M/S. CIVITECH HOUSING INDIA (P) LTD.,DELHI vs. ACIT, NEW DELHI

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ITA 481/DEL/2017Status: DisposedITAT Delhi16 October 2019AY 2010-113 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 levy of penalty under Section 271(1)(c) is not justified if the Assessing Officer fails to record satisfaction as to which limb of the section has not been fulfilled by the assessee and no show cause notice is issued.

What were the facts?

A survey was conducted on the assessee's premises, and an addition was made on account of cash found. The Assessing Officer initiated penalty proceedings under Section 271(1)(c) for furnishing inaccurate particulars of income.

What were the issues?

Whether penalty under Section 271(1)(c) is valid when the Assessing Officer fails to record satisfaction regarding the specific limb of default and does not issue a show cause notice.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 133A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Before: MS. SUSHMA CHOWLA & SHRI B.R.R.KUMAR

For Appellant: Adv. & Ms. Sishmita Kumar, Adv
For Respondent: Ms. Ashima Neb, Sr.DR
Hearing: 03.10.2019Pronounced: 16.10.2019

आदेश / ORDER आदेश आदेश आदेश PER SUSHMA CHOWLA, JM: The appeal filed by assessee is against order of CIT(A)-2, New Delhi, dated 24.11.2016 relating to assessment year 2010-11 against penalty levied u/s section 271(1)(c) of the Income-tax Act, 1961 (in short ‘the Act’).

2.

The only issue raised in the present appeal is against the levy of penalty for concealment u/s 271(1)(c) of the Act.

ITA No:481/Del/2017 Assessment Year: 2010-11

3.

Briefly the facts and circumstances of the case are that a survey operation u/s 133A of the Act was conducted on the premises of the assessee on 12.10.2019. The assessee was engaged in the construction activities. The assessee had furnished return of income declaring total income of Rs.3.03 crores. An addition in the hands of the assessee was made on account of cash found during the survey amounting to Rs.8,16,767/-. The Assessing Officer made the addition in the hands of the assessee and initiated penalty proceedings observing as under:-

“Penalty proceedings u/s 271(1)(c) are being initiated separately.”

4.

Thereafter, penalty was levied u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income at Rs.2,77,620/-. The said penalty was confirmed by the CIT(A), against which the assessee is in appeal.

5.

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.

6.

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.

1.

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 ITA No:481/Del/2017 Assessment Year: 2010-11 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.

7.

In the result, the appeal of assessee is allowed.

Order pronounced in the open court on 16th day of October, 2019.

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