Subject: Authorized Representatives of the parties to the appeal
Referred Sections:
Section 271(l)(c)
Section 274
Section 271
Section 142(1)/143(2) of the Income Tax Act,
Referred Cases / judgments
CIT vs. Reliance Petro Products Pvt. Ltd. 322 ITR 158 (S.C.)
Commissioner of Income-tax, Bangalore vs. SSA’S Emerald Meadows [2016] 73taxmann.com 241(Karnataka)
CIT vs. Manjunatha Cotton & Ginning Factory [2013] 359 ITR 565/218 Taxman 423/35 taxman.com 250(karn).
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH: `E': NEW DELHI)
BEFORE SHRI N.K SAINI, ACCOUNTANT MEMBER
&
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No:- 120/Del/2016
(ASSESSMENT YEAR-2011-12)
M/s Replika Press Pvt. DCIT
Limited., Vs. Circle-15(1)
B-214, Ashok Vihar, Phase-I New Delhi.
New Delhi-110052.
PAN No: AAACR1084L
APPELLANT RESPONDENT
Assessee by : Sh. K. Sampath, Adv. &
Sh. V. Rajkumar, Adv.
Revenue by : Sh. S.R. Senapati, Sr. DR
Date of Hearing : 19.06.2018.
Date of Pronouncement : 10/07/2018.
ORDER
PER: KULDIP SINGH, JM
The Appellant, M/s Replika Press Pvt. Ltd., New Delhi-110052
(hereinafter referred to as `the Assessee') by filing the present appeal,
2
ITA No.-120/Del/2016.
M/s Replika Press Pvt. Ltd., New Delhi.
sought to set aside the impugned order dated 02.12.2015 passed by Ld.
CIT(A)-7, New Delhi, on the grounds that:-
" On the facts and in the circumstances of the case and in
law the Ld. CIT(A) erred in confirming the action of the
Assessing Officer u/s 271(1)(c) of the Income-tax Act,
1961 in holding the assessee guilty of furnishing
inaccurate particulars of income with regard to claim for
depreciation disallowed in the assessment. The action
being arbitrary, erroneous, unjustified, untenable and
unlawful must be quashed with directions for appropriate
relief.
2. Briefly stated the facts necessary for adjudication of the
controversy at hand are:- on the basis of completed assessment u/s
143(3) of the Income Tax Act, 1961 (for short the `Act) at income of Rs.
62572560/- by making addition of Rs. 494230/- and Rs. 1563142/- on
account of disallowance u/s 40A(3) and on account of excess depreciation
claim, respectively, penalty proceedings u/s 271(1)(c) of the Act were
initiated. Declining the contentions raised by the assessee, AO treated the
mistake of claiming excess depreciation of Rs. 1563142/- as furnishing of
`inaccurate particulars of income' of Rs. 2057372/- and thereby levied a
penalty of Rs. 699500/- u/s 271(1)(c) of the Act.
3. The assessee carried the matter before the Ld. CIT(A) by way of
filing the appeal, who has deleted the penalty imposed by the AO qua
addition of Rs. 494230/- on account of disallowance u/s 40A(3), however,
3
ITA No.-120/Del/2016.
M/s Replika Press Pvt. Ltd., New Delhi.
confirmed the penalty of Rs. 494230/- levied by the AO. Feeling
aggrieved, the assessee has come up before the Tribunal by way of filing
the present appeal.
4. We have heard the Ld. Authorized Representatives of the parties to
the appeal, gone through the documents relied upon and orders passed
by the revenue authorities below in the light of the facts and
circumstances of the case.
5. Undisputedly, the penalty has been levied in this case, on account
of excess depreciation of Rs. 1563142/- claimed by the assessee. It is
also not in dispute that the disallowance of depreciation has been
accepted by the assessee. It is also not in dispute that the assessee
claimed bonafide mistake in making excess claim of depreciation.
6. In the backdrop of the aforesaid facts and circumstances of the
case, argument addressed by the Ld. Authorized Representatives of the
parties to the appeal, the sole question arises for determination in the
case is:-
"as to whether the assessee has concealed particulars
of income or has furnished inaccurate particulars of
such income during assessment proceedings?".
4
ITA No.-120/Del/2016.
M/s Replika Press Pvt. Ltd., New Delhi.
7. Hon'ble Supreme Court in a case cited as CIT vs. Reliance
Petro Products Pvt. Ltd. 322 ITR 158 (S.C.) while interpreting
the provisions contained u/s 271(1)(c) of the Act, decided the
identical issue in favor of the assessee. Operative part of which is
reproduced for ready reference as under:-
"A glance at the provisions of section 271(l)(c) of the
IT. Act, 1961 suggests that in order to be covered by
it, there has to be concealment of the particulars of
the income of the assessee. Secondly, the assessee
must have furnished inaccurate particulars of his
income. The meaning of the word "particulars" used in
section 271(l)(c) would embrace the detail of the
claim made. Where no information given in the return
is found to be incorrect or inaccurate, the assessee
cannot be held guilty of furnishing inaccurate
particulars. In order to expose the assessee to
penalty, unless the case is strictly covered by the
provision, the penalty provision cannot be invoked. By
no stretch of imagination can making an incorrect
claim tantamount to furnishing inaccurate particulars.
There can be no dispute that everything would
depend upon the return filed by the assessee, because
that is the only document where the assessee can
furnish the particulars of his income. When such
particulars are found to be inaccurate, the liability
would arise. To attract penalty, the details supplied in
the return must not be accurate, not exact or correct,
not according to the truth or erroneous.
Where there is no finding that any details
supplied by the assessee in its return are found to be
incorrect or erroneous or false there is no question of
inviting the penalty under section 271(l)(c). A mere
making of a claim, which is not sustainable in law, by
5
ITA No.-120/Del/2016.
M/s Replika Press Pvt. Ltd., New Delhi.
itself, will not amount to furnishing inaccurate
particulars regarding the income of the assessee.
Such a claim made in the return cannot amount to
furnishing inaccurate particulars. "
8. Bare perusal of the penalty order, apparently goes to prove, that
there is no finding whatsoever on the part of the Revenue authorities
below that any detail supplied by the assessee in his return of income is
found to be incorrect and erroneous or false. In case, the assessee has
claimed excess depreciation, it is for the tax authority to examine if the
same is allowable or not.
9. Furthermore, perusal of the notice issued by the Assessing Officer
to the assessee u/s 274 of the Act, available at page 79 of the Paper
Book, goes to prove that even at the time of issuance of the notice as well
as at the time of passing the penalty order, AO was not clear, "as to
whether the penalty proceedings are being initiated for `concealment of
the particulars of income or furnishing inaccurate particulars of income',
rather the assessee has been charged for having `concealed the
particulars of income as well as furnishing inaccurate particulars of such
income: For ready perusal notice is extracted as under:-
6
ITA No.-120/Del/2016.
M/s Replika Press Pvt. Ltd., New Delhi.
NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE
INCOME TAX ACT, 1961
PAN-AAACR7619C Deputy Commissioner of Income-Tax
Circle-15(1), New Delhi
Dated: 24.12.2013
To,
M/s Replika Press Pvt. Ltd.
B-214, Ashok Vihar,
Phase-I, Delhi-110052.
Whereas in the course of proceedings before me for the
assessment year 2011-12 it appears to me that you:-
*have without reasonable caused failed to comply with a
notice under section 142(1)/143(2) of the Income Tax Act, 1961
dated.....................
*have concealed the particulars of your income or
furnished inaccurate particulars of such income in terms of
explanation 1,2,3,4 and 5.
You are hereby requested to appear before me at....11.00
....AM/PM on 27.01.2014 and show cause why an order imposing a
penalty on you should not be made under section 271 of the
Income Tax Act, 1961. If you do not wish to avail yourself of this
opportunity of being heard in person of through authorized
representative you may show cause in writing on or before the said
date which will be considered before any such order is made under
section 271(1)(c).
Assessing Officer
Sd/-
(JANARDAN DAS)
Deputy Commissioner of Income-tax
Circle 15(1), New Delhi
(JARANDAN DAS)
Dy. Commissioner of Income Tax
Circle-15(1), New Delhi.
7
ITA No.-120/Del/2016.
M/s Replika Press Pvt. Ltd., New Delhi.
10. The identical issue has been decided by the Hon'ble High Court of
Karnataka in the case of Commissioner of Income-tax, Bangalore vs.
SSA'S Emerald Meadows [2016] 73taxmann.com 241(Karnataka)
and has deleted the penalty by following the decision rendered by Division
Bench of Hon'ble High Court of Karnataka in the case cited as CIT vs.
Manjunatha Cotton & Ginning Factory [2013] 359 ITR 565/218
Taxman 423/35 taxman.com 250(karn).
11. Hon'ble Supreme Court of India upheld the decision rendered by
Hon'ble High Court of Karnataka in the case of SSA'S Emerald
Meadows (supra) by returning the following findings:-
" Section 274, read with section 271(1)(c), of the Income-
tax Act, 1961-Penalty-Procedure for imposition of
(conditions precedent)-Assessment Year 2009-10- Tribunal,
relying on decision of Division Bench of Karnataka High
Court rendered in case of CIT v. Manjunatha Cotton &
Ginning Factory [2013] 359 ITR 565/218 Taxman 423/35
taxmann.com 250, allowed appeal of assessee holding that
notice issued by Assessing Officer under section 274 read
with section 271(1)(c) was bad in law, as it did not specify
under which limb of section 271(1)(c) penalty of
proceedings had been initiated, i.e., whether for
concealment of particulars of income or furnishing of
inaccurate particulars of income-High Court held that
matter was covered by aforesaid decision of Division Bench
and, therefore, there was no substantial question of law
arising for determination-whether since there was no merit
in SLP filed by revenue, same was liable to be dismissed-
Held, yes [para 2] [in favour of assessee]
8
ITA No.-120/Del/2016.
M/s Replika Press Pvt. Ltd., New Delhi.
12. In view of what has been discussed above, AO has failed to make
out the case of `concealment of income or furnishing of inaccurate
particulars of such income' by the assessee, so as to attract the provisions
contained u/s 271(1)(c) of the Act, hence penalty levied by the AO and
confirmed by the Ld. CIT(A) is hereby ordered to be deleted.
Consequently, present appeal filed by the assessee is allowed.
Order pronounced in the open court on 10/7/2018
Sd/- Sd/-
(N.K SAINI) (KULDIP SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 10.07.2018
Pooja/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
9
ITA No.-120/Del/2016.
M/s Replika Press Pvt. Ltd., New Delhi.
Date of dictation
3/7/2018
Date on which the typed draft is placed before the
dictating Member 9/7/2018
Date on which the typed draft is placed before the
Other Member
Date on which the approved draft comes to the Sr. 10/7/2018
PS/PS
Date on which the fair order is placed before the 10 /7/2018
Dictating Member for pronouncement
Date on which the fair order comes back to the Sr. 10/7/2018
PS/PS
Date on which the final order is uploaded on the
website of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order
10
ITA No.-120/Del/2016.
M/s Replika Press Pvt. Ltd., New Delhi.
|
