SUKHDEV SINGH,GHAZIABAD vs. ITO, WARD- 2(3), GHAZIABAD

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ITA 7108/DEL/2018Status: DisposedITAT Delhi02 March 2021AY 2009-104 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the quantum addition was deleted, the penalty levied under section 271(1)(c) could not be sustained. Therefore, the penalty order was bad in law.

What were the facts?

The assessee's appeal was against a penalty order under section 271(1)(c). The original addition was made on a protective basis, and later enhanced by the CIT(A). However, subsequent ITAT orders deleted the substantive addition in the hands of others.

What were the issues?

The key issues were the validity of penalty proceedings initiated by the CIT(A) on an enhanced addition, and whether penalty could be levied when the underlying addition was deleted.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 250(6),Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC-1’, NEW DELHI

Before: Sh. Bhavnesh SainiDr. B. R. R. Kumar

Hearing: 18.01.2021Pronounced: 02.03.2021

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the assessee against the order of the ld. CIT(A)-2, Noida dated 13.09.2018.

2.

Following grounds have been raised by the assessee:

1. That on the facts and circumstances of the case, the penalty order passed by the learned Commissioner of Income Tax (Appeals) (Ld. CIT (A)) under section 271(1)(c) of the Act is bad, both in the eyes of law and on facts.

2.(i) That on the facts and in the circumstances of the case, the initiation of penalty proceedings u/s 271(1)(c), is bad in law, as order passed u/s 250(6) of the Act in which penalty proceedings initiated is itself being bad in law and a nullity.

2 Sukhdev Singh (ii) That the order u/s 250(6) of the Act is itself null and void being the said order passed in violation of settled law that CIT(A) has no power to assess new source of income, which was not subject matter of original assessment.

3. That on the facts and circumstances of the case, the penalty order passed u/s 271(1)(c) of the Act by the Ld. CIT(A) on the total amount of addition of Rs.1,90,18,000/- is contrary to the view taken by him that wrong addition made by the AO is modified and enhanced from Rs.43,25,000/- to Rs.1,90,18,000/-. Thus penalty order passed by the Ld. CIT(A) is bad in law and liable to be quashed.

4. That on the facts and circumstances of the case, the Ld CIT(A) erred in imposing penalty u/s 271(1)(c) of the Act on the total amount of addition of Rs.1,90,18,000/- which includes amount of addition of Rs.43,25,300/- made by the AO on which penalty has already been imposed Thus penalty imposed by the Ld CIT(A) on amount of Rs.43,25,300/- tantamount to double penalty which is bad in law and liable to be cancelled.

Without prejudice to the above

5. That on the facts and in the circumstances of the case the Ld. CIT(A) erred in law issuing show cause notice u/s 274 r.w.ss 271 of the Act without specifying under which limb of section 271(1)(c) penalty proceedings has been initiated i.e. either for concealment of income or for fur fishing of inaccurate particulars of income, is invalid and penalty order so passed is without Jurisdiction and is bad in law and is liable to be quashed.

6. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in mechanically and arbitrarily passing the penalty order ups 271(1)(c) of the Act without recording necessary satisfaction that either the appellant has concealed particulars of income or furnished inaccurate particulars of income as these two connotation are mutually exclusive.

3 Sukhdev Singh Hence the penalty order passed ups 271(1)(c) of the Act is without jurisdiction and is null and void.

7.

That on the facts and in the circumstances of the case, the Ld. CIT(A) erred both in law and on facts in imposing penalty u/s 271(1)(c) of the Act without appreciating the fact that there was no concealment or furnishing of inaccurate particulars of income as contemplated u/s 271(1)(c) as the alleged addition made on account of capital gain in the hands of the appellant has never been earned by the appellant and is sub-judice before the Hon’ble Bench of ITAT.”

3.

The addition has been made on protective basis in the hands of the assessee namely Shri Sukhdev Singh and substantive basis in the hands of two persons namely Sh. Kamaldeep Singh and Shri Kamal Ashish Singh being the Power of Attorney holders.

4.

The substantive assessments has been made by the ITO, Ward-2, Phagwara and confirmed by the ld. CIT (A), Jallandhar. Further, the Co-ordinate Bench of ITAT in of 2007 dated 24.06.2019 confirmed the addition in the case of one of the Power of Attorney holders wherein it was categorically held that the sale consideration has been received by the Power of Attorney holders and hence they are liable to pay the capital gains.

5.

Owing to the order of the Co-ordinate Bench of Tribunal at Amritsar in the case of the Power of Attorney holder, the protective addition and the subsequent enhancement made by the ld. CIT (A) has been deleted by the by the Co-ordinate Bench of ITAT at Delhi in for the assessment year 2009-10. Since, as on now, the quantum addition stands deleted and 4 Sukhdev Singh hence the penalty levied u/s 271(1)(c) cannot be sustained.

6.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 02/03/2021.

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