PRADEEP GARG, AJMER,AJMER vs. ITO 2(1) AJMER , AJMER

ITA 397/JPR/2024Status: DisposedITAT Jaipur05 May 2025AY 2010-1121 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty proceedings were initiated for "furnishing inaccurate particulars" as recorded in the assessment order, which provided clarity to the assessee. The Tribunal found that the mistake in the penalty notice, where both limbs of Section 271(1)(c) were not struck off, did not cause prejudice to the assessee as the assessment order clearly specified the ground for penalty. This issue was considered settled by the Hon'ble Supreme Court. Regarding the additions sustained, the Tribunal noted that the assessee failed to establish the claim of expenditure for boundary wall construction before the transfer of land. Evidence like handwritten letters and payments below Rs. 20,000/- without banking channels were not considered sufficient proof. The Tribunal confirmed the additions of Rs. 2,03,925/- and Rs. 3,75,917/- for the construction of boundary walls on two plots as unexplained income. Consequently, the penalty levied on these sustained additions was upheld. The Tribunal did not expressly leave any issue undecided.

What were the facts?

The assessee, Pradeep Garg, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Jaipur Bench, challenging the order dated 30.01.2024 passed by the National Faceless Appeal Centre, Delhi (CIT(A)). This order confirmed the penalty levied for Assessment Year 2010-11. The penalty order, dated 26.03.2018, was originally passed by the Income Tax Officer (ITO), Ward 2(1), Ajmer, under Section 271(1)(c) of the Income Tax Act, 1961. The assessee had initially declared an income of Rs. 3,47,613/-. However, during reassessment proceedings under Section 147, initiated due to the purchase and sale of certain lands not declared in the original return, the total income was determined at Rs. 21,59,025/-. This reassessment included additions for unexplained investment in boundary walls and other disallowances. The original penalty computed was Rs. 5,52,009/-, which was revised to Rs. 1,71,452/- after certain additions were deleted in the quantum appeal.

What were the issues?

1. Whether the impugned penalty order under Section 271(1)(c) of the Act is bad in law and on facts for want of jurisdiction and other reasons, and thus liable to be quashed? 2. Whether the Show Cause Notice (SCN) issued under Section 274 read with Section 271(1)(c) of the Act, which failed to specify whether penalty proceedings were initiated for concealment of particulars of income or for furnishing inaccurate particulars of income, renders the penalty void? 3. Whether the confirmation of the penalty of Rs. 1,71,452/- under Section 271(1)(c) of the Act by the CIT(A)/NFAC is contrary to law and facts, and thus liable to be deleted? Assessee's Contentions: - The penalty order is bad in law and on facts due to want of jurisdiction and other reasons. - The SCN is defective as it does not specify whether the proceedings are for concealment or furnishing inaccurate particulars, relying on judgments from the Gujarat High Court, Supreme Court, and Karnataka High Court. - The penalty of Rs. 1,71,452/- is contrary to law and facts and should be deleted. Revenue's Contentions: - The revenue did not file any specific contentions in the provided text, but the CIT(A)'s order implies that the additions sustained were for unexplained investment in boundary walls, and the penalty was levied for furnishing inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274,Section 147,Section 143(3),Section 64(1)(iv),Section 40A(3)

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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR

Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI,

For Appellant: Adv. &, Adv. राजस्व की ओर से /
Hearing: 17/04/2025Pronounced: 05/05/2025

PER: RATHOD KAMLESH JAYANTBHAI, AM The present is filed by an assessee-appellant challenging the finding so recorded by the learned National Faceless Appeal Centre, Delhi [ for short CIT(A)] dated 30/01/2024 confirming the levy of penalty for the assessment year 2010-11. The said order of the Id. CIT(A) arises because passed under section 271(1)(c) of the Income Tax Act, 19

The order continues below.

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