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Income Tax Appellate Tribunal, DELHI BENCH: ‘A’ NEW DELHI
Before: DR. B. R. R. KUMAR & SH. YOGESH KUMAR U.S.
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.
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.”
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/-.
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.
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.
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.
We have heard the parties, perused the material on record and gave our thoughtful consideration.
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.
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.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Open Court on : 21.10.2022.