ACIT, CIRCLE-52(1), NEW DELHI vs. ARUN SANKHWAL, NEW DELHI

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ITA 9856/DEL/2019Status: DisposedITAT Delhi21 October 2022AY 2015-165 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that penalty under Section 271(1)(c) cannot be levied when the returned income and the assessed income are the same. The CIT(A) was correct in deleting the penalty.

What were the facts?

The assessee filed a return of income which was accepted by the Assessing Officer (AO) without any additions. Subsequently, the AO levied a penalty under Section 271(1)(c) for concealment of income. The CIT(A) deleted the penalty.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied when there are no additions to the returned income. Whether concealment of income can be inferred when returned income equals assessed income.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH: ‘A’ NEW DELHI

Before: DR. B. R. R. KUMAR & SH. YOGESH KUMAR U.S.

For Appellant: Shri K. Sampath, Adv. &, Shri V. Rajkumar, Adv.;
For Respondent: Shri Kanav Bali
Hearing: 19.10.2022Pronounced: 21.10.2022

This appeal is filed by the Revenue for assessment year 2015-16 against the order of the ld. Commissioner of Income Tax (Appeals)-XXV, New Delhi [hereinafter referred to as CIT (Appeals)] dated 15.10.2019.

2.

The Revenue has raised the following grounds of appeal:-

ACIT Vs. Arun Sankhwal, N. Delhi

“1. Whether on the facts and circumstances of the case, the Ld.CIT (A) has erred in deleting the penalty levied by AO u/s 271(l)(c) read with section 274 of the I.T. Act, 1961, amounting to Rs.1,15,42,231/-.

2. Whether on the facts and circumstances of the case, tlie Ld. CIT(A) has erred in deleting the penalty levied by AO u/s 271(l)(c) amounting to Rs.l, 15,42,231/- without considering the facts tlmt the assessee had concealed its particulars of income which was detected during the course of proceedings u/s 131 of the Income Tax Act, 1961 before the investigation wing.

3. Whether on the facts and circumstances of the case, the Ld.CIT(A) has erred in deleting the penalty levied by AO u/s 271(l)(c) amounting to Rs.l,15,42,231/-, without considering the fact that tlie assessee had declared/surrendered the amount in question when he was confronted during the course of proceedings u/s 131 of the Income Tax Act, 1961 before the investigation wing.”

3.

Brief facts of the case are that, the assessee filed a return for the year under consideration i.e. Assessment Year 2015-16 at Rs. 2,06,13,700/-. The assessment order came to be passed on 16/12/2017 u/s 143(3) of the Act wherein the Ld. A.O. assessed the income of the assessee same as returned income at Rs. 2,06,13,700/-. Subsequently, penalty proceedings have been initiated and penalty order u/s 271(1)(c) of the Act came to be passed against the assessee by imposing penalty of Rs. 1,15,42,231/-.

4.

As against the penalty order dated 28/06/2018, the assessee has preferred an appeal before the CIT(A). The Ld.CIT(A) vide order dated 15/10/2019 deleted the penalty imposed by the Ld. A.O. As against the order

ACIT Vs. Arun Sankhwal, N. Delhi of the Ld.CIT(A) in deleting the penalty order, the revenue has preferred the present appeal on the grounds mentioned above.

5.

The Ld. DR vehemently submitted that the penalty order required to be sustained and the Ld.CIT(A) has committed an error in deleting the penalty order and relied on the penalty order.

6.

Per contra, the Ld. Counsel for the assessee submitted that the return income of the assessee and the assessed income of the assessee are one and the same, therefore, the penalty proceedings cannot be initiated against the assessee. By relying on the order of the Ld. CIT(A), the Ld. Counsel for the assessee submitted that the order of the Ld. CIT(A) requires no interference and the appeal of the Revenue deserves to be dismissed.

7.

We have heard the parties, perused the material on record and gave our thoughtful consideration.

8.

It is not in dispute that the assessee has declared the total income at Rs. 2,06,13,700/- and the assessment order u/s 143 (3) of the Act has been passed by assessing the total income of the assessee at Rs. 2,06,13,700/- only. When the return of the income and the assessed income are the same, the provision for levying penalty u/s 271(1)(c) of the Act cannot be invoked. The penalty proceedings are initiated with reference to the tax sought to be evaded which is the difference between the Income return and the Income assessed by the A.O. The Jurisdictional High Court in the case of CIT Vs. SAS Pharmaceutical (2011) 335 ITR 259 (Del), held that the penalty u/s 271(1)(c) of the Act can only be levied if in the course of the proceedings, the A.O. is satisfied that there is a concealment or furnishing of inaccurate particulars. The words ‘in the course of any proceedings under this Act mean the assessment proceedings.’ However, the question ‘whether there is concealment

ACIT Vs. Arun Sankhwal, N. Delhi or inaccurate particulars’ has to be determined with reference to the returned income.

9.

In view of the above, we are of the considered opinion that the Ld.CIT(A) not committed any error in allowing the appeal of the assessee by deleting the penalty imposed by the A.O. Therefore, we do not find any merit in the grounds of appeal of the Revenue, accordingly, the grounds of appeal of the Revenue are dismissed.

10.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the Open Court on : 21.10.2022.

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