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TMI Blog2018 (9) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or some of the details are available in the Website of the Ministry of Corporate Affairs. In our opinion, no prejudice would have been caused to the assessee by submitting the details as called for by the ADIT (Investigation), as per the summons u/s 131(1A) if those details are already available in the records of the I.T. Department or in the website of the Ministry of Corporate Affairs. The conduct of the assessee in the instant case, in our opinion, is not at all bona-fide. Order of the ld. CIT(A) in confirming the penalty of ₹ 10,000/- levied u/s 272A(1)(c) is upheld. - Decided against assessee - ITA No.5303/Del/2016 - - - Dated:- 30-8-2018 - SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER For The Assessee : Shri Yogesh Thar, CA And Shri Ankit Agarwal, CA For The Department : Shri S.S. Rana, CIT-DR ORDER PER R. K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 15.07.2016 of the CIT(A)- 36, New Delhi relating to assessment year 2011-12. 2. Facts of the case, in brief, are that a letter was issued to M/s Young Indian on 04.07.2014 u/s 133(6) of the Income Tax Act, seek ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation on the ground that the said transaction had no bearing on any provision of the Income Tax Act. This objection was comprehensively discussed and addressed by the DDIT (Inv), Unit IV(3) vide his letter dated 23.09.2014. The DDIT(Inv) also raised four specific issues on which information was sought. To enable the assessee to furnish the information, summons u/s 131 (lA) was also issued on 23.09.2014 directing the assessee to furnish information as called for vide letter dated 23.09.2014 on 01.10.2014. On the date fixed for compliance of the said summons by the DDIT(Inv) Unit IV(3) New Delhi i.e. on 01.10.2014, the assessee failed to furnish any details or documents. Instead, through a letter dated 30.09.2014 it was submitted by the assessee that the details sought from it were not relevant for the purpose of the income Tax Act. The DDIT (Inv) vide his office letter dated 22.10.2014 comprehensively addressed their concerns and once again requested the assessee to furnish the details/ documents as asked for vide summons dated 23.09.2014 which were required by him for the purpose of investigation in the cases of the persons mentioned in the said summons. Vide the said letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed @ ₹ 10,000/- for each default should not be levied upon it for its aforesaid failure. The assessee filed its reply vide letter dated 21.12.2014 in which it contended that the reply filed by it before the DDIT (Inv) vide its letter dated 02.12.2014 should be treated as its reply to the said notice. 7. However, the Additional Director of Income Tax (Inv.) was not satisfied with the explanation given by the assessee. He observed that the assessee has still not furnished any details as called for vide summons issued on 23.09.2014. The explanation of the assessee that the law does not provide for any penalty for failure of compliance with the summons issued u/s 131(1A) of the I.T. Act was rejected by him on the ground that the provisions of section 131(1A) provides that for the purpose of making any enquiry or investigation it shall be competent for Assistant Director or Deputy Director to exercise the powers conferred under sub-section (1) of section 131 of the I.T. Act. Therefore, any noncompliance shall attract the penalty provisions for not complying with section 131(1) of the I.T. Act. 8. So far as the contention of the assessee that the information sought is identic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e details called for in respect of pricing of shares amongst the shareholders from the Company are details which are beyond the powers conferred u/s 131(lA) of the Act and therefore, that cannot be the basis for levy of penalty for alleged noncompliance of such requirements. The monies received from issue of new shares are already part of the Audited Balance Sheet available with the Tax Department and therefore, when such details are available, there is no justification whatsoever for issue of summons u/s 131(lA). Having regard to the fact that the relevant transaction has been disclosed in the notes to accounts filed with the return of income, no basis survives for any suspicion that any income is concealed or is likely to be concealed. It was submitted that in view of such explicit disclosure, there is no room for suspicion and therefore, in the absence of any suspicion, the jurisdiction u/s, 131(lA) is not in existence. The assessee reiterated the submissions that the information called for lacks 'relevance' and expressed its outburst that the information called for is not for the purpose of I.T Act but in furtherance of certain proceedings initiated by political rivals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Hon ble Bombay High Court in the case of Jamnadas Madhavji vs. ITO, 162 ITR 331 it was submitted that the Hon ble High Court in the said decision has held that powers u/s. 131(1) cannot be exercised when there are no proceedings pending before the income tax officer. Insertion of section 131(lA) nullifies the effect of that decision, thereby empowering certain authorities to issue summons even in absence of pending proceedings. Clearly, therefore, the provisions of section 131(lA) are mutually exclusively from the provisions of section 131(1) in as much as: a) authorities mentioned under the two sub-sections are different; and b) the powers mentioned in sub-section (1) can be invoked only when proceedings are pending before the relevant authorities whereas the powers under sub-section (lA) can be invoked even where there are no proceedings pending before the concerned authorities. 11. It was accordingly argued that the penalty levied u/s 272A(1)(c) of the I.T. Act is illegal and bad in law and hence should be deleted. 12. However, ld. CIT(A) also was not satisfied with the arguments advanced by the assessee and upheld the penalty of ₹ 10,000/- levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance shall attract the penalty provisions for not complying with section 131(1). The section 131(1A) clearly states that .. for the purpose of making any enquiry or investigation relating thereto, it shall be competent for him to exercise the powers conferred under sub-section 1 on the income tax authorities referred to in that sub section .... . This clearly implies that the powers of section 131(1A) are derived from the powers of 131 and hence the same penalty u/s 272A shall be levied as for the non compliance of summons u/s. 131(1). It is improbable that the legislation would have no intention to levy any penalty in case of non compliance u/s. 131(1A) which would in effect leave that section without any penal provision. In view of the above discussion, the penalty of ₹ 10,000/- u/s. 272A(1) for non compliance of summons dated 23.09.2014 is confirmed. 13. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds :- GROUND I: 1. On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) - 36, New Delhi ( CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the income of the Appellant in any manner, and hence such enquiries were beyond jurisdiction conferred u/s. 131(1A) of the Act. Consequently, penalty levied for alleged failure to comply with such summons also ought to be deleted. 3. Accordingly, the Appellant prays that the penalty levied u/s. 272A of the Act ought to be deleted. GROUND III: The Appellant craves leave to add to, amends and / or alter the above ground of appeal at the time of hearing. 14. The ld. counsel for the assessee strongly challenged the order of the ld. CIT(A). Referring to page 22 of the Paper Book, he drew the attention of the Bench to the show-cause notice which is due to alleged non-compliance to summons u/s 131(1A) of the I.T. Act and not to non-compliance of any summon u/s 131 of the I.T. Act. Referring to the provisions of section 131(1) and the provisions of section 131(1A), he submitted that the penalty provisions under the above sections are different. As per the provisions of section 131(1), the power regarding discovery, production of evidence, etc can be exercised only when any proceedings are pending before the Income Tax Authorities. However, as per the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o para 96 of the order and drew the attention of the Bench to the meaning of the words under and in accordance with . Referring to the said paragraph, he submitted that the phrase in accordance with in the context implies similarity or harmony but not identity. 18. Referring to the decision of the Hon'ble Supreme Court in the case of Bijaya Kumar Agarwala Etc vs. State of Orissa reported in 1996 SCC (5) 1, he drew the attention of the Bench to page 5 of the order and submitted that the Hon'ble Supreme Court in the said decision has held that if two possible and reasonable constructions can be put upon a penal provision, the court must lean towards that construction which exempts the subject from penalty rather than the one which imposes penalty. It is not competent to the court to stretch the meaning of an expression used by the Legislature in order to carry out the intention of the Legislature. 19. Referring to the decision of the Hon'ble Supreme Court in the case of Kumar Jagdish Chandra Sinha vs. CIT reported in 220 ITR 67, he drew the attention of the Bench to para 11 of the said order and submitted that the Hon'ble Supreme Court has answered the ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty was rightly confirmed by the ld. CIT(A). He accordingly submitted that the order of the ld. CIT(A) be upheld and the grounds raised by the assessee be dismissed. 23. We have considered the rival arguments made by both the sides, perused the orders of the authorities below and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the penalty of ₹ 10,000/- was levied by the ADIT (Inv.) under the provisions of section 272A(1)(c) on the ground that the assessee deliberately and without any valid reasons failed to furnish the following details as called for vide summons u/s 131(1A) dated 23.09.2014 :- A. The details of persons who at any time during the Financial year 2010-11 was a founder member, ordinary member, Patron member, Member of the Managing committee, Director or Manager or M/s Young Indian. B. Complete details of subsequent transfer of shares of M/s Young Indian made by the 2 founder members who were holding 550 shares each (Certificates bearing numbers 1 and 2) allotted to them at the time of incorporation, which as per the statutory filings made by the company to the MCA was effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Website of the Ministry of Corporate Affairs, therefore, there was a reasonable cause on the part of the assessee for non-submissions of the same as those details would have gone to the hands of the political opponents for mis-utilize of the same. 25. We do not find any merit in the above arguments of the ld. counsel for the assessee. So far as argument of the ld. counsel for the assessee that provisions of section 131(1) and 131(1A) are different, there is no dispute to the same. However, as per the provisions of section 131(1A) for the purpose of making any enquiry or investigation relating thereto it shall be competent for the officer to exercise the powers conferred under sub-section (1) on the Income Tax Authorities referred to in that sub-section. Therefore, the provisions of section 131(1A) has to be read along with the provisions of section 131(1) of the I.T. Act. Therefore, the consequences for failure to furnish the requisite details will be the same as prescribed u/s 272A(1)(c) of the I.T. Act, 1961. 26. So far as the various decisions relied upon by the ld. counsel for the assessee are concerned, the same in our opinion are distinguishable and not applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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