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TMI Blog2015 (1) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... Under these facts and circumstances, we hold that the penalty levied cannot be sustained. Hence we quash the order levying penalty u/s 271(1)(c) and allow the appeal of the assess. - Decided in favour of assessee. - ITA No. 1036/Del/2013 - - - Dated:- 16-1-2015 - Shri J. Sudhakar Reddy, AM And Shri George George K, JM,JJ. For the Petitioner : Shri Raj Kumar Gupta, Sh. Satish Aggarwal, CAs For the Respondent : Smt. Parwinder Kaur, Sr. D.R. ORDER Per J. Sudhakar Reddy, Accountant Member This is an appeal filed by the Assessee and is directed against the order dated 15.01.2013 of Ld.CIT(A)-XIII, New Delhi pertaining to the AY 1997-98. 2. Facts in brief:- The assessee is a company incorporated in July, 1988. It was engaged in the business of manufacturing of PVC Water Storage Tanks. The manufacturing facility was constituted at Plot no.6B, Site B, Surajpur, Greater Noida, U.P. The company was financed by U.P. Financial Corporation (hereinafter called UPFC) and Pradeshiya Industrial and Investment Corporation of U.P. (hereinafter called PICUP). 2.1. On 28.7.1995, the assessee was taken over by UPFC for failure to clear dues. On 13.12.1996, reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to condone the delay. The Ld.CIT(A) also considered the arguments of the assessee on merits and came to a conclusion that the loss claimed by the assessee was not genuine and was claimed to defraud the interest of the Revenue. 3.1. Aggrieved the assessee is before us. 4. The Ld.Counsel for the assessee Mr.Raj Kumar Gupta submitted that the Ld.CIT(A) was wrong in not condoning the delay in filing of the appeal. He submitted that the delay in this case can be broken up into two parts - the first part is the delay of 2367 days which is attributable to the action of the official liquidator. He pleaded that the assessee was under a bonafide impression that the appeal must have been filed by the official liquidator. He vehemently contended that the official liquidator is the competent authority and the latches on his part cannot be fastened on the assessee. On the second part he submitted that the assessee got the information that the penalty has been demanded, when the official liquidator forwarded a demand notice, to the assessee on 18.11.2009 and after 198 days the assessee filed the appeal. He submits that after excluding 30 days allowed for filing the appeal, the balance pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided. He submitted that the assessment order was made on pure guess work, not specifying any undisclosed income or concealed income. 4.3. His submissions are mainly three fold (i) penalty cannot be levied on additions made on estimate basis; (ii) no penalty can be levied if the AO has not considered the explanation offered at the stage of assessment proceedings, inspite of the fact that it was available with him before the imposition of penalty; (iii) penalty cannot be levied on deemed income; (iv) the AO should be clear as to whether the penalty in question is levied for concealment of income or on the charge that the assessee has furnished inaccurate particulars of income; (v) without prejudice, if it is to be considered, that the penalty is to be levied on the charge of concealing of particulars of income, based on the notings in the assessment order. Then, there is no undisclosed income that has been a subject matter of addition. It was submitted that the difference between the returned income and the assessed income is not on account of finding of assessee having any concealed income. Reliance was placed on a number of case laws which are as under :- i) Sangrur Vansspati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record and case laws cited, we hold as follows. 8. The Ld.CIT(A) at para 2 page 3 has rejected the plea of the assessee for condonation of delay in filing of the appeal before him on the following grounds. a. The assessee was aware of the penalty proceedings as the order was served on him; b. The main Director of the assessee company Shri RK Srivastav was alive during the passing of penalty order. He died on 1.1.2005. c. Even after the death of the main Director the appeal has been filed after a gap of 5 yrs-6 months, for which no explanation is given by the assessee; d. The assessee has not shown any cogent reason for filing the appeal with delay, except the sickness of Shri RK Srivastav. 8.1. In our view these findings of the First Appellate Authority are not factually correct for the following reasons. 8.2. The assessee company was declared a sick company on 23.2.2000, where the BIFR ordered its winding up. On 14th Feb.2001 the Hon ble Delhi High Court appointed an official liquidator. This fact was informed to the AO. The AO passed an ex parte penalty order on 27.5.2003. He has not served this penalty order on the official liquidator, who is the competen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re still lying with him. The balance records/books were with the official liquidator. There is no active Directors in the company. The company was sick and has no business from the AY 1997-98. Under these circumstances we are of the considered opinion that the assessee was prevented from sufficient cause in filing the appeal in time before the First Appellate Authority and under those circumstances, the delay in question is to be condoned. 8.6. The ITAT C Bench of Ahmedabad in ITA no.954/Ahmd./2009 for the AY 2003-04 vide order dt. 14.10.2011 had considered in a similar case, at para 6 page 8 held as follows.: 6. We have considered the rival submissions and material on record. It is not a disputed fact that the assessee went in liquidation at the initial stage because of the order passed by the Hon ble Gujarat High Court and the Official Liquidator was appointed in the matter. The AO framed the assessment in the name of the Official Liquidator attached to the assessee company and ultimately after various rounds of litigations and taking steps in the matter winding up was set aside by the Hon ble Gujarat High Court in January, 2008. These facts were sufficient to hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, erroneous, as inaccurate statement, copy or transcript. The word particular means detail or details of a claim or separate items of an account (See CIT vs. Reliance Petroproducts Pvt.Ltd. (2010) 322 ITR 158 (SC). Thus the words - furnished inaccurate particulars is broader and would refer to inaccuracy which would cause under declaration or escapement of income. It may refer to particulars which should have been furnished or were required to be furnished or recorded in the books of accounts etc. (see CIT vs. Raj Trading Co. (1996) 217 ITR 208 (Raj.) Inaccuracy or wrong furnishing of income would be covered by the said expression, though there are decisions that adhoc addition per se without other or corroborating circumstances may not reflect - furnished inaccurate particulars. Lastly, at times and it is fairly common, the charge of concealment and - furnishing of inaccurate particulars may overlap. 8.11 The Hon ble Karnatak High Court in the case of CIT vs. Manjunatha Cotton and Gining Factory , Manjunatha Ginning and Pressing, Veerabhadrappa Sangappa and Co., V.S. Lad and Sons, G.M. Exports (2013) 359 ITR 565 (Karn) in ITA Nos. 2564 of 2005, 2565 of 2005, 5020 of 2009, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. (n) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. (o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. (p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income (q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. (r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. (s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another ..... X X X X Extracts X X X X X X X X Extracts X X X X
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