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Income Tax Appellate Tribunal, DELHI BENCH “SMC-I”: NEW DELHI
Before: SHRI P.K.BANSAL
O R D E R PER P.K. BANSAL, A. M.
This appeal has been filed by the assessee against the order of the Ld. CIT(A) dated 31.12.2015. The only issue involved in this appeal relates to the sustenance of the penalty amounting to Rs. 2,44,940/- by the Ld. CIT(A), imposed by the AO u/s 271(1)(c) of the Income Tax Act.
I have heard the rival submissions and carefully considered the same along with the order of the tax authorities below. I noted that in this case the AO levied the penalty on the assessee @200% of the tax sought to be evaded amounting to Rs. 4,89,880/- by observing as under “The assessee has kept changing the explanation, rather he kept on submitting wrong facts/misleading facts both before the AO and the CIT(A), therefore, it is a fit case for imposition of penalty @ 200%. In view of the above I find it reasonable to impose a penalty of Rs. 4,89,880/- being 200% of the tax sought to be evaded as calculated below :- i) Tax as per assessed income : Rs. 3,50,269/- ii) Tax as per returned income : Rs. 1,05,329/- iii) Tax sought to be evaded : Rs. 2,44,940/- iv) Minimum penalty leviable @ 100% : Rs. 2,44,940/- v) Maximum penalty leviable @ 200%: Rs. 4,89,880/-“
When the matter went before the Ld. CIT(A), the Ld. CIT(A) reduced the penalty to 100% of the tax sought to be evaded amounting to Rs. 2,44,940/-.
Provision of section 271(1)(c) empowers the AO to impose penalty if in the course of the proceedings under the Income Tax Act the AO is satisfied that any person has concealed the particulars of his income & furnishing inaccurate particulars of such income. Thus there are two different charges in respect of which penalty has to be imposed.
The charge of concealing the particulars of income is different from furnishing of inaccurate particulars of the income. Explanation I is applicable in case of concealment of particulars of income. In the case of concealment of particulars of income, the onus is on the assessee. In 2 view of applicability of Explanation I to prove that the assesee has not concealed the particulars of income while in the case of furnishing the inaccurate particulars of income the onus lies on the revenue to prove that the assesee has furnished inaccurate particulars of income. Thus there must be specific charge in respect of which the penalty u/s 271(1)
(c) can be imposed in the case of the assessee. It is apparent from the penalty order the AO is not aware of for which charge he has imposed the penalty whether it is for furnishing inaccurate particulars or for concealing the particulars of income. Until and unless there is a specific charge being levied on the assesee, I am of the view no penalty u/s 271(1)(c) can be imposed on the assessee. My aforesaid view is duly supported by the decision of Gujarat High Court in the case of New Sorathia Engg. Co. vs. CIT 282 ITR 642 (Gujarat), Hon’ble Karnataka High Court has also taken the similar view in the case of CIT vs. Manjunatha Cotton & Ginning Factory 359 ITR 565. Since it is not discernible from the order passed by the AO for which specific charge the penalty has been imposed u/s 271(1)(c), I therefore delete the penalty imposed u/s 271(1)(c) of the Act.
In the result appeal filed by the assessee is allowed.
Order pronounced in the open court on 11/07/2016.