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Income Tax Appellate Tribunal, DELHI BENCHES “SMC”: DELHI
Before: SHRI BHAVNESH SAINI
This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-13, New Delhi, Dated 13.08.2018, for the A.Y. 2013-2014, challenging the levy of penalty under section 271(1)(c) of the I.T. Act, 1961.
Briefly the facts of the case are that A.O. levied penalty under section 271(1)(c) of the I.T. Act on three additions i.e., addition of Rs.7,20,000/- made under section 2 ITA.No.5775/Del./2018 Shri Jai Prakash, New Delhi.
40(A)(3) of the I.T. Act for furnishing inaccurate particulars of income, addition of Rs.10,38,816/- on account of payment made in cash, but, now shown in the books of account for concealment of particulars of income and addition of Rs.51,720/- for the amount to the capital saying source was agricultural income for concealment of particulars of income. The A.O. in this case passed the assessment order dated 25.02.2016 and at the end of the assessment order noted that penalty proceedings under section 271(1)(c) of the I.T. Act are being initiated separately. The Ld. CIT(A) confirmed the levy of penalty under section 271(1)(c) of the I.T. Act.
I have heard the Learned Representatives of both the parties. Learned Counsel for the Assessee at the outset submitted that the A.O. issued notice under section 274 r.w.s. 271 Dated 25.02.2016 before levy of the penalty in which the A.O. has mentioned :
“Have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of Explanation 1, 2, 3, 4 and 5.”
3 ITA.No.5775/Del./2018 Shri Jai Prakash, New Delhi.
3.1. He has, therefore, submitted that the issue is covered by the Judgment of the Hon’ble Apex Court in the case of CIT vs. M/surrendered SSA”s Emrald Meadows reported in 73 taxmann.com 248 (SC). He has also submitted that recently the Hon’ble Delhi High court in the case of Pr. CIT vs. M/s. Sahara India Life Insurance Company Ltd., 2019(8) TMI 409 (Del.) vide Judgment Dated 02.08.2019 in paras 21 and 22 held 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
4 ITA.No.5775/Del./2018 Shri Jai Prakash, New Delhi. Meadows (2016) 73 Taxman.com 241 (Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No.11485 of 2016 by order dated 5th August, 2016.
On this issue again this Court is unable to find
any error having been committed by the ITAT. No substantial question of law arises.”
The Ld. D.R. on the other hand submitted that A.O. has initiated the penalty proceedings specifically for furnishing inaccurate particulars of income and for concealment of particulars of income, therefore, penalty have been correctly levied in the matter.
I have considered the rival submissions, perused the material on record and Orders of the authorities below.
In this case, the A.O. issued show cause notice for levy of penalty under section 271(1)(c) of the Act which is bad in law as it did not specify in which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or 5 ITA.No.5775/Del./2018 Shri Jai Prakash, New Delhi. furnishing inaccurate particulars of income. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. On this score itself similar view is taken by Hon’ble Karnataka High Court in the case of CIT vs. M/s. SSAs Emerald Meadows 73 taxmann.com 241. This decision is confirmed by the Hon’ble Supreme Court reported in 73 taxmann.com 248. Further, the Hon’ble Delhi High court recently vide Order dated 02.08.2019 in the case of Pr. CIT vs. M/s. Sahara India Life Insurance Company Ltd., (supra) following the decision of Hon’ble Supreme Court in the case of M/s. SSAs Emerald Meadows (supra) confirmed cancellation of the penalty. I, therefore, following the aforecited decision of the Hon’ble Delhi High Court in the case of Pr. CIT vs. M/s. Sahara India Life Insurance Company Ltd., (supra) set aside the Orders of the authorities below and cancel the penalty.
In the result, appeal of assessee allowed.
6 ITA.No.5775/Del./2018 Shri Jai Prakash, New Delhi.
Order pronounced in the open Court.