DCIT, New Delhi v. M/s. Sardar Exhibitors Pvt. Ltd., Delhi

ITA 5433/DEL/2010 | 1990-1991
Pronouncement Date: 10-11-2014 | Result: Dismissed

Appeal Details

RSA Number 543320114 RSA 2010
Assessee PAN AABCS1835K
Bench Delhi
Appeal Number ITA 5433/DEL/2010
Duration Of Justice 3 year(s) 11 month(s) 8 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Sardar Exhibitors Pvt. Ltd., Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 10-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 10-11-2014
Date Of Final Hearing 05-11-2014
Next Hearing Date 05-11-2014
Assessment Year 1990-1991
Appeal Filed On 02-12-2010
Judgment Text
ITA NO S . 5432 - 5438 & 5485/ DEL/ 2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI H.S. SIDHU JUDICIAL MEMBER AND SHRI T.S. KAPOOR ACCOUNTANT MEMBER I.T.A. N OS. 5432 5433 5434 5435 5436 5437 5438 & 5485 /DEL/201 0 A.Y RS . 1989 - 90 1990 - 91 1991 - 92 1992 - 93 1993 - 94 1995 - 96 1996 - 97 & 1994 - 95 D CIT CIRCLE - 7(1) ROOM NO. 321 3 RD FLOOR CR BUILDING IP ESTATE NEW DELHI VS. M/S SARDAR EXHIBITORS PVT. LTD. 1147 CHANDNI CHOWK DELHI 110 006 (PAN: AABCS1835K) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. VIKRAM SAHAY SR. DR ASSESSEE BY : SH. K. SAMPATH SR. ADV. AND SH. V. RAJ KUMAR ADV. DATE OF HEARING : 0 5 - 11 - 2014 DATE OF ORDER : 10 - 11 - 2014 ORDER PER BENCH TH ESE EIGHT APPEAL S BY THE REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDER S OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) NEW DELHI P ERTAINING TO ASSESSMENT YEAR S 1989 - 90 1990 - 91 1991 - 92 1992 - 93 1993 - 94 1995 - 96 1996 - 97 & 1994 - 95. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON WE ARE THEREFORE PROCEEDING ITA NO S . 5432 - 5438 & 5485/ DEL/ 2010 2 TO DISPOSE THEM OFF THESE APPEALS BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE BY ADJUDICATING THE ITA NO. 5432 /DEL/201 0 (A.Y. 1989 - 90 ) AS UNDER: - 2. THE GRO UNDS RAISED IN THE ITA NO. 5432 /DEL/201 0 READ AS UNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IN LAW AS WELL AS ON MERITS IN DELETING THE PENALTY OF RS. 24 61 047/ - IMPOSED BY THE AO U/S. 271(1)(C) ON THE INCOME TAX ACT 1961. 2. THE APPELLANT CRAVES TO AMEND MODIFY ALTER ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3 . THE FACTS OF THE CASE ARE NOT IN DISPUTE BY BOTH THE PARTIES THEREFORE NEED NOT REPEATED HERE FOR THE S AKE OF CONVENIENCE. 4 . AGAINST THE ORDER OF THE ASSESSING OFFICER ASSEESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE IMPUGNED ORDER 21 . 9 .201 0 HAS ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE PENALTY IMPOSED BY THE ASSESSING OF FICER. 5 . AGGRIEVED BY THE AFORESAID ORDER DATED 21 . 9 .201 0 REVENUE IS IN APPEAL BEFORE US. 6 . LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER REITERATED ON THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED BY THE REVENUE. HE ALSO REITERATED THE CONTENTS OF THE PENALTY ORDER DATED 30.3.2009 PASSED BY THE ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 7(1) NEW DELHI THAT THE ASSESSEE HAS NOT CONTESTED THE PROCEEDINGS OF PENALTY ON MERIT IT WAS HELD THAT THE ASSESS EE HAS FAILED TO FURNISH THE ACCURATE ITA NO S . 5432 - 5438 & 5485/ DEL/ 2010 3 PARTICULARS OF INCOME BY CLAIMING ARREAR OF RENT AS CAPITAL RECEIPTS THE AO TREATED THE SAME AS REVENUE RECEIPTS WHICH WERE CONFIRMED BY THE ITAT. HE ALSO SUBMITTED THAT AS PER THE FINDING OF THE ITAT DURING THE YEA R UNDER CONSIDERATION THE ARREAR RENT RECEIPTS COMES TO RS. 20 19 107/ - AND PENALTY U/S. 271(1) WAS LEVIED FOR AN AMOUNT OF RS. 11 66 033/ - I.E. 100% OF TAX SOUGHT TO BE EVADED. 7 . LD. COUNSEL OF THE ASSESSEE IN SUPPORT OF HIS CLAIM HAS FILED ONE PAPER BOOK HAVING PAGES 1 TO 146 CONTAINING THE ARBITRATION ORDER ITAT HIGH COURT AND SUPREME COURT ORDERS AND RECORD AT ASSESSMENT AND APPELLATE STAGES. LD. COUNSEL OF THE ASSESSEE ON THE CONTRARY REITERATED THE CONTENTS OF LD. CIT(A) S ORDER WHERE IN HE HAS OBSERVED THAT ASSESSEE HAS STATED THAT PENALTY CAN BE ONLY IMPOSED IF: (A) ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THEIR EXPLANATION. (B) WHEN SUCH EXPLANATION WAS NOT BONAFIDE AND (C) WHEN ALL THE RELEVANT FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF TOTAL INCOME HAVE NOT BEEN DISCLOSED. 7 .1 HENCE LD. COUNSEL OF THE ASSESSEE STATED THAT LD. CIT(A) HAS RIGHTLY OBSERVED THAT THERE IS NO CONCEALMENT OF FACTS OR FILING OF INACCURATE PARTICULARS. THERE EXIST NO CONDITIONS WHICH SHOULD ATTRACT PENAL PROVISIONS. IT IS ALSO SEEN THAT ALL THE RELEVANT AND MATERIAL FACTS ARE WELL WITHIN THE KNOWLEDGE OF THE DEPARTMENT HIGH COURTS AND OTHER AUTHORITIES. IT WAS THE LD. CIT(A) OB SERVATION THAT THIS IS A CASE WHERE THERE IS ONLY A DIFFERENCE OF INTERPRETATION AND OPINION. HENCE IT IS FELT THAT THESE CASES DO NOT FALL WITHIN THE ITA NO S . 5432 - 5438 & 5485/ DEL/ 2010 4 PURVIEW OF SECTION 271(1)(C). HENCE THE PENALTY IMPOSED FOR RS. 11 66 033/ - WAS DELETED. 8 . WE HAV E HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE HAVE ALSO GONE THROUGH THE PAPER BOOK FILED BY THE ASSESSEE S COUNSEL AND THE CONTENTION RAISED BY BOTH THE PARTIES . WE FIND THAT LD. CIT(A) HAS ADJUDICATED THE ISSUE AS UNDER: - AS THE ASSESSEE HAS NOT CONTESTED THE PROCEEDINGS OF PENALTY ON MERIT IT IS HELD THAT THE ASSESSEE HAS FAILED TO FURNISH THE ACCURATE PARTICULARS OF INCOME BY CLAIMING ARREAR OF RENT AS CAPITAL RECEIPTS THE AO TREATED THE SAME AS REVENUE RECEIPTS WHICH WERE CONFIRMED BY THE ITAT. HE ALSO SUBMITTED THAT AS PER THE FINDING OF THE ITAT DURING THE YEAR UNDER CONSIDERATION THE ARREAR RENT RECEIPTS COMES TO RS. 20 19 107/ - AND PENALTY U/S. 271(1) WAS LEVIED FOR AN AMOUNT OF RS. 11 66 033/ - I.E. 100% OF TAX SOUGHT TO BE EVADED. THE SUBMISSIONS MADE BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS HAVE BEEN CAREFULLY CONSIDERED. IT IS SEEN THAT THE AMOUNT RECEIVED BY THE ASSESSEE WAS COMPENSATION FOR ILLEGAL OCCUPATION OF THE PREMISES BY THE MINISTRY OF DEFENCE. T HE APPELLANT HAS STATED THAT THERE WAS NO FRAUD OR CONCEALMENT OF ANY INCOME AND ALL THE FACTS HAD BEEN DISCLOSED TRULY AND CORRECTLY BEFORE THE AUTHORITIES AND THE HON BLE COURTS. IT HAS BEEN STATED THAT ADDITION WAS MADE ONLY ON ACCOUNT OF ITA NO S . 5432 - 5438 & 5485/ DEL/ 2010 5 DIFFERENCE OF INTERPRETATION BETWEEN THE DEPARTMENT AND THE ASSESSEE. THE APPELLANT HAS RLIED ON THE CASE OF CIT VS. NATH BROTHERS EXIM INTERNATIONAL LTD. 288 ITR 570. THE APPELLANT ALSO RELIED ON CIT VS. RAHULJEE AND CO. 250 ITR 225 (DEL); CIT VS. CHANDRAKANT M. T OLLA 218 ITR 438 (MAD.); KIKANI GORDHAN DASS & CO. VS. CIT 200 ITR 678; CIT VS. AJAIB SINGH AND CO. (2002) 253 ITR 630 (P&H); CIT VS. CALCUTTA CREDIT CORPORATION (1987) 166 ITR 29 (CAL.); CIT VS. HARSHVARDHAN CHEMICAL AND MINERALS LTD. (2003) 259 ITR 212 ( RAJ.); CIT VS. INDIAN METALS AND FERRO ALLOYS LTD. (1995) 211 ITE 35 (ORI.). IT HAS BEEN STATED THAT THE ASSESSEE RECEIVED RS. 5.12 CRORES IN AY 1998 - 99 WHEREAS THIS ARREARS OF RENT WAS ADDED W.E.F. 1989 - 90 AND FOLLOWING DEMANDS WERE RAISED WHICH INCLUD ES INTEREST U/S. 234 AS BELOW: - S.NO. YEAR ADDITIONAL DEMAND INTEREST U/S. 234 TOTAL 1 1989 - 90 1262478 4096741 5359219 2 1990 - 91 2433850 7313719 9747569 3 1991 - 92 4301247 1034499 5335746 4 1992 - 93 3209044 6883399 10092443 5 1993 - 94 4350116 6807931 11158047 6 1994 - 95 3905296 5486941 9392237 7 1995 - 96 2175298 2925775 5101073 8 1996 - 97 2505389 2618131 5123520 TOTAL 24142718 37167136 61309584 ON THE BASIS OF THE ABOVE CHART THE ASSESSEE HAS SUBMITTED THAT ON TOTAL ARREAR OF RENT OF RS. 5.12 CRORES A SUM OF RS. 6.13 CRORES HAS BEEN RAISED AS ITA NO S . 5432 - 5438 & 5485/ DEL/ 2010 6 INCOME TAX PAYABLE. AS PER THE ASSESSEE THEY HAVE BEEN ALREADY PENALIZED BY THE CHARGING OF INTEREST U/S. 234 AMOUNTING TO RS. 3 71 67 136/ - . FURTHER THE APPELLANT HAS STATED THAT PENALTY CAN BE ONLY IMPOSED IF: A) ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THEIR EXPLANATION. (B) WHEN SUCH EXPLANATION WAS NOT BONAFIDE AND (C) WHEN ALL THE REL EVANT FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF TOTAL INCOME HAVE NOT BEEN DISCLOSED. IT IS SEEN THAT IN THE PRESENT CASE THAT THERE IS NO CONCEALMENT OF FACTS OR FILING OF INACCURATE PARTICULARS. THERE EXIST NO CONDITIONS WHICH SHOUL D ATTRACT PENAL PROVISIONS. IT IS ALSO SEEN THAT ALL THE RELEVANT AND MATERIAL FACTS ARE WELL WITHIN THE KNOWLEDGE OF THE DEPARTMENT HIGH COURTS AND OTHER AUTHORITIES. IT WAS THE LD. CIT(A) OBSERVATION THAT THIS IS A CASE WHERE THERE IS ONLY A DIFFERENCE OF INTERPRETATION AND OPINION. HENCE IT IS FELT THAT THESE CASES DO NOT FALL WITHIN THE PURVIEW OF SECTION 271(1)(C). HENCE THE PENALTY IMPOSED FOR RS. 11 66 033/ - IS DELETED. 8 .1 WE ALSO FIND THAT SECTION 271(1)(C) POSTULATES IMPOSITION OF PENAL TY FOR FURNISHING OF INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. ON THE FACTS AND CIRCUMSTANCES OF THIS CASE THE ASSESSEE S CONDUCT CANNOT BE SAID TO BE CONTUMACIOUS SO AS TO WARRANT LEVY OF PENALTY. ITA NO S . 5432 - 5438 & 5485/ DEL/ 2010 7 8 .2 IN THIS REGARD WE DRAW SUPPORT FROM THE HON BLE APEX COURT DECISION IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. IN CIVIL APPEAL NO. 2463 OF 2010 WHICH IS SQUARELY APPLICABLE IN THE PRESENT CASE OF THE ASSESSEE. IN THIS CASE VIDE ORDER DATED 17.3.2010 IT HAS BEEN HELD THAT THE LAW LAID DOWN IN THE DILIP SHEROFF CASE 291 ITR 519 (SC) AS TO THE MEANING OF WORD CONCEALMENT AND INACCURATE CONTINUES TO BE A GOOD LAW BECAUSE WHAT WAS OVERRULED IN THE DHARMENDER TEXTILE CASE WAS ONLY THAT PART IN DILIP SHEROFF CASE WHERE IT WAS HELD THAT MENSREA WAS A ESSENTIAL REQUIREMENT OF PENALTY U/S 271(1)(C). THE HON BLE APEX COURT ALSO OBSERVED THAT IF THE CONTENT ION OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLAIM IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON THE ASSESSEE WILL INVITE THE PENALTY U/S 271(1)(C). THIS IS CLEARLY NOT THE INTENDMENT OF LEGISLATURE. 8 .3 WE FURTH ER DRAW SUPPORT 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 WHEREIN IT WAS HELD THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI - CRIMINAL PROCEEDINGS AND PENALTY WILL NOT ORDINARILY 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 DISREGARD 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 OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY 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 PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A ITA NO S . 5432 - 5438 & 5485/ DEL/ 2010 8 BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 9 . IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS WE FIND THAT THE LEVY OF PENALTY IN THIS CASE IS NO T JUSTIFIED HENCE WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ACCORDINGLY WE UPHOLD THE SAME AND DECIDE THE ISSUE AGAINST THE REVENUE. 1 0 . IN THE RESULT ALL THE EIGHT APPEAL S FILED BY THE REVENUE STAND DISMISSED. ORD ER PRONOUNCED IN THE O PEN C OURT ON 10 / 11 /20 1 4 . SD/ - SD/ - [ T.S. KAPOOR ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 10 / 11 /201 4 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES