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Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI
Before: SHRI CHANDRA MOHAN GARG
ORDER This appeal by assessee has been directed against the order of the Ld. CIT(A), National Faceless Appeal Centre [“NFAC”], dated 28.10.2021, for the A.Y. 2015-2016 and arises out of penalty order passed by the A.O. dated 29.06.2018 passed under section 271(1)(c) of the I.T. Act, 1961.
Briefly stated facts of the case are that the assessee is an Indian company and is engaged in the 2 ITA.No.14/Del./2022 M/s. AVP Buildtech Private Ltd., Delhi. business of real estate and construction and following Percentage Completion of Method [“PCM”] Accounting. It filed return of income on 30.10.2017 declaring total income at Rs.1,63,430/-. In this case, the A.O. completed the original assessment under section 143(3) of the I.T. Act, 1961 by determining the total income of the assessee company at Rs.30,08,070/- vide order dated 28.12.2017 and initiated the penalty proceedings separately vide penalty order dated 29.06.2018 passed under section 271(1)(c) of the I.T. Act, 1961 by levying the penalty of Rs.8,78,990/- after obtaining necessary approval from the Ld. Addl. CIT, Range-1, Noida under section 274(2) of the I.T. Act, 1961 vide order dated 29.06.2018.
2.1. Aggrieved by the order of the A.O, the assessee carried the matter in appeal before the Ld. CIT(A) who vide order dated 28.10.2021 confirmed the penalty of Rs.8,78,990/- imposed by the A.O.
Aggrieved by the order of the Ld. CIT(A), NFAC, Delhi, the assessee carried the matter in appeal before the Tribunal with a delay of 07 days.
3 ITA.No.14/Del./2022 M/s. AVP Buildtech Private Ltd., Delhi. 3.1. The Learned Counsel for the Assessee submitted that the delay in filing the appeal is due to obtaining Power of Attorney and prayed to condone the delay of 07 days to meet the ends of justice as the assessee company has got fair chances to succeed in it’s appeal.
The Ld. D.R. on the other hand strongly opposed for condonation of delay.
I have heard the submissions of both the parties and I am satisfied that the assessee has sufficient cause in not filing the appeal within a prescribed period and, therefore, I am condoning the meager delay of 07 days in filing the appeal before the Tribunal and proceed to decide the appeal on merits.
During the course of hearing, the Learned Counsel for the Assessee drew the attention of the Bench that the authorities below did not point out any omissions or falsity in the facts submitted by the assessee and, therefore, no penalty could be levied by the authorities below. He submitted that the A.O. while levying the 4 ITA.No.14/Del./2022 M/s. AVP Buildtech Private Ltd., Delhi. impugned penalty, ignored the fact that the assessee- company has neither concealed the particulars nor furnished inaccurate particulars of Income as is evident from the observations of the A.O. in the original assessment order. He drew the attention of the Bench of the assessment order of the A.O. dated 28.12.2017 passed under section 143(3) of the I.T. Act, 1961 and submitted that for the impugned A.Y. 2015-16 the assessee completed construction work of 27.2% and estimated the profit thereon up to 31.03.2014 by following Percentage Completion Method at Rs.85,00,000/-, out of which, the assessee has already paid an amount of Rs.50,00,000/- as estimated profit during F.Y.-2012-13. Accordingly balance profit of Rs.35,00,000/- is being taxed for F.Y. 2013-14 relevant to A.Y. 2014-15. He submitted that the A.O. has accepted the estimated profit in the preceding assessment years where no penalty proceedings have been initiated against the assessee as the assessee has neither furnished inaccurate particulars of income nor concealed the particulars of income and, therefore, for the impugned assessment year also i.e, A.Y.
5 ITA.No.14/Del./2022 M/s. AVP Buildtech Private Ltd., Delhi. 2015-16, the penalty proceedings initiated by the A.O. and confirmed by the Ld. CIT(A) are not warranted and prayed that the penalty of Rs.8,78,990/- levied by the A.O. and confirmed by the Ld. CIT(A), be deleted. He further submitted that the assessee has filed it’s return of income for the A.Y. 2015-16 and tax audit report, balance-sheet and P & L A/c for the A.Y. 2015-16 before the A.O, which are placed on record before the Tribunal also, to demonstrate that the assessee-company has not concealed any particulars of it’s income or furnished inaccurate particulars of income.
The Ld. D.R. on the other hand strongly relied on the orders of the authorities below and submitted that the orders of the authorities below are in accordance with law which needs to be upheld by the Tribunal.
I have heard the rival submissions of both the parties and perused the material available on record. I find in the instant case the assessee-company is following Percentage Completion Method and furnished the profit at 27.2% of the completed construction area, which has been 6 ITA.No.14/Del./2022 M/s. AVP Buildtech Private Ltd., Delhi. accepted by the A.O. and made the addition in the impugned assessment year, on which, penalty proceedings were initiated. In this connection, I find that in the preceding A.Y. 2014-15 on similar set of facts, the A.O. has not levied any penalty, thereby, the A.O. satisfied that there was no concealment of the income on the part of the assessee-company. However, for the impugned A.Y. 2015- 16, when the assessee carried the matter in appeal before the Ld. CIT(A), the Ld. CIT(A) simply confirmed the penalty levied by the A.O. under section 271(1)(c) of the I.T. Act, 1961 at Rs.8,78,990/-, without going into the merits of the case. It is a fact that in the assessment order the A.O. has accepted the profit arises out of Percentage Completion Method followed by the assessee at 27.2% and accepted the estimated profit on the said percentage at Rs.35 lakhs and made the impugned addition, on which, penalty proceedings were initiated by the A.O. vide order dated 29.06.2018. In view of the above, first of all, I note that the Ld. Sr. D.R. did not controvert the submissions of the assessee that under identical facts and circumstances, the A.O. himself has 7 ITA.No.14/Del./2022 M/s. AVP Buildtech Private Ltd., Delhi. dropped penalty proceedings under section 271 (1)(c) of the I.T. Act, 1961 for the immediately preceding A.Y. 2014-15 order dated 02.05.2017 with following findings :
“Reply of the assessee and facts of the case is considered. It is observed that assessee has furnished all the details which were part of the balance-sheet. Thus, there was no concealment, but, had failed to show income as per percentage of completion method. Assessee has cooperating in assessment proceedings and accepted the order and had filed appeal against the said order. In view of the above, deliberate concealment is not proved. Assessee has also not provided inaccurate particulars. In view of the above, proceedings initiated under section 271(1)(c) for A.Y. 2014-15 is hereby dropped.” 8.1. Therefore, I am compelled to note that while considering the issue of imposing penalty under section 271(1)(c) of the Act, the A.O. cannot blow hot and cold in different assessment years on identical and similar facts and circumstances. Thus, penalty imposed by the A.O. and confirmed by the Ld. CIT(A) does not stand sustainable on this count. I, therefore, find force in the arguments of the Learned Counsel for the Assessee and in absence of any 8 ITA.No.14/Del./2022 M/s. AVP Buildtech Private Ltd., Delhi. contrary material brought on record by the Ld. D.R to the effect that assessee concealed the particulars of income or furnished inaccurate particulars of income, I, set aside the orders of the authorities below and delete the penalty. Accordingly, appeal of the assessee is allowed.
In the result, appeal of the assessee is allowed.