JAMMULAMADAKA ANJANEYA SHARMA ,SECUNDERABAD vs. INCOME TAX OFFICER, WARD-10(2) , HYDERABAD

We now advert to the assessee’s sole substantive grievance challenging correctness of both the lower authorities’ action imposing Section 271(1)(c) penalty of Rs.8,40,000/- in Assessing Officer’s order dt.31-03-2016 as upheld in the CIT(A)’s order.

Learned departmental representative fails to dispute at the outset that the Assessing Officer’s penalty herein above nowhere specifies as to whether the assessee had concealed particulars of his taxable income or furnished inaccurate particulars of such an income as contemplated u/s. 271(1)(c) of the Act. Hon'ble jurisdictional high court’s decision Pr.CIT Vs. Baisetty Revathi [398 ITR 88] (Telangana & AP), - such a failure renders penal action as not sustainable in law. Coupled with this, we also notice that the impugned penalty pertains to quantum addition of Rs.28 lakhs made in assessee’s hands as on 31-03-2014 on account of his failure in proving an alleged advance receipt from one Shri Bandela Chandraiah. The assessee had sought to get the same verified but the corresponding affidavit to this effect has been treated as a fabricated one. Be that as it may, all this sufficiently suggests that it is an instance of the assessee’s supportive evidence produced but not accepted as correct. Hon'ble apex court’s landmark decision in CIT Vs. Reliance Petroproducts P. Ltd., [322 ITR 158] (SC) holds that quantum and penalty are parallel proceedings wherein each and every disallowance/addition made in the case of the former does not ipso facto attract the latter penal provision. We go by the very reasoning and direct the Assessing Officer to delete the impugned penalty.

This assessee’s appeal is allowed in above terms.