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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC-3’ NEW DELHI
Before: SHRI H. S. SIDHU
Date of Hearing on : 24/08/2016 Order Pronounced on : 14/09/2016
ORDER
PER H.S. SIDHU, JM
This appeal is filed by the Assessee against the Order dated 12.8.2014 passed by the Ld. CIT(A)-VI, New Delhi relating to Assessment Year 2002-03 on the following grounds:-
1. That having regard to the facts and circumstances of the case, Ld. ClT(A) has erred in law and on facts in confirming the action of Ld. AO in not deleting the penalty of Rs.7,60,5l2/- as levied by Ld. AO and that too without assuming jurisdiction as per law and without considering the facts and circumstances of the case and the impugned penalty order being illegal and void ab initio .
2. That in any case and in any view of the matter, action of Ld. CIT(A) in not quashing the penalty order framed by Ld. AO is beyond jurisdiction and without considering the facts and circumstances of the case and the impugned penalty order being illegal and void ab initio and the impugned penalty order has been framed without considering the submissions/evidences of the assessee and without providing any adverse material on record.
3. That having regard to the facts and circumstances of the case, Ld. ClT (A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned penalty order being contrary to law as the assessment order framed under section l53A dated 20-12-2007 and additions made therein were also illegal, beyond jurisdiction and void ab initio.
4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s 271(1)(c) on the additions made in the assessment order u/s 153A dated 20-12-2007 as these additions are also contrary to law and facts.
5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s 271(1)(c) is bad in law being beyond jurisdiction and barred by limitation and contrary to the principles of natural justice and has been passed by recording incorrect facts and findings and without giving adequate opportunity to the assessee and without considering the submissions/evidences of the assessee and without providing any adverse material on record and the same is not sustainable on various legal and factual grounds.
6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned penalty order framed by Ld. AO that too without recording mandatory "satisfaction" as per law.
7. That the assessee craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other.
2. The brief facts of the case are that the assessment in this case was completed vide order dated 20.12.2007 passed u/s. 143(3) of the I.T. Act, 1961 at an income of Rs. 26,18,700/- as against declared income of Rs. 72,000/-. The difference between the assessed income and returned income was on account of the addition of Rs.25,00,000/- made on account of unexplained cash credit (gift) and Rs. 46,700/- on account of low withdrawal. Penalty proceedings u/s. 271(1)(c) of the I.T. Act, 1961 were initiated at the time of assessment. AO observed that the addition of Rs. 25,00,000/- was confirmed by the Ld. CIT(A), as there are sufficient facts / evidences on the record to establish that the assessee had concealed his income and also furnished inaccurate particulars to the extent of addition of Rs. 25 lasc, hence, the penalty of Rs. 7,60,512/- was levied u/s. 271(1)(c) of the I.T. Act, 1961 vide order dated 29.3.2010.
3. Against the above Penalty Order dated 29.3.2010 passed by the Assessing Officer, assessee appealed before the Ld. First Appellate Authority, who vide impugned order dated 12.8.2014 dismissed the appeal of the assessee.
4. Against the above order of the Ld. CIT(A) dated 12.8.2014, assessee is in appeal before the Tribunal.
5. As per the assessee’s counsel contention, there was no satisfaction for concealment was recorded by the AO. Therefore, the amount of Rs. 7,60,512/- does not attract any penalty. In support of his contention, he relied upon the decision of the Hon’ble Apex Court in the case of CIT vs. Reliance Petro Products (2010) Taxman 322.
On the other hand, Ld. DR relied upon the order of the authorities below and requested that the Appeal of the Assessee may be dismissed.
I have heard both the parties and perused the records, especially the orders of the authorities below, I find that in this case no satisfaction for concealment was recorded for penalty of Rs.7,60,512/- I further note the AO observed that assessee furnished inaccurate particulars of its income and is liable for penalty u/s 271(1)(c), which did not establish from the facts and circumstances of the case that how the assessee has furnished inaccurate particulars of its income. Section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. In this regard, I draw my support from the decision of the Hon'ble Apex Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR-158 (SC) wherein the Hon'ble Supreme Court has held that 'where there is no findings that any details supplied by the assessee in its return are found to be incorrect or erroneous or false, there is no question of inviting the penalty u/sec. 271(1)(c) of the Act. A mere making a claim, which is not sustainable in law, by itself, will not amount of furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to furnishing a inaccurate particulars of income. As the assessee has furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely, because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty u/sec. 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the Assessing Officer for any reason, the assessee will invite penalty u/sec. 271(1)(c). That is clearly not the intendment of the Legislature".
In the background of the aforesaid discussions and precedent, I am of the considered view that the assessee has not furnished inaccurate particulars of income and there are no findings of the Assessing Officer and the CIT (Appeals) that the details furnished by the assessee in his return are found to be inaccurate or erroneous or 4 false. Under these circumstances, in our view the penalty in dispute is totally unwarranted and deserve to be deleted. Accordingly, I delete the penalty of Rs. 7,60,512/- made u/s. 271(1)(c) of the I.T. Act and cancel the orders of the authorities below on the issue in dispute.
In the result, the appeal filed by the Assessee stands allowed.