PN SECURITIES PRIVATE LIMITED,. vs. ACIT CIRCLE - 19(2), DELHI, .

PDF · subscribers
ITA 121/DEL/2024Status: DisposedITAT Delhi16 December 2024AY 2016-17Bench: SHRI SATBEER SINGH GODARA (Judicial Member)2 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 held that a debatable issue of addition arising from a change in accounting method does not automatically amount to concealment of income or furnishing inaccurate particulars. Therefore, the penalty was deleted.

What were the facts?

The assessee's appeal challenges a penalty levied under Section 271(1)(c) of the Income-tax Act. This penalty was imposed due to a quantum disallowance of loss amounting to Rs. 14,13,938/- made by the Assessing Officer.

What were the issues?

Whether a penalty under Section 271(1)(c) can be levied when the addition arises from a change in the method of accounting, which is considered a debatable issue and potentially a bona fide mistake.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

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

Before: SHRI SATBEER SINGH GODARA

For Appellant: Shri Rajeev Saxena, Adv.; &, Shri Dishant Sethi
For Respondent: Shri Siddharth B.S. Meena, Sr. DR
Hearing: 16.12.2024Pronounced: 16.12.2024

O R D E R

PER SATBEER SINGH GODARA, JM:

1.

This assessee’s appeal for assessment year 2016-17 arises against National Faceless Appeal Centre (NFAC), Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1059185949(1), dated 29.12.2023, in case no. CIT(A), Delhi-7/10415/2019-20, in proceedings u/s 271(1)(c) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.

Heard both the parties. Case file perused.

2.

Coming to the assessee’s sole substantive grievance herein i.e. challenging both the lower authorities’ action in levying and sustaining section 271(1)(c) penalty of Rs. 4,36,907/-, it emerges during the course of hearing with the able assistance coming from both the parties that the same pertains to corresponding Rs. 14,13,938/- made by the Assessing Officer on account of the fact that its relevant system of accounting did not represent the true picture of the corresponding assessable income.

3.

Faced with this situation, learned DR could hardly dispute that such a debatable issue of addition arising from change in method of accounting would not per se amount to either concealment of income or furnishing of inaccurate particular of income being a bona fide mistake, and therefore, I quote CIT v. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) that quantum and penalty proceedings are parallel proceedings wherein each and every addition/disallowance made in the course of former does not ipso facto attract the latter penalty provision, to delete the impugned penalty in very terms. Ordered accordingly.

4.

This assessee’s appeal is allowed in very terms.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →