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Income Tax Appellate Tribunal, [ DELHI BENCH “F”: NEW DELHI ]
Before: SHRI KUL BHARATSHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M.
This appeal is filed by the assessee trust against the order of the ld. Commissioner of Income Tax (Appeals)–14, New Delhi, (the learned CIT – A) dated 2.04.2018 wherein penalty levied by the ld. Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 (the Act) by order dated 31.01.2017 amounting to Rs. 3,40,058/- was confirmed. The assessee is challenging the same.
The assessee has raised the following grounds of appeal:- “1. Ld. CIT(A) erred in facts and in law in confirming action of Ld. A.O. in imposing penalty u/s 271(1)(C) at Rs.3,40,058/- is arbitrary erroneous and must be quashed.
2. CIT (A) has erred on fact and in law in confirming the action in imposing penalty levied by Ld. A.O. without assuming jurisdiction and without levying any specific charge and without recording mandatory satisfaction as per law.
3. Order passed is against principles of natural justice. Page | 1
4. Appellant craves leave to add any other Ground before the hearing. “
Brief facts of the case shows that assessee filed return of income in the status of private trust at total income of Rs.62,71,110/- on 13th September, 2014. This was assessed by the ld. Assessing Officer by passing an order under Section 143(3) of the Act on 12.07.2016 wherein additional income disclosed of Rs. 8,71,610/- was added to the total income of the assessee and total income of the assessee was determined at Rs. 75,79,421/-.
The facts of the addition shows that assessee’s case was picked up for scrutiny for the reason that there is a high increase in annual letting value of the house property. During the course of assessment proceedings assessee revised his return of income to Rs. 71,42,720/- claiming that due to over-sight rent receipt of the last month could not be included in the return of income. Assessing Officer held that the revised return is not acceptable as it was found after detection of the error by selecting the case of the assessee for scrutiny on this reason. The Assessing Officer initiating the penalty proceedings held that there is a concealment / furnishing of inaccurate particulars of income. The assessee submitted a reply that inadvertently lesser income was shown which was revised subsequently before the detection, and, therefore, no penalty should be levied. Several case laws were also cited before him. The Assessing Officer noted that the return of the assessee was selected for limited scrutiny only to examine substantial increase in the rental income of the assessee and, therefore, revised return was after detection and he held that assessee has deliberately concealed its income by furnishing inaccurate particulars of income. He levied a penalty of Rs. 3,40,058/- by order dated 31.01.2017. The order was challenged before the ld. CIT (Appeals), but it was confirmed and, therefore, this appeal is filed. 5. We have heard the rival contentions of both the parties. 6. On hearing the parties, on perusal of the orders of the lower authorities and looking at the ground of appeals filed by the assessee, we find that as per ground No. 2, assessee has challenged the levy of penalty despite in the penalty notice the ld. Assessing Officer has not specified any of the specific limb. A further anomaly was shown to us that in fact the assessment order Page | 2
under Section 143(3) of the Act was passed on 12th July, 2016, whereas show cause notice under Section 271(1)(c)of the Act was issued on 11thJuly, 2016. Therefore, the satisfaction was recorded by the Assessing Officer on 12th July, 2016 i.e. on the date of making of assessment, whereas show cause notice has been issued to the assessee one day prior to that i.e. on 11.07.2016. Even otherwise, the notice issued on 11.07.2016, did not specify any of the charges. Coming to the assessment order, the Assessing Officer categorically held that penalty proceedings are initiated for concealment and furnishing of inaccurate particulars of income. In the penalty order, learned Assessing Officer specifically hold assessee of having deliberately concealed its income by furnishing inaccurate particulars of income. The ld. CIT (Appeals) confirmed the penalty holding that assessee has concealed the income. Therefore, there are several inconsistencies in the penalty proceedings. Even otherwise the assessee’s case is squarely covered in its favour by the decision of Hon’ble Delhi High Court in Pr. CIT Vs. Sahara India Life Insurance Company Ltd. in dated 2.08.2019 wherein for non-striking of any of the limbs in the non-statutory notice issued under Section 274 of the Act, the penalty orders were quashed. Therefore, respectfully following the same, we reverse the orders of the lower authorities and direct the assessing Officer to delete the penalty imposed under Section 271(1)(c) of the Act of Rs. 3,40,058/-. Accordingly, appeal of the assessee is allowed.
Order pronounced in the open court on : 27/08/2021.