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Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI
Before: MS. SUSHMA CHOWLA & DR. B.R.R.KUMAR
आदेश आदेश / ORDER आदेश आदेश PER SUSHMA CHOWLA, JM: The appeal filed by assessee is against order of CIT(A)-2, New Delhi, dated 28.10.2016 relating to assessment year 2009-10 against penalty levied u/s section 271(1)(c) of the Income-tax Act, 1961 (in short ‘the Act’).
ITA No:327/Del/2017 Assessment Year: 2009-10
The only issue raised in the present appeal is against the levy of penalty for concealment u/s 271(1)(c) of the Act.
Briefly the facts and circumstances of the case are that the assessee has furnished income declaring total income of Rs.23.43 crores.
The case of the assessee was taken up for scrutiny and various additions were made in the hands of the assessee. The Assessing Officer while making the different additions in the hands of the assessee recorded satisfaction under each addition made in the hands of the assessee for initiating penalty proceedings u/s 271(1)(c) of the Act, holding that the assessee to have concealed the income/filed inaccurate particulars.
While levying the penalty, the Assessing Officer held the assessee to have concealed the particulars of income and furnished inaccurate particulars of income and the assessee was held liable to penalty u/s 271(1)(c) of the Act in respect of additions totaling to Rs.21,09,080/-. Hence, penalty of Rs.7,16,876/- was levied upon the assessee u/s 271(1)(c).
The limited issue which arises in the present appeal is whether where the Assessing Officer has failed to record the satisfaction in the assessment order as to which limb of section 271(1)(c) of the Act has not been fulfilled by the assessee, is the levy of penalty to be upheld in the case of the assessee.
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
ITA No:327/Del/2017 Assessment Year: 2009-10 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, we 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, we 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). Applying the said ratio, we delete the penalty levied u/s 271(1)(c) of the Act.
In the result, the appeal of assessee is allowed.
Order pronounced in the open court on 16th day of October, 2019.