SANJEEV CHOUDHARY,SIRSA V. DCIT CENTRAL CIRCLE, GHAZIABAD

ITA 89/DEL/2020

AI Insights

The case involves Sanjeev Choudhary, who appealed against the penalty imposed by the Deputy Commissioner of Income Tax, Central Circle, Ghaziabad, which was confirmed by the Commissioner of Income Tax (Appeals)-4, Kanpur. The penalty was imposed following the assessment for the assessment year 2009-10, where it was found that the assessee had fraudulently set off a capital gain against a capital loss through M/s A to Z Stock Traders Pvt. Ltd. The Tribunal dismissed the appeal, noting that the assessee did not appear to contest the penalty and that the claims of bogus losses were substantiated by the investigation wing of Ahmedabad.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 22881 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 14-10-2024
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V.K. DUBEY
• Keywords: Reasonable cause; Principle of natural justice; Bogus
• Section: 143(3); 142(1); 271(1)(c); 274

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. M. BALAGANESH, ACCOUNTANT MEMBER AND SH. SUDHIR KUMAR, JUDICIAL MEMBER ITA No.89/Del/2020 Assessment Year: 2009-10 Sanjeev Choudhary C/o Sudhindra Jain & Co. 113/7A, Indra Jit Jian Marg, Swaroop Nagar, Kanpur 208002 PAN No.AEYPC5911Q Vs. DCIT Central Circle Ghaziabad (APPELLANT) (RESPONDENT) Appellant by None Respondent by Sh. V.K. Dubey, Sr. DR Date of hearing: 14/10/2024 Date of Pronouncement: 12/11/2024 ORDER PER SUDHIR KUMAR, JM: This appeal by the assessee is directed against the order of the Commissioner of Income Tax-IV, Kanpur[hereinafter referred to as “CIT(A)”] vide order dated 04.11.2019 pertaining to A.Y. 2009-10 pertaining to arises out of the assessment order 2 dated30.12.2016under section 143(3)/147 of the Income Tax Act, 1961 [hereinafter referred as ‘the Act’]. 2. The assessee has raised following grounds of appeal :- 1. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in confirming the penalty amounting to Rs. 44,07,020/- u/s 271(1)(c) of the Income Tax Act, 1961, on erroneous understanding of facts and provisions of law. Rs.44,07,020.00 2. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in not considering that in the absence of statutory notice required in terms of section 274 of the Income Tax Act, 1961, in the prescribed format, the penalty proceedings(s) were not valid in law and the penalty order under appeal was liable to be cancelled. 44,07,020.00 3. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in not considering that specific charge/default for which penalty was initiated was never crystallized and clearly stated neither the assessment order nor in any of the notice(s) therefore, 3 the penalty imposed was also not valid in law and on facts and was liable to be cancelled. Rs.44,07,020.00/-. 4. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in not considering that that A.O. did not specifically invoke Explanation 5A to Section 271(1)(c) of the Income Tax Act, 1961, neither in the Assessment Order nor in any of the notice(s) issued therefore, the imposition of penalty by the unilateral presuming that explanation 5A to Sec. 271(1)(c) of the Income Tax Act, 1961 is applicable, was not sustainable in law and on facts. 5. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in not considering and appreciating the conditions necessary for invocation of Explanation 5A to Section 271(1)(c) of the Income Tax Act, 1961 were neither present in the facts of the present case nor the onus cast upon the A.O. for invocation of Explanation 5A to Section 271(1)(c) of the Income Tax Act, 1961 was discharged by him, therefore, the penalty imposed was not sustainable in law and on facts. 4 6. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in sustaining the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 therefore the penalty is liable to be cancelled. 7. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in not appreciating that the penalty could not have been levied for twin charges (for concealment of particulars of income and filing of inaccurate particulars) because both the charges given in section 271(1)(c) of the income Tax Act, 1961are mutually exclusive situation and cannot co-exist therefore, the penalty imposed was bad in law and liable to be cancelled. 8. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in not appreciating that it is essential on the part of the A.O. to inform the assessee that the penalty proceedings are being initiated against him by invoking Explanation to Section 271(1)(c) of the Income Tax Act, 1961, hence, in the absence of the same the penalty imposed is insupportable in law and on facts. 5 9. That the Ld. C.I.T. (A) has erred in law and on facts in sustaining the impugned Penalty Order ignoring the fact that penalty was levied on the charge of concealment of particulars of income whereas the penalty was initiated on the charge of furnishing of inaccurate particulars of income. 10. That the Ld. CIT(A) has erred in law and on facts in sustaining the impugned Penalty order ignoring the fact that the related assessment order is illegal, void- ab-initio, without jurisdiction, therefore, impugned penalty order is also unsustainable in law. 10. That the Ld. A.O. has not recorded satisfaction in accordance with section 271(1)(c) r.w.s. 271(1B) of the Income Tax Act, 1961 therefore the impugned penalty order is void-ab-initio and liable to be quashed. 12. That the Ld. C.I.T. (Appeals)-4, Kanpur has erred in law and on facts by sustaining the penalty, which is wholly unjustified, without proper basis, too much high & excessive and deserves to be deleted. 6 13. That the order of the Ld. C.I.T. (Appeals)-4, Kanpur is insupportable in law and on facts and is also contrary to the principles of natural justice and equity. 3. None appeared on behalf of the assessee. Even on previous dates no one appeared on 24.04.2020 and 11.07.2024. On perusal of the material available on record we have decided to proceed with the matter. We have heard the Ld. DR and perused the material available on record. 4. The brief facts of the case are that the assessee has filed his return of income declaring income at Rs 6,21,160/- on 30- 09-2009. The information received to the department that assessee has fraudulently set off the capital gain of Rs 1,89,86,619/- against the capital loss of Rs 18986619/- through M/s A to Z Stock traders Pvt. Ltd during the A. Y 2009- 10. A notice was issued to the assessee u/s 142(1) of the Act. The authorized representative of the assessee attended the proceedings. After considering the reply filed by the assessee, the assessing officer was completed the assessment u/s. 143(3) of the Act on 30.12.2016 at income of Rs.2,26,56,230/- by making addition ofRs.2,20,35,074/- on account of disallowance of bogus shortterm capital loss set off. The Ao has issued the 7 notice for penalty u/s 271(1)(c) of the Act and imposed the penalty of Rs 44,07,020/- against the assessee. Aggrieved by the order of the AO the assessee was filed the appeal before the CIT(A). The ld. CIT(A) dismissed the appeal by observing as under :- 5.2 It is an admitted fact that a detailed inquiries and investigation were conducted by the investigation wing of Ahemdabad, wherein it was clearly brought out that short term capital loss claim by the appellant is concocted, bogus and fictitious on account of client code modification. Appellant could not controvert this finding of the fact, recorded by AO that appellant has furnished inaccurate particulars of his income by claiming bogus loss to conceal his true income. Hence, it is concluded that appellant has not only committed default within the meaning of provision of section 271 (1)(c) of the Act, but also failed to furnish the reasonable cause for committing such default. 5.3 Thus, keeping in view the above stated detailed discussion, undersigned finds, no reason to interfere with the levy of penalty by the Assessing Officer. The same is therefore, confirmed and grounds of appeal of the appellant are dismissed. 6. Ground no. 4 is general in nature. Therefore, same is not being adjudicated and is dismissed. 8 5. On perusal of the order of the Ld CIT(A) it reveals that the assessee has claimed the bogus short term capital loss. The assessee has furnished the inaccurate particulars of his income by claiming bogus loss to conceal his true income. He has also failed to furnish the reasonable cause for committing such default. We do not find any illegality in the findings of the both the authorities below. The appeal of the assessee is liable to be dismissed exparte. 6. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 12.11.2024. Sd/- Sd/- (M. BALAGANESH) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER *NEHA, Sr. PS* Date:- .11.2024 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(Appeals) ` 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "