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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ NEW DLEHI
Before: SHRI PRADIP KUMAR KEDIA & SHRI N.K. CHOUDHRY
This appeal has been preferred by the Assessee against the order dated 24.01.2019 impugned herein, passed by the learned Commissioner of Income-tax (Appeals)-15, Delhi (in short ‘ld. Commissioner’) u/s. 250(6) of the Income-tax Act, 1961 (in short ‘the Act’) for the assessment year 2010-11.
Though notice for hearing on dated 02.05.2022 was sent to the Assessee vide speed post at the address mentioned in Form No. 36, however the same could not be served and returned back un-served by the postal department, therefore, we are constrained to decide this appeal as ex parte.
Brief facts of the case relevant for adjudication of this appeal are that during the financial year under consideration, the Assessee along with her husband jointly entered into an agreement for purchase of a flat on a total consideration of Rs.46,00,000/- and an amount of Rs.3,12,000/- as registration and stamp duty charges. The Assessing Officer asked the Assessee to explain the source of payments, in response to which, the Assessee submitted that an amount of Rs.35,00,000/- was paid by cheque and balance amount of Rs.11,00,000/- as consideration charges and Rs.3,12,000/- as registration charges and stamp duty, have been paid fromaccumulated cash savings, marriage gifts in cash and cash withdrawals from her own saving bank accounts and of her husband. The Assessing Officer while considering the claim of the Assesseequa cash payment, accepted to the tune of Rs.3,50,000/- and Rs.2,08,000/- and added an amount of Rs.5,58,000/- as undisclosed investment u/s. 69 of the Act.
The Assessee, being aggrieved, preferred first appeal before the ld. Commissioner, who vide impugned order held that out of total cash paid amounting to Rs.14,12,000/-, a total of Rs.10,28,000/- was tried to be explained as cash withdrawals made from various accounts. Out of it, the Assessing Officer accepted the explanation only to the extent of Rs.3,50,000/-. In this manner, the unexplained payment works out is Rs.10,62,000/-(Rs.14,12,000 – 3,50,000). However, in the assessment order, the Assessing Officer has made addition of Rs.5,58,000/- only. This way, the income was under assessed to the tune of Rs.5,04,000/-(Rs.10,62,000 – 5,58,000).
4.1 Ultimately the ld. Commissioner affirmed the addition of Rs.5,58,000/- and enhanced the income to the tune of Rs.5,04,000/- and for the enhanced income of Rs.5,04,000/-, also initiated penalty proceedings u/s. 271(1)(c) of the Act and vide penalty order dated 24.01.2019, impugned herein, levied the penalty to the tune of Rs.1,60,000/- on the amount of Rs.5,04,000/- for concealment of income.
Against the levy of penalty by the Ld. Commissioner, the Assessee is in appeal before us.
6. We have given our thoughtful consideration to the peculiar facts and circumstances of the case and observe that the Assessee in the instant case, though tried to explain its claim before the Assessing Officer minutely, however, the Assessing Officer partly allowed the claim of the Assessee qua cash payment and made the addition of Rs.5,58,000/- only. The ld. Commissioner while realizing that the Assessing Officer has failed to consider the entire amount of disallowance and under-assessed the income of the Assessee to the tune of Rs.5,04,000/-, enhanced the income of the Assessee to the tune of Rs.5,04,000/-by way of quantumappeal order dated 30.07.2018.
6.1 We observe that it is not the case of the Revenue that the Assessee has acted deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation and therefore in our considered view, mere making of a claim, which is not sustainable in law, would not, ipso facto, amount to concealment of income or furnishing of inaccurate particulars regarding the income of the Assessee and would, therefore, not automatically result in a penalty order against the Assessee’ in view of judgment of the Hon’ble Apex Court in the case of Reliance Petro Products Pvt. Ltd 322 ITR 158wherein it was held “Merely because the Assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under Section 271(1)(c). If we accept the contention of the Revenue then in case of every Return where the claim made is not accepted by Assessing Officer for any reason, the assessee will invite penalty under Section 271(1)(c). That is clearly not the intendment of the Legislature.”
5.2 Hence on the aforesaid analyzations, the penalty under challenge is not sustainable, consequently we are inclined to delete the penalty imposed by the ld. Commissioner on the enhanced income made by him.
In the result, the appeal filed by the Assessee stands allowed.
Order pronounced in the open court on 25/05/2022.