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Facts
The assessee's appeal for AY 2010-11 challenged a penalty levied under section 271(1)(c) for furnishing inaccurate particulars of income. The lower authorities had sustained the penalty based on additions/disallowances related to deemed dividend under section 2(22)(e), rates and tax, ROC fees, and diversion of interest. The assessee was absent during the tribunal hearing, proceeding ex-parte.
Held
The Tribunal, relying on the Supreme Court's decision in CIT vs. Reliance Petroproducts, clarified that mere quantum additions or disallowances do not automatically attract a penalty under section 271(1)(c), as these are parallel proceedings. Applying this principle, the Tribunal found that the issues in question did not constitute concealment or furnishing inaccurate particulars of income. Consequently, the impugned penalty was deleted.
Key Issues
Whether a penalty under section 271(1)(c) can be imposed for furnishing inaccurate particulars of income, specifically concerning quantum additions/disallowances related to deemed dividend and other items, when such additions alone do not establish concealment.
Sections Cited
Section 271(1)(c) of the Income Tax Act, 1961, Section 2(22)(e) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. M. Balaganesh
Asstt. Year : 2010-11 Nidhi Auto Pvt. Ltd., Vs DCIT, 8599, East Park Road, Karol Bagh, Circle-13(1), New Delhi-110005 New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AABCN8112G Assessee by : None Revenue by : Sh. B. S. Anand, Sr. DR Date of Hearing: 25.11.2024 Date of Pronouncement: 27.11.2024 ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2010-11, arises against the order of CIT(A)/NFAC, Delhi dated 22.03.2024 in DIN & Order No. ITBA/NFAC/S/250/2023- 24/1063146918(1) in proceedings u/s 271(1)(c) of the Income Tax Act, 1961 (in short “The Act”).
Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.
It emerges at the outset with the able assistance coming from the Revenue’s side that both learned lower authorities have held the assessee to have furnished inaccurate particulars of its taxable income which included the corresponding quantum additions/disallowance of section 2(22)(e) deemed dividend, rates and tax, ROC fees and diversion of interest;
Learned departmental representative vehemently supported the impugned penalty that the assessee had not even cooperated in the lower appellate proceedings nor could it files reasonable explanation before the Assessing Officer. Be that it may, the facts remains that all these four issues could hardly be treated as an instance of either concealment of furnishing of inaccurate particulars of income going by CIT vs. Reliance Petroproducts 322 ITR 158 (SC) wherein their lordships has settled the instant issue long back that each and every quantum addition/disallowance does not attract section 271(1)(c) penalty as both are parallel proceedings. We draw strong support there from to delete the impugned penalty. Ordered accordingly.
This assessee’s appeal is allowed in above terms. Order Pronounced in the Open Court on 27/11/2024.