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Income Tax Appellate Tribunal, DELHI BENCH ‘S.M.C’, NEW DELHI
Before: MS. SUSHMA CHOWLA
आदेश / ORDER
PER SUSHMA CHOWLA, JM
The present appeal filed by assessee is against order of CIT(A)-7, New Delhi dated 10.01.2019 relating to assessment year 2003-04 against penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (in short ‘the Act’).
The only issue raised in the present appeal is against the levy of penalty for concealment of income u/s 271(1)(c) of the Act.
The Assessing Officer has initiated the penalty proceedings for furnishing of inaccurate particulars of income. However, in the penalty order, the Assessing Officer levied the penalty for concealment of income.
The Ld. DR placed reliance on the orders of the authorities below.
I have heard the rival contentions and perused the record. The issue which arises in the present appeal is against the levy of penalty for concealment of income u/s 271(1)(c) of the Act.
Penalty proceedings u/s 271(1)(c) of the Act are attracted where the assessee had either concealed its income or furnished inaccurate particulars of income. For default of either of the limbs of the said section, the assessee can be held liable for levy of penalty of concealment.
However, the Assessing Officer while initiating penalty proceedings has to come to a finding in this regard. In the present case, I find that the Assessing Officer has failed to record the satisfaction as to which limb of the said section has not been fulfilled by the assessee. In the absence of the same i.e. where the assessee has not been given any show cause notice as to which limb of section 271(1)(c) of the Act has not been fulfilled by the assessee, the levy of the penalty in this circumstances is not justified.
In this regard, I find support from the ratio laid down by the Hon’ble Bombay High Court in the case of CIT Vs. Shri Samson Perinchery (2017)
392 ITR 4 (Bom).
Further, the plea of the assessee is before us is that even the notice issued u/s 274 r.w.s. 271(1)(c) of the Act suffers from infirmity, as the inappropriate limb has not been struck off. The Ld.AR before us had produced the original notice issued to the assessee in this regard. There is merit in the plea of the assessee. The Hon’ble Delhi High Court in Pr.CIT vs Sahara India Life Insurance Company Ltd. in judgement dated 02.08.2019 has held that in such facts where the limb of the section is not struck off in the notice issued u/s 274 r..w.s. 271(1)(c) of the Act, then the levy of penalty u/s 271(1)(c) of the Act suffers from infirmity. Applying the said principle and also applying the ratio laid down by the Hon’ble Bombay High Court in CIT Vs. Shri Samson Perinchery (supra) as the Assessing Officer has failed to record proper satisfaction in the assessment order while initiating the penalty proceedings u/s 271(1)(c) of the Act and also while issuing notice, penalty levied for concealment u/s 271(1)(c) of the Act is not justified. Accordingly, we direct the Assessing Officer to delete the same.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 17th January 2020.