Rakesh Garg, J. - (1.) THE present appeal has been filed by the Revenue against the order dated April 5, 2007, passed by the Income Tax Appellate Tribunal, Delhi Bench "H", New Delhi in I. T. A. No. 175/D/2006 in the case of the respondent -assessee for the assessment year 1993 -94 raising the following substantial questions of law: (a) Whether, on the facts and in the circumstances of the case, the hon'ble Income Tax Appellate Tribunal erred in deciding that proving contumacious intent is an essential ingredient in levy of penalty in contravention of the provisions of a civil statute like Income Tax Act in spite of there being so many judgments that breach of a civil obligation attracts levy of penalty whether the contravention was made by the defaulter with any guilty intention or not ? (b) Whether, on the facts and in the circumstances of the case, the hon'ble Income Tax Appellate Tribunal is in contravention of many judicial pronouncements including Thirupathy Kumar Khemka v. CIT : [2007] 291 ITR 122 :, 210 CTR 287 (Mad) (c) Whether, on the facts and in the circumstances of the case, the hon'ble Income Tax Appellate Tribunal erred in deleting the penalty levied Under Section 271(1)(c) of the Income Tax Act, 1961, whereas it had confirmed all the additions/disallowances?
(2.) A brief facts giving rise to this appeal are as under: The respondent -assessee filed a return declaring an income of Rs. 45,62,890 on January 4, 1994, which was processed under Section 143(1)(a) of the Income Tax Act (for short "the Act") on an income of Rs. 53,17,880 vide order dated February 14, 1994. This order was rectified under Section 154 of the Act on an income of Rs. 45,76,027 vide order dated March 4, 1994 and the same was again rectified on March 18, 1994, to an income of Rs. 45,63,320, and finally the assessment was made vide order dated March 26, 1996, by the Additional Commissioner of Income Tax, Special Range, Faridabad under Section 143(3) of the Income Tax Act, 1961. While making the assessment, the Assessing Officer observed that the assessee has not shown purchases of Rs. 5,71,360 in the closing stock and thereby concealed income to that extent. He further observed that the assessee has filed inaccurate particulars of income by making a wrong claim of commission paid to M/s. Rohan Engineers and Consultant (P.) Ltd. for Rs. 94,991. He also observed that the assessee has made false statement with regard to the payment of Rs. 52,500 to M/s. Proplus Management, Registrar of Companies and Sh. K.K. Paul claiming this expenditure to be revenue in nature whereas the same was capital expenditure. Thus, the Assessing Officer vide the assessment order dated March 26, 1996, made the assessment and also ordered for initiation of proceedings under Section 271(1)(c) of the Act. Against the above orders, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), Faridabad who partly allowed the appeal vide his order dated February 16, 1998, against which both the Revenue and the assessee preferred appeals before the Tribunal which was decided by the Tribunal vide its order dated August 5. 2004, in I. T. A. No. 2865/D/98.
(3.) THE Assessing Officer initiated penal proceedings under Section 271(1)(c) and in those penalty proceedings, the assessee was granted an opportunity to explain as to why penalty orders should not be passed on the points of additions which were finally upheld by the Tribunal. The assessee vide his letter dated April 18, 2005, submitted that they had neither concealed nor submitted any inaccurate particulars and it was requested that the penalty proceedings may be dropped. However, the Assistant Commissioner of Income Tax, Range -I, Faridabad vide his order dated April 28, 2005, passed the penalty order against the respondent -assessee. The relevant part of the order is reproduced as under: In view of the above position, it is held that the assessee -con -cealed income of Rs. 5,71,360 by not showing purchases of the same amount in the closing stock. Further, the assessee filed inaccurate particulars by making a wrong claim of payment of commission of Rs. 94,991 to M/s. Rohan Engineers and Consultants (P.) Ltd. Similarly the assessee -company made payments of Rs. 52,500 to M/s. Proplus Management, Registrar of Companies and Sh. K.K. Paul and claimed the same as revenue expenditure when in fact, they were of capital nature. This total income concealed/inaccurate particulars filed was of the order of Rs. 7,18,851 and I am satisfied that for concealment/wrong claim, the assessee is liable to penalty on the sum of Rs. 7,18,851. A penalty of Rs. 4,15,000 is as such imposed which is worked out as under: Tax payable on income of Rs. 54,03,021 Rs. After appeal effect to the order of the hon'ble Income Tax 31,06,736 Appellate Tribunal Less: Tax on above income as reduced by Rs. 7,18,851 i.e. on 26,93,398 Rs. 46,84,170 - - - - - - - - - - - - Tax sought to be evaded 4,13,338 Minimum penalty at 100 per cent. 4,13,338 Maximum penalty at 300 per cent. 12,40,014 Fenalty imposed 4,15,000 Issued demand notice and challan. The above penalty order has been passed after taking necessary approval from the Addl. Commissioner of Income Tax, Range -I, Faridabad communicated vide his letter No. 380 dated April 28, 2005.;