M/s. Vishesh Credits Pvt. Ltd, New Delhi v. ITO, New Delhi

ITA 3006/DEL/2009 | 1999-2000
Pronouncement Date: 25-02-2011 | Result: Allowed

Appeal Details

RSA Number 300620114 RSA 2009
Assessee PAN AAACV0237B
Bench Delhi
Appeal Number ITA 3006/DEL/2009
Duration Of Justice 1 year(s) 7 month(s) 29 day(s)
Appellant M/s. Vishesh Credits Pvt. Ltd, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted H
Tribunal Order Date 25-02-2011
Date Of Final Hearing 15-02-2010
Next Hearing Date 15-02-2010
Assessment Year 1999-2000
Appeal Filed On 26-06-2009
Judgment Text
ITA NO. 3006/DEL/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 3006/DEL/2009 A.Y. : 1999-2000 M/S VISHESH CREDITS PVT. LTD. 204 RAJ TOWER II ALAKNANDA COMMERCIAL COMPLEX KALKAJI NEW DELHI (PAN/GIR: AAACV0237B) VS. INCOME TAX OFFICER WARD 17(4) NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. RS SINGHVI CA DEPARTMENT BY : SH. AMRENDRA KUMAR SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE LD. COMMISSIONER OF INCOME TAX (APPEALS)S ORDER DATED 1 6.4.2009 PERTAINING TO ASSESSMENT YEAR 1999-2000. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN UPHOLDING THE PENALTY OF ` 2 00 000/- LEVIED U/S. 271(1)(C) OF THE IT ACT. 3. IN THIS CASE THE ASSESSEE IS A CLOSELY HELD COMP ANY. RETURN WAS ORIGINALLY FILED ON 31.12.1999 DECLARING LOSS OF ` 1 052/-. IT WAS PROCESSED U/S 143(1) OF THE IT ACT 1961. LATER ON INFORMATION WAS RECEIVED FROM THE DIRECTOR OF INCOME TAX (INVESTIGA TION) THAT THE ASSESSEE COMPANY HAD RECEIVED TWO AMOUNTS OF ` 3 00 0 00/- & ` 1 64 517/- FROM M/S MY MONEY SECURITIES LTD. WHICH A RE IN THE NATURE ITA NO. 3006/DEL/2009 2 OF ACCOMMODATION ENTRIES: AFTER THE RECEIPT OF THIS INFORMATION PROCEEDINGS INITIATED U/S 147 OF THE IT ACT 1961. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) ON 27.12.2006 DET ERMINING THE TOTAL INCOME AT ` 4 72 755/- AGAINST RETURNED LOSS OF ` 1 052/-. 2.1 THE ASSESSING OFFICER SUBSEQUENTLY FINALIZED TH E PROCEEDINGS U/S 271(1)(C) ON 28.6.2007 LEVYING A PENALTY OF ` 2 00 000/-. THE REASONS GIVEN BY THE ASSESSING OFFICER AS UNDER:- FROM THE DISCUSSION ABOVE IT IS CLEAR THAT THE ASSE SSEE CAME FORWARD TO SURRENDER OR OFFER THIS SUM OF ` 4 64 517 /- AS ITS INCOME ONLY ON ACCOUNT OF REPEATED INQUIRIES AND DE TAILED INVESTIGATION MADE BY THE DEPARTMENT. THUS SURRENDER IS NOT VOLUNTARILY. THE ONLY IRREFUTABLE CONCLUSION WHIC H CAN BE REACHED UNDER THE CIRCUMSTANCES IS THAT THE PARTICU LARS OF INCOME OF ` 4 64 517/- WERE CONCEALED BY THE ASSESSEE BY C AMOUFLAGING IT AS A RECEIPT BY WAY OF CHEQUES FROM M/S MY MONEY S ECURITIES LTD. I ACCORDINGLY HOLD THAT THE PARTICULARS OF I NCOME OF ` 4 64 517/- WHICH REPRESENTED RECEIPT BY WAY OF CHE QUES FROM MY MONEY SECURITIES LTD. AS ALSO A SUM OF 9220 BEING 2% COMMISSION PAID TO OBTAIN THESE ENTRIES IS INCOME OF THE ASSESSEE COMPANY FROM UNDISCLOSED SOURCES THE PARTIC ULARS OF WHICH HAVE BEEN CONCEALED. THE TOTAL INCOME IN RESPE CT OF WHICH THE PARTICULARS HAVE BEEN CONCEALED WORKS OUT OF ` 4 73 807/-. THE PROVISIONS OF SECTION 271(1)(C) ARE CLEARLY ATT RACTED IN THIS CASE AND HENCE A PENALTY OF ` 2 00 000/- IS IMPOSED U/S 271(1)(C) OF THE IT ACT 1961. 3. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ADDITION BY INTER-ALIA REFE RRING THE DECISION OF ITA NO. 3006/DEL/2009 3 THE HONBLE APEX COURT IN THE CASE OF DHARMENDRA TEXT ILE PROCESSORS AND ANR. 4. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. COUNSEL OF THE ASSESSEE CLAIMED THAT THE IMPUGNED AMO UNT WAS ALREADY OFFERED FOR TAXATION IN ASSESSMENT YEAR 1998 -99 WHEREIN ` 464517/- WAS INCLUDED IN THE TOTAL OF ` 709517/- FR OM THE BALANCE SHEET. HE FURTHER CLAIMED THAT DUE TO THE REASO NS FOR AVOIDING LITIGATION ASSESSEE HAS CAME FORWARD AND ACCEPTED T HE ADDITION. IN THIS REGARD HE REFERRED IN PAPER BOOK PAGE NO. 4 W HEREIN THERE IS CONFIRMATION OF ACCOUNT FROM MY MONEY SECURITIES LTD. REGARDING THE ASSESSEE IN THE SAID ACCOUNT. WE FIND THAT THERE IS ALREADY AN OPENING BALANCE OF ` 464516/- AS ON 1.4.1998. THER EAFTER TWO CHEQUES HAVE BEEN RECEIVED ONE ON 16.10.1998 AMOUNT ING TO ` 3 00 000/- AND ANOTHER ON 13.2.1999 AMOUNTING TO ` 154516/-. ON THIS STRENGTH LD. COUNSEL CONTENDED THAT THE AMOUNT HAS ALREADY BEEN ACCOUNTED IN THE EARLIER YEAR SO TREATMENT OF THE SAME AS INCOME IN THE CURRENT YEAR IS TOTALLY WRONG WHICH IS MERELY B ECAUSE THE ASSESSEE HAS ACCEPTED THE ADDITION IT DOES NOT MEAN THAT PE NALTY U/S 271(1)(C) IS LEVIABLE. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. W E FIND THAT SECTION 271(1)(C) O F THE ACT POSTULATES IMPOSITION OF PENALTY FOR FURN ISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. IN THE PRESENT CASE WE FIND CONSIDERABLE COGENCY IN THE CONTENTION OF THE ASSESSEE THAT AMOUNT INVOLVED WAS APPEARING IN DEBIT IS OPENING BA LANCE AND AMOUNT RECEIVED IS AGAINST THAT OPENING BALANCE. U NDER THE CIRCUMSTANCES IN OUR CONSIDERED OPINION ASSESSEES CONDUCT CANNOT ITA NO. 3006/DEL/2009 4 BE SAID TO BE CONTUMACIOUS SO AS TO ATTRACT THE LEV Y OF PENALTY U/S 271(1)(C). 7. IN THIS REGARD WE PLACE RELIANCE TO THE HONBLE APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010. IN THIS CASE VIDE ORDER DATED 17.3.2010 IT HAS BEEN H ELD THAT THE LAW LAID DOWN IN THE DILIP SHEROFF CASE 291 ITR 519 (SC) AS TO THE M EANING OF WORD CONCEALMENT AND INACCURATE CONTINUES TO BE A GOOD LAW BECAUS E WHAT WAS OVERRULED IN THE DHARMENDER TEXTILE CASE WAS ONLY THAT PART IN DILI P SHEROFF CASE WHERE IT WAS HELD THAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PE NALTY U/S 271(1)(C). THE HONBLE APEX COURT ALSO OBSERVED THAT IF THE CONTEN TION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CL AIM IS NOT ACCEPTED BY THE AO FOR ANY REASON THE ASSESSEE WILL INVITE THE PENAL TY U/S 271(1)(C). THIS IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. 8. IN THIS REGARD WE ALSO PLACE RELIANCE FROM THE APEX COURT DECISION RENDERED BY A LARGER BENCH COMPRISING OF THREE OF THEIR LORDSHIPS IN THE CASE OF HINDUSTAN STEEL VS. STATE OF ORISSA IN 83 ITR 26 W HEREIN IT WAS HELD THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTO RY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDINGS AND PENALTY WILL NOT OR DINARILY 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 LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER ITA NO. 3006/DEL/2009 5 OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDIC IALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENA LTY IS PRESCRIBED 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 P ROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OF FENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 9. AS REGARDS THE RELIANCE PLACED UPON LD. CIT(A) ON T HE DECISION OF DHARMENDRA TEXTILE (SUPRA) WE FIND THAT THE SAME IS N OT APPLICABLE. THE HONBLE APEX COURT IN 317 ITR 1 HAS ITSELF EXPL AINED THE RATIO OF THE DECISION AS UNDER:- 23. THE DECISION IN DHARMENDRA TEXTILE MUST THEREFO RE BE UNDERSTOOD TO MEAN THAT THOUGH THE APPLICATION OF S ECTION 11AC WOULD DEPEND UPON THE EXISTENCE OR OTHERWISE O F THE CONDITIONS EXPRESSLY STATED IN THE SECTION ONCE TH E SECTION IS APPLICABLE IN A CASE THE CONCERNED AUTHORITY WOU LD HAVE NOT DISCRETION IN QUANTIFYING THE AMOUNT AND PENALTY MUST BE IMPOSED EQUAL TO THE DUTY DETERMINED UNDER SUB-SEC TION (2) OF SECTION 11A. THAT IS WHAT DHARMENDRA TEXTILE DECIDES. ITA NO. 3006/DEL/2009 6 10. ACCORDINGLY IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENTS WE SET ASIDE THE ORDERS OF THE AUTHORIT IES BELOW AND DELETE THE LEVY OF PENALTY. 11. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25/2/2011. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [RAJPAL YADAV] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 25/2/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES