RAMGARHIA COOPERATIVE BANK LIMITED,DELHI V. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-63(1), DELHI, DELHI

ITA 2001/DEL/2024

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474938 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 14-08-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 26-04-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHASHI KAJLE
• Keywords: Set aside
• Section: 40(a)(ia)

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI BEFORE SH. S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SH. SUDHIR KUMAR, JUDICIAL MEMBER ITA No.2001/Del/2024 Assessment Year: 2013-14 Ramgarhia Cooperative Bank Limited, 1/4, Desh Bandhu Gupta Road, Paharganj, New Delhi-110055 PAN No.AAAJR0315H Vs Assistant Commissioner of Income-tax Circle – 63 (1), Delhi (APPELLANT) (RESPONDENT) Appellants by Sh. Bhupender Jit Kumar, Advocate Sh. Shreyansh Kushwaha, Advocate Respondent by Ms. Shashi Kajle, Sr. DR Date of hearing: 14/08/2024 Date of Pronouncement: 03/10/2024 ORDER PER SUDHIR KUMAR, JM: The above captioned appeal by the assessee is directed against the order of the NFAC/Commissioner of Income Tax (Appeals), Delhi [hereinafter referred to as “CIT(A)”], vide order dated 27.02.2024 pertaining to A.Y.2013-14 arises out of the order passed by the Assessing Officer dated 27.03.2023. 2 2. The assessee has raised the following grounds of appeal :- 1. That on the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as \"CIT(A)\") erred on facts and in law in passing the impugned order dated 27.02.2024 in Appeal No. NFAC/2012-13/10310181 in confirming the imposition of penalty amounting to Rs. 6,89,635/- imposed by the Assessing Officer, National Faceless Assessment Centre, Delhi (hereinafter referred to as \"AO\") under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the \"Act\") in the case of the Appellant for the Assessment Year (hereinafter referred to as \"Α.Υ.\") 2013- 14. 2. That on the facts and circumstances of the case, the learned CIT(A) erred on facts and in law in confirming the penalty of Rs. 6,89,635/- imposed by the AO in the case of the Appellant for A.Y. 2013-14, because no valid satisfaction has been recorded in the assessment order. 3. That on the facts and circumstances of the case, the learned CIT(A) erred on facts and in law in confirming the penalty of Rs. 6,89,635/- imposed by the AO in the case of 3 the Appellant for A.Y. 2013-14, even when the impugned order has been passed mechanically, without proper application of mind, without giving the Appellant sufficient, reasonable and proper opportunity and without considering the submissions filed by the Appellant. 4. That on the facts and circumstances of the case, the learned CIT(A) erred on facts and in law in confirming the penalty of Rs.6,89,635/- imposed by the AO in the case of the Appellant for A.Y.2013-14, because the Appellant has not furnished any inaccurate particulars of its income, as incorrectly held in the penalty order. 3. The brief facts of the case are that the assessee is incorporated as a co-operative society. It is carrying on the business of banking and providing credit facilities. The assessee filed its return of income on 29.09.2013 declaring total income of Rs.1,76,68,630/-. The case was selected for scrutiny assessment under CASS. Notice u/s. 143 (2) along with notice u/s. 142 (1) of the Act was issued on 01.09.2014 and duly served upon the assessee. Subsequently a notice u/s.142 (1) along with a detailed questionnaire was issued on 09.04.2013. The assessing officer has passed the assessment order by computing the income of the assessee as under;- 4 4. The assessee has filed the appeal before the Ld CIT(A) who has confirmed the disallowance of Rs 1,72,27,362/- out of total disallowance of Rs 6,36,02,481/- made by AO on account of non deduction of the tax on interest paid on various depositions invoking the provisions of section 40(a)(ia) of the Act. Further the CIT(A) has also confirmed the addition of Rs 52,20,914/- on account of interest on ‘Non Performing Asset’ and also confirmed the disallowance of an amount of Rs.192041/- on account of amortization of premium on government securities. Aggrieved by the order of the Ld CIT(A) the assessee has preferred an appeal before the Hon’ble ITAT who vide his order dated 15-09-2023 disallowance of Rs.22,18,816/- has confirmed and rest was deleted. 5 5. After the receipt of the order of the Hon’ble ITAT Delhi, the AO started the penalty proceedings u/s 271(1) of the Act and Rs.689635/- penalty was imposed by order dated 27-03-2023. Aggrieved by the order of the Assessing officer the assessee has filed the appeal before the Ld CIT(A) who vide his order dated 27-02-2024 dismissed the appeal against which the assessee is in appeal before us. 6. The Ld.AR of the assessee has submitted that the penalty order was passed without proper application of mind. The AO has issued the unclear, unspecified and defective notice on which basis the penalty imposed by AO was not proper. The assessing officer has not recorded the valid satisfaction in the penalty order. The assessee has not furnished any inaccurate particulars of its income as mentioned in the penalty order. He has further submitted that concealment of income and furnishing of inaccurate particulars of income are two different concepts. 7. The Ld. DR has submitted that the assessee has concealed the particulars of income and penalty order was rightly passed by the assessing officer after issuing the valid notice. He supported the order of the lower authorities and submitted that the order be upheld. 6 8. We have heard the parties and perused the materials available on the record. 9. The Ld AR has submitted that the assessing officer has not been issued the valid notice to the assessee for initiation the penalty. The notice issued by the AO as under ;- 10. On perusal of the order of the AO it reveals that the penalty order was passed for furnishing the inaccurate 7 particulars of income to the extent of Rs.2231829/-. The notices for initiation of the processing were issued and in the first notice dated 17-12-2015 the AO had mentioned the reasons ‘you have concealed the particulars of your income or furnished inaccurate particulars of such income to start the penalty proceedings but not tick which was applicable on the assessee. The AO has not been specified the charge in the penalty notice then the notice issued by AO was defective. The Hon’ble Jurisdictional High Court in the case of PCIT vs Sahara India Life Insurance CO LTD 432 ITR 84 (Del) has held that the penalty order passed is liable to be quashed on account of this defect which is fetal. We further note that Full Bench of Hon’ble Bombay High Court in the case of Mr. Mohd. Farhan A Shaikh vs ACIT(Supra) has held that no specification in the penalty notice leads to same becoming void and penalty on that count is to be deleted. Hon’ble Court held as under ;- Head Note only S271(1)(c); penalty Concealment Non striking off the irrelevant part while issuing notice under section 271(1)(c )of the Income Tax Act- Order is bad in law – Assessee must be informed of the grounds of the penalty proceedings only through stator notice. An omnibus notice suffers from the vice of vagueness.” 11. The notice issued by the AO was defective because charges were not clearly informed to the assessee. The proceeding of the 8 penalty order is not sustainable on the defective notice. Therefore the above discussions the penalty order is liable to be set aside and set aside accordingly. 12. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 03.10.2024. Sd/- Sd/- (S. RIFAUR RAHMAN) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER *NEHA, Sr. PS* Date:-03.10.2024 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(Appeals) ` 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "