MANJU VAISH,NEW DELHI vs. ACIT, CIRCLE- 61(1), NEW DELHI

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order of the ld CIT(A)-20, New Delhi dated 28.09.2018. By this order the ld CIT(A) has confirmed the levy of the penalty of Rs. 312410/- u/s 271(1)(c) of the Act on the concealment of income of Rs. 10,11,026/- levied by the ld AO by passing an order on 29.06.2017. 2. The assessee has raised the following grounds of appeal:- “1. That the Commissioner of Income Tax (Appeals) ['CIT(A)'] erred on facts and in law in confirming penalty of Rs.3,12,410 levied by the assessing officer vide order dated 29.06.2017 passed under section 271(l)(c) of the Income Tax Act, 1961 ('the Act') [„penalty order‟]

2. That the CIT(A) erred on facts and in law in upholding the levy of penalty despite initiation of penalty proceedings being bad in law in absence of - (i) valid satisfaction recorded in the assessment order, and (ii) specific charge in notice under section 274 r.w.s 271 nor in the assessment or penalty order; which are sine qua non for assumption of jurisdiction. 2.1 That the CIT(A) erred on facts and in law in not appreciating that the aforesaid levy of penalty was in respect of the income of Rs. 10,11,026 inadvertently not included in the taxable income, due to transfer of assets/ liabilities existing in the books of Late Shri O.P Vaish, husband Manju Vaish Vs. ACI (Assessment Year: 2014-15) of the appellant, to the books of the appellant, post his demise during the year under consideration.

3. That the CIT(A) erred on facts and in law in not appreciating that amount of Rs. 10,11,026, qua which penalty is levied, was inadvertently added to the capital account and omitted to be offered to tax on account of bonafide error on part of the ex-accountant engaged in preparation of return of income. 3.1 That the CIT(A) erred on facts and in law in holding that since the appellant had professional assistance from the accountant and the auditor, the aforesaid inadvertent mistake could not be regarded as a bona-fide mistake. 3.2 That the CIT(A) erred on facts and in law in drawing adverse inference against the appellant observing that the accounts of the appellant were audited by the tax auditor in terms of section 44 A A of the Act, without appreciating that the said section merely provides for maintenance of book of accounts and does not obligates audit. 3.3 That the CIT(A) erred on the facts and in law in upholding the penalty order without appreciating that there was no concealment of income or furnishing of inaccurate particulars of income qua the aforesaid addition warranting any levy of penalty under section 271(1 )(c) of the Act.”

3. The brief facts of the case shows that the assessment u/s 143(3) of the Act was completed on 28.12.2016 at Rs. 4547220/- against the return income of Rs. 3536190/- wherein, the addition u/s 68 of the Act was made with respect to the income of Rs. 1011026/- was found in the Royal Bank of Scotland account of the assessee. The assessee could not offer any plausible explanation and therefore, the ld AO after making all the additions initiated penalty proceedings u/s 271(1)(1)(c) of the Act for concealment of the income/ furnishing inaccurate particulars of such income. The penalty was levied by passing an order u/s 271(1)(1)(c) of the Act holding that assessee has concealed particulars of income and therefore, liable for penalty u/s 271(1)(1)(c) of the Act. Thus, the penalty of Rs. 3124010/- was levied.

4. The assessee aggrieved with the order preferred an appeal before the ld CIT(A) who confirmed the same as per order dated 28.09.2018 and thus, the assessee is in appeal before us.

5. The assessee has raised ground No. 2 stating that penalty has been levied without making any specific change in the notice issued u/s 274 of the Act read with section 271. Page | 2