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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’, NEW DELHI
Before: SHRI BHAVNESH SAINI & SHRI O.P. KANT
ORDER PER O.P. KANT, AM:
This appeal by the assessee is directed against order dated 15/02/2017 passed by the learned CIT(Appeals)-31, New Delhi, [in short ‘the Ld. CIT(A)’] for assessment year 2008-09, in relation to penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (in short ‘the Act’). The grounds raised by the assessee are reproduced as under:
1. The Ld. CIT(A) grossly erred in confirming penalty of Rs.24,74,317/- which were levied u/s 271(1)(c) of the Act by Assessing Officer on Ad-hoc addition of Rs.72,79,545/- made in assessment @ 0.25% of Sub-Contract payment of Rs.2,91,18,17,989/- made by appellant for its business during the assessment year. 2. The appellant prays to add, amend or modify the grounds of appeal at any time.
2. The assessee also raised additional ground in his application dated 09/11/2019, which is reproduced as under: “Whether the penalty is for concealment of income or furnishing of inaccurate particulars of income is not evident from the notice nor from the penalty order. Penalty provisions being quasi-judicial, unless there is specific charge, there cannot be any levy of penalty. Therefore, the order levying penalty is wrong and bad in law.” 2.1 After hearing the parties, in view of the settled principle that the issue being legal in nature and no investigation of the fresh facts was required, the additional ground raised
by the assessee was admitted
3. The assessee filed a copy of the notice dated 30/03/2016 initiating penalty under section 271(1)(c) of the Act. The learned counsel of the assessee submitted that the Assessing Officer has not specified the charges for levy of the penalty in the said notice. According to him, the learned Assessing Officer has not strike out anyone of the charge, out of the two charges of concealment of the particular of the income or furnishing inaccurate particulars of income. The learned counsel of the assessee relied on the order dated 17/10/2019 of the Tribunal in the case of the assessee in to 244/Del/2017 for assessment year 2007-08, 2009-10, 2010-11 and 2011-12 and submitted that penalty under section 271(1)(c ) of the Act has been cancelled in identical circumstances and additional ground raised by the assessee was allowed.
On the contrary, learned DR relied on the order of the lower authorities and placed reliance on following decisions: i. Sundaram Finance Ltd. Vs. CIT [2018] 99 taxmann.com 152 (SC) ii. Sundaram Finance Ltd. Vs. CIT [2018] 93 taxmann.com 250 (Madras)/[2018] 403 ITR 407 (Madras) iii. CIT Vs. Smt. Kaushalya [1994] 75 Taxman 549 (Bombay)/[1995] 216 ITR 660 (Bombay) iv. New Holland Tractors (India) (P.) Ltd. Vs. CIT [2014] 49 taxmann.com 573 (Delhi)/[2015] 228 Taxman 66 (Delhi)/[2015] 275 CTR 291 (Delhi) v. Trimurti Engineering Works Vs. ITO [2012] 25 taxmann.com 363 (Delhi)/[2012] 138 ITD 189 (Delhi)/[2012] 150 TTJ 195 (Delhi) vi. Hybrid Rice International Pvt. Ltd. Vs. CIT (ITA No. 285/2007) vii. Earthmoving Equipment Service Corporation Vs. DCIT {2017} 84 Taxmann.com 51 (Mumbai – Trib.)/[2017] 166 ITD 113 (Mumbai – Trib.)/[2017] 187 TTJ 233 (Mumbai-Trib.) viii. DCIT Vs. Shah Rukh Khan [2018] 93 taxmann.com 320 (Mumbai- Trib.) ix. Dhanraj Mills Pvt. Ltd. Vs. ACIT, & 3833/Mum./2009
We have heard the rival submission and perused the relevant material on record. In the instant case, the Ld. CIT(A) has upheld the penalty following his own finding in assessment year 2007-08, 2009-10, 2010-11 and 2011-12. In assessment years 2007-08, 2009-10, 2010-11 & 2011-12, the Tribunal (supra) has cancelled the penalty in view of no specific charges for levy of the penalty communicated to the assessee. The relevant finding of the Tribunal is reproduced as under: “7. It is evident that the Assessing Officer has not specified for which charge, the penalty was being proposed for levy. While initiating the penalty proceedings in the assessment order also, the Assessing Officer did not specify the charges and simply mentioned that the assessee has concealed its income and/or filed inaccurate particulars of its income. In view of the above facts and circumstances, prior to levy of the penalty, the specific charges were not communicated to the assessee and therefore, the Assessing Officer is not justified in penalizing the assessee in view of the decision of the Hon’ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory(supra) and the decision of the Hon’ble Supreme Court in the case of SSA'S Emerald Meadows(supra). Accordingly, the order of the learned CIT(A) in all the six assessment years are set aside and the penalty levied by the Assessing Officer is cancelled in all the six assessment years. The additional ground raised by the assessee is allowed. As we have already cancelled the penalty in dispute, the grounds of appeal of the assessee are not required to be adjudicated.”
6. As identical issue involved in the year under consideration, respectfully following the finding of the Tribunal (supra), in absence of specific mention of the charge either of the concealment of the income or filing of inaccurate particulars of the income in the notice issued for levy of penalty, the penalty levied by the Assessing Officer is cancelled.
7. The additional ground raised
by the assessee is accordingly allowed. Since we have already allowed the additional ground, the ground raised in the appeal is not adjudicated being rendered academic only.
8. In the result, the appeal filed by the assessee is allowed Order pronounced in the open court on 26th February, 2020.