M/S. PASHUPATI SPINNING & WEAVING MILLS LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 1510/DEL/2014Status: DisposedITAT Delhi03 May 2016AY 2007-085 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that additional evidence filed by the assessee, which was rejected by the CIT(A), needed to be examined by the Assessing Officer. The matter was set aside to the AO for a fresh decision after considering this evidence.

What were the facts?

The assessee's appeal concerned a penalty levied under Section 271(1)(c) for the assessment year 2007-08. The penalty was based on disallowances of prior period expenses due to the assessee's inability to produce supporting bills and vouchers.

What were the issues?

Whether the CIT(A) erred in rejecting additional evidence filed by the assessee during penalty proceedings, and if the penalty was sustainable without proper examination of all evidence.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

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Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI

Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI

Date of Hearing : Date of Hearing : 13 Date of Hearing : Date of Hearing : 13 13-04-201 13 201 2016 201 Date of Order : 03-05-201 Date of Order : 2016 Date of Order : Date of Order : 201 201

ORDER ORDER ORDER ORDER PER H.S. SIDHU PER H.S. SIDHU : : : : JM PER PER H.S. SIDHU H.S. SIDHU Assessee has filed this appeal against the Order dated 26.12.2013 of the Ld. Commissioner of Income Tax (Appeals)-XXII, New Delhi pertaining to assessment year 2007-08 on the following grounds:-

“1. That the CIT(Appeals) has , in view of the fact and circumstances of the case, grossly erred on facts and in law in upholding the penalty order passed by the AO levying the penalty uls 271(1)(c) of Rs 4,65,270/-. 2. That the CIT(A) has failed to appreciate that no satisfaction was recorded before initiation of penalty proceedings U/S 271 (1) (c) and as such the notice issued U/S 271 (1) (c) and the penalty order passed under said section are without jurisdiction and are liable to be quashed.

3. That the CIT(A) has erred in ignoring the fact that the Assessing Officer has, in view of the facts and circumstances of the case, grossly erred in law and on facts in initiating and levying penalty proceedings U/S 271 (1)( c) on ground of furnishing inaccurate particulars of income.

4. That the disallowance of claim of the appellant relating to prior period expense cannot be the reason for imposing penalty as the expenses related to the business and the claim was based on bonafide belief.

5. That the alleged failure on the part of the Asseessee to substantiate the bonafide business expenses cannot be the ground for imposing penalty. The AO and CIT(A) has failed to establish any concealment of income or furnishing of inaccurate income on behalf of the Appellant.

6. That the CIT(A has erred in law and on facts in upholding the penalty of Rs 4,65,270/- when the returned income and the assessed income is Nil and there is no tax payable by the appellant for the relevant Assessment year.

7.

That the CIT(Appeals) has , in view of the, fact and circumstances of the case, grossly erred on facts and in law in ignoring and rejecting the application under Rule 46A and the additional evidences filed by the assessee.

8.

That the CIT(Appeals) has, in view of the fact and circumstances of the case and in law, failed to appreciate the fact that this is only a case where the disallowances of Rs 13,82,267 were made only because the assessee could not produce the supporting bills and voucher and there are no other adverse findings by the AO .

9.

That the CIT(Appeals) as, in view of the fact and circumstances of the case and in law, failed to appreciate the fact that the assessee has now produced the bills and vouchers for the disallowed amount of Rs 13,82,267 and hence no addition and or penalty is called for now .

10.

That the AO has failed to appreciate that no satisfaction was recorded before initiation of penalty proceedings u/s 271 (1) (c) and as such the notice issued u/s 271 (1 ) (c) and the penalty order passed under said section are without jurisdiction and are liable to be quashed.

11.

That the information filed and the material available on 'record are not properly considered and as such the order imposing penalty U/S 271 (1) (c) is illegal and bad in law.

12.

That in any case the penalty imposed is unjust, arbitrary and highly excessive.”

2.

The facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of brevity.

3.

At the time of hearing, Ld. Counsel of the assessee draw our attention towards the impugned order at Para no. 4 Page No. 3 & 4 and stated that the assessee has filed some additional evidence before the Ld. CIT(A) which has not been admitted by the Ld. CIT(A) on the ground that the assessee should have brought the additional evidence before the Appellate Authority at the time of decision on the quantum addition, not in penalty proceedings which is contrary to the law and facts of the case, because the additional evidence can be filed at any time for substantiating the claim of the assessee, in view of the decision of the Hon’ble Supreme Court of India in the case of NTPC Limited 229 ITR 383 NTPC Limited 229 ITR 383 . . NTPC Limited 229 ITR 383 NTPC Limited 229 ITR 383 . . He requested that the issue in dispute may be set aside to the AO to decide the same afresh under the law, after giving adequate opportunity of being heard to the assessee as well as for producing the evidences for substantiating its claim before the AO.

4.

On the contrary, Ld. DR relied upon the order of the authorities below.

5.

We have heard both the partiers and perused the relevant records available with us, especially the orders passed by the Revenue Authorities, we are of the considered view that as per the decision of the Hon’ble Supreme Court of India in the case of NTPC Limited 229 ITR 383 NTPC Limited 229 ITR 383 NTPC Limited 229 ITR 383 , , , , the assessee can file NTPC Limited 229 ITR 383 the additional evidences before any authority for substantiating its claim subject to some condition. In the interest of justice, the evidence produced by the assessee which the assessee has enclosed in the Paper Book containing pages 1 to 40 in which he has attached the copy of the submission filed on 6.12.2013; Copy of Application under Rule 46A; ledger account of Jindal Cargo Movers; Bank statement of Pashupati Spinning and Weaving Mills; Details of Travelling expenses of employees; Ledger accounts pertaining to other parties; Details of expenses of H.M. Jain and Ledger accounts of BIC Logistics Ltd. needs to be examined by the AO because the same are very much important for the correct decision on the issue in dispute. Therefore, we are admitting the additional evidences filed by the Assessee which has wrongly been rejected by the Ld. CIT(A) and accordingly, we set aside the issues in dispute to the file of the AO to decide the same afresh, under the law, after giving adequate opportunity of being heard as well as opportunity of producing the additional evidences as discussed above before the AO.

6.

In the result, the Appeal filed by the Assessee stands allowed for statistical purposes.

Order pronounced in the Open Court on 03/5/2016

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