SHASHANK GUPTA,MUZAFFARNAGAR vs. ITO, WARD-2(3), MUZAFFARNAGAR

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ITA 6446/DEL/2018Status: DisposedITAT Delhi12 April 2019AY 2014-154 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 followed a precedent where it was held that surrendering an exemption during assessment proceedings, after initially claiming it as per law, does not amount to furnishing inaccurate particulars. Therefore, no penalty is leviable.

What were the facts?

The Assessing Officer made an addition to the assessee's income based on a surrender of sale amount. Subsequently, a penalty was levied under Section 271(1)(c) for concealment or furnishing inaccurate particulars of income. The CIT(A) confirmed this penalty.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when an assessee surrenders an exemption during assessment proceedings after claiming it as per law.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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

Before: SHRI N.S. SAINI

For Respondent: Shri S.L. Anuragi, Sr. DR
Hearing: 11.04.2019Pronounced: 12.04.2019

ORDER This is an appeal filed by the assessee against the order of Ld. CIT(Appeals), Muzaffarnagar dated 28.08.2018.

2.

The sole issue involved in this appeal is that the CIT(A) erred in confirming the levy of penalty imposed of Rs. 2,15,500/- u/s 271(1)(c) of the Act.

3.

The brief facts of the case are that the Assessing Officer completed the assessment for the year under consideration of the assessee at an income of Rs. 11,84,740/- by making an addition of Rs. 6,89,655/- on account of surrender of sale amount of the assessee in place of returned income of Rs. 4,95,080/-.

4.

Thereafter, the AO levied penalty u/s 271(1)(c) of the Act of Rs. 2,15,500/- for concealment/furnishing inaccurate particulars of income.

5.

On appeal, Ld. CIT(A) confirmed the action of the Assessing Officer.

6.

The AR of the assessee submitted that the issue is covered in favour of the assessee by the order of the Tribunal in the case of Deepti Aggarwal vs. ITO, Charu Aggarwal vs. ITO in & 1302/Del/2018 order dated 10.09.2018 passed in the AY 2014- 15.

7.

The DR relied on the orders of the lower authorities. I find that the Tribunal in the case of Deepti Aggarwal, Charu Aggarwal (supra) has held as under:

“4. I have given the thoughtful consideration to the orders of the authorities below. I find that in the computation of income the assessee has duly disclosed all the particulars of her income and under the head “Income with full exemption” the assessee has claimed dividend income as exempt and also long term capital gain on which STT is paid which is also exempt from tax. I further find that during the course of scrutiny assessment proceedings the AO has proceeded by the assumption that the shares purchased and sold by the assessee comes into the category of penny stock companies. The AO has drawn support from outside information. In my considered opinion the surrender of exemption by the assessee on repetitive queries would not amount to furnishing of inaccurate particulars of income. The assessee has claimed exemption as per the provisions of law, though surrendered during the course of assessment proceedings. In my considered opinion, on the facts of the case, no penalty is leviable u/s 271(1)(c) of the Act. I accordingly set aside the finding of the Ld. CIT(A) and direct the AO to delete the penalty so levied.” 8. Facts being identical. Respectfully following the precedent, I set aside the orders of the lower authorities and delete the levy of penalty of Rs. 2,15,500/-.

9.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 12/04/2019

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