Amrit Lal Aggarwal, Faridabad v. ACIT, Faridabad

ITA 4755/DEL/2009 | 2003-2004
Pronouncement Date: 10-01-2011 | Result: Allowed

Appeal Details

RSA Number 475520114 RSA 2009
Assessee PAN AAXPA0473G
Bench Delhi
Appeal Number ITA 4755/DEL/2009
Duration Of Justice 1 year(s) 25 day(s)
Appellant Amrit Lal Aggarwal, Faridabad
Respondent ACIT, Faridabad
Appeal Type Income Tax Appeal
Pronouncement Date 10-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 10-01-2011
Date Of Final Hearing 10-01-2011
Next Hearing Date 10-01-2011
Assessment Year 2003-2004
Appeal Filed On 16-12-2009
Judgment Text
ITA NO. 4755/DEL/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 4755/DEL/2009 A.Y. : 2003-04 SH. AMRIT LAL AGGARWAL PROP. KISMAT INDUSTRIES 105 SECTOR-24 FARIDABAD (PAN/GIR NO. : AAXPA0473G) VS. ACIT RANGE - II FARIDABAD (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. VED JAIN CA AND SH. VENKAT MOHAN DEPARTMENT BY : MRS. ANUSHA KHURANA SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM PER SHAMIM PER SHAMIM PER SHAMIM YAHYA: AM YAHYA: AM YAHYA: AM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 27/10/ 2009 PERTAINING TO ASSESSMENT YEAR 2003-04. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN CONFIRMING THE PENALTY U/S 271(1) (C) ON AN ADDITION OF ` 2 69 134/- MADE ON ACCOUNT DIFFERENCE IN VALUAT ION OF CLOSING STOCK. 3. IN THIS CASE ASSESSING OFFICER HAS MADE THE ADD ITION OF ` 2 69 134/- ON ACCOUNT OF VALUATION OF CLOSING STOC K. IN THE PENALTY PROCEEDINGS ASSESSING OFFICER NOTED THAT REGARDIN G ENHANCEMENT IN THE VALUE OF CLOSING STOCK BY ` 2 69 134/- MADE H AS BEEN ACCEPTED BY THE ASSESSEE. PENALTY IN THIS REGARD WAS ALS O IMPOSED. ITA NO. 4755/DEL/2009 2 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE PENALTY ON THIS ACCOUNT NOT ING THAT THOUGH THE LD. A.R. HAS CONTESTED IN THE WRITTEN STATEMENT HE HAS NOT PRESSED IT NOW. HENCE PENALTY ON AN ADDITION OF ` 2 69 134/ - WAS UPHELD. 5. AGAINST THIS ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT ASSESSEE HAD SUBMITTED BEFORE THE LD. COM MISSIONER OF INCOME TAX (APPEALS) THAT ASSESSEE IS CARRYING MANU FACTURING BUSINESS OF STEEL FABRICATION MS STEEL PLATE FLAT ROUND ANGLE CR/HR S STEEL SHEETS ETC. ARE USED IN MANUFACTURING /FABRICA TION JOBS. THESE MATERIALS ARE OF HEAVY NATURE AS SUCH DIRECTLY UNL OADED IN THE WORKING SHED AND THE BIFURCATION OF THE STOCK HAS B EEN GIVEN BY THE ACCOUNTANT WHO IS NOT A TECHNICAL PERSON AS SUCH TH ERE IS DIFFERENCE IN CALCULATION OF VALUE OF CLOSING STOCK WHICH IS A B ONA-FIDE MISTAKE AND ASSESSEE HAS AGREED TO PAY THE INCOME TAX ON THE ENH ANCED VALUE OF THE CLOSING STOCK FOR THE YEAR UNDER CONSIDERATION AND HAS ALSO PAID THE INCOME TAX DEMAND THEREON. HENCE IT WAS SUBMITTE D THAT ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICUL ARS OF HIS INCOME. WE HAVE CAREFULLY CONSIDERED THE ISSUE. WE FIND T HAT ADDITION HAS BEEN MADE ON ACCOUNT OF INCREASE IN VALUATION OF C LOSING STOCK WHICH HAS BEEN ACCEPTED BY THE ASSESSEE. AS POINTED OU T BY THE ASSESSEE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) T HESE MATERIALS ARE OF HEAVY NATURE AND SOME BONA-FIDE MISTAKE OCCURR ED IN THE VALUATION OF THE CLOSING STOCK. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS UPHELD THE PENALTY BY HOLDING THAT AS SESSEE HAS NOT PRESSED FOR THE SAME BUT THE ASSESSEE HAS FURNISHE D DETAILED SUBMISSIONS AGAINST THE PENALTY. WE FIND THAT SECTION 271(1(C) OF THE ITA NO. 4755/DEL/2009 3 ACT POSTULATES IMPOSITION OF PENALTY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. IN THIS CASE WE FIND THAT THE ASSESSEE CANNOT BE SAID TO BE GUILTY OF CONTUMACIOUS CONDUCT SO AS TO ATTRACT THE LEVY OF PENALTY U/S 271(1)(C). ACCORDINGLY WE ARE OF THE CONSIDERED O PINION THAT THE PENALTY IS NOT LEVIABLE INTHIS CASE. 6.1 IN THIS REGARD WE PLACE RELIANCE TO THE HONBL E 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. 6.2 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 ITA NO. 4755/DEL/2009 4 PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER 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. 7. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENTS WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSE E STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/01/2011 UP ON CONCLUSION OF HEARING. SD/- SD/- [R.P. TOLANI] [R.P. TOLANI] [R.P. TOLANI] [R.P. TOLANI] [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 10/01/2011 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