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Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN
Before: MS SUCHITRA KAMBLE & DR. B. R. R. KUMAR
PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order dated 26.05.2017 passed by CIT(A)-Dehradun for Assessment Year 2011-12.
The grounds of appeal are as under:-
“The appellants craves leave to respectfully object to the order appealed against on the following grounds:-
1. That under the facts and circumstances of his case the Ld. A.O erred in levying the impugned penalty and the Ld.CIT(A) in confirming it substantially.”
3. The assessee firm is a partnership firm carrying on the business of civil construction work and is an old tax payer. Original return of income was filed declaring net taxable income of Rs. 1,19,287/- on 21st September, 2011. Search was conducted u/s 132 of the Income Tax Act, 1961, on 17/2/2012. Notice u/s 153A was issued to furnish return of income on or before 12/3/2013 vide notice dated 4/2/2013. On 22/05/2013 in response to notice u/s 153A, the assessee filed return of income declaring the income of Rs. 2,50,19,287/- which include original return income of Rs. 1,19,287/- + 1,50,000/- surrendered amount credited to profit and loss account. Assessment order dated 30/1/2014 was passed thereby assessing the total income at Rs. 5,91,05,464/-. The assessee filed appeal before the CIT(A) and sustain the additions vide order dated 26/05/2017. The assessee filed appeal before the Tribunal and the Tribunal granted relief to the extent of Rs. 1,89,07,245/- vide order dated 3/6/2019 for which order giving effect was passed on 19/8/2019 by the Assessing Officer . In the meanwhile, notice u/s 274 read with Section 271 was issued on 30/1/2014 and after giving opportunity to the assessee passed the penalty order dated 30/03/2016.
Being aggrieved by the penalty order, the assessee filed appeal before the CIT (A). The CIT (A) partly allowed the appeal of the assessee.
The Ld. AR submitted that notice dated 30/1/2014 has not specified under which the penalty has been initiated. The Ld. AR relied upon the decision of Hon'ble Supreme Court in case of CIT (A) Vs. SSA’s Emerald Meadows (2016) 73 taxmann.com 248 (SC) and CIT Vs. Reliance Petro Products Pvt. Ltd. 322 ITR 158 (SC) as well as Delhi High Court decision in case of Pr. CIT(A) S. M/s Sahara India Life Insurance Co. Lt. (ITA No. 475/2019 vide order dated 02.08.2019). Thus, the Ld. AR submitted that the penalty itself becomes null and void.
The Ld. DR relied upon the assessment order, penalty order and the order of the CIT(A).
We have heard both the parties and perused the material available on record. It is pertinent to note that in assessment order while initiating the penalty u/s 271(1)(c) of the Act no satisfaction was recorded as to whether both the limbs of Section 271(1)(c) of the Act was invoked relating to concealment of income or furnishing of inaccurate particulars. Merely stating that 271(1)(c) of the Act penalty was initiated does not amount to satisfaction. The notice u/s 271(1)(c) read with Section 274 is also silent on the particular limb under which the penalty order was passed. There were no specific charges as to concealment of income or furnishing of inaccurate particulars of income in the penalty order itself. Therefore, the very basis of the penalty was not determined by the Revenue Authorities. In light of the decisions of the Hon'ble Supreme Court in case of SSA’s Emerald (Supra) and Hon’ble Delhi High Court in case of M/s Sahara India (Supra), we delete the penalty. The appeal of the assessee is allowed.
In result, the appeal of the assessee is allowed. Order pronounced in the Open Court on this 15th Day of March, 2021.