Smt. Suman Lakhani, New Delhi V. ACIT, Faridabad

ITA 857/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1162 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 18-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JANARDAN DAS
• Keywords: Business income; Depreciation; Bonafide belief; Earning of tax free income; Proportionate interest; Question of law; Initiation of penalty proceedings; Wrong claim; Bad and doubtful debts; Difference of opinion; Commercial expediency; Revised return; Revenue expenditure; Capital expenditure; Set aside
• Section: 27; 271(1)(c); 43B; 143(3); 14A; 274; 80IC

Judgement Text

ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 1 OF 25 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: C: NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 857/DEL/2016 ( ASSESSMENT YEAR: 2008-09) SMT. SUMAN LAKHANI, W-9, G.K.-II, NEW DELHI-110048. VS. ACIT, CIRCLE-II, FARIDABAD. PAN NO: AAGPL7939R APPELLANT RESPONDENT ASSESSEE BY : SHRI GAURAV MADAN, CA REVENUE BY : SHRI JANARDAN DAS, SR. DR ORDER PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL BY ASSESSEE IS FILED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), FARIDABAD, [LD. CIT(A), FOR SHORT] , DATED 02.12.2015 FOR ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL ARE AS UNDER: 1. THAT THE ORDER DTD. 02.12.2015 PASSED BY LD. CI T(A) RECEIVD ON 30/12/2015 IS BAD IN LAW AND ON FACTS. 2. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS. 6,16,688/- 3. THAT THE APPELLANT CRAVES LEAVE TO ALTER, AMEND, VARY OR ADD ANY OTHER GROUNDS OF APPEAL. ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 2 OF 25 (B) ASSESSMENT ORDER DATED 20.12.2010 WAS PASSED BY TH E ASSESSING OFFICER (AO, FOR SHORT) U/S 143(3) OF INCOME TAX ACT, 1961 (I.T . ACT, FOR SHORT) WHEREIN AN AMOUNT OF RS. 18,15,188/- WAS DISALLOWED OUT OF ASSESSEES CLAIM FOR DEDUCTION ON ACCOUNT OF INTEREST EXPENSES. THE AO ALSO LEVIED PENALTY U/S 271(1)(C) OF I.T. ACT VIDE ORDER DATED 24.03.2014, AMOUNTING TO RS. 6,16,688/- IN RE SPECT OF AFORESAID DISALLOWANCE AMOUNTING TO RS. 18,15,188/-. THE ASSESSEES APPEA L AGAINST THE AFORESAID ORDER DATED 24.03.2014 IMPOSING PENALTY U/S 271(1)(C) OF I.T. A CT WAS DISMISSED BY LD. CIT(A)- FARIDABAD, VIDE APPELLATE ORDER DATED 02.12.2015 OF LD. CIT(A). AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL IN INCOME TAX APPELL ATE TRIBUNAL (ITAT, FOR SHORT) AGAINST THE AFORESAID IMPUGNED APPELLATE ORDER DATE D 02.12.2015 OF LD. CIT(A). IN THE COURSE OF APPELLATE PROCEEDINGS IN ITAT, TWO SEPARA TE WRITTEN SUBMISSIONS, DATED 10.12.2018 AND 04.09.2019 WERE FILED FROM THE ASSES SEES SIDE WHICH ARE REPRODUCED BELOW FOR EASE OF REFERENCE: ASSESSEES SUBMISSIONS DATED 10/12/2018: IN CONTINUATION OF GROUNDS OF APPEALS, MOST RESPECT FULLY IT IS SUBMITTED THAT THE LD. CIT (A) HAS WRONGLY CONFIRMED A PENALTY WITHOUT CON SIDERING THE FACT THAT THE ISSUE OF DISALLOWANCE OF INTEREST U/S 36(L)(III), IS HIGH LY DEBATABLE ISSUE. THUS, THERE IS DIFFERENCE OF OPINION AS THE MATTER/ ISSUE IS HIGHL Y DEBATABLE ISSUE. MOST RESPECTFULLY IT IS SUBMITTED THAT THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) REVERSED HIS OWN PENALTY ORDER IN SUBSEQUENT A.YS.2010-11 AND 2012-13 ON SAME ISSUE IN CASE OF APPELLANT. COPIES OF CIT (A) ORDERS ARE ENCLOSED FOR YOUR REFE RENCE. THE LD. CIT (A) HAS DELETED THE PENALTIES IN BOTH ASSESSMENT YEARS ON SAME GROU ND AND IN CASE OF SAME ASSESSEE BY CONSIDERING THE HONBLE SUPREME COURT J UDGEMENT AND VARIOUS JUDICIAL DECISIONS OF ITAT; THE RELEVANT EXTRACTS OF THE CIT (A) ORDER IS AS UNDER: 9. IT IS OBSERVED THAT THERE HAS BEEN NO CONCEALME NT OR FURNISHING OF INACCURATE ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 3 OF 25 PARTICULARS BY THE ASSESSEE IN THIS CASE. THE DISAL LOWANCE HAS BEEN MADE BY COMPUTING THE SUMS WHICH WERE DULY DISCLOSED IN THE RETURN AND ACCOUNTS OF THE ASSESSEE. I FIND THAT SEC 271(L)(C) POSTULATES IMPO SITION OFPENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. H ENCE, IN MY CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THIS CASE THE ASS ESSEES CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF PENALTY. H ENCE I HOLD THAT NO PENALTY IS LEVIABLE ON THIS GROUND. 10. WHILE COMING TO THE AFORESAID CONCLUSION, I PLACE RELIANCE UPON THE APEX COURT DECISION RENDERED BY A LARGER BENCH COMPRISING OF T HREE OF THEIR LORDSHIPS IN THE CASE OF HINDUSTAN STEEL VS. ORISSA IN 83ITR 26 WHEREIN IT WAS HELD THAT: AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS, AND PENALTY WILL N OT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DI SREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFU L TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIG ATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A C ONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRI BED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT, OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIA BLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 11. I FURTHER PLACE RELIANCE UPON THE HONBLE APEX COU RT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD (SUPRA). IN THIS CASE VIDE ORDER DTD. 17/03/2010 IT HAS BEEN HELD THAT THE LAW LAID DOWN IN THE DILIP SHEROFF CASE 291 ITR 519 (SC) AS TO THE MEANING OF WORD CONCEALMENT AND INACCURAT E CONTINUES TO BE A GOOD LAW BECAUSE WHAT WAS OVERRULED IN THE DHARMENDER TEXTILE CASE WAS ONLY THAT PART IN DILIP SHEROFF CASE WHERE IT WAS HELD THAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PENALTY U/S 271(1) (C). THE HONBLE APEX COURT ALSO OBSERVED THAT IF THE CONTENTION OF THE REVENUE IS ACCEPTED THEN EVERY RETURN WHERE THE CLAIM IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE THE PENALTY U/S 271(L)(C). THIS IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. 12. RELIANCE IS ALSO PLACED ON THE DECISION OF THE FOLL OWING JUDICIAL DECISIONS WHICH DIRECTLY COVER THE ISSUE OF LEVY OF PENALTY U/S 27 L(L)(C) ON DISALLOWANCES: A) ITAT, DELHI -ASST. COMMISSIONER OF INCOME TAX US. MR. MANISH JAIN PROP. BPB PUBLICATIONS - IT A NO.5999/DEL/2012. B) ITAT, MUMBAI - DEPUTY COMMISSIONER OF INCOME TAX VS. M/S PARLE PET PVT ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 4 OF 25 LTD - ITA NO.391/MUM/2010 DTD.20/07/2011. C) 2013 (12) TMI 922 - ITAT, AMRITSAR - DEPUTY COMMISSIONER OF INCOME TAX VS. M/S MAX INDIA LTD. 13. IT IS ALSO PERTINENT TO REPRODUCE THE JUDGEMENT OF THE HONBLE ITAT BENCH CHANDIGARH ON ABSOLUTELY SIMILAR FACTS IN THE CASE OF A.B. SUGARS LTD, CHANDIGARH VS. DEPARTMENT OF INCOME TAX IN ITA NO.LL07/CHD/201 4 DTD.16/02/2016FOR THE A. Y.2007-08. ASSESSEES SUBMISSIONS IN CONTEXT OF SECTION 36(L)(III): IN A RECENT JUDGEMENT IN CASE OF HERO CYCLES (P) LTD VS. COMMISSIONER OF INCOME-TAX (CENTRAL) LUDHIANA [(2015) 63 TAXMANN.COM 308 (SC)] , THE HONBLE SUPREME COURT HAS AGAIN AUTHORITATIVELY UPHELD THE PRIMARY RIGHT OF ANY BUSINESSMAN/ ORGANIZATION TO PLAN AND CONDUCT HIS/ ITS BUSINESS, THEREBY EFFE CTIVELY NEGATING ANY ATTEMPTS ON THE PART OF REVENUE TO STEP INTO THE SHOES OF AN BU SINESSMAN AND SIT IN JUDGEMENT ON BUSINESS DECISIONS, PARTICULARLY WITH REGARD TO JUDGING THE REASONABLENESS OF ANY EXPENDITURE AND THE COMMERCIAL PRUDENCE OR CORRECTN ESS OF ANY DECISION. MORE SPECIFICALLY RENDERED IN THE CONTEXT OF ALLOWABILIT Y OF INTEREST U/S 36(L)(III) OF THE INCOME-TAX ACT, 1961 (THE ACT), THE OBSERVATIONS, INTERPRETATION OF LAW AND THE CONCLUSIONS DRAWN THEREIN, IF APPLIED OBJECTIVELY, WILL HAVE WIDE REACHING RAMIFICATIONS. IN RECENT TIMES THE JUDGEMENT OF THE PUNJAB AND HAR YANA HIGH COURT IN THE CASE OF CIT VS. ABHISHEK INDUSTRIES LTD [(2006) 286 ITR 1] HAD BECOME THE BENCHMARK/ BASIS FOR THE REVENUE TO DISALLOW CLAIMS FOR INTERE ST U/S 36(L)(III) OF THE ACT. WITHOUT IN ANY MANNER DISPUTING THE CORRECTNESS OF THE SAID JUDGEMENT, THE DEPARTMENT HAD RESORTED TO RATHER LIBERALLY, UNILATERALLY AND UNJU STIFIEDLY APPLY IT AS A BASIS FOR DISALLOWING CLAIMS OF INTEREST WHICH OTHERWISE SEEM ED TENABLE. THE BLANKET APPLICATION OF THE SAID JUDGEMENT TO MYRIAD ASSESSE ES ACROSS THE SPECTRUM WITHOUT DUE REGARD TO SPECIFIC FACTS AND CIRCUMSTANCES OF A NY CASE HAD LED TO UNNECESSARY LITIGATION APART FROM UNMITIGATED HARDSHIPS TO ASSE SSEES. ALTHOUGH, SUBSEQUENTLY THE HONBLE SUPREME COURT IT SELF IN THE CASE OF S.A BUILDERS VS. CIT [(2007) 288 ITR 1 (SC)] HAD AMPLIFIED THE SCOPE OF COMMERCIAL EXPEDIENCY SPECIFICALLY IN THE CONTEXT OF SEC 36(L)(III) OF TH E ACT, THERE WAS NO LET-UP IN THE LITIGATION ON THIS COUNT. WITH THE LATEST JUDGEMENT IN THE CASE OF HERO CYCLES (P) LTD, THE HONBLE SUPREME COURT HAS AGAIN UPHELD IN NO UN CERTAIN TERMS THAT ONCE IT IS ESTABLISHED THAT THERE IS NEXUS BETWEEN EXPENDITURE AND PURPOSE OF BUSINESS REVENUE CANNOT JUSTIFIABLY CLAIM TO PUT ITSELF IN ARM-CHAIR OF BUSINESSMAN OR IN POSITION OF BOARD OF DIRECTORS AND ASSUME ROLE TO DECIDE HOW MUCH IS REA SONABLE EXPENDITURE HAVING REGARD TO CIRCUMSTANCES OF CASE . RENDERED IN THE CONTEXT OF ALLOWABILITY OF INTEREST U/S 36(L)(III) OF THE ACT AND THE FACT OF INTEREST FREE LOANS HAVI NG BEEN GRANTED TO SUBSIDIARY COMPANIES AND DIRECTORS, THIS JUDGEMENT SHOULD ACT AS A TOUCHSTONE FOR INTERPRETING ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 5 OF 25 SEC 36(L)(III) AND BY AGAIN ESTABLISHING THE PRIMAC Y OF A BUSINESSMAN TO PLAN, ORGANIZE AND CONDUCT HIS/ ITS AFFAIRS PERHAPS LEAD TO A MORE REASONABLE INTERPRETATION AND ADOPTION OF SAGACIOUS COURSE OF ACTION BY THE REVEN UE AUTHORITIES. ASSESSEES SUBMISSIONS ON PENALTY ORDER: 1. MOST RESPECTFULLY IT IS SUBMITTED THAT THE LD. A O HAS LEVIED AND CIT (A) CONFIRMED THE PENALTY OF RS.6,16,688/- ON THE BASIS THAT TAX SOUG HT TO BE EVADED ON INCOME OF RS. 18,15,188/- REPRESENTING DISALLOWANCE OF INTEREST A ND BANK CHARGES U/S 36(L)(III). IT IS SUBMITTED THAT PENALTY AND ASSESSMENT ARE TWO INDEPENDENT PROCEEDINGS. IT MAY BE NOTED THAT THERE COULD BE GENUINE DIFFERENCE OF OPINION BETWEEN TAX GATHERER AND TAX PAYER BUT PENALTY PROCEEDINGS REQU IRE FURNISHING OF INACCURATE PARTICULARS OF INCOME/ CONCEALMENT OF INCOME. RELIA NCE IS PLACED UPON THE FOLLOWING JUDGMENTS: A) CIT VS. RELIANCE PETRO PRODUCTS PVT LTD (322 ITR 158) SC: COPY OF ORDER IS ENCLOSED. THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE P ETROPRODUCTS PVT LTD (322 ITR 158) IN THE ORDER DTD. 17/03/2010 HAS HELD THAT, A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOU NT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. I F THIS CONTENTION IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY THE AO FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY U/S 271(L) (C). THAT IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. IN ORDER TO EXPOSE THE A SSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENA LTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLA IM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. B) HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26: THE APEX COURT DECISION RENDERED BY A LARGER BENCH COMPRISING OF THREE OF THEIR LORDSHIPS IN CASE OF HINDUSTAN STEEL VS. STATE OF O RISSA IN 83 ITR 26 WHEREIN IT WAS HELD THAT, AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASICRIMINAL PROCEEDINGS, AND PENA LTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONS CIOUS DISREGARD 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 JUDICIA LLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY I S PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED I N REFUSING TO IMPOSE PENALTY, WHEN ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 6 OF 25 THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVIS IONS OF THE ACT, OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS N OT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 2. FURTHER, WITH REGARD TO PENALTY ON DISALLOWANCE U/S 36(L)(III), YOUR KIND ATTENTION IS DRAWN TOWARDS THE FOLLOWING CASE LAWS WHICH CLEARLY MENTION THAT NO PENALTY U/S 271(1 )(C) CAN BE IMPOSED ON TH IS DISALLOWANCE: A) 2013 - ITAT CHANDIGARH - MDC PHARMACEUTICALS PVT LT D VS. DEPARTMENT OF INCOME TAX, ITA NO.697/CHD/2012 FOR A.Y.2007-08, DATE OF PRONOUNCEMENT 28/02/2013. COPY OF ORDER IS ENCLOSED. THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF CIT (APPEALS), CHANDIGARH RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE PEN ALTY LEVIED U/S 271(L)(C) OF INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ONLY EFFECTIVE GROUND OF APPEAL RAISED BY T HE REVENUE READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT (A) HAS ERRED IN HOLDING THAT PENALTY U/S 271(L)(C) COULD NOT BE LEV IED ON THE DISALLOWANCE OF INTEREST ON ACCOUNT OF DIVERSION OF INTEREST BEARING FUND TO SISTER CONCERN WITHOUT CHARGING ANY INTEREST. 3. THE ONLY ISSUE RAISED IN PRESENT APPEAL IS AGAINST THE PENALTY LEVIED U/S 271(L)(C) OF THE ACT. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD MADE ADDITION ON ACCOUNT OF DISALLOWANCE OF INTERES T U/S 36(L)(III) ON INTEREST FREE ADVANCES MADE BY THE ASSESSEE. FURTHER, ADDITION WAS MADE BY RESTRICTING THE DEDUC TION U/S 80IC OF THE ACT. THE ASSESSING OFFICER LEVIED PENALTY U/S 271(L)(C) OF T HE ACT AMOUNTING TO RS. 4,65,544/- ON THE ABOVE SAID ADDITION. 4. THE CIT (APPEALS) DELETED THE PENALTY LEVIED ON DI SALLOWANCE OF PROPORTIONATE INTEREST U/S 36(L)(III) OF THE ACT HOLDING THAT ASS ESSEE NOT TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME. THE CIT (A), HOWEVER, UPHELD THE LEVY OF PENALTY ON DISALLOWANCE OF DEDUCTION U/S 80IC ON THE GROUND OF MISCELLANEOUS INCOME. 5. THE REVENUE IS IN APPEAL AGAINST ORDER OF CIT (APP EAL) IN DELETING THE PENALTY LEVIED BY ASSESSING OFFICER ON DISALLOWANCE OF INTE REST ON DIVERSION OF INTEREST FREE FUNDS TO SISTER CONCERN BY THE ASSESSEE. 6. DESPITE SERVICE OF NOTICE NONE APPEARED ON BEHALF OF ASSESSEE AND BECAUSE OF SMALLNESS OF THE ISSUE WE PROCEED TO DECIDE THE PRE SENT APPEAL AFTER HEARING LEARNED D.R FOR REVENUE. ON THE PERUSAL OF THE RECORD, IT T RANSPIRES THAT THE PENALTY U/S 271(L)(C) OF THE ACT HAS BEEN LEVIED ON THE DISALLO WANCE OF INTEREST U/S 36(1)(HI) OF THE ACT RELATABLE TO THE INTEREST FREE ADVANCES MAD E BY THE ASSESSEE AS AGAINST THE ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 7 OF 25 INTEREST EXPENDITURE ON INTEREST BEARING FUNDS. IN THE ABOVE SAID FACTS AND CIRCUMSTANCES THE ASSESSING OFFICER HAS FAILED TO E STABLISH THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME IN CONNE CTION WITH THE SAID DISALLOWANCE. THE ASSESSEE HAD FURNISHED COMPLETE PARTICULARS OF ITS INCOME AND EXPENDITURE AND HAD ALSO FURNISHED THE DETAILS OF INTEREST BEARING FUNDS AND ALSO INTEREST FREE ADVANCES MADE BY IT. THE CASE OF THE REVENUE WAS TH AT IN VIEW OF THE MIXED FUNDS AVAILABLE WITH THE ASSESSEE, PROPORTIONATE DISALLOW ANCE IS TO BE MADE OUT OF INTEREST EXPENDITURE RELATABLE TO THE INTEREST FREE ADVANCES MADE BY THE ASSESSEE. WE ARE IN AGREEMENT WITH THE ORDER THAT THE ASSESSEE HAVING F URNISHED COMPLETE PARTICULARS OF INCOME AND MERE DISALLOWANCE OF INTEREST IN THE HAN DS OF THE ASSESSEE U/S 36(1)(HI) OF THE ACT DOES NOT WARRANT LEVY OF PENALTY U/S 271 (L)(C) OF THE ACT. THE GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH DAY OF FEBRUARY, 2013. B) ITAT, MUMBAI - AMI BUILDERS PVT LTD VS. ACIT - 5(1) MUMBAI, ITA NO.803/MUM/2014 FOR A.Y.2009-10, DATE OF PRONOUNCEM ENT 02/03/2016 . COPY OF ORDER IS ENCLOSED. 16. IN THE PRESENT CASE THE AO IN THE COURSE OF AS SESSMENT PROCEEDINGS HAD NOT RECORDED ANY SATISFACTION WHILE INITIATING PENALTY THE PENALTY PROCEEDINGS, THEREFORE, THE PENALTY U/S 271(1)(C) OF THE ACT WAS NOT LEVIAB LE. IN THE PRESENT CASE, THIS CONTENTION OF THE ID. COUNSEL FOR THE ASSESSEE THAT IN THE SUBSEQUENT YEAR SIMILAR CLAIM WAS ALTHOUGH DISALLOWED BUT PENALTY PROCEEDIN GS WERE DROPPED WAS NOT REBUTTED. THEREFORE, ON THE IDENTICAL FACTS IN THE YEAR UNDER CONSIDERATION VIS-A- VIS THE SUBSEQUENT YEAR PENALTY U/S 271(L)(C) OF THE AC T WAS NOT LEVIABLE, PARTICULARLY WHEN THE DEPARTMENT ITSELF DROPPED THE PENALTY IN T HE SUBSEQUENT YEAR IN SIMILAR FACTS. IN THE INSTANT CASE THE ASSESSEE CLAIMED THE DEDUCTION ON ACCOUNT OF INTEREST U/S 24 OF THE ACT BECAUSE IT WAS CLAIMED AND ALLOWE D IN THE PRECEDING YEAR THEREFORE, THE CLAIM OF THE ASSESSEE WAS A BONAFIDE CLAIM BASE D ON A SIMILAR CLAIM OF THE EARLIER YEAR, THE ASSESSEE DISCLOSED ALL THE FACTS RELATING TO THE PAYMENT OF INTEREST AND CLAIM OF DEDUCTION BEFORE THE AO. THEREFORE, ONLY O N THE BASIS THAT THE CLAIM IN FULL WAS NOT ACCEPTED BY THE AO, IT CANNOT BE SAID THAT THE ASSESSEE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF HIS INCOME. AS SUCH PENALTY U/S 271(L)(C) OF THE ACT WAS NOT LEVIABLE. WE, THEREFORE, BY CONSIDERING THE PECULIAR FACTS OF THIS CASE AS DISCUSSED HEREINABOV E DELETE THE PENALTY SUSTAINED BY THE LD. CIT (A). AS A RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 ND MARCH, 2016. ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 8 OF 25 C) DEPUTY COMMISSIONER OF INCOME TAX VS. EAGLE IRON AN D METAL INDUSTRIES LTD - ITAT, MUMBAI J BENCH (2011) 11 ITR 384. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A O IN THE ASSESSMENT FOR THE RELEVANT YEAR HAD MADE ADDITIONS TO THE TOTAL INCOME ON ACCO UNT OF FOLLOWING DISALLOWANCES: (I) DISALLOWANCE OF RS.9,76,256/- U/S 43B AND 36(1 )(VA) OF THE ACT IN RELATION TO DELAY IN DEPOSITING EMPLOYEES AND EMPLOYERS CONTRIBUTION TO THE PROVIDENT FUND AND THE ESIC WITH CONCERNED AUTHORITIES, (II) DISALLOWANCE OF RS.48,99,360/- ON ACCOUNT OF REPAIR AND MAINTENANCE EXPENSES, (III) DISALLOWANCE OF RS.26,45,967/- OUT OF PETTY CASH EXPENSES BY CONSIDERING THE SAME TO BE NON GEN UINE, (IV) DISALLOWANCE OF RS.23,37,548/- OUT OF INTEREST PAID ON THE GROUND T HAT THE ASSESSEE WAS NOT CHARGING INTEREST ON DEPOSITS AND LOANS GIVEN, (V) DISALLOWANCE OF RS. 15,000/- OUT OF MISCELLANEOUS INCOME, (VI) ADDITION OF RS.4,681/ - ON ACCOUNT OF INTEREST INCOME FROM BANK NOT DISCLOSED. THE ADDITIONS MADE BY THE AO WERE CONFIRMED BY CIT (A) AND NO FURTHER DISPUTE HAD BEEN RAISED BY THE ASSESSEE. THE AO HAD ALSO INITIA TED PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME. IN RESPONSE TO SHOW-CAUSE NO TICE, THE ASSESSEE SUBMITTED THAT NO PENALTY COULD BE IMPOSED AS THE AO HAD NOT RECORDED SATISFACTION OF CONCEALMENT IN THE PENALTY PROCEEDINGS. IT WAS ALSO SUBMITTED THAT DISALLOWANCES HAD BEEN MADE BY THE AO PURELY BASED ON DIFFERENCE OF OPINION AND ON ESTIMATE AND THERE WAS NO CASE MADE OUT FOR CONCEALMENT OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN SUCH CASES IT WAS POINTED OUT NO PENALTY FOR CONCEALMENT COULD BE IMPOSED. THE ASSESSEE PLACED RELIANCE ON S EVERAL DECISIONS OF COURTS. THE AO WAS HOWEVER NOT SATISFIED. THE ASSESSEE DISPUTED THE MATTER IN APPEAL AND REIT ERATED THE SUBMISSIONS MADE BEFORE THE AO THAT MERE DISALLOWANCE/ ADDITIONS TO INCOME WOULD NOT AUTOMATICALLY LEAD TO PENALTY. RELIANCE WAS PLACED ON THE JUDGMEN T OF THE SUPREME COURT IN THE CASE OF S. A. BUILDERS LTD VS. CIT (A) (2006) 206 C TR (SC) 631 : (2007) 288 ITR 1 (SC). IT WAS POINTED OUT THAT DURING THE ASSESSMENT PROCEEDI NGS THE ASSESSEE HAD GIVEN THE DETAILS OF VARIOUS PURPOSES FOR WHICH ADVANCES HAD BEEN GIVEN. THE CIT (A) WAS SATISFIED BY THE EXPLANATION GIVEN BY THE ASSESSEE. IT WAS OBSERVED BY HIM THAT THERE WAS NO MATERIAL TO SHOW THAT THERE WAS DELIBERATE A CT ON THE PART OF THE ASSESSEE TO CONCEAL ANY INCOME. THE CIT (A) FURTHER AGREED THAT MERE DISALLOWANCE OF CERTAIN EXPENSES WOULD NOT AUTOMATICALLY LEAD TO PENALTY. R ELIANCE WAS PLACED ON THE JUDGMENT OF THE HON 'BLE HIGH COURT OF PUNJAB & HAR YANA IN CASE OF CIT VS. AJAIB SINGH AND CO (2001) 170 CTR (P&H) 489: (2002) 253 ITR 630 (P&H) AND SEVERAL OTHER JUDGMENTS. THE CIT (A) ACCORDINGLY ACCEPTED THE EXP LANATION OF THE ASSESSEE IN RELATION TO VARIOUS DISALLOWANCE AS BONA FIDE AND D ELETED THE PENALTY IMPOSED BY THE AO. AGGRIEVED BY THE SAID DECISION THE REVENUE IS I N APPEAL. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVA L CONTENTIONS CAREFULLY. THE ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 9 OF 25 DISPUTE RAISED IS REGARDING LEVY OF PENALTY FOR CON CEALMENT OF INCOME ON ACCOUNT OF VARIOUS ADDITIONS MADE IN THE ASSESSMENT AS MENTION ED IN PARA 2 EARLIER. PENALTY U/S 271(1)(C) IS A CIVIL LIABILITY AND THE REVENUE IS N OT REQUIRED TO PROVE WILFUL CONCEALMENT AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARAMENDRA TEXTILE AND PROCESSORS (SUPRA). HOWEVER EACH AND EVERY ADDITION MADE IN THE ASSESSMENT CANNOT AUTOMATICALLY LEAD TO LEVY OF PENALTY FOR CONCEALMENT OF INCOME. A CASE FOR IMPOSITION OF PENALTY HAS TO BE EXAMINED IN TERMS OF THE PROVISIONS OF EXPLN. 1 TO SEC 271(L)(C). SECONDLY I T IS A SETTLED LEGAL DECISION THAT PENALTY PROCEEDINGS ARE DIFFERENT FROM ASSESSMENT P ROCEEDINGS. THE FINDING GIVEN IN THE ASSESSMENT THOUGH IS A GOOD EVIDENCE BUT THE SA ME IS NOT CONCLUSIVE IN PENALTY PROCEEDINGS AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF ANANTHARAM VEERASINGHAIAH & CO VS. CIT (1980) 16 CTR (SC) 189: (1980) 123 ITR 457 (SC) . THEREFORE MERELY BECAUSE THE ADDITIONS MADE IN THE ASSESSMENT HAVE BEEN CONFIRMED IN APPEAL OR THE ASSESSEE DID NOT FILE AN Y APPEAL AGAINST THE ADDITION CANNOT BE THE SOLE GROUND FOR IMPOSING PENALTY. IN CASE THE ASSESSEE FOR WANT OF PROPER LEGAL ADVICE OR FOR ANY OTHER REASONS DID NO T APPEAL AGAINST THE ASSESSMENT ORDER THE ADDITION MADE IN THE ASSESSMENT CANNOT AU TOMATICALLY LEAD TO LEVY OF PENALTY IF ON THE BASIS OF MATERIAL AVAILABLE ON RE CORD NO DEFINITE INFERENCE CAN BE DRAWN THAT THE ASSESSEE HAD TRIED TO CONCEAL ANY IN COME FROM TAXATION. THE OTHER MAJOR ADDITION IS ON ACCOUNT OF DISALLOWA NCE OF INTEREST OF RS.23,37,548/-. THE DISALLOWANCE HAS BEEN MADE BY THE AO IN RELATIO N TO INTEREST-FREE ADVANCES. THE ASSESSEE HAD EXPLAINED BEFORE THE AO THAT INTEREST- FREE ADVANCES HAD BEEN GIVEN FOR THE PURPOSE OF BUSINESS DETAILS OF WHICH HAD ALSO B EEN GIVEN WHICH HAS BEEN REPRODUCED IN PARA 2.1 OF THIS ORDER EARLIER. THERE IS NO FINDING BY THE AO THAT ADVANCES WERE NOT FOR THE PURPOSES MENTIONED BY THE ASSESSEE. OBVIOUSLY THEREFORE THE ADVANCES WERE FOR COMMERCIAL EXPEDIENCY. IN SUC H CASES, DISALLOWANCE OF INTEREST CANNOT BE UPHELD AS HELD BY THE HONBLE SUPREME COU RT IN CASE OF S. A. BUILDERS LTD. (SUPRA). THEREFORE EVEN IF THE ADDITION IS CONFIRME D OR NO APPEAL IS FILED BY THE ASSESSEE FOR WANT OF PROPER ADVICE OR ANY OTHER REA SONS, THE ADDITION MADE CANNOT BE BASIS FOR IMPOSING PENALTY WHEN THE CLAIM IS ALL OWABLE. THUS, IN OUR VIEW THERE IS NO CASE FOR CONCEALMENT OF PENALTY IN RESPECT OF AN Y OF THE ADDITIONS MADE BY THE AO. IN VIEW OF THE FOREGOING DISCUSSION AND FOR THE REA SONS GIVEN EARLIER WE SEE NO INFIRMITY IN THE ORDER OF THE CIT (A) DELETING THE PENALTY AND THE SAME IS THEREFORE UPHELD. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 10 OF 25 D) SHERVANI HOSPITALITIES LTD VS. COMMISSIONER OF INCO ME TAX - DELHI HIGH COURT, ITA NO.804 OF 2011, DATE OF DECISION 28/05/2013 . THIS APPEAL BY THE ASSESSEE WHICH RELATES TO THE AS SESSMENT YEAR 2001 - 02, IN EFFECT IMPUGNS ORDER DTD.26/03/2010, PASSED BY THE INCOME TAX APPELLATE TRIBUNAL CONFIRMING IMPOSITION OF PENALTY U/S 271(1 )(C) OF THE INCOME TAX ACT, 1961. PENALTY U/S 271(L)(C) - THE ADDITIONS INCLUDING ADD ITION IN RESPECT OF CAPITAL EXPENDITURE FOR INTERIOR DESIGNING AMOUNTING TO RS. 1,32,000/- WERE UPHELD BY THE TRIBUNAL. PENALTY U/S 271(1 )(C) OF THE ACT WAS IMP OSED AMOUNTING TO RS. 16,44,330/- . THE REAL QUESTION PERTAINS TO THE FIRST TWO CLAIM S I.E. LOSS ON CLOSURE OF SOUTH EXTENSION UNIT OF RS.25,37,521/- AND CAPITAL EXPEND ITURE FOR INTERIOR DESIGNING OF RS. 1,32,000/-. THE ASSESSEE IS IN APPEAL BEFORE US. HE LD THAT - 25. IN VIEW OF THE AFORESAID DISCUSSION, THE QUEST ION OF LAW IS ANSWERED IN NEGATIVE AND IN FAVOUR OF THE APPELLANT ASSESSEE AND IT IS H ELD THAT PENALTY U/S 271(L)(C) OF THE ACT IS NOT JUSTIFIED IN RESPECT OF RS.25,37,521/- A ND RS. 1,32,000/-. PENALTY FOR CONCEALMENT ON THE SAID AMOUNTS IS DIRECTED TO BE D ELETED. THE APPEAL IS DISPOSED OF. NO COSTS. E) IT AT, DELHI - ASST. COMMISSIONER OF INCOME TAX VS. MR. MANISH JAIN PROP. BPB PUBLICATIONS - ITA NO.5999/DEL/2012. F) ITAT, MUMBAI - DEPUTY COMMISSIONER OF INCOME TAX V S. M/S PARLE PET PVT LTD - ITA NO.391/MUM/2010 DTD.20/07/2011. G) 2013 2013 (12) TMI 922 - ITAT, AMRITSAR - DEPUTY C OMMISSIONER OF INCOME TAX VS. M/S MAX INDIA LTD. H) 2013 - ITAT MUMBAI - VINATI ORGANICS LTD, MUMBAI V S. DEPARTMENT OF INCOME TAX. I) 2012 (7) TMI 12 - ITAT DELHI - DCIT, CIRCLE 9(1) V S. SPECIALTY FOOD (INDIA) PVT LTD- ITA NO.3270(DEL)/2011 ORDER DTD.31/05/2012. J) ITAT MUMBAI - ACIT, CIRCLE- 4(2) MUMBAI VS. SOVEREIGN SECURITIES PVT LTD - ITA NO.L624(MUM)/2012 ORDER DTD.05/04/2013. 3. FURTHER, IT IS SUBMITTED THAT THE PROVISIONS OF SECTION 271(L)(C) READS AS UNDER: 271(1) IF THE ASSESSING OFFICER OR THE COMMISSIONE R (APPEALS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON - (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN ORDER TO BE COVERED UNDER THESE PROVISIONS, THER E HAS TO BE EITHER CONCEALMENT OF THE PARTICULARS OF INCOME OR FURNISHING OF INACCURA TE PARTICULARS. AS PER LAW LEXICON, ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 11 OF 25 THE MEANING OF THE WORD PARTICULAR IS DETAIL OR D ETAILS, THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFORE, THE WORD PARTICULARS USED IN THE SECTI ON 271(1 )(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. THE WORDS INACCURATE PARTICULARS MEAN THAT THE DETAILS SUPPLIED IN THE RETURN ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. HOWEVER, IN THIS CASE THE ASSESSEE MIGHT NOT HAVE PROVED TO THE SATISFACTION FOR THE CLAIM OF EXPENSE S BUT ASSESSEE NOWHERE HAS FILED ANY INACCURATE PARTICULARS OR CONCEALED THE INCOME. IN THE ABSENCE OF A FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE, THERE WOULD BE NO QUESTION OF I NVITING PENALTY U/S 271(L)(C). IT IS TO BE SATISFIED THAT THE ASSESSEE HAS CONCEALED INC OME OR THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR THAT THE CASE OF THE ASSESSEE IS COVERED BY THE DEEMING FICTION OF ONE OF THE EXPLAN ATIONS APPENDED TO SECTION 271(L)(C). THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS U/S 271(L)(C) MUST EXIST BEFORE THE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAU SE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF H IS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARI SE. A CLAIM MADE BY THE ASSESSEE UNDER BONAFIDE BELIEF AND IMPRESSION BUT REJECTED B Y THE AO CANNOT BE SUBJECTED TO PENALTY IN CASE THE ASSESSEE HAS BEEN ABLE TO PROVE AND ESTABLISH THAT THE CLAIM WAS MADE BONA FIDE AND ALL PARTICULARS RELATING THERETO WERE FURNISHED BEFORE THE AO BEFORE PENALTY IS IMPOSED. IT HAS BEEN HELD BY THE HONBLE SUPREME COURT IN THE CASE OF AMIT MOHAN BINDAL (317 ITR 1) THAT THE PENA LTY U/S 271(1 )(C) IS A CIVIL LIABILITY ALBEIT A STRICT LIABILITY. IT HAS BEEN FURTHER JUDICIALLY HELD THAT THE CIVIL LIABILITY OF PENALTY U/S 271(L)(C) CANNOT BE CONSTRUED TO MEAN THAT THE PENALTY IS AN AUTOMAT IC CONSEQUENCE OF AN ADDITION MADE TO THE INCOME. THE ONLY IMPACT OF LIABILITY BE ING CIVIL LIABILITY IS THAT THE MENSREA OR THE INTENTIONS OF THE ASSESSEE NEED NOT BE PROVED. THERE HAS TO BE CONTRAVENTION OF A STATUTORY OBLIGATION FIRST - WIL LFUL OR NOT. THERE IS NO CAUSE AND EFFECT RELATIONSHIP BETWEEN PENALTY AND ADDITION. A FINDING IN THE ASSESSMENT ORDER MAY CONSTITUTE GOOD EVIDENCE IN THE PENALTY PROCEED INGS BUT SUCH FINDING CANNOT BE REGARDED AS CONCLUSIVE FOR THE PURPOSE OF PENALTY P ROCEEDINGS. RAISING A LEGAL CLAIM, EVEN IF IT IS ULTIMATELY FOUND TO BE LEGALLY UNACCE PTABLE CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE DEEMING FI CTION IN EXPLANATION 1 IS ALSO NOT ATTRACTED AS IT RELATES ONLY TO FACTUAL ASPECTS. DI FFERENT VIEWS TAKEN ON THE SAME SET OF FACTS, AT THE MOST, BE TERMED AS DIFFERENCE OF O PINION BUT NOTHING TO DO WITH THE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THESE LEGAL ASPECTS ARE REQUIRED TO BE SEEN IN THE FACTS AND CI RCUMSTANCES OF EACH CASE. ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 12 OF 25 CONSIDERING THE ABOVE FACTUAL & LEGAL MATRIX IT IS PRAYED THAT PENALTY IMPOSED MAY KINDLY BE QUASHED AS THE ASSESSEE HAS NEITHER FURNI SHED ANY INACCURATE PARTICULARS NOR HAS CONCEALED ANY INCOME. ASSESSEES SUBMISSION DATED 04/09/2019: SUB: RE: APPEAL NO.857/ DEL-2016 FOR A.Y.2008-09 RESPECTED SIR, THE ABOVE-MENTIONED APPEAL IS FIXED BEFORE YOUR HON OUR FOR 04/09/2019. IN THIS CONNECTION AND IN CONTINUATION OF PAPER BOOK A LREADY SUBMITTED ON 19/12/2018. MOST RESPECTFULLY IT IS SUBMITTED THAT THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) REVERSED HIS OWN PENALTY ORDER IN SUBSEQUENT A.YS.2010-11 AND 2012-13 ON SAME ISSUE IN CASE OF APP ELLANT. COPIES OF CIT (A) ORDERS HAVE ALREADY SUBMITTED. TH E TD. CIT (A) HAS DELETED THE PENALTIES IN BOTH ASSESSMENT YEARS ON SAME GROUND AND IN CASE OF SAME ASSESSEE BY CONSIDERING THE HON'BLE SUPREME COURT JUDGEMENT AND VARIOUS JUD ICIAL DECISIONS OF LTAT. IT IS SUBMITTED THAT PENALTY' AND ASSESSMENT' AR E TWO INDEPENDENT PROCEEDINGS. IT MAY BE NOTED THAT THERE COULD BE GENUINE DIFFERENCE OF OPINION BETWEEN TAX GATHERER AND TAX PAYER BUT PENALTY PROCEEDINGS REQUIRE 'FURN ISHING OF INACCURATE PARTICULARS OF INCOME/ CONCEALMENT OF INCOME. FURTHER, IT IS SUBMITTED THAT WHILE PASSING THE ASS ESSMENT ORDER DTD.2.0/12/2010 PASSED U/S 143(3) OF THE ACT, THE LD. AO HAS STATED THAT ' ... ASSESSEE HAS FURNISHED INACCURATE PARTICULARS AND HENCE PENALTY PROCEEDINGS U/S 271(1 )(C) ARE INITIATED SEPARATELY., WHICH IS NOT SUFFICIENT AND THEREFORE, THE PENALTY PROCEE DINGS CANNOT BE SAID TO BE VALIDLY INITIATED UNDER SUCH CIRCUMSTANCES. THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS AS BANK INTEREST OF RS. 18,15,188/- HAS BEEN CLEARLY DISCLOSED IN PROFIT & LOSS ACCOUNT. HOWEVER, NOWHERE IN THE ASSESSMENT ORDER STATES THE SPECIFIC CHARGE OF ALLEGED CONCEALMENT AND / OR FURNISHING O F INACCURATE PARTICULARS OF INCOME. THEREFORE, THE ENTIRE PENALTY PROCEEDINGS STAND VIT IATED, BECAUSE IT IS NOT IN ACCORDANCE WITH LAW. IN VIEW/ OF THE LAW SETTLED IN THE VARIOU S CASE LAWS OF ITAT. WE ARE ALSO PLEASED TO SUBMIT THE LATEST PRONOUNCEMENTS: A) THE HONORABLE DELHI HIGH COURT IN PR. CIT VS. SAMTEL INDIA LTD (ORDER PRONOUNCED ON 09/07/2018) HAS HELD THAT. 13. THE INTENTION OF THE PARLIAMENT CANNOT BE TAKE N TO HAVE BEEN TO PENALIZE EVERYONE WHO MAKES A WRONG CLAIM OF DEDUCTION. THE LEGISLATU RE DOES NOT INTEND TO PENALIZE EVERY PERSON WHOSE CLAIM IS DISALLOWED. THIS IS NOT THE A IM OF THE LEGISLATURE. THE TRIBUNAL IN THE FACTS OF THIS CASE, THEREFORE, CORRECTLY REACHE D THIS CONCLUSION. THE QUESTION OF LAW IS ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 13 OF 25 ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE; THEREFORE, THE APPEAL HAS NO MERIT AND IS DISMISSED. COPY OF ORDER IS ENCLOSED. (PLEASE REFER PARA 10 T O 13 OF THE ORDER) B) ITAT NEW DELHI - M/S ABR AUTO PVT LTD VS. ACIT, CIRCLE 1(1) NEW DELHI IN ITA NO.6236/DEL/2015 FOR A.Y.2009-10, DATE OF PRON OUNCEMENT OF ORDER IS 04/12/2017. COPY OF ORDER IS ENCLOSED. THE RELEVANT EXTRACT OF THE JUDGEMENT IS AS UNDER: (PLEASE REFER PARA 6-7 OF TH E ORDER) 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RELEVANT RECORDS. WE FIND THAT ASSESSEE HAD APPEALED BEFORE THE LD. C1T(A) AGAINST THE QUANTUM ADDITIONS I.E. DISALLOWANCE U/S 14A AMOUNTING TO RS . 4,07,158/- AND DISALLOWANCE ON ACCOUNT OF LONG TERM CAPITAL LOSS TREATED AS BUSINE SS INCOME AMOUNTING TO RS. 91,39,000/-. HOWEVER, THE ASSESSEE DID NOT PRESS FO R OTHER DISALLOWANCES MADE ON ACCOUNT OF BAD DEBTS OF RS. 1,32,000/- AND DISALLOW ANCE OF EXPENSES ON ACCOUNT OF RETURN OF INVESTMENT OF RS.10,84,005/-. WE FURTHER FIND THAT IN HIS APPELLATE ORDER DATED 01.2.2013 THE LD. C1T(A) DID NOT ALLOW THE APPEAL O F THE ASSESSEE AND AGGRIEVED WITH THE ACTION OF THE LD. C1T(A), THE ASSESSEE APPEALED BEF ORE THE TRIBUNAL AGAINST DISALLOWANCE U/S 14A OF RS. 4,07,158/- AND AGAINST LONG TERM CAP ITAL LOSS TREATED AS BUSINESS INCOME OF RS.91,39,000/- AND THE ITAT VIDE ITS ORDER DATED 5.8.2016 IN ITA NO.2375/DEL/2013 HAD SET ASIDE THE FINDING OF THE LD. CIT(A) ON THE ISSU E U/S 14A AND RESTORE THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION AFTER DUE VER IFICATION OF THE CLAIM OF THE ASSESSEE REGARDING NO EXPENDITURE HAVING BEEN INCURRED AND A LLOWED THE ISSUE RELATING TO LONG TERM CAPITAL LOSS TREATED AS BUSINESS INCOME OF RS. 91,39,000/- BY DELETED THIS ADDITION. WE FURTHER NOTE THAT DURING THE PENALTY PROCEEDINGS , THE AO VIDE HIS ORDER DATED 31.3.2014 IMPOSED PENALTY OF RS. 36,58,000/- U/S 27 1(L)(C) OF THE ACT, IN RESPECT OF ALL THE FOUR ADDITIONS OF RS.1,07,62,163/- MENTIONED IN THE GROUNDS OF APPEAL, AS AFORESAID, ON THE ALLEGED GROUND THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. 6.1 AFTER PERUSING THE ASSESSMENT ORDER, WE FI ND THAT AO ALSO DID NOT RECORD HIS SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS, BECAUSE WHILE PASSING THE ASSESSMENT ORDER DATED 30.12.2011 PASSED U/S 143(3)(II) OF THE ACT, THE AO HAS STATED THAT PENALTYPROCEEDINGSU/S 271(L)(C) IS BEING INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME / CONCEALMENT INCOME , WHICH IS NOT SUFFICIENT AND THEREFORE, THE PENALTY PROCEEDINGS CANNOT BE SAID TO BE VALIDLY IN ITIATED UNDER SUCH CIRCUMSTANCES. HOWEVER, NOWHERE IN THE ASSESSMENT ORDER STATES THE SPECIFIC CHARGE OF ALLEGED CONCEALMENT AND / OR FURNISHING OF INACCURATE PARTI CULARS OF INCOME. THEREFORE, THE ENTIRE PENALTY PROCEEDINGS STAND VITIATED, BECAUSE IT IS NOT IN ACCORDANCE WITH LAW, IN VIEW OF THE LAW SETTLED IN THE FOLLOWING CASE LAWS. I) CIT & ANR. VS. M/S SSA'S EMERALD MEADOWS - 2 015 (11) TM1 1620 KARNATAKA HIGH COURT HAS HELD THAT TRIBUNAL HAS CORRECTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 READ WITH SECTION 27L(L)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WH ICH LIMB OF SECTION 271(1) (C) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WH ETHER FOR CONCEALMENT OF PARTICULARS OF ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 14 OF 25 INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) (7) TMI 620- KARANATAKA HIGH COURT. THUS SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE AR E OF THE OPINION NO SUBSTANTIAL QUESTION OF LAW ARISES - DECIDED IN FAVOUR OF ASSESSEE. II) CIT & ANR. VS. M/S SSAS EMERALD MEADOWS - H ON BLE SUPREME COURT OF INDIA - REPORTED IN 2016 (8) TMI 1145 - SUPREME COURT. THE APEX COURT HELD THAT HIGH COURT ORDER CONFIRMED (2015) (11) TMI 1620 (SUPRA) - KARN ATAKA HIGH COURT. NOTICE ISSUED BY AO UNDER SECTION 274 READ WITH SECTION 271(L)(C) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 27 L(L)(C) OF THE ACT, THE PE NALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME - DECIDED IN FAVOUR OF ASSESSEE. 6.2 IN THE BACKGROUND OF THE AFORESAID DISCUSSION S AND RESPECTFULLY FOLLOWING THE PRECEDENTS, WE DELETE THE PENALTY IN DISPUTE AND DE CIDE THE ISSUE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE. SINCE WE HAVE DELETED THE PENALTY AND DID NOT DISCUSS THE PENALTY ISSUE ON MERIT, HENCE, THE CASE LAWS CITED BY THE LD. DR ARE NOT USEFUL AT THIS JUNCTURE, BECAUSE THESE CASE LAWS ARE ON THE MERITS OF THE CASE, WHICH WE HAVE NOT DISCUSSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/12/2017. C) 2019 - IT AT NEW DELHI - M/S PADMINI INFRASTRUCTURE DEVELOPERS (INDIA) LTD VS. DCIT, CIRCLE 14(1) NEW DELHI IN IT A NO.L002/DEL/20 14 FOR A.Y.2006-07, DATE OF PRONOUNCEMENT OF ORDER IS 07/02/2019. RELEVANT PAGES OF ORDER ARE ENCLOSED. THE RELEVANT EXTRACT OF THE JUDGEMENT IS AS UNDER: (4.2) IN VIEW OF THE FOREGOING DISCUSSIONS, WE CAN CEL THE PENALTY LEVIED U/S 271(L)(C) OF I.T. ACT BY THE AO AND WE SET ASIDE THE IMPUGNED OR DER OF LD. CIT(A), WHEREIN THE LD. CIT(A) HAD CONFIRMED THE PENALTY. (5) AS REGARDS THE CONTENTION OF THE LD. COUNSEL FO R ASSESSEE, THAT THE AO DID NOT MAKE SPECIFIC CHARGE AGAINST THE ASSESSEE - WHETHER THE PENALTY PROCEEDINGS WERE FOR 'CONCEALMENT OF THE PARTICULARS OF INCOME' OR FOR F URNISHING OF INACCURATE PARTICULARS OF INCOME'; WE FIND FROM PERUSAL OF ORDER DATED 28.03. 2012 OF THE AO, PASSED U/S 27 L(L)(C) OF I. T. ACT, THAT THE ASSESSEE WAS ISSUED FOUR NOT ICES U/S 271(L)(C) OF I.T. ACT, DATED 26.09.2008, 18.01.2012, 06.02.2012 AND 14.02.2012. ALTHOUGH COPY OF NOTICE DATED 26.09.2008 HAS BEEN FILED FROM ASSESSEE'S SIDE DURI NG THE APPELLATE PROCEEDINGS IN IT AT, THE COPIES OF THE OTHER THREE NOTICES ARE NOT ON OU R RECORDS. WE ALSO FIND THAT THIS CONTENTION, THAT THE AO DID NOT MAKE THE SPECIFIC C HARGE AGAINST THE ASSESSEE - WHETHER THE PENALTY PROCEEDINGS WERE FOR 'CONCEALMENT OF TH E PARTICULARS OF INCOME' OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME', HA S BEEN RAISED FOR THE FIRST TIME BEFORE THE ITAT AND THIS GROUND WAS NOT TAKEN BY THE ASSES SEE BEFORE LOWER AUTHORITIES, NAMELY ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 15 OF 25 AO AND CIT(A). THEREFORE, INFORMATION REGARDING WHE THER THE SPECIFIC CHARGE AGAINST THE ASSESSEE - WHETHER THE PENALTY PROCEEDINGS WERE FOR 'CONCEALMENT OF THE PARTICULARS OF INCOME' OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME' WAS MADE BY THE AO IN ONE OR MORE OF THE OTHER THREE NOTICES IS NOT AVAILABLE FROM EITHER THE RECORDS OF THE TRIBUNAL OR FROM PERUSAL OF THE ORDERS OF THE LOWER AUTHORIT IES AS THIS CONTENTION WAS NOT RAISED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. MOREO VER, WE ALSO FIND THAT IN THE PRESENT APPEAL IN ITA T, NO SPECIFIC GROUND HAS BEEN TAKEN BY THE ASSESSEE IN RESPECT OF THIS CONTENTION WHICH WAS ADVANCES AT THE TIME OF HEARIN G BEFORE US. BE THAT AS IT MAY, SINCE WE HAVE ALREADY DELETED THE PENALTY U/S 271(1 )(C) OF I. T. ACT, IN THE FORGOING PART OF THIS ORDER, THIS CONTENTION OF THE LD. COUNSEL FOR ASSES SEE IS MERELY ACADEMIC PRESENTLY AND NEED NOT BE ADJUDICATED. WHEN IT IS ALREADY FOUND T HAT THE DISPUTABLE CLAIM MADE BY THE ASSESSEE NEITHER AMOUNTS TO 'CONCEALMENT OF PARTICU LARS OF INCOME NOR TO FURNISHING OF INACCURATE PARTICULARS OF INCOME'; IT IS IMMATERIAL WHETHER THE ASSESSING OFFICER MADE SPECIFIC CHARGE AGAINST THE ASSESSEE WHETHER THE PE NALTY' PROCEEDINGS WERE FOR CONCEALMENT OF THE PARTICULARS OF INCOME' OR FOR F URNISHING OF INACCURATE PARTICULARS OF INCOME'. THEREFORE, PRESENTLY WE DECLINE TO EXPRESS AN OPINION ON THIS CONTENTION OF THE LD. COUNSEL FOR ASSESSEE; BECAUSE THIS IS MERELY AN Y ACADEMIC ISSUE AT PRESENT. (5) IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07 DAY OF FEB RUARY, 2019 SD/- SD/- (K.N. CHARY) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER D) MUMBAI IN ITA NO.3195/MUM/2018 FOR A.Y.2014-15. DATE OF PRONOUNCEMENT OF ORDER IS 23/08/2018 . COPY OF ORDER IS ENCLOSED. THE RELEVANT EXTRACT OF THE JUDGEMENT IS AS UNDER: (PLEASE REFER PARA 15-19 OF THE ORDER) 19. UPON CAREFUL CONSIDERATION, WE NOTE THAT IT WI LL BE APPOSITE TO REFER TO THE MERITS OF THE PENALTY IN THIS CASE. TO RECAPITULATE AS MENTIO NED IN EARLIER PART OF THIS ORDER, THE ADDITION WAS MADE BY THE A.O BY DISALLOWING INTERES T EXPENDITURE OF AN AMOUNT OF RS.12,26,80,137/- U/S 36(L)(III) OF THE ACT.THIS WA S DONE ON THE GROUND THAT NO INCOME HAS BEEN EARNED BY THE ASSESSEE. SO THE EXPENDITURE CAN NOT BE HELD TO BE INCURRED EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSE SSEE. THE A.O THEN CONTRADICTED HIMSELF THAT THE ASSESSEE WAS NOT DOING ANY BUSINES S BY HOLDING THAT THE ASSESSEE HAS MADE HUGE INVESTMENTS. THAT IN THIS VIEW OF THE MAT TER, THE ASSESSEE HAS DIVERTED INTEREST BEARING FUNDS TO EARN EXEMPT INCOME. HENCE , THIS AMOUNT WAS ALSO DISALLOWED U/S 14A OF THE ACT. IN THIS REGARD, WE NOTE THAT TH E PENALTY HAS BEEN LEVIED ONLY WITH RESPECT TO THAT LIMB OF THE DISALLOWANCE IN WHICH T HE A.O HAS HELD THAT AMOUNT WAS DISALLOWED U/S 36(1) (HI) OF THE ACT. 20. IN THIS CONNECTION, WE NOTE THAT ALL THE PARTI CULARS OF INTEREST WERE DULY DISCLOSED. THE VERACITY OF THE EXPENDITURE CLAIMED HAS NOT BEE N DOUBTED BY THE AUTHORITIES BELOW. THE ASSESSEE HAS EXPLAINED THAT IT HAS CLAIMED THE EXPENDITURE AS IN THE OPINION OF THE ASSESSEE IT HAS SET UP THE BUSINESS WHICH MANDATES THE ALLOWANCE OF CLAIM OF EXPENDITURE. IT WAS THE ASSESSEE'S OPINION THAT IT WAS NOT NECESSARY TO CARRY ON THE BUSINESS. THIS EXPLANATION HAS NOT BEEN ACCEPTED BY THE AUTHORITIES BELOW. IN OUR ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 16 OF 25 CONSIDERED OPINION, THE EXPLANATION BY THE ASSESSEE IS A PLAUSIBLE ONE. THE ASSESSEE'S ADMISSION THAT IT WAS NOT CARRYING ON BUSINESS WAS ADMITTEDLY WITH RESPECT TO THE TRANSPORT BUSINESS IN AS MUCH AS A.O HAD HIMSELF AD MITTED THAT THE ASSESSEE WAS MAKING HUGE INVESTMENT BY DIVERTING INTEREST BEARING FUNDS . IN THIS VIEW OF THE MATTER, THE VERY PREMISE THAT THE ASSESSEE WAS NOT CARRYING ON 'ANY' BUSINESS FAILS. BY NO STRETCH OF IMAGINATION, THAT ASSESSEE'S EXPLANATION CAN BE SAI D TO BE SPURIOUS, VEXATIOUS, MERE BLUSTER OR FRIVOLOUS. IN SIMILAR SITUATION, THE HON 'BLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD. (SUPRA) HAS HELD THAT DISALL OWANCE OF A CLAIM MADE BY THE ASSESSEE OR A WRONG CLAIM BY THE ASSESSEE CANNOT BY ITSELF L EAD TO LEVY OFPENALTY U/S 27 L(L)(C) OF THE ACT. 21. HENCE, ON THE ANVIL OF THE AFORESAID DISCUSSIO N AND PRECEDENT, THIS PENALTY IS NOT LIABLE TO BE SUSTAINED. 22. ANOTHER REASON FOR THE ID. CIT (A) UPHOLDING THE PE NALTY IS THAT THE ASSESSEE HAS NOT APPEALED AGAINST THE ADDITION. WE FIND THAT THIS CA NNOT AT ALL LEAD TO A CONCLUSION THAT THE LEVY OF PENALTY IS AUTOMATIC WHEN ADDITION IS NOT A PPEALED AGAINST OR FOR THAT MATTER IT IS SUSTAINED. IT IS SETTLED LAW THAT THE ASSESSMENT PR OCEEDINGS AND PENALTY PROCEEDINGS ARE DIFFERENT. 23. WE FURTHER FIND THAT ANOTHER LIMB WHICH IS IMP ORTANT IN THIS RESPECT IS THAT THE A.O IN HIS ORDER HIMSELF HAS GIVEN A FINDING THAT THE A SSESSEE HAS DIVERTED INTEREST BEARING FUNDS TO MAKE HUGE INVESTMENTS FROM WHICH NO INCOME HAS BEEN EARNED. HENCE, THE DISALLOWANCE HAS ALSO BEEN SUSTAINED ON ACCOUNT OF INVOKING OF THE PROVISION OF SECTION I4A. WHEN THE A.O HAS HIMSELF SAID THAT THE ASSESSE E HAD BORROWED HUGE AMOUNTS AND IT HAS MADE HUGE INVESTMENTS IN SHARES AND SECURITIES WHICH DID NOT YIELD ANY INCOME AND THE INTEREST SO INCURRED IS LIABLE TO DISALLOWANCE U/S!4A WHERE THE QUESTION OF DISALLOWANCE ON THE PREMISE THAT THE ASSESSEE HAS N OT CONDUCTED 'ANY BUSINESS' ARISES. CONSPICUOUSLY, THE A.O HIMSELF HAS NOT MENTIONED TH AT THE PENALTY> IS BEING INITIATED FOR THIS ASPECT OF THE DISALLOWANCE. WE FIND THAT DISAL LOWANCE U/S 14A IN THIS REGARD IS ITSELF NOT SUSTAINABLE ON THE TOUCH STONE OF THE HON'BLE J URISDICTIONAL HIGH COURT DECISION IN THE CASE OF BALLARPUR INDUSTRIES LTD. (SUPRA). IN THIS VIEW OF THE MATTER ALSO IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY IN THIS CASE IS NOT AT ALL LEVIABLE. 24. HENCE, IN OUR CONSIDERED OPINION, THE PENALTY LEVIED U/S 271(I)(C) IN THIS CASE IS LIABLE TO BE DELETED. WE SET ASIDE THE ORDERS OF THE AUTHO RITIES BELOW AND DELETE THE LEVY OF PENALTY. WE NOTE THAT THE ASSESSEE HAS ALSO RAISED THAT THE PENALTY IS NOT LEVIABLE IN AS MUCH AS PENALTY NOTICE DID NOT SPECIF THE CHARGE O N WHICH THE PENALTY WAS BEING LEVIED. WE NOTE THAT VARIOUS CASE LAWS IN THIS REGARD HAVE ALSO BEEN MENTIONED IN THEIR RESPECTIVE FAVOURS BY THE ID. COUNSEL OF THE ASSESS EE AND THE ID. DR ALSO. 25. BE AS IT MAY, WE FIND THAT SINCE WE HAVE ALREAD Y DELETED THE PENALTY AS MENTIONED ABOVE, THE ADJUDICATION ON THE LEVY OF PENALTY ON T HE DEFECT IN THE MENTIONING OF THE CHARGE IS ONLY OF ACADEMIC INTEREST. HENCE, WE ARE NOT ENGAGING INTO THE SAME. 26. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STA NDS ALLOWED. ' ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 17 OF 25 ORDER PRONOUNCED IN THE OPEN COURT ON 23.08.2018 E) 2018 - ITAT NEW DELHI - DC1T VS. M/S NATIONAL TEXTILES, NE W DELHI IN ITA NO. 5757/DEL/2015 FOR A.Y.2009-10, DATE OF PRONO UNCEMENT OF ORDER IS 22/02/2018 . COPY OF ORDER IS ENCLOSED. THE RELEVANT EXTRACT OF THE JUDGEMENT IS AS UNDER: (PLEASE REFER PARA 16-18 OF THE ORDER) 16. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF T HE AUTHORITIES BELOW AND THE MATERIAL PLACED BEFORE US. WE HAVE ALSO DELIBERATED ON THE J UDICIAL PRONOUNCEMENTS REFERRED TO BY THE LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS W>ELL AS CITED BY THE LEARNED DR AND AR DURING THE COURSE OF HEARING. THE LEARNED CIT(A) WHILE DELETING THE PENALTY HAS PASSED A WELL REASONED ORDER WHICH DOES NOT REQUIRE ANY IN TERFERENCE. THE FINDINGS OF THE LEARNED CIT(A) ARE AS UNDER: ' GROUND NO. 1, 3 &5 RELATED TO IMPOSITION OF PENAL TY U/S 271(1 )(C) WHICH ARE DEALT WITH AS UNDER ON THE FACTUAL FRONT, THERE IS LOSS IN FOR EIGN EXCHANGE FLUCTUATION. WHETHER IT IS CAPITAL IN NATURE OR REVENUE IN NATURE IS THE ISSUE OF CONTENTION. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SUFFERED LOSS DUE TO FOR EIGN EXCHANGE RATE FLUCTUATIONS. THIS WAS IN RELATION TO IMPORT OF MACHINERY FROM OTHER C OUNTRIES. AS PER SECTION 43A, WHEN THE ASSESSEE WAS SUPPOSED TO ADD THIS AMOUNT TO THE COST OF PLANT AND MACHINERY AND CLAIM DEPRECIATION AGAINST IT, INSTEAD IT CLAIMED I T WRONGLY AS REVENUE EXPENDITURE. IT IS A FACT THAT THE ASSESSEE ACCEPTED THE ADDITION AT CIT (A)'S LEVEL AND DID NOT FURTHER CARRY THE MATTER TO HIGHER APPELLATE FORUM. ONCE ON THE FACTU AL FRONT THE ISSUE IS DECIDED, NOW COMES THE ISSUE OF PENALTY. MENS REA AFTER THE AME NDMENT TO SEC.27L(L)(C) W.E.F 1.4.1964, MENS REA NEED NOT BE ESTABLISHED. HENCE O N THIS GROUND ASSESSEE'S CONTENTION FAILS. SUPPORT FOR THIS RATIONAL IS TAKEN FROM THE FOLLOWING JUDGMENTS . HON'BLE APEX COURT IN UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS (SC) 306 ITR 277, GIDJAG INDUSTRIES LTD. VS. CTO (SC) 293 ITR 584 AND CIT VS. ATUL MOHA N BINDAL (SC) 317 ITR 1 HAVE HELD THAT 'MENS REA' NOT ESSENTIAL FOR CIVIL LIABILITY OF PE NALTY - PENALTIES UNDER FISCAL STATUTES ARE FOR BREACH OF CIVIL LIABILITIES - WILLFUL CONCEALME NT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MA TTER OF PROSECUTION U/S 276C. ASSESSMENT AND PENALTY PROCEEDINGS ARE TWO SEPARATE AND DISTINCT PROCEEDINGS. EVERY ADDITION IN ASSESSMENT ORDER DOES NOT AUTOMA TICALLY QUALIFY FOR LEVY OF PENALTY. IT IS SETTLED POSITION THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE, AND DISTINCT AND AS HELD BY HON'BLE SUPREME COURT I N THE CASE OF ANANTHARAMAN VEERASINGHAIAH & CO. V. CIT {1980] 123 ITR 457, THE FINDINGS IN THE ASSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CONCLUSIVE FOR TH E PENALTY PROCEEDINGS. IT IS ALSO WELL SETTLED THAT THE CRITERION AND YARDSTICKS FOR THE P URPOSE OF IMPOSING PENALTY U/S 271 (L)(C) OF THE ACT ARE DIFFERENT THAN THOSE APPLIED FOR MAK ING OR CONFIRMING THE ADDITIONS. IT HAS BEEN HELD BY HON'BLE COURTS, INCLUDING HON'BLE MUMB AI TRIBUNAL IN THE CASE OF YOGESH R.DESAI VS. ACIT (8DTR101), EACH AND EVERY ADDITION MADE DURING ASSESSMENT ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 18 OF 25 PROCEEDINGS DOES NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY FOR CONCEALMENT OF INCOME. IF THE REVENUE IS NOT ABLE TO ESTABLISH EITHER CONCEAL MENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, PENALTY U/S 271(1 )(C) IS NOT LEVIABLE. IN SUCH CIRCUMSTANCES, HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. BACARDI MARTINI INDIA LTD. [2007] 288 ITR 585/158 TAXMAN 348 HELD THAT NO PENA LTY IS IMPOSABLE. IN THE PRESENT CASE, IN THE PENALTY PROCEEDINGS NO CONCEALMENT OF INCOME OR INACCURATE PARTICULARS OF ITS INCOME HAS BEEN ESTABLISHED BY T HE DEPARTMENT. THEY SIMPLY RELIED ON THE FINDINGS IN THE ASSESSMENT ORDER, WHICH WILL NO T SUFFICE FOR LEVY OF PENALTY. MAKING A WRONG CLAIM OF DEDUCTION-WILL IT QUALIFY F OR LEVY OF PENALTY U/S 271 (I)(C) ? THE HON'BLE APEX COURT IN ITS JUDGMENT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. 189 TAXMAN 322/SC) SAID NO TO THIS PROPOSITION. 'MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WA S NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT T HE PENALTY UNDER SECTION 271(L)(C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY ASSESSING OFFICER FOR ANY R EASON, THE ASSESSEE WILL INVITE PENALTY UNDER SECTION 27L(L)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATU RE'. . 17. FROM THE PERUSAL OF ABOVE, IT IS CLEAR THAT THE ASS ESSEE'S INTENTION WAS NOT TO CONCEAL THE INCOME. THE ASSESSEE HAD RIGHTLY DISCLO SED IT IN THE PROFIT AND LOSS ACCOUNT AND NOT INCLUDED WHILE COMPUTING THE TAXABLE INCOME . THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE HAS ALSO BEEN ACCEPTED BY THE AO. I N VIEW OF THE JUDGMENT OF HON'BLE SUPREME IN THE CASE OF CIT VS. RELIANCE PETRO PRODU CTS P. LTD. (2010) 322 ITR 158, WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF P ENALTY AS AO HAD NOT GIVEN ANY FINDING SEPARATELY AS TO WHETHER THERE WAS CONCEALMENT OF I NCOME OR WHETHER ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. THE AO HAS IMPOSED THE PENALTY ON THE GROUND OF DISALLOWANCE OF FOREIGN EXCHANGE FLUCTUAT ION. THE ASSESSEE CANNOT BE FASTENED WITH THE LAW OF PENALTY WITHOUT THERE BEING A CLEAR SPECIFIC CHARGE. FIXING A CHARGE SHOULD NOT BE IN A CASUAL MANNER AND IT HAS NOT BEEN PERMI TTED UNDER THE LAW. AFTER CONSIDERING THE JUDGMENTS RELIED ON BY BOTH THE SIDES AND ORDER S OF THE LOWER AUTHORITIES, WE, WHILE UPHOLDING THE ORDER OF CIT (A), ARE OF THE CONSIDER ED OPINION THAT LEARNED CIT(A) IS JUSTIFIED IN DELETING THE PENALTY. 18. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON ...22ND. FEBR UARY, 2018. F) 2 018 - ITAT NEW DELHI - VIPUL GOEL VS. ACIT, CENTRAL CIRCLE MEERUT IN ITA NO. 10 & 11/DEL/2015 FOR A.Y. 2005-06 AND 2006-07, DATE OF PRONOUNCEMENT OF ORDER IS 22/05/2018. COPY OF RELEVANT PAGES OF ORDER IS ENCLOSED. THE RE LEVANT EXTRACT OF THE JUDGEMENT IS AS UNDER: ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 19 OF 25 ITA NO. 10 & 170/DEL/2015 [ASSESSMENT YEAR : 2005-06] 37. BOTH THE CROSS-APPEALS ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), MEERUT DATED 20.10.2014 FOR AY 2005-06, CHALLENGING THE LEVY OF PENALTY' AND CANCELLATION OF PENALTY U/S 271(L)(C) OF THE ACT. THE AO VIDE SEPARATE ORDE R- LEVIED THE PENALTY U/S 271(L)(C) OF THE ACT ON THE ADDITION MADE IN THE ASSESSMENT ORDER. L D. CIT(A) PARTLY CONFIRMED THE ADDITIONS/ SUSTAINED IN APPEAL. LD. CIT(A), THEREFO RE, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND CANCELLED THE PART PENALTY. THE ASSESS EE IS IN APPEAL CHALLENGING THE PENALTY ORDER. THE REVENUE IS IN APPEAL CHALLENGING THE DEL ETION OF PENALTY BECAUSE THE DEPARTMENTAL APPEAL ON MERITS IS PENDING BEFORE THE TRIBUNAL. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT QUANTUM ORDER OF THE TRIBUN AL MAY BE FOLLOWED IN DECIDING THE PENALTY APPEALS AND ALSO FILED COPY OF THE SHOW CAU SE NOTICE DATED 29.12.2009 ISSUED FOR ASSESSMENT YEAR UNDER APPEAL BEFORE LEVY OF PENALTY U/S 274 R.W.S 27L(L)(C) IN WHICH THE AO HAS MENTIONED (C) HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR .................................................. ................................................... .................... FURNISH ED INACCURATE PARTICULARS OF SUCH INCOME. LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED NOTICE IS BAD IN LAW AND THAT PENALTY IS NOT LEVIABLE IN THE MATTER. 38. ON THE OTHER HAND, LD. SR. DR RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW RELIED UPON THE ORDER OF ITAT\ MUMBAI BENCH IN THE CASE OF SH.MAHESH M GANDHI VS ACIT IN ITA NO.2976/MUM/2016 VIDE ORDER DATED 27.02.2017. I N THIS CASE IN NOTICE, REASONS FOR PENALTY WERE NOT MENTIONED. THE TRIBUNAL HELD THAT THE AO HAS RECORDED SATISFACTION IN THE ASSESSMENT ORDER IN RELATION TO INVOKING PENALT Y PROCEEDINGS. LD. COUNSEL FOR THE ASSESSEE STATED THE DECISION CITED BY LD. SR. DR IS NOT APPLICABLE TO THE FACTS OF THIS CASE. 39. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE AR E OF THE VIEW THAT PENALTY IS NOT LEVIABLE IN THE MATTER. ON QUANTUM APPEAL, WE HAVE DELETED A LL THE ADDITIONS IN ITA NO.L018/DEL/2014 & C.O.NO.-297/DEL/2014, THEREFORE, PENALTY CANNOT BE LEVIED AGAINST THE ASSESSEE. 40. FURTHER, THE AO HAS ISSUED A SHOW CAUSE NOTICE WHICH IS BAD IN LAW BECAUSE IT DID NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(L)(C), PENA LTY PROCEEDINGS HAVE BEEN INITIATED I.E. WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ISSUE IS COVERED IN FAVOUR OF THE AS SESSEE BY THE JUDGEMENT OF KARNATAKA HIGH COURT IN THE CASE OF CIT VS SSA EMARALD MEADOW S 73 TAXMANN.COM 241 IN WHICH SIMILAR VIEW WAS TAKEN AND DEPARTMENTAL APPEAL IS D ISMISSED. THE JUDGEMENT OF HON'BLE HIGH COURT IS CONFIRMED BY THE HON BLE SUPREME COU RT BY DISMISSING THE SLP OF THE DEPARTMENT REPORTED IN 73 TAXMANN.COM 248. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND CANCEL THE PENALTY. 41. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AND DEPARTMENTAL APPEAL IS DISMISSED. ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 20 OF 25 ITA NO. 11/DEL/2015 [ASSESSMENT YEAR: 2006-07] 42. THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(A), MEERUT DATED 20.10.2014 FOR AY 2006-07, CHALLENGING THE LE VY OF PENALTY U/S 271(1) (C) OF THE ACT. IN THIS CASE, WE HAVE DELETED ALL THE ADDITIONS ON MERIT AND ALLOWED CROSS-OBJECTION I.E. C.O.NO.-298/DEL/2014 (IN ITA NO.L019/DEL/2014) [ASS ESSMENT YEAR: 2006-07]. THE AO ISSUED SIMILAR SHOW CAUSE NOTICE BEFORE LEVY OF THE PENALTY AS WAS ISSUED IN A Y 2005-06 ABOVE. THE ISSUE IS IDENTICAL AS HAS BEEN CONSIDERE D IN AY 2005-06 ABOVE IN ITA NO. 11 & 170/DEL/2015. FOLLOWING THE REASONS FOR DECISION FO R A Y 2005-06, WE SETASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY. 43. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. 44. IN THE FINAL RESULT, THE APPEALS OF THE ASSESSE E AND CROSS OBJECTIONS ARE ALLOWED WHEREAS DEPARTMENTAL APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. CONSIDERING THE ABOVE FACTUAL & LEGAL MATRIX IT IS PRAYED THAT PENALTY IMPOSED MAY KINDLY BE QUASHED AS THE ASSESSEE HAS NEITHER FURNISHED AN Y INACCURATE PARTICULARS NOR HAS CONCEALED ANY INCOME. (B.1) THE COPIES OF THE FOLLOWING ORDERS / PRECEDENTS WE RE ALSO FILED FROM ASSESSEES SIDE: 1. COVERING LETTER CONTAINING REPLY/ SUBMISSIONS 2. CIT(A) PENALTY ORDER IN CASE OF ASSESSEE FOR TH E A.Y. 2012-13 VIDES APPEAL NO. 10027/2017-18 ORDER DTD. 23/08/2018. 3. CIT(A) PENALTY ORDER IN CASE OF ASSESSEE FOR THE A.Y. 2010-11 VIDES APPEAL NO. 10406/2017-18 ORDER DTD. 23/08/2018. 4. HONBLE SUPREME COURT ORDER IN CASE OF RELIANCE PETROPRODUCTS PVT. LTD. ARISING OUT OF SLP (C) NO. 27161 OF 2008 5. HONBLE ITAT, CHANDIGARH ORDER IN CASE OF MDC PH ARMACEUTICALS PVT. LTD. IN ITA NO. 697/CHD/2012 6. HONBLE ITAT, MUMBAIORDER IN CASE OF AMI BUILDER S PVT LTD. IN ITA NO. 803/MUM/2014 7. COVERING LETTER CONTAINING REPLY/ SUBMISSION 8. HONBLE HIGH COURT OF DELHI IN CASE OF PR. CIT-8 VS. SAMTEL INDIA LTD. ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 21 OF 25 9. HONBLE ITAT, NEW DELHI IN CASE OF M/S ABR AUTO PVT LTD. VS. ACIT, CIRCLE-1(1) NEW DELHI IN ITA NO. 6236/DEL/2015 10. HONBLE ITA, NEW DELHI IN CASE OF M/S PADMINI I NFRASTRUCTURE DEVELOPERS (INDIA) LTD VS. DCIT, CIRCLE-14(1), NEW DELHI IN ITA NO. 1002/DEL/2014 11. HONBLE ITAT, MUMBAI IN CASE OF ROBUST TRANSPOR TATION PVT LTD VS. DCIT-3(3)(1) MUMBAI IN ITA NO. 3195/MUM/2018 12. HONBLE ITAT, NEW DELHI IN CASE OF DCIT, CIRCLE -17(2) NEW DELHI IN CASE OF DCIT, CIRCLE-17(2) NEW DELHI VS. M/S NATION AL TEXTILE CORPORATION LTD. IN ITA NO. 5757/DEL/2015 13. HONBLE ITAT, NEW DELHI IN CASE OF VIPUL GOEL V S. ACIT, CENTRAL CIRCLE MEERUT IN DIFFERENT ITA NOS. 10 & 11/DEL/2015 AND C ROSS OBJECTIONS . (C) WHEN THE APPEAL CAME UP FOR HEARING BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE (LD. AR, FOR SHORT) OF THE ASSESSE E VEHEMENTLY CONTENDED THAT THE DISALLOWANCE MADE BY THE AO AMOUNTING TO RS. 18,15, 188/- OUT OF ASSESSEES CLAIM FOR INTEREST EXPENSES WAS HIGHLY DISPUTABLE IN NATURE H AVING REGARD TO SPECIFIC FACTS AND CIRCUMSTANCES IN THE CASE OF THE ASSESSEE, AND NO P ENALTY U/S 271(1)(C) OF I.T. ACT CAN BE LEVIED IN RESPECT OF ISSUES OF SUCH HIGHLY DISPU TABLE NATURE. THE LD. AR FOR THE ASSESSEE PLACED STRONG RELIANCE ON THE ORDER OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCT PVT. LTD. (322 IT R 158) SC, FOR THE PROPOSITION THAT PENALTY CANNOT BE IMPOSED MERELY ON THE BASIS OF DI SALLOWANCE OF A CLAIM OF DEDUCTION. THE LD. AR DREW OUR FURTHER ATTENTION TO THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCT PVT. LTD. (SUPRA), THAT THE EXPRESSION INACCURATE PARTICULARS OF INCOME MEANS THAT DETAILS FILED IN THE ASSESSMENT PROCEEDINGS MUST BE FOUND TO BE WRONG OR INACCURATE ; AND FURTHER, THAT MERE MAKING OF ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 22 OF 25 A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, WILL NOT A MOUNT TO INACCURATE PARTICULARS OF INCOME. THE LD. AR FURTHER DREW OUR ATTENTION TO THE SEPARATE APPELLATE ORDERS, EACH DATED 23.08.2018 IN ASSESSEES OWN CASE, WHEREIN TH E LD. CIT(A) [THE SAME INCUMBENT, NAMELY SHRI MANU MALIK COMMISSION OF INCOME TAX (AP PEALS), FARIDABAD] ON IDENTICAL FACTS AND CIRCUMSTANCES, DELETED PENALTY LEVIED BY THE AO FOR ASSESSMENT YEARS 2010- 11 AND 2012-13 RESPECTIVELY. THE LD. AR ASSAILED TH E AFORESAID IMPUGNED APPELLATE ORDER DATED 02.12.2015 OF LD. CIT(A) STRONGLY ON TH E FURTHER GROUND THAT THE LD. CIT(A) HAS, BY NECESSARY IMPLICATION, HIMSELF ADMITTED THA T VIEW TAKEN AGAINST THE ASSESSEE IN ASSESSMENT YEAR 2008-09 WAS ERRONEOUS WHEN, FOR SUB SEQUENT YEARS; THE VIEW TAKEN BY THE SAME INCUMBENT CIT(A) IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2010-11 AND 2012-13 WAS IN FAVOUR OF THE ASSESSEE IN IDENTI CAL FACTS AND CIRCUMSTANCES. THE LD. AR PLACED FURTHER RELIANCE ON THE AFORESAID TWO WRITTEN SUBMISSIONS DATED 10.12.2018 AND 04.09.2019, AND ON THE ORDERS / PREC EDENTS ALREADY MENTIONED IN FOREGOING PARAGRAPH NO. (B) . THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR, FO R SHORT) DID NOT DISPUTE ANY FACTS CLAIMED IN THE AFO RESAID WRITTEN SUBMISSIONS FILED FROM THE ASSESSEES SIDE OR THE FACTS CONTENDED BEFORE U S AT THE TIME OF HEARING. HE ALSO FAILED TO BRING OUT ANY DISTINGUISHING FACTS AND CI RCUMSTANCES FOR THIS YEAR AS COMPARED WITH ASSESSMENT YEAR 2010-11 AND 2012-13. HOWEVER, HE RELIED ON THE ORDERS OF THE LD. CIT(A) AND THE ASSESSING OFFICER. (D) WE HAVE HEARD BOTH SIDES. WE HAVE PERUSED THE MAT ERIALS AVAILABLE ON RECORDS CAREFULLY. WE HAVE ALSO CONSIDERED THE JUDICIAL PR ECEDENTS BROUGHT TO OUR ATTENTION, AT THE TIME OF HEARING OR REFERRED TO IN THE RECORDS. WE FIND THAT IN ASSESSEES OWN CASE ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 23 OF 25 FOR ASSESSMENT YEARS 2010-11 AND 2012-13, THE SAME INCUMBENT IN THE OFFICE OF LD. CIT(A) DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF I.T. ACT, ON THE IDENTICAL ISSUE IN IDENTICAL FACTS AND CIRCUMST ANCES. HOWEVER, FOR THE YEAR UNDER CONSIDERATION, IN APPEAL BEFORE US, THE SAME INCUMB ENT IN THE OFFICE OF LD.CIT(A) HAS CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFIC ER U/S 271(1)(C) OF I.T. ACT, ON IDENTICAL ISSUE IN IDENTICAL FACTS AND CIRCUMSTANCE S. THE REASON FOR THIS INCONSISTENCY IN THE ORDER OF THE LD. CIT(A) IN ASSESSMENT YEAR 2008 -09 AS COMPARED WITH THE DECISION OF THE LD. CIT(A) IN ASSESSMENT YEARS 2010-11 AND 2 012-13 IS NOT FAR TO SEEK. WHEN WE PERUSED THE ORDERS OF THE LD. CIT(A) FOR ASSESSM ENT YEARS 2010-11 AND 2012-13, IT WAS FOUND THAT ASSESSMENT YEARS 2010-11 AND 2012-13 , THE LD. CIT(A) BASED HIS DECISION ON THE BINDING PRECEDENTS OF THE HONBLE S UPREME COURT IN THE CASES OF CIT VS. RELIANCE PETRO PRODUCT LTD. (SUPRA) AND HINDUSTAN S TEEL VS. STATE OF ORISSA 83 ITR 26 (SC). HOWEVER, THESE BINDING PRECEDENTS WERE NOT C ONSIDERED BY THE LD. CIT(A) IN HIS AFORESAID IMPUGNED APPELLATE ORDER DATED 02.12.2015 FOR ASSESSMENT YEAR 2008-09. THUS, WE FIND THAT THE AFORESAID IMPUGNED APPELLATE ORDER DATED 02.12.2015 FOR ASSESSMENT YEAR 2008-09 WAS PASSED BY THE LD. CIT(A ) IN IGNORANCE OF THE AFORESAID BINDING PRECEDENTS. AN ORDER PASSED IN IGNORANCE OF BINDING PRECEDENTS IS ERRONEOUS. NOW, IT IS LEFT TO US IN THE PRESENT APPEAL BEFORE US FOR ASSESSMENT YEAR 2008-09 TO REDRESS THE ERROR OF THE LD. CIT(A) IN P ASSING THE AFORESAID IMPUGNED APPELLATE ORDER DATED 02.12.2015, WITHOUT THE LD. C IT(A) CONSIDERING CIT VS. RELIANCE PETRO PRODUCT LTD. (SUPRA). RESPECTFULLY FOLLOWING THE AFORESAID BINDING PRECEDENT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCT LTD. (SU PRA); WHICH WAS ALSO FOLLOWED BY THE ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 24 OF 25 LD. CIT(A) IN HIS ORDERS FOR ASSESSMENT YEARS 2010- 11 AND 2012-13; PENALTY LEVIED U/S 271(1)(C) OF I.T. ACT FOR THIS YEAR IS HEREBY CANCE LLED, HAVING REGARD TO THE SPECIFIC FACTS AND CIRCUMSTANCES OF THE CASE BEFORE US. (E) IN THE RESULT, THE PENALTY AMOUNTING TO RS. 6,16,6 88/- U/S 271(1)(C) LEVIED BY THE AO VIDE AFORESAID ORDER DATED 20.12.2010 AND CO NFIRMED BY THE LD. CIT(A) VIDE HIS AFORESAID IMPUGNED APPELLATE ORDER DATED 02.12.2015 IS HEREBY CANCELLED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/9/2019 SD/- SD/- (AMIT SHUKLA) (ANADEE NATH MISSHRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13/9/2019 (POOJA) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA-857/DEL/2016. SMT. SUMAN LAKHANI. PAGE 25 OF 25 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 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 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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