SANDEEP JALAN,GUWAHATI vs. DCIT/ACIT CIR-1, GUWAHATI

PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

1. In this case, the ITAT Registry has reported a delay of 470 days in filing of the said appeal. The assessee has requested for condoning the same as under:

“I, Sandeep Jalan, Appellant, respectfully submit this application seeking condonation of delay in filing the appeal before the Hon’ble Tribunal against the order passed by the CIT(A), dated 08.12.2023, under the Income Tax Act, 1961.

2. The present appeal arises from the order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”), dated 08.12.2023, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter “the Ld. CIT(A)].

2.1 Brief facts of the case are that the assessee filed return of income for AY 2015-16 in ITR-1 u/s 139(4) of the Act on 30.11.2015 declaring total income at Rs. 29,58,250/-. Subsequently, the case of the assessee was selected for scrutiny under CASS and statutory notices u/s 143(2)/ 142(1)

Sandeep Jalan were issued. During the assessment proceedings, it was noted by the AO that the assessee had earned long term capital gains (LTCG) of Rs. 24,10,000/- from sale of shares of M/s Sulabh Engineers & Services Ltd. On the basis of the discussions made by the AO in the assessment order and assessee's own admission, it was held by the AO that the assessee had routed his unaccounted income in the guise of bogus LTCG and therefore, an amount of Rs. 24,10,000/- was added u/s 68 of the Act. Further, a sum of Rs. 48,200/- (being 2% of Rs. 24,10,000/-) was added u/s 69C as unexplained expenditure on account of charges paid to earn accommodation entry and an amount of Rs. 1,16,400/- was also added u/s 69 of the Act. In the assessment order, the AO initiated penalty proceedings u/s 271(1)(c) of the Act for concealment of particulars of income to the extent as discussed above. Thereafter show cause notice was issued to the assessee on various dates calling for his explanation as to why an order imposing penalty u/s 271(1)(c) as discussed should not be levied upon him for concealment of particulars of income. In response, the assessee filed his submission laying major emphasis on the fact that he voluntarily declared the income and paid taxes thereon. The AO did not find the explanation plausible and noted that the assessee did commit a default within the meaning of section 271(1)(c) without any reasonable cause and has wilfully committed the default of concealing the particulars of income. Accordingly, the AO passed the impugned penalty order dated 25.03.2022 imposing a minimum penalty of Rs. 9,07,500/-, @ 100% of tax sought to be evaded for concealing particulars of income. Aggrieved by the order, the appellant has filed this appeal.

2.2 The assessee could not succeed at first appellate stage also as the Ld. CIT(A) supported the action of Ld. AO by emphasizing the point that the assessee allegedly always had the intention of booking LTCG by trading in penny stock.

Sandeep Jalan 2.3 Aggrieved with this action, the assessee has approached the ITAT with the following grounds:

“1. For that the penalty proceedings having been initiated for alleged furnishing of inaccurate particulars of income, the action of the Ld. AO in imposing penalty for concealment of income, proves that the Ld. AO was not sure about the penalty to be imposed and the action of the Ld. AO in passing the penalty order u/s 271(1)(c) is arbitrary, unjustified, unwarranted and illegal.

4. For that the appellant having voluntarily offered the amount of Rs Rs. 24,24,519/- as income by way of revised computation much before the issuance of notice u/s 143(2)/142(1) of the Income-tax Act, 1961 and paid the applicable taxes with interest thereon, the action of the Ld. AO in alleging concealment of income ignoring such revised computation is arbitrary, unjustified, unwarranted and illegal.

5. For that the penalty u/s 271(1)(c) of the Income-tax Act, 1961 can only be levied when the explanation offered by the appellant is found to be false and there being no such allegation, in view of the Suo moto revised computation having been filed by the appellant, the action of the Ld. AO in imposing the penalty u/s 271(1)(c) is arbitrary, unjustified, unwarranted and illegal.

Sandeep Jalan 3. Before us, the Ld. AR argued that whatever may be the intention of the assessee in trading in penny stock but had requested as earlier as 18.01.2016 through letter to the AO as under:

3.1 It was the further submission that the earliest notice issued by the Ld. AO in this regard was dated 26.07.2016. This particular notice was pointed out at page 28 of the paper book. In light of this, the Ld. AR averred that there was no intention whatsoever to conceal any particulars of income by the assessee and the assessee wanted to make a full disclosure much before the Revenue authorities had taken any adverse notice of any item of his income. It was a further submission that on identical grounds Sandeep Jalan in the brother’s case, the Ld. CIT(A) had given relief on a similar penalty. This particular order was placed at pages 261 to 279 of the paper book and the same was placed before us for perusal [the case of Mantulal Jalan, PAN : ACRPJ7747A, order dated 26.07.2024].

3.2 The Ld. DR relied on the orders of authorities below.

“Section 271(1)(c) of the Income-tax Act, 1961 – Penalty – For concealment of income- Tribunal; cancelled penalty levied under section 271(1)(c) on the ground that department had not discharged its burden of proving concealment and had simply rested its conclusion on assessee’s act of voluntary surrender in good faith – High Court, on reference, upheld Tribunals, findings, whether any interference was called for – Held, no.” Furthermore, we are persuaded by the findings of Ld. CIT(A) in the case of the assessee’s brother (supra), where on similar set of facts relief has been given to the assessee. Considering the totality of facts and circumstances of the case, it is clear that no penalty is exigible in this case and accordingly the penalty is directed to be deleted.

Sandeep Jalan Order pronounced on 19.11.2025