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Income Tax Appellate Tribunal, DELHI BENCH ‘ A’ NEW DLEHI
Before: SHRI N.K. BILLAIYA & SHRI K. NARASIMHA CHARY
PER K. NARASIMHA CHARY, J.M. Aggrieved by the order dated 31/10/2017 passed by the learned Commissioner of Income Tax (Appeals)-2, Agra ("Ld. CIT(A)") for the assessment year 2010-11 in the case of Agra Development Authority(“the assessee”), the Revenue filed this appeal.
Brief facts of the case are that for the assessment year 2010-11, the assessee filed their return of income on 08.10.2010 declaring Nil income, claiming status as per Part-A, General Column. 5 in ITR-7 as No. 16, i.e., Local Authority. Assessment u/s. 143(3) was, however, concluded at an income of Rs.78,66,01,270/- after holding that the activities of the assessee are not charitable in nature in view of proviso to section 2(15) of the Income Tax Act, 1961 (“the Act”). Learned Assessing Officer simultaneously initiated penalty proceedings and concluded the same after the additions were confirmed by the first appellate authority by way of order dated 28.03.2016. Learned Assessing Officer levied a penalty of Rs.23,31,31,200/- for furnishing inaccurate particulars of income.
Assessee preferred an appeal before the ld. CIT(A) and pleaded that no proper opportunity was granted to be present and to adduce evidence; that basic preconditions for levy of penalty were not complied with; that penalty proceedings could be initiated either for concealment of particulars of income or furnishing inaccurate particulars there and if the proceedings are initiated on charge of concealment of particulars of income then penalty cannot be levied on the charge of furnishing of inaccurate particulars thereof and vice versa; that merely because the Assessing Officer held that the activities of the assessee are not charitable in nature in view of proviso to section 2(15) of the Act and consequent to addition, it does not ipso facto lead to levy penalty; and that the Assessing Officer did not bring on record any material to justify the conclusion of furnishing inaccurate particulars of income by the assessee. Assessee relied upon the decisions in CIT vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158(SC), Shiv Lal Tak vs. CIT, 251 ITR 373(Raj), CIT vs. Saheli Leasing & Finance Ltd., 191 Taxmann 165, Metal Rolling Works Ltd. vs. CIT 245 CTR 113(Bom) and CIT vs. Nath Bros. Exim International Ltd. 288 ITR 670 (Del).
Learned CIT(A) considered the contentions of the assessee and held that merely because certain additions are made in respect of certain debatable issues, it does not mean that the assessee furnished inaccurate particulars and consequently liable for penalty. While following the decision dated 29.08.2016 of Hon’ble Allahabad High Court in the case of CIT vs. Hapur Pilakhua Development Authority in appeal No. 657 of 2007 and group, where the Hon’ble jurisdictional High Court decided the issue in favour of assessee, learned CIT(A) deleted the penalty.
Revenue is, therefore, aggrieved by such deletion of penalty and preferred this appeal stating that it is an erroneous order.
None is present on behalf of the assessee despite notice was sent to the address given in form No. 36 If the assessee is available in such address, such notice should have been served on the assessee. If for any reason, the assessee is not available there, it is for the assessee to make arrangements for service of such notice by furnishing the address where the assessee would be available, or to deliver it to some authorised person, or by making request to the postal department to detain the mail till the assessee claims the same. Since the assessee does not seem to have adopted any of these methods, we proceed to and decide the matter on merits after hearing the ld. DR.
Learned DR, though relied on the penalty order, does not dispute the fact that the CIT(A) followed a binding precedent of Jurisdictional High Court while deleting the penalty. It is also not in dispute that the CIT(A) deleted the penalty by reaching a conclusion that there are conflicting decisions on the issue of different ITAT Benches and the High Courts. Since no material is placed before us to show that there is a contrary judgment in favour of the Revenue, we find it difficult to deviate from the view taken by the ld. CIT(A) basing on the binding precedent rendered by the Jurisdictional High Court. Hence, we are of the considered opinion that the impugned order does not suffer any illegality or irregularity and the appeal of the Revenue is liable to be dismissed.