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Income Tax Appellate Tribunal, DELHI ‘D’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI CHALLA NAGENDRA PRASAD
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the
CIT[A]- 42, New Delhi dated 20.12.2016 pertaining to Assessment Year
2011-12.
The assessee has raised the following grounds of appeal:
On the facts and in the circumstances of the case and in law, the notice issued u/s 274 r.w.s 271(1)(c) dated 31.03.2015 ios bad in law and consequently, the penalty levied in pursuance of the said notice should be deleted.
On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in confirming the action of the Assessing Officer in levying penalty u/s 271(1)(c) of the Act. Of Rs. 6,96,223/-
The above grounds of appeal are without prejudice to one another.”
The roots for levy of penalty lie in the assessment order framed u/s
143(3) of the Act by which the retuned income of Rs. 87,53,200/- was
assessed at Rs. 1,04,66,910/- after making addition of Rs. 17,13,707/-.
The said addition was on account of non-inclusion of income of Rs.
17,13,707/-. Penalty proceedings were separately initiated for
concealment of particulars of income and for furnishing of inaccurate
particulars thereof.
Penalty was subsequently levied @ 100% of the taxes sought to be
evaded at an amount of Rs. 6,96,223/-. While levying penalty, the
Assessing Officer, at para 7 of his order, observed that the present case
would fall under concealment of income and furnishing of inaccurate
particulars of income.
The representatives of both the sides were heard at length, the
case records carefully perused.
Notice u/s 274 r.w.s 271(1)(c) of the Act read s under:
A perusal of the above shows that the Assessing Officer was not
certain whether penalty was leviable for concealment of income or for
furnishing of inaccurate particulars of income.
We have given thoughtful consideration to the orders of the
authorities below. The Hon’ble Delhi High Court in case of Pr. CIT vs.
Sahara India Life Insurance Company Ltd. ITA 475 of 2019, while deciding
the 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 ITA No. 380 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.”
A SLP of the revenue against this judgement of the Hon’ble High
Court of Karnataka was dismissed by the Hon’ble Supreme Court in
73 taxmann.com 248.
Respectfully following the binding decision of the Hon’ble
Jurisdictional High Court of Delhi, we direct the Assessing Officer to
delete the penalty levied under section 271(1)(c) of the Act.
Before parting, the assessee has raised an additional ground which
reads as under:
“The ld. CIT(A) erred in stating that Rs. 35,89,225/- has remained unexplained whereas the assessee has only offered to tax Rs. 22,53,148/-. The ld. CIT(A) also erred in stating that he is separately informing the Assessing Officer about the said difference and such statement of the ld. CIT(A) is erroneous, contrary to record irrelevant and without putting to the assessee.”
In support of his contention, the ld. AR relied upon several judicial
decisions.
We have carefully considered the judicial decisions relied upon by
the assessee. In our considered opinion, all the judicial decisions are
misplaced and not relevant to the facts of the case in as much as the ld.
CIT(A) has not given direction to the Assessing Officer to make further
addition but has simply informed about the difference in amount offered
for taxation vis a vis unexplained foreign receipts.
A perusal of the findings of the ld. CIT(A) clearly show that he has
not transgressed his powers nor he has issued any unwarranted direction
to the Assessing Officer. The additional ground raised is accordingly
dismissed.
In the result, the appeal of the assessee in ITA No. 1133/DEL/2018 is
partly allowed.
The order is pronounced in the open court on 13.12.2021 in the
presence of both the representatives.
Sd/- Sd/-
[CHALLA NAGENDRA PRASAD] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 13th December, 2021
VL/