M/S. BANSI LAL AND SONS,NEW DELHI vs. ACIT, NEW DELHI

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ITA 2/DEL/2015Status: DisposedITAT Delhi13 September 2019AY 2009-105 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 notice was bad in law as it did not clearly specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. Following the Delhi High Court's decision, the penalty was directed to be deleted.

What were the facts?

The assessee's returned income of Rs. 28 lakhs was assessed at Rs. 1.05 crores. Penalty proceedings under Section 271(1)(c) were initiated for concealing particulars of income and furnishing inaccurate particulars of income.

What were the issues?

Whether a penalty notice under Section 271(1)(c) is valid if it fails to specify whether it is for concealment of income or furnishing inaccurate particulars of income.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274,Section 143(3),Section 145

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,

Before: SHRI N.K. BILLAIYA, & MS. SUCHITRA KAMBLE

For Appellant: Shri V. Raja Kumar AR
For Respondent: Shri Thungaleng, Sr. DR
Hearing: 09.09.2019Pronounced: 13.09.2019

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

1.

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals], XXVIII, New Delhi dated 28.10.2014 pertaining to assessment year 2009-10.

2.

Solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the levy of penalty u/s 271(1)(c) of the Act holding that the assessee is guilty of concealing particulars of income and also furnishing of inaccurate particulars of income.

3.

Briefly stated the facts of the case are that assessment was completed on 27.12.2011 by framing order u/s 143(3) r.w.s 145 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short].

Returned income of Rs. 28 lakhs was assessed at Rs. 1.05 crores.

Simultaneously, penalty proceedings u/s 271 of the Act were initiated alleging that the assessee has concealed particulars of income and has also furnished inaccurate particulars of income.

4.

Notice u/s 274 r.w.s 271 of the Act dated 27.12.2011 was issued and served upon the assessee. In the notice also, the allegation was that the assessee has concealed particulars of income and also furnished inaccurate particulars of income. Assessment order and penalty notice clearly show that the Assessing Officer has not made his intention clear whether the penalty is levied for concealment of income or furnishing of inaccurate particulars of income.

5.

This issue is squarely covered in favour of the assessee and against the Revenue by the order of the Hon'ble High Court of Delhi in a bunch of appeals in 426, 427 and 429 of 2019 vide order dated 2.8.2019. The relevant findings of the Hon'ble High Court read as under:

“21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1) (c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA ’s Emerald Meadows (2016) 73 Taxman.com 241 (Kar). the appeal against which was dismissed by the Supreme Court of India in STP No.11485 of 2016 by order dated 5th August, 2016.

22.

On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises.”

6.

Respectfully following the findings of the Hon'ble High Court [supra] in the light of facts relating to levy of penalty, as mentioned elsewhere, we direct the Assessing Officer to delete the penalty so levied.

7.

In the result, the appeal of the assessee in is allowed.

The order is pronounced in the open court on 13.09.2019.

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