IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES: `D', NEW DELHI
BEFORE SMT. BEENA A PILLAI, JUDICIAL MEMBER
AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA No. 4759/Del/2015
AY: 2008-09
Utech Developers Ltd. ITO, Ward 18(1)
305, 3rd Floor vs. New Delhi
Bhanot Corner
Pamposh Enclave, G.K.-I
New Delhi 110 048
PAN: AAACU8713H
(Appellant) (Respondent)
Assessee by : Sh. M.P.Rastogi, Adv.
Department by : Smt.Naina Soin Kapil, Sr.DR.
Date of Hearing : 29/01/2019
Date of Pronouncement: 08/02/2019
ORDER
PER BEENA A PILLAI, JUDICIAL MEMBER
Present penalty appeal has been filed by assessee against
order dated 12/06/15 passed by Ld.CIT(A)-22, New Delhi for
assessment year 2008-09 on following grounds of appeal:
ITA No.4759/Del/2015 AY: 2008-09
Utech Developers Ltd. Vs. ITO
"1. That on facts and in the circumstances of law, Lower authorities
erred in levying penalty u/s 271(1)(c ) of the I.T.Act, 1961 of
Rs.7,93,100/-.
2. That on facts and in the circumstances of law, Lower authorities
erred in levying penalty on adhoc disallowances made by
Ld.Assessing Officer.
3. That on facts and in the circumstances of law, Lower authorities
erred in concluding that assessee deliberated attempted to evade
taxes by making a malafide claim of travelling expenses.
4. The Appellant craves leave to add, alter, delete, modify or vary the
above grounds of appeal at or before the time of hearing."
2. Brief facts of case are as under:
Assessee filed its return of income on 23/09/08 declaring total
income of Rs.17,70,44,900/-. The case was selected for scrutiny
and assessment proceedings were initiated by issuing statutory
notices. Representatives of assessee appeared before Ld.AO and
filed various requisite details as called for. It was observed that
Ld.AO passed assessment order by making ad hoc addition in
respect of travelling expenses claimed by assessee incurred for air
travel undertaken by Executive Vice President along with other
employees.
2.1. Aggrieved by order of Ld. AO, assessee preferred appeal
before Ld.CIT(A) who upheld addition.
2.2. Accordingly, Ld.AO issued notice under section 271 r.w.s.
271(1)(c) of I.T. Act, 1961 (the Act) for filing of inaccurate
particulars/concealment of income. Ld.AO rejected explanation
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ITA No.4759/Del/2015 AY: 2008-09
Utech Developers Ltd. Vs. ITO
offered by assessee and passed penalty order on 22/03/13 levying
100% penalty on ad hoc disallowance on account of travelling
expenses to the extent of Rs.20 Lacs made by Ld.AO.
3. Aggrieved by order of Ld. AO, assessee preferred appeal before
Ld. CIT (A) who confirmed penalty.
4. Aggrieved by order of Ld. CIT (A) assessee is in appeal before us
now. At the outset assessee has raised additional ground vide
application dated 25/01/19 which reads as under:
" That in the absence of any specific limb/charge in the notice as
contemplated u/s 271(1)(c ) of the I.T.Act, 1961, the penalty as
imposed by the AO is arbitrary and bad in law."
5. Ld.AR argued that, at the threshold, initiation of penalty is
bad in law, as Assessing Officer in assessment order has not
specified as to under which limb penalty needs to be initiated.
5.1. He submitted that case of assessee is squarely covered by
decision of Hon'ble Supreme Court in case of CIT vs. SSA's Emerald
Meadows reported in 242 taxman 180.
6. Ld. Sr.DR submitted that assessee has not established its bona
fides, and there was no appeal preferred by assessee against
disallowance before this Tribunal. She thus supported orders of
authorities below.
7. We have perused submissions advanced by both sides in light
of records placed before us.
7.1. It goes without saying that for applicability of Section
271(1)(c), conditions stated therein must exist. There can be no
dispute that everything would depend upon return filed because
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ITA No.4759/Del/2015 AY: 2008-09
Utech Developers Ltd. Vs. ITO
that is only document, where assessee can furnish particulars of
his income.
7.2. The section 271(1)(c) presents two essentials - ' concealment'
and 'furnishing inaccurate particulars of income'. The revenue
claims that, by furnishing wrong claim assessee has 'furnished
inaccurate particulars of income' that amounts to concealment.
7.3. In present case before us, assessee cannot be penalized for
making a claim of expenditure, which is not acceptable to Ld. AO.
In fact it is found that Ld.A.O. disallowed expenditure on ad hoc
basis. This itself shows that there is no dispute regarding all
particulars being filed by assessee which is disallowed in part by
Ld. AO on premise that it has not been incurred exclusively and
wholly for purpose of business of assessee. The Ld. AO has not
brought on record anything contrary to establish that claim of
assessee do not pertain to travelling expenses. From paper book
filed before us it is observed that assessee has placed vouchers and
invoices raised by airlines in respect of payments made for travel
by its officials. Further Assessing Officer has not found fault with
explanation offered by assessee in response to notice u/s 274 of the
Act. Merely because disallowance has been made which has been
confirmed by Ld.CIT(A), he proceeded to levy penalty on ad hoc
disallowance. As we are deleting penalty levied, we do not wish to
venture into expressing our view in respect of additional ground
raised by assessee and same is kept open.
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ITA No.4759/Del/2015 AY: 2008-09
Utech Developers Ltd. Vs. ITO
7.4. We are therefore inclined to delete penalty for reason that
disallowance made was on ad hoc basis, without there being any
conclusive material on record.
7.5. Accordingly penalty levied stands deleted.
8. In the result appeal filed by assessee stands allowed.
Order pronounced in the open court on 08th February, 2019.
Sd/- Sd/-
( PRASHANT MAHARISHI) (BEENA A PILLAI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dt. 08th February, 2019
Gmv
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
- TRUE COPY -
By Order,
ASSISTANT REGISTRAR
ITAT Delhi Benches
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ITA No.4759/Del/2015 AY: 2008-09
Utech Developers Ltd. Vs. ITO
Date
Draft dictated on 06.02.19
Draft placed before author 06.02.19
07.02.19
Draft proposed & placed before the second 07.02.19
member
Draft discussed/approved by Second
Member.
Approved Draft comes to the Sr.PS/PS
Kept for pronouncement on 08.02.19
&
Order uploaded on :
File sent to the Bench Clerk
Date on which file goes to the AR
Date on which file goes to the Head Clerk.
Date of dispatch of Order.
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