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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI YOGESH KUMAR U.S
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the Revenue is preferred against the order of the Commissioner of Income Tax [Appeals] - 01, New Delhi dated 16.05.2017 pertaining to Assessment Year 2011-12.
The grievances of the Revenue read as under:
“1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the penalty amounting to Rs. 1,71,40,000/- imposed by the Assessing Officer u/s 271(1)(c) of the Act.
2. The ld. CIT(A) erred on facts and in law holding the penalty proceedings initiated and levied by the Assessing Officer u/s 271(1)(c) of the Act as invalid since the show cause notice and the penalty order passed by the Assessing Officer are in conformity with the intent and purpose of the Act and hence the infirmity, if any in these are taken care of by the provisions of section 292B of the Act.”
Representatives were heard at length. Case records carefully perused.
Briefly stated, the facts of case are that the assessee filed its Return of Income electronically on 30.09.2011 showing total income at Rs. 1,20,19,74,162/-, which was subsequently revised at Rs. 1,19,91,36,679/- . The return was selected for scrutiny assessment and accordingly, statutory notices were issued and served upon the assessee.
Returned income was assessed at Rs. 1,25,87,20,383/- after making additions on account of : i) ALV of vacant commercial/ self-occupied assets - Rs.5,90,67,704/- ii) Addition on account of disallowance of amortized cost of land in respect of wind power projects - Rs. 5,16,000/-
Quantum additions were challenged before the ld. CIT(A) and the ld. CIT(A), vide his order dated 27.11.2014, directed the Assessing Officer to delete the addition of Rs. 5,16,000/-, and following the order of the Hon'ble High Court of Delhi in assessee’s own case for earlier years, upheld the addition of ALV in respect of vacant commercial/self-occupied assets.
Penalty proceedings were separately initiated for furnishing of inaccurate particulars of income/concealment of income u/s 271(1)(c) of the Act and vide order dated 28.03.2016, the Assessing Officer levied penalty of Rs. 1,71,40,000/-.
Levy of penalty was challenged before the ld. CIT(A). It was strongly contended before the ld. CIT(A) that in earlier Assessment Years, ALV was deleted by the ld. CIT(A) and also by the Tribunal, but subsequent to the decision of the Hon'ble High Court of Delhi, ALV has been taxed in the hands of the assessee. It was strongly contended that two views are possible and the assessee has taken a plausible view, which cannot tantamount to concealment of income or furnishing of inaccurate particular of income.
The assessee also challenged the validity of notice claiming that the Assessing Officer has not specified as to under which limb penalty is leviable.
After considering the facts and submissions, the ld. CIT(A) was convinced on both counts. On merits, he deleted the penalty stating that the impugned issue is highly debatable and the assessee has taken a plausible view and also went on to quash the notice itself stating that the Assessing Officer has not mentioned whether the assessee has concealed particulars of income or furnished inaccurate particulars of income.
Before us, the ld. DR strongly supported the findings of the Assessing Officer.
On the other hand, the ld. counsel for the assessee relied upon the findings of the ld. CIT(A).
We have given thoughtful consideration to the orders of the authorities below. Taxability of ALV was highly debatable and, in fact, right from Assessment Year 1998-99 and till such time, while the Assessing Officer was making similar additions, the ld. CIT(A) and the Tribunal were consistently deleting the same year after year. It is not in dispute that it is only by order dated 31.10.2012, the Hon'ble High Court of Delhi decided the issue against the assessee. It is equally true that SLP of the assessee is pending before the Hon'ble Supreme Court.
Past history of the assessee clearly shows that taxability of ALV in respect of vacant commercial/self-occupied assets was a highly debatable issue and two views were possible. Since the assessee has taken a plausible view, the same cannot be considered as filing of inaccurate particulars of income or concealment of particulars of income.
Therefore, we do not find any error or infirmity in the findings of the ld. CIT(A). Ground No. 1 is accordingly dismissed.
The Hon'ble High Court of Delhi in the case of Pr. CIT vs. Sahara India Life Insurance Company Ltd. ITA 475 of 2019, while deciding an identical issue, held as under:
“21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of inc me or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 Taxman.com 241 (Kar) , the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of2016 by order dated 5th August, 2016.”
Similar view was taken by the Hon’ble High Court of Karnataka in the case of SSA Emerald Meadows of 2015. The relevant findings of the judgement read as under:
“Notice issued by the Assessing Officer u/s 274 r.w.s 271(1)(c) of the Act to be bad in law as it did not specify which limb of section 271(1)(c) of the Act the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The issue was decided in favour of the assessee.”
Respectfully following the binding decisions of the Hon’ble High Courts [supra], Ground No. 2 is also dismissed.
In the result, with the above directions, the appeal of the Revenue is dismissed.
The order is pronounced in the open court on 22.02.2022 in the presence of both the rival representatives.