Loading judgment…
Facts
The assessee faced penalties under Section 271(1)(c) of the Income-tax Act for assessment years 2012-13 to 2014-15, amounting to Rs. 1,42,975/-, Rs. 55,913/-, and Rs. 64,161/-, respectively. These penalties were imposed for alleged concealment of income and furnishing inaccurate particulars related to estimated rental receipts and disallowance of cost of acquisition, following a search action on a related group. The assessee was proceeded ex parte as no one appeared on their behalf.
Held
The Tribunal deleted all the impugned penalties, observing that while a search action had occurred, the penalties were levied under Section 271(1)(c) and not Section 271AAB, which is specifically for undisclosed income detected during search. Citing Supreme Court precedent, the Tribunal ruled that quantum additions do not automatically attract penalty, and there was no basis to sustain the penalties as they were not based on seized material.
Key Issues
Whether penalties under Section 271(1)(c) for alleged concealment/inaccurate particulars were valid, particularly when not linked to seized material from a search and despite the existence of a specific penalty section (271AAB) for search-related undisclosed income.
Sections Cited
Section 271(1)(c), Section 271AAB, Income-tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R PER SATBEER SINGH GODARA, JM:
These assessee’s three appeals in to 202/Del/2024 for assessment years 2012-13 to 2014-15 arise against learned CIT(Appeals)-29, Delhi’s as many orders; all dated 29.11.2023; in appeal nos. CIT(A), Delhi- 29/10002/2019-20; CIT(A), Delhi-29/10010/2019-20; and CIT(A), Delhi- 29/10012/2019-20 respectively, in proceedings u/s 271(1)(c) of the Income-tax Act, 1961, hereinafter referred to as the “Act”.
Cases called twice. None appears at the assessee’s behest. He is accordingly proceeded ex parte. and Revenue’s vehement contentions that both the learned lower authorities have levied the impugned section 271(1)(c) penalties of Rs. 1,42,975/-, Rs. 55,913/-; and Rs. 64,161/-; assessment year wise respectively, on the ground that the assessee had concealed and furnished inaccurate particulars of income representing estimated rental receipts with cost of acquisition (in the first and foremost year followed by similar heads, after department’s search action conducted on M/s SRM group of cases on 15.10.2013.
The Revenue’s vehement contention is that all the impugned penalties represent the assessee’s undisclosed income and therefore, they deserve to be upheld.
I have considered the relevant facts in the case files as well as rival pleas and find no reason to sustain the impugned penalties qua quantum additions of estimated rental income and disallowance of cost of acquisition, as the case may be. It is made clear that Section 271AAB of the Act is special provision dealing with such a penalty arising from detection of undisclosed income in the course of search action on or after 1.7.2012 but before 2016. It is an admitted factual position that both the learned lower authorities have levied penalty in assessee’s hands u/s 271(1)(c) of the Act only and, therefore, the same is not based on any seized material in the course of search. That being the case and going by their lordships landmark decision in 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, I delete all the three impugned penalties in the impugned as many assessment years forming subject matter of adjudication. The assessee succeeds in identical substantive grounds in the instant appeals therefore.
Ordered accordingly.
These assessee’s three appeals in to 202/Del/2024 are allowed.
A copy of this common order be placed in respective case file.
Order pronounced in open court on 14.11.2024.