IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "C": DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA.No.4442/Del./2016
Assessment Year 2012-2013
Shri Harish Chander
Kapoor, Prop. M/s. Lucky The Income Tax Officer,
Enterprises, Gurgaon.
PIN 122001 PAN AICPK4192K vs., Ward 2 (1),
C/o. Shri Kapil Goel,
Advocate, F-26/124, Gurgaon.
Sector-7, Rohini, Delhi.
(Appellant) (Respondent)
For Assessee : Shri Kapil Goel, Advocate.
For Revenue : Ms. Rakhi Vimal, Sr. D.R.
Date of Hearing : 09.10.2019
Date of Pronouncement : 11.10.2019
ORDER
PER BHAVNESH SAINI, J.M.
This appeal by Assessee has been directed against
the Order of the Ld. CIT(A)-1, Gurgaon, Dated 14.06.2016
for the A.Y. 2012-2013.
2. We have heard the Learned Representatives of
both the parties.
2
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
3. Learned Counsel for the Assessee submitted that
prior to levy of the penalty under section 271(1)(c) of the I.T.
Act, A.O. issued show cause notice dated 02.03.2015 in
which A.O. has mentioned as under :
"Have concealed the particulars of your income or
furnished inaccurate particulars of such income."
3.1. He has further submitted that A.O. issued
another show cause notice under section 271(1)(c) of the I.T.
Act, 1961, Dated 14.08.2015 for levy of the penalty in which
A.O. has mentioned as under :
"During the course of assessment proceeding for the
Asst. Year 2012-13 penalty proceedings u/s 271(l)(c) of
the Income-tax Act, 1961 were initiated vide this office
notice dated 02.03.2015 against you but no reply
appears to have been received from you. You are hereby
afforded another opportunity to show cause as to why
the above penalty be not imposed upon you for the said
default."
3
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
3.2. He has submitted that A.O. similarly in the
assessment order has mentioned that he has satisfied that
assessee has concealed his particulars/furnished
inaccurate particulars of income. He has, therefore,
submitted that A.O. has not mentioned in the above show
cause notices as to under which limb of Section 271(1)(c) of
the I.T. Act, penalty proceedings under section 271(1)(c) of
the I.T. Act have been initiated i.e., whether for concealment
of particulars of income or furnishing of inaccurate
particulars of income. Therefore, penalty is liable to be
cancelled. He has submitted that issue is covered by the
Orders of ITAT, Delhi C-Bench in the case of Shri Gulshan
Kumar Jhurani, New Delhi vs., ACIT, Circle-37(1), New
Delhi, Dated 04.10.2019 in ITA.No.704/Del./2015 and
Hemla Embroidery Mills Private Ltd., Faridabad vs., DCIT,
Circle-1, Faridabad, Dated 04.10.2019 in ITA.No.4747/Del/
2016 in which the Tribunal following the decision of Hon'ble
Delhi High Court as well as Hon'ble Supreme Court, have
cancelled the penalty on identical facts.
4
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
4. The Ld. D.R. on the other hand relied upon the
Orders of the authorities below and submitted that this
point have not been raised by assessee and essentially it is
an issue of fact, therefore, this ground cannot be considered
in favour of the assessee and relied upon Order of ITAT,
Delhi G-Bench in the case of Mr. Vijay Aggarwal, Meerut vs.,
DCIT, Central Circle-1, Faridabad, Dated 09.08.2019 in
ITA.Nos.5434 & 5435/Del./2016 for the A.Ys. 2008-2009
and 2009-2010.
5. We have considered rival submissions and
perused the material on record. The contents of the notice
issued before levy of the penalty are reproduced above
which clearly show that A.O. has not mentioned as to for
which limb of Section 271(1)(c) of the I.T. Act penalty
proceedings have been initiated i.e., whether for
concealment of particulars of income or furnishing of
inaccurate particulars of income. The ITAT, Delhi C-Bench
in the case of Shri Gulshan Kumar Jhurani, New Delhi vs.,
ACIT, Circle-37(1), New Delhi (supra), considering the
Judgment of Hon'ble Delhi High Court in the case of Pr. CIT
5
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
vs., M/s. Sahara India Life Insurance Company Ltd., 2019
(8) TMI 409 (Del.) and Hon'ble Supreme Court in the case of
M/s. SSA Emerald Meadows reported in 73 taxmann.com
248 (SC) set aside the Orders of the authorities below in
same circumstances and cancelled the penalty. The Order is
reproduced as under :
"IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "C": DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA.No.704/Del./2015
Assessment Year 2010-2011
Shri Gulshan Kumar The ACIT,
Jhurani, B-226A, Greater Circle 37 (1),
Kailash Part-1, New Delhi. vs., New Delhi.
PIN 110 048. PIN 110 001.
PAN ACHPJ2336H
(Appellant) (Respondent)
For Assessee : Shri Ashwani Kumar, C.A.
For Revenue : Shri S.S. Rana, CIT-D.R.
Date of Hearing : 03.10.2019
Date of Pronouncement : 04.10.2019
ORDER
PER BHAVNESH SAINI, J.M.
6
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
This appeal by Assessee has been directed
against the Order of the Ld. CIT(A)-XX, New Delhi,
Dated 19.11.2014 for the A.Y. 2010-2011, challenging
the levy of penalty under section 271(1)(c) of the I.T. Act,
1961.
2. We have heard the Learned Representatives
of both the parties and perused the material on record.
3. The assessee in the present appeal has
challenged the levy of penalty under section 271(1)(c) of
the I.T. Act. The assessee also raised additional ground
of appeal stating therein that levy of the penalty is
unjustified because A.O. has not specified whether
penalty have been levied for concealment of particulars
of income or furnishing inaccurate particulars of income.
Since it is a legal issue, therefore, same is admitted for
disposal of the appeal.
4. Learned Counsel for the Assessee referred to
show cause notice Dated 28.03.2013 which was issued
7
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
for levy of penalty in which the A.O. has mentioned as
under:
"Have concealed the particulars of your income or
furnished inaccurate particulars of such income."
4.1. He has, therefore, submitted that the issue is
covered by the Judgment of the Hon'ble Delhi High court
in the case of Pr. CIT vs. M/s. Sahara India Life
Insurance Company Ltd., 2019 (8) TMI 409 (Del.) vide
Judgment Dated 02.08.2019 in paras 21 and 22 held as
under :
"21. The Respondent had challenged the
upholding of the penalty imposed under Section 271(1)
(c) of the Act, which was accepted by the ITAT. It
followed the decision of the Karnataka High Court in
CIT v. Manjunatha Cotton & Ginning Factory 359
ITR 565 (Kar) and observed that the notice issued by
the AO would be bad in law if it did not specify which
limb of Section 271(1) (c) the penalty proceedings had
been initiated under i.e. whether for concealment of
8
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
particulars of income or for furnishing of inaccurate
particulars of income. The Karnataka High Court had
followed the above judgment in the subsequent order
in Commissioner of Income Tax v. SSA's Emerald
Meadows (2016) 73 Taxman.com 241 (Kar), the appeal
against which was dismissed by the Supreme Court of
India in SLP No.11485 of 2016 by order dated 5th
August, 2016.
22. On this issue again this Court is unable to find
any error having been committed by the ITAT. No
substantial question of law arises."
5. The Ld. D.R. on the other hand, relied upon
the Orders of the authorities below and relied upon
Judgment of Hon'ble Madras High Court in the case of
Sundaram Finance Ltd., vs. CIT [2018] 93 taxmann.com
250 (Mad.) and Judgment of Hon'ble Supreme Court in
the case of Sundaram Finance Ltd., vs. CIT [2018] 99
taxmann.com 152 (SC).
9
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
6. We have considered the rival submissions. In
this case, the A.O. issued show cause notice for levy of
penalty in which A.O. has mentioned both the limbs of
section 271(1)(c) of the Act that assessee has concealed
the particulars of income or furnished inaccurate
particulars of such income. The issue of the notice is
bad in law as it did not specify under which limb of
Section 271(1)(c) of the I.T. Act, penalty proceedings
have been initiated whether for concealment of
particulars of income or furnishing of inaccurate
particulars of income. The issue is, therefore, covered by
Judgment of Hon'ble Karnataka High Court in the case
of CIT vs. M/s. SSAs Emerald Meadows 73
taxmann.com 241 (Kar.) and confirmed by the Hon'ble
Supreme Court reported in 73 taxmann.com 248 (SC).
Further, the Hon'ble Delhi High court in the case of Pr.
CIT vs. M/s. Sahara India Life Insurance Company Ltd.,
(supra) decided the same issue in favour of the
assessee. Following the same, we are of the view that
since notice is bad in law, therefore, the entire penalty
10
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
proceedings are vitiated and as such no penalty is
leviable against the assessee. We, accordingly, set
aside the Orders of the authorities below and cancel the
penalty.
7. In the result, appeal of assessee allowed."
5.1. Same view have been taken by ITAT, Delhi C-
Bench in the case of Hemla Embroidery Mills Private Ltd.,
Faridabad vs., DCIT, Circle-1, Faridabad (supra). In the
present case, assessee has raised a specific ground of
appeal that A.O. has miserably failed to point-out exactly
under which limb of Section, the impugned penalty
proceedings have been initiated and for want of which, the
present penalty have become invalid. Therefore, we are of
the view that the contention of the Ld. D.R. has no merit
and is accordingly rejected. Following the above decisions,
we are of the view that since the impugned show cause
notices issued by the A.O. are bad in law, therefore, entire
penalty proceedings are vitiated and as such, no penalty is
leviable against the assessee. We, accordingly, set aside the
Orders of the authorities below and cancel the penalty.
11
ITA.No.4442/Del./2016 Shri Harish
Chander Kapoor, Gurgaon.
6. In the result, appeal of Assessee allowed.
Order pronounced in the open Court.
Sd/- Sd/-
(PRASHANT MAHARISHI) (BHAVNESH SAINI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Delhi, Dated 11th October, 2019
VBP/-
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT "C" Bench
6. Guard File
// BY Order //
Asst. Registrar : ITAT Delhi Benches :
Delhi.
|