITION OF ` 2,33,252/- WAS MADE IN TH E RETURNED INCOME. PENALTY PROCEEDINGS WAS ALSO INITIATED ON T HIS AND PENALTY OF ` 82,000/- WAS IMPOSED. 4. UPON ASSESSEES APPEAL, LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE PENALTY. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. ASSESSEE HAS CONTENDED THAT THE CASE DOES NOT COME UNDER THE PURVIEW OF SEC TION 271(1)(C), AS THERE IS NO FURNISHING OF INACCURATE PARTICULARS AN D CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. HE CLAIMED THAT ALL THE BILLS WERE DULY DISCLOSED BY HIM. CERTAIN DISALLOWANCES HAVE BEEN MADE BY THE ASSESSING OFFICER, WHICH THE ASSESSEE HAS AG REED. HE CLAIMED THAT THIS DOES NOT MANDATE LEVY OF PENALTY U/S. 271( 1)(C) OF THE ACT. ITA NO. 801/DEL/2012 3 6.1 LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAN D CLAIMED THAT THE ASSESSEE HAD CLAIMED INADMISSIBLE AMOUNT AND IT WA S ONLY IN THE ASSESSMENT THAT THE DEFECTS WERE NOTICED. HE PLAC ED RELIANCE UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COU RT IN THE CASE OF C.I.T. VS. OF ZOOM COMMUNICATION P LTD. 327 ITR 510. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT SECTION 271(1(C) OF THE ACT POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AN D CONCEALMENT OF INCOME. IN THE PRESENT CASE, WE FIND THAT ALL THE PARTICU LARS WERE DULY DISCLOSED BY THE ASSESSEE. IT WAS ONLY THAT CER TAIN DISALLOWANCES MADE BY THE ASSESSING OFFICER THAT LED TO THE ADDIT IONS IN THIS CASE. IN OUR CONSIDERED OPINION, ASSESSEES ACTION CANNOT BE SAID TO BE CONTUMACIOUS ENOUGH TO ATTRACT THE RIGORS OF PEN ALTY U/S. 271(1)(C). THE CASE LAW RELIED UPON BY THE REVENUE IS NOT APP LICABLE ON THE FACTS OF THIS CASE. 8. IN THIS CASE WE PLACE R ELIANCE FROM THE APEX COURT DECISION RENDERED BY A LARGER BENCH COMPRISING OF THREE OF THEIR LOR DSHIPS IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 WHEREIN IT WAS HELD THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGA TION IS THE RESULT OF A QUASI- CRIMINAL PROCEEDINGS, AND PENALTY WILL NOT ORDINARI LY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LA W OR WAS GUILTY OF CONDUCT ITA NO. 801/DEL/2012 4 CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DI SREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDIC IALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENA LTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED I N REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE P ROVISIONS OF THE ACT, OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OF FENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 9. WE WOULD ALSO LIKE TO REFER TO THE HONBLE APE X COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010. IN THIS CASE VIDE ORDER DATED 17.3.2010 IT HAS BEEN HELD T HAT THE LAW LAID DOWN IN THE DILIP SHEROFF CASE 291 ITR 519 (SC) AS TO THE MEANI NG OF WORD CONCEALMENT AND INACCURATE CONTINUES TO BE A GOOD LAW BECAUSE WH AT WAS OVERRULED IN THE DHARMENDER TEXTILE CASE WAS ONLY THAT PART IN DILI P SHEROFF CASE WHERE IT WAS HELD THAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PE NALTY U/S 271(1)(C). THE HONBLE APEX COURT ALSO OBSERVED THAT IF THE CONTEN TION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CL AIM IS NOT ACCEPTED BY THE AO FOR ANY REASON, THE ASSESSEE WILL INVITE THE PENAL TY U/S 271(1)(C). THIS IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. ITA NO. 801/DEL/2012 5 10. IN THE BACKGROUND OF THE AFORESAID DISCUSSION S AND PRECEDENTS, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELET E THE LEVY OF PENALTY. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/4/2012. SD/- SD/- [ [[ [I.P. BANSAL I.P. BANSAL I.P. BANSAL I.P. BANSAL] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 20/4/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES