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Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI
Before: SHRI BHAVNESH SAINI
ORDER This appeal by assessee has been directed against the Order of the Ld. CIT(A)-20, New Delhi, dated 04.09.2017, for the A.Y. 2009-2010, challenging the levy of penalty under section 271(1)(c) of the I.T. Act, 1961.
I have heard the Learned Representatives of both the parties.
2 ITA.No.7157/Del./2017 Shri Amit Bhatia, Delhi.
3. Learned Counsel for the Assessee filed copy of the notice dated 18.03.2013 issued for levy of penalty in which A.O. has mentioned “have concealed the particulars of your income or furnishing inaccurate particulars of such income in terms of explanation 1, 2, 3, 4 and 5.” He has, therefore, submitted that notice is invalid and bad in law. The issue is covered by the Order of ITAT, SMC-Bench in the case of M/s. Scout Exim Pvt. Ltd., New Delhi vs. ITO, Ward-22(3), New Delhi, dated 08.03.2018 in which in paras 2 and 3 it was held as under:
“2. Briefly, the facts of the case are that the A.O. passed the assessment order under section 143(3) and considered the issue of bogus purchases and on surrender by assessee of 5% of the alleged purchases, made addition of Rs.6,17,000/-. The A.O. noted in the assessment order that he was satisfied that assessee has furnished inaccurate particulars and thereby, concealing the particulars of its income and rendering itself liable for initiation of penalty proceedings under section 271(1)(c) of 3 ITA.No.7157/Del./2017 Shri Amit Bhatia, Delhi. the Act r.w.s. 274 of the I.T. Act, 1961. The A.O. in the penalty order has mentioned that he has issued show cause notice dated 23rd March, 2016 seeking explanation of assessee, copy of which is filed in the appeal papers in which the A.O. has mentioned “have concealed the particulars of your income or furnishing inaccurate particulars of such income”. The A.O. was not satisfied with the explanation of the assessee and levied the penalty, which is confirmed by the Ld. CIT(A).
3. After considering the rival contentions, I am of the view that penalty is not leviable in the matter. The A.O. issued penalty notice dated 23rd March, 2016, under section 274 r.w.s. 271(1)(c) of the I.T. Act, referred to above, which is bad in Law as it did not specify which limb of section 271(1)(c) of the Act, penalty proceedings had been initiated i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. I am fortified in my view by decision of Hon’ble Karnataka High Court in 4 ITA.No.7157/Del./2017 Shri Amit Bhatia, Delhi.
the case of CIT vs. M/s. SSA’s Emerald Meadows 73 taxmann.com 241 (Kar.) (HC) in which on the same matter, the Departmental Appeal has been dismissed. The view of the Hon’ble Karnataka High Court in the case of CIT vs. M/s. SSA’s Emerald Meadows (supra), has been confirmed by the Hon’ble Supreme Court by dismissing the SLP reported in 73 taxmann.com 284 (SC). In view of the above discussion, I set aside the orders of the authorities below and cancel the penalty.”
After considering the rival submissions in the light of notice for levy of the penalty and following the Order of the Tribunal in the case of M/s. Scout Exim Pvt. Ltd., New Delhi vs. ITO, Ward-22(3), New Delhi (supra), I set aside the Orders of the authorities below and cancel the penalty. Appeal of Assessee is allowed.
In the result, appeal of Assessee is allowed.
5 ITA.No.7157/Del./2017 Shri Amit Bhatia, Delhi.
Order pronounced in the open Court.