THE PR. COMMISSIONER OF INCOME TAX -CENTRAL -1 vs. VIKRAM DHIRANI

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ITA - 175 / 2024HC Delhi12 March 20242 pages
For Petitioner: RUCHIR BHATIA
AI SummaryAllowed

What did the High Court hold?

The High Court admitted the appeal for further consideration, framing a question of law regarding the ITAT's deletion of the penalty. The court noted the assessee's alleged failure to substantiate the source of undisclosed income.

What were the facts?

The ITAT annulled a penalty imposed under Section 271AAA of the Income Tax Act, holding the assessee was not given an opportunity to explain the source of undisclosed income. The Revenue appealed this decision.

What were the issues?

Whether the ITAT was correct in deleting the penalty under Section 271AAA when the assessee allegedly failed to substantiate the source of undisclosed income.

Which sections of the Income-tax Act were involved?

Section 271AAA

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$~82 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 175/2024

THE PR. COMMISSIONER OF INCOME

TAX -CENTRAL -1

..... Appellant

Through: Mr. Ruchir Bhatia, SSC.

versus

VIKRAM DHIRANI

..... Respondent

Through: None.

CORAM:

HON'BLE MR. JUSTICE YASHWANT VARMA

HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR

KAURAV

O R D E R %

12.03.2024

1.

Notice. Although the respondent is stated to have been placed on advance notice, none has appeared on its behalf when the matter was called. Consequently, let learned counsel appearing for the appellant take steps for service upon the said respondent through all permissible modes including via approved courier service. 2. Prima facie and on a consideration of the submissions addressed by Mr. Bhatia, learned counsel, we find that the appeal would merit further consideration in light of the following facts. 3. The Income Tax Appellate Tribunal [“ITAT”] has essentially annulled the penalty which had been imposed under Section 271AAA of the Income Tax Act, 1961 [“Act”] holding that the assessee was neither confronted with any question during the recordal of its statement nor called upon to explain the source of the undisclosed income. 4. It is in the aforesaid context, let Mr. Bhatia, learned counsel, This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:15:38

draws our attention to paragraph 13 and 14 of the judgment in Principal Commissioner of Income Tax vs. Smt. Ritu Singhal [(2018) 92 taxmann.com 224 (Delhi)]. Matter requires consideration. 5. We consequently admit the instant appeal on the following question of law:- A. Whether on the facts and in the circumstances of the case, the ITAT is correct in deleting the penalty of Rs.50,00,000/- imposed by the AO under Section 271AAA of the Act despite the fact that the assessee has failed to substantiate the manner in which undisclosed income was derived? 6. List again on 10.05.2024.

YASHWANT VARMA, J.

PURUSHAINDRA KUMAR KAURAV, J. MARCH 12, 2024/neha

This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 14:15:38

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