CIT-1 vs. BIRLA ELECTRICALS LTD

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ITA/500/2014HC DelhiDLHC01140532201409 February 2016Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court was not persuaded that the assessee failed to disclose full and true particulars. Therefore, the cancellation of penalty by the ITAT was not considered perverse.

What were the facts?

The Assessing Officer levied penalty under Section 271(1)(c) as the assessee could not provide explanation for the trading declared. The assessee claimed the books of accounts were misplaced during office shifting.

What were the issues?

Whether the cancellation of penalty under Section 271(1)(c) was justified in law, given the assessee's explanation for not producing accounts.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

ITA 500/2014 Page 1 of 2

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 5. +

ITA 500/2014

CIT-1

..... Appellant Through: Mr Dileep Shivpuri, Senior Standing Counsel.

versus

BIRLA ELECTRICALS LTD

..... Respondent

Through: Mr Siddharth, Advocate.

CORAM: JUSTICE S.MURALIDHAR JUSTICE VIBHU BAKHRU

O R D E R %

09.02.2016 1. The Revenue has filed the present appeal against an order dated 11th April, 2014 passed by the Income Tax Appellate Tribunal („ITAT‟) in ITA No. 5680/Del/2013 for the Assessment Year („AY‟) 2006-07. While, admitting this appeal on 9th March, 2015, the following question of law was framed for consideration: “Whether in the facts and circumstances the cancellation of the penalty was justified in law?”

2.

The Court has been taken through the original assessment order dated 26th December, 2011 of the Assessing Officer in which the gross profit was computed by applying the average rate profit of 2004-05, 2005-06 and 2007-

ITA 500/2014 Page 2 of 2

08 since no explanation was offered for “dismissal trading declared for the relevant previous year”. The explanation offered by the Assessee for the inability to produce books of accounts, stock register, supporting bills, etc. was that they had been misplaced during the shifting of its office from Sion Mumbai to Goregaon (Mumbai).

3.

Having heard Mr Dileep Shivpuri, learned Senior Standing counsel for the Revenue, the Court is not persuaded to accept that this was a case of failure by the Assessee to disclose full and true particulars, warranting the levy of penalty under Section 271 (1) (c) of the Act. The Court is not persuaded to hold that the deletion of the penalty by the ITAT is perverse, warranting interference.

4.

The question framed is answered in the affirmative i.e. in favour of the Assessee and against the Revenue. The appeal is dismissed.

S.MURALIDHAR, J

VIBHU BAKHRU, J FEBRUARY 09, 2016/MK

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