HARVANSH CHAWLA, NEW DELHI V. ACIT, CENTRAL CIRCLE- 5, NEW DELHI

ITA 9547/DEL/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5407 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FARHAT KHAN
• Keywords: Unexplained cash credit
• Section: 271(1)(c); 14A; 40(a)(ia); 274; 143(2); 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI SMC-1 BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NOS.9547 & 9545/DEL/2019 ASSESSMENT YEARS : 2008-09 & 2009-10 HARVANSH CHAWLA, C-17, GF, EAST NIZAMUDDIN, NEW DELHI-110013. PAN-ADDPC7559G VS A CIT, CENTRAL CIRCLE-5, NEW DELHI. APPELLANT RESPONDENT APPELLANT BY SH. ROHIT TIWARI, ADV. RESPONDENT BY SH. FARHAT KHAN, SR.DR DATE OF HEARING 3 1 .03.2021 DATE OF PRONOUNCEMENT 10 .0 5 .2021 ORDER PER KUL BHARAT, JM : THESE APPEALS BY THE ASSESSEE FOR THE ASSESSMENT YE ARS 2008-09 & 2009-10 ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT (A)-24, NEW DELHI BOTH DATED 29.11.2019. 2. BOTH APPEALS WERE TAKEN UP TOGETHER BEING DISPOSED OF BY WAY OF A CONSOLIDATED ORDER. FIRST WE TAKE UP ITA NO.9545/DEL/2019 [ASSESSMENT YEAR 2009-10] WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF AO OF LEV Y OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 ('THE ACT') AMOUN TING RS. 12,80,780/- INITIATED ON THE BASIS OF THE NOTICE U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT DATED 28-12-2011 ISSUED A LONGWITH THE ITA NOS.-9545 & 9547/DEL/2019 2 ASSESSMENT ORDER WITHOUT SPECIFYING CLEAR-CUT CHARGE O F CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO PASSE D UNDER SECTION 271(1)(C) OF THE ACT WHICH IS NOT CONFORMITY WITH THE P ROVISIONS OF SECTION 271(1)(C) OF THE ACT. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) FAIL TO APPRECIATE THAT LD. ASSESSING OFFICER I NVOKE EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT WHICH I S APPLICABLE ONLY IN CASE OF CONCEALMENT OF INCOME AND NOT FOR FURNIS HING OF INACCURATE PARTICULAR OF INCOME. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A)/AO ERRED IN HOLDING THAT THE APPELLANT HAS FURN ISHED INACCURATE PARTICULAR IN RESPECT OF DISALLOWANCE OF T HE INTEREST EXPENDITURE CLAIMED U/S 36(I)(III) OF THE ACT PLACED ON RECOR DS. 5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A)/AO ERRED IN HOLDING THAT THE APPELLANT HAS FURN ISHED INACCURATE PARTICULAR IN RESPECT OF ADDITION ON ACCO UNT OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT PLACED ON RECORDS. 6) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A)/AO ERRED IN NOT APPRECIATING THE FACT THAT APP ELLANT RELIED ON THE OPINION OF THE EXPERT, THUS THE MATTER IS SQU ARELY COVERED BY THE JUDGMENT OF HON'BLE SUPREME COURT IN CASE OF PRIC E WATERHOUSE COOPERS (P.) LTD. VS COMMISSIONER OF INCOME TAX, KOLKAT A [2012] 348 ITR 306 (SC). 3. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY ASSESSMENT. THE AS SESSMENT U/S 143(2) OF THE INCOME TAX ACT, 1961 (THE ACT) VIDE ORDE R DATED ITA NOS.-9545 & 9547/DEL/2019 3 28.12.2011. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICE R MADE VARIOUS DISALLOWANCES AND ADDED THE SAME INTO THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER HAD MADE ADDITION ON ACCO UNT OF DISALLOWANCE OF INTEREST, ADDITION OF UNEXPLAINED CREDITS, ADDITIO N ON ACCOUNT OF DISALLOWANCE U/S 14A OF THE ACT, ADDITION ON AC COUNT OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT AND ADDITION ON ACCOUNT OF PRIOR PERIOD EXPENSES. ON APPEAL, LD.CIT(A) CONFIRMED THE ADDITION ON RS.37,34,407/- AND ADDITION MADE ON ACCOUNT OF DISALLOWANC E U/S 40(1)(IA) OF THE ACT WAS SUSTAINED ON THIS. THE ASSESSING OFFIC ER PROCEEDED TO IMPOSE THE PENALTY U/S 271(1)(C) OF THE ACT. AFTER GIVING NOTICE TO THE ASSESSEE, PENALTY OF RS. 12,80,780/- U/S 27 1(1)(C) OF THE ACT WAS IMPOSED VIDE ORDER DATED 30.03.2019. 4. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED APPEA L BEFORE LD.CIT(A) WHO ALSO SUSTAINED THE PENALTY. 5. NOW, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 6. GROUND NOS.1, 2 AND 3 RAISED BY THE ASSESSEE ARE AG AINST THE LEGALITY OF PENALTY. LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE PENALTY DESERVES TO BE DISMISSED ON ACCOUNT OF DEFECTIVE NOTICE. LD. COUNSEL FOR THE ASSESSEE DREW MY ATTENTION TO THE NOT ICE ISSUED BY THE ASSESSING OFFICER. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT FROM THE NOTICE ALSO, IT IS CLEAR THAT THERE IS NO SPECIFIC CHARGE BY THE ASSESSING OFFICER. HE SUBMITTED THAT IN THE LIGHT OF JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS SAHARA INDIA LIFE INSURANCE COMPANY LTD. IN ITA NO.475/2019 JUDGEMENT DATED 02.08.2019, THE IMPUGNED ITA NOS.-9545 & 9547/DEL/2019 4 ORDER DESERVES TO BE QUASHED AS THE INITIATION OF PROCE EDINGS IS NOT IN ACCORDANCE WITH LAW. 7. ON THE CONTRARY, LD. SR. DR OPPOSED THE SUBMISSIONS AND RELIE D ON THE ORDERS OF THE AUTHORITIES BELOW. LD. SR. DR SUBMITTE D THAT ASSESSEE HIMSELF HAD PARTICIPATED IN THE PENALTY PROCEEDINGS AND AS SUCH WAS AWARE OF THE CHARGE. HE FURTHER SUBMITTED AT THIS STAG E, THE ASSESSEE SHOULD NOT BE PERMITTED TO RAISE SUCH OBJECTION. 8. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THE REVENUE COULD NOT DISPUTE THE FACT THA T NOTICE U/S 271(1)(C) OF THE ACT DOES NOT SPECIFY SPECIFIC CHARGE WHETHE R IT IS AGAINST THE FILING OF ACCURATE PARTICULARS OF INCOME OR CONCEALING PAR TICULARS OF INCOME. THE HONBLE DELHI HIGH COURT IN PR.CIT VS SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA) HELD AS UNDER:- 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING OF TH E PENALTY IMPOSED UNDER SECTION 271(1) (C) OF THE ACT, WHICH WAS A CCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA H IGH COURT IN CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (K AR) AND OBSERVED THAT THE NOTICE ISSUED BY THE AO WOULD BE B AD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) (C) THE P ENALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER FOR C ONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURA TE PARTICULARS OF INCOME. THE KARNATAKA HIGH COURT HAD FOLLOWED THE ABOV E JUDGMENT IN THE SUBSEQUENT ORDER IN COMMISSIONER OF INCOME T AX V. SSA'S EMERALD MEADOWS (2016) 73 TAXMAN.COM 241 (KAR), THE AP PEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF INDIA IN SLP NO.11485 OF 2016 BY ORDER DATED 5TH AUGUST, 2016. ITA NOS.-9545 & 9547/DEL/2019 5 22. ON THIS ISSUE AGAIN THIS COURT IS UNABLE TO FIN D ANY ERROR HAVING BEEN COMMITTED BY THE ITAT. NO SUBSTANTIAL QUES TION OF LAW ARISES. 23. THE APPEALS ARE ACCORDINGLY DISMISSED. 9. RESPECTFULLY FOLLOWING THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN PR.CIT VS SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA), I HEREBY QUASH THE PENALTY ORDER AS THE INITIATION OF PENALTY IS NOT IN ACCORDANCE WITH LAW. GROUND NOS.1, 2 & 3 OF THE ASSESSEES APPEAL ARE ALLOWED. GROUND NOS. 4 & 5 OF THE ASSESSEE ARE ON MERIT OF LEVY O F PENALTY AS I HAVE QUASHED THE PENALTY AND BEING NOT IN ACCORDANCE WITH LAW. HENCE, REST OF THIS GROUNDS ARE NOT BEING ADJUDICATED, THE SAME HAVE BECOME ACADEMIC ONLY. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 11. NOW, COMING TO ITA NO.9547/DEL/2019 FILED BY THE ASSESSEE RELATING TO ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF AO OF LEV Y OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, I961 ('THE ACT') AMOUN TING RS 18,64,850/- INITIATED ON THE BASIS OF THE NOTICE U/S 274 READ WITH SECTION 271 OF THE ACT DATED 30-12-2010 ISSUED ALONGWI TH THE ASSESSMENT ORDER WITHOUT SPECIFYING CLEAR-CUT CHARGE O F CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO PASSE D UNDER SECTION ITA NOS.-9545 & 9547/DEL/2019 6 271(1)(C) OF THE ACT WHICH IS NOT CONFORMITY WITH THE P ROVISIONS OF SECTION 271(1)(C) OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) FAIL TO APPRECIATE THAT LD. AO INVOKE EXPLANATI ON 1 TO SECTION 27L(L)(C) OF THE ACT WHICH IS APPLICABLE ONLY IN CASE O F CONCEALMENT OF INCOME AND NOT FOR FURNISHING OF INACCURATE PARTICULAR OF INCOME. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A)/AO ERRED IN HOLDING THAT THE APPELLANT HAS FURN ISHED INACCURATE PARTICULAR IN RESPECT OF DISALLOWANCE OF T HE INTEREST EXPENDITURE CLAIMED U/S 36(I)(III) OF THE ACT PLACED ON RECO RDS. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A)/AO ERRED IN NOT APPRECIATING THE FACT THAT APP ELLANT RELIED ON THE OPINION OF THE EXPERT, THUS THE MATTER IS SQUARE LY COVERED BY THE JUDGMENT OF HON'BLE SUPREME COURT IN CASE OF PRICE W ATERHOUSE COOPERS (P.) LTD. VS COMMISSIONER OF INCOME TAX, KOLKAT A [2012] 348 ITR 306 (SC). 12. THE GROUNDS RAISED IN ASSESSMENT YEAR 2008-09 AR E IDENTICAL TO THE ISSUE RAISED IN ASSESSMENT YEAR 2009-10. 13. BOTH REPRESENTATIVES ADOPTED THE SAME ARGUMENTS AS IN ITA NO.9545/DEL/2019. 14. I HAVE HEARD THE LD. REPRESENTATIVES OF BOTH PART IES. THE FACTS IN THE YEAR UNDER CONSIDERATION ARE SIMILAR TO THE FACTS FOR THE ASSESSMENT YEAR 2009-10. THE GROUNDS ARE ALSO IDENTICAL. I HAVE QU ASHED PENALTY FOR THE ASSESSMENT YEAR 2009-10 BY OBSERVING AS UNDER:- 9. RESPECTFULLY FOLLOWING THE JUDGEMENT OF HONBLE DELHI H IGH COURT IN PR.CIT VS SAHARA INDIA LIFE INSURANCE COMPAN Y LTD. (SUPRA), I HEREBY QUASH THE PENALTY ORDER AS THE INITIA TION OF PENALTY ITA NOS.-9545 & 9547/DEL/2019 7 IS NOT IN ACCORDANCE WITH LAW. GROUND NOS.1, 2 & 3 OF THE ASSE SSEES APPEAL ARE ALLOWED. GROUND NOS. 4 & 5 OF THE ASSESSEE A RE ON MERIT OF LEVY OF PENALTY AS I HAVE QUASHED THE PENALTY AND BEING NOT IN ACCORDANCE WITH LAW. HENCE, REST OF THIS GROUNDS ARE NOT BEING ADJUDICATED, THE SAME HAVE BECOME ACADEMIC ONLY. 15. THUS, TAKING THE CONSISTENT VIEW, THE GROUNDS RAISED IN THIS APPEAL ARE ALSO ALLOWED AS THE ISSUES ARE IDENTICAL IN ASSESSMENT YEAR 2009-1 0. 16. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRTUAL H EARING IN THE PRESENCE OF BOTH THE PARTIES ON 10 TH MAY, 2021. SD/- (KUL BHARAT) JUDICIAL MEMBER * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI