H.M. Ice & Storage Pvt. Ltd., Delhi V. DCIT, Circle- 12(1), New Delhi

ITA 926/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4195 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2001-2002
• Appeal Filed On: 06-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.926/DEL/2018 ASSESSMENT YEAR : 2001-02 H.M. ICE & STORAGE PVT. LTD., AK- 2, SHALIMAR BAGH, NEW DELHI. VS. DCIT, CIRCLE- 12(1), NEW DELHI. PAN : AABCH0132N (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. APOORVA BHARDWAJ, CA DEPARTMENT BY : SHRI ATIQ AHMED, SR. DR DATE OF HEARING : 02-08-2018 DATE OF PRONOUNCEMENT : 20-08-2018 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 15.11.2017 OF CIT(A)- 42, NEW DELHI RELATING TO ASS ESSMENT YEAR 2001-02. 2. LEVY OF PENALTY OF RS.5,14,150/- BY THE ASSESSIN G OFFICER U/S 271(1)(C) OF THE I.T. ACT, 1961 WHICH HAS BEEN SUSTAINED BY T HE LD. CIT(A) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPE AL. 3. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET R EFERRING TO PAGE 1 OF THE PAPER BOOK DREW THE ATTENTION OF THE BENCH TO THE N OTICE ISSUED U/S 274 R.W.S. 271 AND SUBMITTED THAT THE ASSESSING OFFICER HAS NO T STRUCK OFF THE INAPPROPRIATE WORDS. THEREFORE, UNDER WHICH LIMB T HE PENALTY HAS BEEN LEVIED HAD NOT BEEN SPECIFIED. REFERRING TO VARIOUS DECIS IONS INCLUDING THE DECISION OF 2 ITA NO.926/DEL/2018 THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF VIDYA NATH URBAN CO-OPERATIVE BANK LTD. VS. ACIT AND VICE-VERSA VIDE ITA NO.2078 & 2079/PUN/2014 ORDER DATED 24.03.2017 FOR ASSESSMENT YEARS 2007-08 & 200 8-09, HE SUBMITTED THAT THE TRIBUNAL, FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATH CATTON & GINNING FACTORY REPORTED IN 359 ITR 565, HAS CANCELLED SUCH PENALTY ON THE GROUND THAT THE N OTICE ISSUED U/S 274 R.W.S. 271 IS BAD IN LAW AND SUBSEQUENT PROCEEDINGS ARISIN G THEREAFTER ARE VITIATED ON ACCOUNT OF NON-STRIKING OFF OF THE INAPPROPRIATE WO RDS IN THE PENALTY NOTICE. REFERRING TO VARIOUS OTHER DECISIONS, SHE SUBMITTED THAT SINCE THE ASSESSING OFFICER IN THE INSTANT CASE HAS NOT STRUCK OFF THE INAPPROPRIATE WORDS IN THE PENALTY NOTICE, THEREFORE, THE PENALTY SO LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) WOULD BAD IN LAW. 4. THE LD. DR ON THE OTHER HAND SUBMITTED THAT NON- STRIKING OFF THE INAPPROPRIATE WORDS FROM THE PENALTY NOTICE WILL NO T INVALIDATE THE PROCEEDINGS. SINCE THE ASSESSEE IN THE INSTANT CASE HAD CONCEALE D ITS TRUE INCOME LIABLE TO TAX BY WAY OF FURNISHING INACCURATE PARTICULARS OF INCO ME O ACCOUNT OF ACCOMMODATION ENTRIES OF RS.13,00,000/-, THEREFORE, THE PENALTY LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) S HOULD BE UPHELD. 3 ITA NO.926/DEL/2018 5. I HAVE CONSIDERED RIVAL ARGUMENTS MADE BY BOTH T HE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND THE ASSESSING OFFICER LEVIED PENALTY OF RS.5,14,150/- U/S 271(1)(C) ON ACCOUNT OF ACCOMMODA TION ENTRIES OF RS.13,00,000/- TAKEN BY THE ASSESSEE FROM M/S ANKUR MARKETING LIMITED WHICH DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS FOU ND NOT IN EXISTENCE AND THE ASSESSEE WAS UNABLE TO PROVE THE IDENTITY AND CREDI TWORTHINESS OF THE LOAN CREDITOR AND GENUINENESS OF THE TRANSACTIONS. I FI ND THE ADDITION WAS SUSTAINED BY THE LD. CIT(A) AND THE ASSESSING OFFICER THEREAF TER INITIATED PENALTY PROCEEDINGS AND, THEREAFTER, LEVIED PENALTY OF RS.5 ,14,150/- U/S 271(1)(C) WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A). IT IS THE SU BMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE INAPPROPRIATE WORDS IN THE NO TICE ISSUED U/S 274 R.W.S. 271 HAS NOT BEEN STRUCK OFF BY THE ASSESSING OFFICER FO R WHICH THE PENALTY PROCEEDINGS ARE INITIATED AND, THEREFORE, THE PENAL TY SO LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) IS BAD IN L AW. 6. I FIND MERIT IN THE ABOVE ARGUMENT OF THE LD. CO UNSEL FOR THE ASSESSEE. A PERUSAL OF THE NOTICE ISSUED U/S 274 R.W.S. 271 SHO WS THAT THE INAPPROPRIATE WORDS IN THE SAID NOTICE HAS NOT BEEN STRUCK OFF I. E. THE NOTICE DOES NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) THE PENALTY P ROCEEDINGS HAD BEEN INITIATED I.E. WHETHER FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE 4 ITA NO.926/DEL/2018 PARTICULARS OF INCOME. I FIND THE HONBLE KARNATAK A HIGH COURT IN THE CASE OF M/S SSAS EMERALD MEADOWS (SUPRA) HAS OBSERVED AS U NDER :- 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY TH E ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 R EAD WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) TO BE BA D IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY P ROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THI S COURT RENDERED 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 SUBSTANTIAL Q UESTION OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE APPEAL IS ACCO RDINGLY DISMISSED. 7. I FIND THE SLP FILED BY THE REVENUE HAS BEEN DIS MISSED BY THE HONBLE APEX COURT. FURTHER, THE VARIOUS BENCHES OF THE TR IBUNAL FOLLOWING THE ABOVE DECISIONS ARE CANCELLING THE PENALTY SO LEVIED BY T HE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF NON-STRIK ING OF THE INAPPROPRIATE WORDS FROM THE NOTICE ISSUED U/S 274 R.W.S. 271 OF THE ACT. SINCE IN THE INSTANT CASE, THE ASSESSING OFFICER HAS NOT STRUCK OFF THE INAPPROPRIATE WORDS IN THE NOTICES ISSUED U/S 274 R.W.S. 271, THEREFORE, THE N OTICE DOES NOT SPECIFY UNDER WHICH LIMB OF SECTION 271(1)(C) THE PENALTY PROCEED INGS HAD BEEN INITIATED I.E. WHETHER FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, THE PENALTY PROCEEDINGS BECOME BAD IN LAW. I, THEREFORE, 5 ITA NO.926/DEL/2018 SET-ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT TH E ASSESSING OFFICER TO CANCEL THE PENALTY SO LEVIED. THE APPEAL FILED BY THE ASS ESSEE IS ACCORDINGLY ALLOWED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH AUGUST, 2018. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 20-08-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI