Cario International, New Delhi v. DCIT, New Delhi

ITA 4439/DEL/2012 | 2008-2009
Pronouncement Date: 11-10-2013 | Result: Allowed

Appeal Details

RSA Number 443920114 RSA 2012
Assessee PAN AADFC3693A
Bench Delhi
Appeal Number ITA 4439/DEL/2012
Duration Of Justice 1 year(s) 1 month(s) 25 day(s)
Appellant Cario International, New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 11-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 11-10-2013
Date Of Final Hearing 06-03-2013
Next Hearing Date 06-03-2013
Assessment Year 2008-2009
Appeal Filed On 17-08-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B: NEW DELHI) BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER AND SHRI T.S. KAPOOR ACCOUNTANT MEMBER ITA NO.4439 /DEL/ 2012 (ASSESSMENT YEAR: 2008-2009) CARIO INTERNATIONAL VS. DC IT X-355 GALI NO. 8 CENTRAL CIRCLE-9 MOHALLA; RAM NAGAR GANDHI NAGAR NEW DELHI NEW DELHI PAN: AADFC3693A (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI D.P. BANSAL CA REVENUE BY : AM RISH BEDI SR.DR. ORDER PER U.B.S. BEDI JM : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY LD. CIT(A)-32 DELHI DATED 29.6.2012 RELEVANT TO ASSESSM ENT YEAR 2008-09. WHEREBY ASSESSEE HAS CHALLENGED CONFIRMATION OF PE NALTY IMPOSED U/S 271(1)(C) IN COST AT RS.1 78 882/- AND REDUCED TO R S.57 890/- IN VIEW OF PROVISIONS OF SECTION 271 AAA OF THE INCOME TAX ACT . 2. THE ASSESSEE CHALLENGED SUCH ACTION OF LD. CIT ( A) BY FILING STATEMENT OF FACTS AND LEGAL SUBMISSIONS BEFORE THI S BENCH AS UNDER :- IN THIS CASE THE APPELLANT IS A PARTNERSHIP FIRM WHICH HAS BEEN FILING RETURN OF INCOME REGULARLY. THE APPELLANT HA S BEEN ITA NO. 4439/ DEL/ 2012 2 CARRYING OUT THE BUSINESS OF GARMENTS AND DECLARED INCOME OF RS.94 120/- FOR THE YEAR UNDER CONSIDERATION. HOWEV ER THE INCOME WAS ASSESSED AT RS.6 73 027/- U/S 143(3) OF THE INCOME TAX ACT 1961. IN THE YEAR UNDER APPEAL A SEARCH AND SEIZURE OPERA TION U/S 132 OF THE INCOME TAX ACT 1961 WAS CONDUCTED ON 16.10. 2007 AND DURING THE SEARCH OPERATION & POST SEARCH INVESTIGA TION DETAILED INVESTIGATION OF BOOKS OF ACCOUNTS AND STOCK ETC. W AS CARRIED OUT AND NOTHING ADVERSE WAS CONCLUDED/FOUND IN THE STOCK BY THE INVESTIGATION WING. DURING THE ASSESSMENT PROCE EDINGS ALSO THE ASSESSEE FURNISHED THE DETAILS/INFORMATION AS C ALLED FOR BY THE AO AND THE LEARNED AO CAME ACROSS NOTHING ADVER SE AFTER DUE VERIFICATION AND APPLICATION OF HIS MIND. THE A SSESSEE ALSO PRODUCED DULY AUDITED BOOKS OF ACCOUNTS ALONG-WITH BILLS AND VOUCHERS WHICH WERE VERIFIED AND FOUND TO BE CORREC T. NO DEFECT WAS FOUND OR POINTED OUT IN THE ACCOUNTING S YSTEM. HOWEVER FOR THE SAKE AND INTEREST OF REVENUE THE L EARNED AO MADE SOME ADDITION ON ACCOUNT OF STOCK WHICH WAS NO T AGITATED BY THE APPELLANT FOR THE PEACE OF MIND. IN REGARD TO PENALTY ORDER U/S 271(1)(C) OF THE I.T . ACT 1961 IT IS HUMBLY SUBMITTED THAT THE SAID ORDER HAS BEEN PA SSED BY THE LEARNED AO WITHOUT JURISDICTION. SINCE IN THE INSTA NT CASE THE LEARNED AO HAS ISSUED NOTICE U/S 271(1)(C) OF THE I .T. ACT 1961 WHEREIN THERE IS NO PROVISION TO ISSUE SUCH NOTICE. UNDER SUCH CIRCUMSTANCES THE AO HAD NOT ASSUMED ANY JURISDICTI ON. HENCE ORDER PASSED U/S 271(1)(C) OF THE INCOME TAX ACT 1 961 IS WITHOUT JURISDICTION AND ACCORDINGLY ORDER IS INVAL ID. IT IS ALSO FURTHER HUMBLY SUBMITTED THAT THE LEARNED CIT (APPE ALS) HAS ALSO NOT CONSIDERED THIS LEGAL AND BASIC ISSUE. THE REFORE ORDER PASSED BY THE AO AS WELL AS APPEAL ORDER PASSED BY THE LEARNED CIT (APPEALS) DESERVE TO BE ANNULLED. IT IS FURTHER SUBMITTED THAT FIRST OF ALL THE LEARN ED CIT (APPEALS) HAS CONSIDERED THE LAST GROUND OF THE APPEAL BEFORE HIM AND DISMISSED THE SAME BY SAYING THAT IT WAS OF GENERAL NATURE. IN THIS REGARD IT IS HUMBLY SUBMITTED THAT THE APPELLA NT HAD SOUGHT PERMISSION FROM THE LEARNED CIT (APPEALS) TO ADD A MEND FORGO OR ALTER ANY OR ALL THE GROUNDS WHICH HAS NOT BEEN CONSIDERED BY HIM AND DISMISSED THE SAME. IN THIS R EGARD IT IS ITA NO. 4439/ DEL/ 2012 3 HUMBLY SUBMITTED THAT SUCH GROUND PLAYS AN IMPORTAN T ROLE IN THE CASE WHERE SOME GROUND HAS ESCAPED TO BE TAKEN AT THE TIME OF FILING THE APPEAL. THEREFORE IT IS HUMBLY SUBMITTED THAT THE LEARNED CIT(APPEALS) HAS GONE AGAINST THE PRINCIPLES OF NATURAL JUSTICE BY DISMISSING LAST GROUND FIRST OF ALL. SINCE THE APPELLANT HAS R AISED ANOTHER GROUND AS PER THE LEARNED CIT(APPEALS) CHALLENGIN G THE INVOCATION OF PROVISIONS OF SECTION 271(1)(C) OF TH E INCOME TAX ACT 1961 IN THE CASE OF THE APPELLANT. WHEREAS IT IS HUMBLY SUBMITTED THE APPELLANT HAS RAISED THIS GROUND VIDE GROUND NO. 1 AND 2 BEFORE THE LEARNED C IT (APPEALS) WHICH HAS NOT BEEN CONSIDERED BY THE LEAR NED CIT(APPEALS) IN THAT WAY DESPITE DISCUSSION AND SUB MISSION MADE DURING THE APPELLATE PROCEEDINGS. FURTHER WITHOUT PREJUDICE ABOVE IT IS HUMBLY SUBM ITTED THAT ARISING A LEGAL ISSUE AT ANY STAGE IS PERMISSIBLE I F IT HAS ESCAPED. BUT IN THE CASE OF THE APPELLANT THE LEGAL ISSUE (M ATTER OF JURISDICTION) HAS BEEN RAISED BEFORE THE APPELLANT AUTHORITY BUT ON THE BASIS OF WHICH THE LEARNED CIT (APPEALS) H AS CONVERTED PENALTY FROM SECTION 271(1)(C) TO SECTION 271(AAA) OF THE INCOME TAX ACT 1961. NOW ISSUE BEFORE YOUR HONOUR IS THAT IS IT PERMI SSIBLE. SINCE PENALTY HAS BEEN INITIATED U/S 271(1)(C) OF THE INC OME TAX ACT 1961WHICH IS NOT PERMISSIBLE AS PER EXPLANATION 5A TO SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 I.E. INITIATI ON OF PENALTY IS INVALID FROM THE VERY BEGINNING I.E. WITHOUT JUR ISDICTION. UNDER SUCH CIRCUMSTANCES IT IS NOT PERMISSIBLE TO THE LEARNED CIT (APPEALS) UNDER LAW TO VALIDATE THE SAME WHICH HAS BEEN DONE BY THE LEARNED AND IN THIS MANNER HE HAS EXCEE DED HIS POWER CONFERRED BY THE INCOME TAX ACT 1961. THE LEARNED CIT (APPEALS) HAS MENTIONED IN THE IMPU GNED APPEAL ORDER THAT IT IS WRONG QUOTING OF SECTION. I N THIS REGARD IT IS HUMBLY SUBMITTED THAT IT NOT WRONG QUOTING OF SE CTION FOR THE REASON THAT PROVISIONS AND APPLICABILITY OF BOTH SE CTIONS ARE TOTALLY DIFFERENT. UNDER SUCH CIRCUMSTANCES THE LEA RNED CIT(APPEALS) IS NOT PERMISSIBLE UNDER LAW TO RECTIF Y THE MATTER OF JURISDICTION. ITA NO. 4439/ DEL/ 2012 4 WITHOUT PREJUDICE ABOVE IT IS ALSO FURTHER HUMBLY SUBMITTED THAT IT IS TIME-BARRED AS PER PROVISIONS OF SECTION 275 OF THE INCOME TAX ACT 1961. THE LEARNED HAS REFERRED THE PROVISIONS OF SECTION 292B OF THE INCOME TAX ACT 1961 TO CONVERT THE PENALTY FROM 27 1(1)(C) TO 271AAA IF THE INCOME TAX ACT 1961. HERE IT IS WROT H MENTIONING THAT THE AO HAS NO JURISDICTION U/S 271( 1)(C) OF THE INCOME TAX ACT 1961 WHICH HE ASSUMED BECAUSE OF PR OVISIONS OF EXPLANATION 5A TO SECTION 271(1) (C) AND 271AAA OF THE INCOME TAX ACT 1961 HOW THE PROVISIONS OF SECTION 292B COULD BE INVOKED BY THE LEARNED CIT (APPEALS) AND A CCORDINGLY THERE WAS ONE OPTION LEFT TO HIM TO CANCEL THE PENA LTY WHICH HE HAS NOT DONE. IN THIS MANNER HE HAS EXCEEDED THE PO WER CONFERRED UNDER INCOME TAX ACT 1961. IN THIS REGAR D THE APPELLANT WOULD LIKE TO QUOTE THE JUDGMENT OF THE H ONBLE HIGH COURT OF CALCUTTA IN THE CASE OF SUNROLLING MILLS ( P) LTD. VS. INCOME TAX OFFICER 160 ITR 412 WHEREIN IT HAS BEEN HELD THAT THE ITO HIMSELF PROCEEDS ON THE BASIS OF SECTION 14 7(B) AND NOT ON THE BASIS OF SECTION 147 (A) OF THE I.T. ACT 19 61 NOTICES FOR REOPENING WERE WITHOUT JURISDICTION QUASHED. 2. 1 LD. A.R. OF THE ASSESSEE WHILE REIT ERATING THE SUBMISSIONS MADE AS ABOVE PLEADED FOR QUASHMENT OF THE PENALTY. 2.2 LD. DR WHILE RELYING UPON THE ORDER OF LD. CIT(A) HAS PLEADED THAT WHATEVER RELIEF WAS AVAILABLE HAS BEEN GIVEN TO ASS ESSEE IN FIRST APPEAL AND WRONG MENTIONING OF SECTION CAN NOT BE FATAL AND PR OCEEDINGS CANNOT BE HELD TO BE VITIATED ALTOGETHER IF INGREDIENTS OF THE REL EVANT SECTION HAVE BEEN COMPLIED WITH TO RESTRICT THE PENALTY IN VIEW OF TH E PROVISION OF SECTION 271AAA SO IT WAS PLEADED FOR CONFIRMATION OF THE IM PUGNED ORDER. 3. WE HAVE HEARD BOTH THE SIDES AND CONSIDERED THE MAT ERIALS ON RECORD AS WELL AS RELEVANT PROVISIONS OF LAW. WE HAVE ALSO GONE THROUGH THE ORDER OF ASSESSMENT ORDER OF PENALTY ALONG-WITH THE ORDE R OF CIT(A) PASSED IN ITA NO. 4439/ DEL/ 2012 5 PENALTY PROCEEDING AND NOTE THAT FOR THE PERIOD UND ER CONSIDERATION WHEN SEARCH TOOK PLACE PENALTY PROVISIONS OF SECTION 27 1AAA WERE APPLICABLE WHEREAS A.O. INITIATED PENALTY PROCEEDINGS U/S 271( 1)(C) AND IMPOSED PENALTY UNDER THAT PROVISION AGAINST WHICH THERE IS SPECIFIC BAR FOR LEVYING PENALTY AS PER SUB-SECTION 3 OF SECTION 271AAA OF I NCOME TAX ACT SO PENALTY U/S 271(1)(C) CANNOT BE IMPOSED UNDER THE S AID PROVISION 3.1 SO FAR AS THE ACTION OF LD. CIT(A) IN CONVERTING SUCH PENALTY UNDER SECTION 271AAA IS CONCERNED IT WOULD BE APT TO REPRODUCE SUB- SECTION (1) OF SECTION 271AAA WHICH READS AS UNDER : 271AAA. (1) THE ASSESSING OFFICER MAY NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT DIRECT THAT IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE 2007 43 [BUT BEFORE THE 1ST DAY OF JULY 2012] THE ASSESSEE SHALL PAY BY W AY OF PENALTY IN ADDITION TO TAX IF ANY PAYABLE BY HIM A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. 3.2 THE ABOVE SAID PROVISION CLEARLY STIPULATES THA T IT IS THE A.O. WHO MAY DIRECT TO IMPOSE PENALTY AS ENVISAGED WHEREAS THE PROVISIONS OF SECTION 271(1) STIPULATES THAT A.O. OR THE COMMISSIONER (AP PEALS) OR THE COMMISSIONER IN THE COURSE OF ASSESSMENT PROCEEDING S UNDER THIS ACT IF SATISFIED CAN PROCEED TO IMPOSE PENALTY U/S 271(1)( C). SO THERE IS CLEAR DISTINCTION BETWEEN THE TWO PROVISIONS BECAUSE U/S 271AAA IT IS THE A.O. WHO COULD INVOKE SUCH PROVISION WHEREAS UNDER THE P ROVISIONS OF SECTION 271(1) ANY OF THE THREE AUTHORITIES INCLUDING COMM ISSIONER (APPEALS) COULD INVOKE THE SAID PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THEREFORE THE ITA NO. 4439/ DEL/ 2012 6 ACTION OF LD. CIT(A) CANNOT BE HELD TO BE JUSTIFIED SO FAR AS PROVISIONS RELATABLE TO SECTION 271AAA IS CONCERNED. 3.3 AS SUCH PENALTY IMPOSED BY THE A.O. U/S 271(1) (C) AND CONVERTED IT BY LD. CIT(A) INTO SECTION 271AAA EVEN ON REDUCED A MOUNT CANNOT BE HELD TO BE PROPER OR LEGALLY JUSTIFIED AT ALL. AS SUCH WHILE ACCEPTING THE APPEAL OF THE ASSESSEE WE VACATE THE PENALTY IMPOSED BY THE A.O. U/S 271(1)(C) AND TO THE EXTENT REDUCED BY LD. CIT(A) U/S 271AAA OF THE ACT. 4. AS A RESULT APPEAL OF THE ASSESSEE IS ALLOWED. 5. ORDER PRONOUNCED IN OPEN COURT ON 11 TH OCTOBER 2013. SD./- SD./- (T.S.KAPOOR) (U.B.S. BEDI ) ACCOUNTANT MEMBER JUDICIAL MEMBER B . RUKHAIYAR/SP. DATE: 11 TH OCTOBER 2013 COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT) NEW DELHI