MUKESH KHURANA,NEW DELHI vs. DCIT, CENTRAL CIRCLE, NOIDA

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ITA 4709/DEL/2018Status: DisposedITAT Delhi01 November 2022AY 2013-145 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the returned income was accepted as such in the assessment order under section 153A, and there was no variation between returned and assessed income, there was no basis for levying penalty under section 271(1)(c). The penalty was deleted.

What were the facts?

During a search operation, the assessee filed a return under section 153A, disclosing short-term capital gains from property sale which were not reported in the original return filed under section 139(1). The Assessing Officer initiated penalty proceedings for concealment of income.

What were the issues?

Whether penalty under section 271(1)(c) can be levied when the returned income is accepted without variation in the assessment order, despite income being offered later under section 153A.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 153A,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘E’ BENCH,

Before: SHRI N.K. BILLAIYA, & SHRI KUL BHARAT

For Respondent: Ms. Sarita Kumari, CIT- DR
Hearing: 01.11.2022Pronounced: 01.11.2022

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-

1.

This appeal by the assessee is preferred against the order of the ld. CIT(A) - IV, Kanpur dated 12.04.2018 pertaining to A.Y. 2013-14.

2.

The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the penalty of Rs. 29,87,050/- levied by the Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'].

3.

None appeared on behalf of the assessee in spite of several notices. Therefore we decided to proceed exparte.

4.

We have heard the ld. DR at length. Case records carefully perused.

5.

The roots for levy of penalty lie in the assessment order dated 31.03.2016 framed u/s 143(3) r.w.s 153A of the Act. Search and seizure operation u/s 132 of the Act was conducted at the premises of the assessee, comprising Shubhkamna Buildtech Pvt Ltd group of cases.

Accordingly, notices u/s 153A of the Act were issued and served upon the assessee.

6.

Pursuant to the said notice, the assessee filed return of income of Rs. 1,02,33,500/-. The Assessing Officer noticed that in the return filed u/s 153A of the Act, the assessee has shown income from short term capital gain to the tune of Rs. 78,30,000/- which was not shown in the return of income filed u/s 139(1) of the Act.

7.

The Assessing Officer found that the assessee had purchased a property for Rs. 1,48,50,000/- which was subsequently sold for Rs. 2,26,80,000/- on which the assessee made short term capital gain which was offered for taxation in the return filed u/s 153A of the Act.

Assessment order was framed u/s 153A of the Act accepting the returned income as such, but penalty proceedings were separately initiated for levy of penalty u/s 271(1)(c) of the Act on the ground that the assessee did not return the capital gain in the return filed u/s 139(1) of the Act and, therefore, the Assessing Officer formed a belief that the assessee has concealed income and has filed inaccurate particulars of income and levied penalty of Rs. 29,87,050/-.

8.

The assessee carried the matter before the ld. CIT(A) but without any success.

10.

We have given thoughtful consideration to the orders of the authorities below. The undisputed fact is that the returned income of Rs. 1,02,33,500/- was assessed as such vide order dated 31.03.2016 framed u/s 143(3) r.w.s 153A of the Act. This means that there is no variation in the returned income and assessed income and only basis for levy of penalty is that in the return filed u/s 139(1) of the Act, the assessee inadvertently could not return short term capital gain made on purchase and sale of property at Noida.

11.

Be that as it may, we find that the basis of levy of penalty is the assessment order dated 31.03.2016 framed u/s 143(3) r.w.s 153A of the Act wherein the returned income and assessed income are one and the same. Therefore, we do not find any reason for levy of penalty u/s 271(1)(c) of the Act. The Assessing Officer is directed to delete the same.

12.

In the result, the appeal of the assessee in is allowed.

The order is pronounced in the open court on 01.11.2022 in the presence of the ld. DR.

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