DEEPA KRISHEN,NEW DELHI vs. ACIT, CIRCLE- 33(1), NEW DELHI

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ITA 2425/DEL/2018Status: DisposedITAT Delhi27 January 2020AY 2014-153 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 the penalty order suffered from infirmity because the Assessing Officer did not record proper satisfaction while initiating penalty proceedings under Section 271(1)(c) of the Act. The penalty was levied for concealment of income, while satisfaction was recorded for furnishing inaccurate particulars.

What were the facts?

The assessee filed their return of income declaring a certain amount. The Assessing Officer initiated penalty proceedings for furnishing inaccurate particulars of income but levied the penalty for concealment of income.

What were the issues?

Whether the penalty levied under Section 271(1)(c) is valid when the Assessing Officer records satisfaction for one limb of the section but levies penalty for another limb.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI

Before: MS. SUSHMA CHOWLA & Sh. N.K. BILLAIYA

Hearing: 13.01.2020Pronounced: 27.01.2020

PER SUSHMA CHOWLA, VP The appeal filed by the assessee is against the order of CIT(A)-11, New Delhi, dated 01/02/2018, relating to assessment year 2014-15 against penalty levied under section 271(1)(c) of the Income Tax Act, 1961 (in short “Act”).

2.

Despite service of notice, none was present on behalf of the assessee.

3.

The only issue raised in the present appeal is against the levy of penalty of Rs.14,08,870/- u/s 271(1)(c) of the Act.

4.

Briefly in the facts of the case the assessee has derived income from salary, house property, business or profession, capital gain and other sources and e-filed return of income declaring income of Rs.11,29,48,720/- on 31.07.2014. The Assessing Officer has initiated penalty proceedings for furnishing of inaccurate particulars of income. However, in the penalty order, the Assessing Officer levied the penalty for concealment of income.

5.

Penalty for concealment u/s 271(1)(c) of the Act is leviable where the assessee had neither concealed its income or furnished inaccurate particulars of income. The Assessing Officer while completing the assessment has to record satisfaction in this regard, in order to show cause the assessee as to which limb of section 271(1)(c) of the Act has not been satisfied by it. This is the basic condition of the aforesaid section. On perusal of the assessment order passed for the instant assessment year reflects satisfaction was recorded for furnishing of inaccurate particulars of income and levied for concealment of income. In such facts & circumstances, the requirements of the section have not been met. Merely, an order issuing notice u/s 274 r.w.s. 271(1)(c) of the Act do not meet the conditions of the said initiation of penalty proceedings. In the absence of the same, there is no merit in the penalty order passed in the case in this regard. We find support from the ratio laid down by the Hon’ble Bombay High Court in CIT vs Shri Samson Perinchery (2017) 392 ITR 4 (Bom.). We hold that in the absence of recording proper satisfaction, while initiating the penalty proceedings u/s 271(1)(c) of the Act, order passed u/s 271(1)(c) of the Act suffers from infirmity. Hence, the same is cancelled. Grounds of appeal raised by the assessee are thus allowed.

6.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court 27th day of January, 2020.

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