SMT. SHANTI DEVI MEHRWAH,HARYANA vs. ACIT, NEW DELHI
Before: SHRI YOGESH KUMAR U.S. & SHRI MANISH AGARWALShanti Devi Mehrwah A-26, First Floor, Kirti Nagar New Delhi PAN: AAJPD8788R Vs. ACIT Central Circle-12 New Delhi Appellant
PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-2, Laxmi Nagar District Centre, New Delhi dated 17/07/2015 pertaining to Assessment Year 2005-06. 2. The Grounds of Appeal are as under:- “1) The Ld. AO has erred in the spirit of law and the principles of natural justice by ignoring the following facts:
a. Age and ill health of the assessee, who is now 94 years old.
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Shanti Devi Mehrwah b. Her only source of income is interest on fixed deposits held with Indian banks.
c. Assessment for AY 2005-06 is also challenged as void-ab- initio before the Hon'ble ITAT.
d. In the absence of any valid notice u/s 148 there was no valid liability of Tax for asst Year 2005-16
e. Liquidity crunch of the assessee as gold jewellery worth over
Rs. 80 lakhs was seized by the Department during search proceedings, her house property at Kirti
Nagar was provisionally attached u/s 2818 and she did not have any other assets to dispose of and generate liquid funds for tax payment.
f. Several requests were made to the Department to dispose of the gold jewellery and appropriate the proceeds towards tax liability of the assessee. However, all such requests were ignored.
g. Therefore, holding the assessee liable for default in not paying the tax due together with interest is unjust.
2) It is also prayed that the Ld. AO may be directed to cancel the demand in the absence of serving any valid notice u/s 143(3)/147 before 31.03.2012 and the original order u/s 148
being unlawful and void-ab-initio, the penalty could not be levied for AY 2005-06. 3) The Ld. CIT (Appeals) -2 in Para 3.2.2 of her Appellate Order dated 17.07.2015 states that "the explanation of the appellant justifying non-imposition of penalty is not found to be bona fide" without giving any valid reason for not considering it as bona fide.
4) It is prayed that in light of the following facts, the penalty may please be dropped:
a. Dispute over validity of notice u/s 143(3), currently pending before the Hon'ble ITAT, Delhi.
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Shanti Devi Mehrwah b. Disregard of requests of the assessee to recover tax amount by selling of gold jewellery seized during search proceedings.
5) The assessee reserves the right to add further explanations with facts and add more grounds of appeal.”
Brief facts of the case are that, an order u/s 271AAA of the Income Tax Act, 1961 (‘Act’ for short) came to passed on 27/09/2013 for Assessment Year 2005-06 by imposing penalty of Rs. 17,74,931/- which is at 10% of undisclosed income.Aggrieved by the order of the penalty dated 27/09/2013, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 17/07/2015, dismissed the Appeal filed by the Assessee, which has been called in question before us on the grounds mentioned above.
The Ld. Counsel for the Assessee vehemently submitted that the invocation of provision of Section 271AAA of the Act itself is without juri iction as the provision of Section has been inserted w.e.f 01/04/2007 which is not applicable for the year under consideration i.e. Assessment Year 2005-06. Therefore, sought for denying the penalty.
Per contra, the Ld. Departmental Representative by relying on the orders of the Lower Authorities, sought for dismissal of the Appeal.
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Shanti Devi Mehrwah
We have heard both the parties and perused the material available on record. The provision of Section 271AAA has been inserted by Finance Act 2007 w.e.f. 01/04/2007, thus, the provision of Section 271AAA is not applicable for the year under consideration which is Assessment Year 2005-06. Therefore, invoking the provision of Section 271AAA of the Act by the A.O. is not only erroneous but also without the authority of law. Therefore, the order of penalty dated 27/09/2013 and the impugned order of the Ld. CIT(A) are hereby quashed.
In the result, the Appeal of the Assessee is allowed.
Order pronounced in the open court on 16th April , 2025 (MANISH AGARWAL)
JUDICIAL MEMBER
Date:- 16.04.2025
R.N, Sr.P.S*