YOGENDER NATH BHARDWAJ,DELHI vs. ITO, NEW DELHI

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ITA 1689/DEL/2016Status: DisposedITAT Delhi08 October 2018AY 2011-124 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty was unsustainable because the Assessing Officer did not specify the exact charge (concealment of income or furnishing inaccurate particulars) in the notice issued under Section 274. This lack of clarity rendered the penalty invalid.

What were the facts?

The assessee, an advocate, filed his return of income. The assessment order determined a higher total income due to additions and disallowances. Consequently, penalty proceedings under Section 271(1)(c) were initiated.

What were the issues?

Whether a penalty under Section 271(1)(c) is valid when the notice issued under Section 274 does not clearly specify the charge against the assessee.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI

Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI

For Appellant: Shri G.C. Srivastava, Adv, Shri Daksh S. Bhardwaj, Adv, Shri Suvinay K. Dash, Adv
For Respondent: Shri Amit Jain, Sr. DR
Hearing: 26/07/2018Pronounced: 08/10/2018

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order of the ld CIT(A)-20, New Delhi wherein he confirmed the levy of the penalty u/s 271(1)(c) of the Act of Rs. 420495/- for Assessment Year 2011-12. 2. The assessee has raised the following grounds of appeal:- “1. That the impugned appellate order dated 23.02.2016 passed by the Commissioner of Income Tax Appeals-20, New Delhi u/s 271 (1) (c) read with section 274 of the Income Tax Act 1961 is bad and defective in the eyes of law.

2. That the above cited Penalty Order as framed is an arbitrary action, in fact No proper and reasonable opportunity has ever been given to the Assessee for the hearing of case and to defend his case.

3. That the Commissioner of Income Tax (Appeals)-20 has not considered the amount of Rs. 12,16,143/- surrendered by the Assessee on account of professional receipts which is unjustified and unlawful.

4. That the Commissioner of Income Tax (Appeals)-20 has not considered plea of the assessee against the penalty imposed by the Assessing officer on account of addition made on account of Page | 1 expenditures disallowed by the A.O. for amounting Rs. 96831/- and 65400/- which is unreasonable and unjustified and it should be deleted.

5. That the Commissioner of Income Tax (Appeals)-20 has not considered the plea given by the assessee against the penalty on income/expenses disallowed on account of Dividend of Rs. 10252/-, Set off of Share loss of Rs. 144684/-, expenses of personal nature 1400/- and Rs. 350/- on account of difference in income as per computation of income, penalty on these additions made by the assessing officer has been imposed without considering the nature of addition and without providing any proper opportunity to the assessee to defend his case.

6. The Assessee had surrendered the income of Rs. 12,16,143/- on account of professional receipts during the hearing of the case with assurance no penalty proceedings will be levied by the department this amount of Rs. 12,16,143/- was surrendered just to buy peace of mind and to avoid further harassment from the department.”

3.

Brief facts of the case is that the assessee is an advocate by profession who filed his return of income on 30.09.2011 for Rs. 1035250/-. The assessment u/s 143(3) of the Act was passed on 10.03.2014 determining total income of Rs. 2570310/-. Additions were not challenged.

4.

Consequent to that penalty u/s 271(1)(c) of the Act was initiated. The ld AO stated that penalty proceedings are initiated on all the additions and disallowances made to the total income of the assessee. The assessee submitted his reply on 21.08.2014 that the assessee has offered a sum of Rs. 1216143/- as difference in professional receipt as stated in form No. 26AS as well as profit and loss account of the assessee. He therefore, stated that penalty thereon cannot be levied. He further stated that on various disallowance of the expenditure no penalty could be levied. He further stated that set off share of loss, assessee has completely disclosed details of such loss and it cannot be said that there is any concealment of income. He therefore, stated that addition are routine and general in nature on account of expenses which does not invite penalty u/s 271(1)(c) of the Act. 5. The ld AO rejected the contention of the assessee and stated that addition of Rs. 121843/- is undisclosed professional receipts and set up of loss of share of Rs. 144684/- against non-speculative would have remain Page | 2

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