BEACON HIGHER EDUCATION SERVICES PRIVATE LIMITED,NEW DELHI vs. THE COMMISSIONER OF INCOME TAX (APPEALS), INCOME TAX DEPARTMENT

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ITA 4107/DEL/2026Status: DisposedITAT Delhi23 September 2026AY 2016-173 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that a penalty under section 271(1)(c) cannot be imposed solely on the basis of disallowance of expenditure. A definite finding of concealment of income or furnishing inaccurate particulars is required, which was absent here.

What were the facts?

The assessee appealed against a penalty order under section 271(1)(c) of the Income-tax Act. The penalty was levied based on the disallowance of depreciation and set-off of losses claimed by the assessee in the quantum proceedings.

What were the issues?

Whether a penalty under section 271(1)(c) can be levied solely on the disallowance of a claim without a finding of concealment or inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘F’: NEW DELHI

For Appellant: Shri Drona Negi, Advocate, Shri Manuj Sabharwal, Advocate
For Respondent: Shri K. Hauthang, CIT DR
Hearing: 12.08.2026Pronounced: 23.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’: NEW DELHI BEFORE SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.4107/DEL/2026 (Assessment Year: 2016-17) M/s. Beacon Higher Education Services Pvt. Ltd., vs. ACIT, Circle 4 (2), 203, 2nd Floor, Ancahl Plaza, New Delhi. Nelson Mandela Road, Vasant Kunj, New Delhi – 110 070. (PAN : AAECB1283F) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Drona Negi, Advocate Shri Manuj Sabharwal, Advocate REVENUE BY : Shri K. Hauthang, CIT DR Date of Hearing : 12.08.2026 Date of Pronouncement : 23.09.2026 O R D E R PER S.RIFAUR RAHMAN,AM: 1. This appeal is filed by the assessee against the order passed by the ld. Commissioner of Income-tax/National Faceless Appeal Centre (NFAC), Delhi [for short ‘ld. CIT (A)] dated 16.02.2026 for the Assessment Year 2016-17 affirming the penalty order dated 14.02.2022 passed under section 271(1)(c) of the Income-tax Act, 1971 (for short ‘the Act’).

2 ITA No.4107/Del/2026

2.

At the time of hearing, ld. AR of the assessee brought to our notice that the penalty levied by the AO on the basis of disallowance of depreciation and set off of losses claimed by the assessee in the quantum proceedings. He also brought to our notice that vide penalty order, the AO proceeded to levy the penalty on the above claim of the assessee.

3.

On the other hand, ld. DR of the Revenue has not objected to the factual position explained by the ld. AR.

4.

Considered the rival submissions and material placed on record. We observed that in the quantum proceedings, the AO has rejected the depreciation claimed by the assessee and also rejected the set off of losses claimed by the assessee. We observe that it is a basic requirement of the provisions of law that definite finding is required to be recorded by the AO for reaching to a conclusion with regard to concealment of income or furnishing of inaccurate particulars of income and without any such findings, there cannot be any question of imposition of any penalty u/s 271(1)(c) of the Act. We observe that assessee cannot be penalized for making a claim of expenditure, which is not acceptable to AO. We observe that the AO has not brought on record anything contrary to establish that claim of assessee does not pertain to the expenses incurred except assessee failed to furnish the required details and not preferred appeal before first appellate authority. In this regard, we find force from

3 ITA No.4107/Del/2026

the decision of Hon’ble Supreme Court in the case of Reliance Petroproducts Ltd. reported in 322 ITR 158 (SC) wherein it is held that an incorrect claim does not amount to furnishing of inaccurate particulars of income. Keeping in view the totality of the facts and circumstances of the case, we are of the considered view that penalty under section 271(1)(c) of the Act cannot be imposed on the basis of disallowance of expenditure. Accordingly, the penalty levied is deleted and the appeal of the assessee is allowed. 5. In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on this 23rd day of September, 2026.

Sd/- sd/- (VIMAL KUMAR) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: 23.09.2026 TS

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