ITO, NEW DELHI vs. SHRI SHANTI SWAROOP BATRA, DELHI

The present appeal has been filed by the Revenue assailing the correctness of the order dated 21.06.2016 of CIT(A)-20, New Delhi pertaining to 2009–10 assessment year on the following grounds:-

1. “On the facts and circumstances of the case, the Ld.CIT(A) has erred in deleting the penalty u/s 271D of the Income Tax Act, 1961.

2. On the facts and circumstances of the case, the Ld.CIT(A) has erred in not appreciating the fact that penalty proceedings u/s 271D had been initiated alongwith proceedings u/s 271(1)(c) on a protective basis during the assessment proceedings. 3. On the facts and circumstances of the case, the Ld.CIT(A) has erred in not appreciating the fact that as per assessee’s own admission, the cash credits represent loan taken from others. 4. That the appellant craves, leave to add, amend or alter any of the ground(s) of appeal before or during the course of hearing of the appeal.”

2. Both the parties were heard. Ld. AR inviting attention to the order dated 21.06.2016 in appeal No. 184/2015–16 submitted that the issue of levy of penalty imposed by the Assessing Officer u/s 271(1)(c) had been challenged by the assessee before the CIT(A).

However, the decision of the CIT(A) in upholding the penalty has not been challenged in appeal by the assessee as the said order has been accepted by the assessee. As a result of this decision, it was submitted by the Ld.AR the CIT(Appeals) has quashed the penalty order u/s 271D.

I.T.A .No.-4631/Del/2016 ITO vs Shanti Swaroop Batra

Page 2 of 3 4. The Ld. Sr.DR submitted that the facts need to be verified namely that has the assessee accepted the penalty order u/s 271(1)(c) which has been confirmed by the CIT(A) or has the assessee and challenged it before the ITAT. Without verifying this fact, it was submitted the order cannot be confirmed. Subject to the verification of this fact, it was his submission that he would have no objection if the impugned order is upheld.

5.1. Considering these facts the CIT(A) in the penalty proceedings as per the impugned order dated 21.06.2016 imposed penalty u/s 271D holding as under:-

“The A.O had initiated the penalty proceedings under section 271D in the assessment order on protective basis as he has added the amount of Rs.13.27 lakhs under section 68 of the Act as unexplained cash credit. The A.O’s action has further been confirmed by the Ld. Commissioner of Income Tax (A)-XXVIII, order dated 07.03.2013. Therefore, once the amount has been held as unexplained under section 68 of the Act, the same cannot be subject t provision of section 269SS of the Act. Therefore, penalty under section 271D for violation of section 269SS of the Act cannot be sustained. It will not be out of context here to mention that the A.O. has already imposed penalty under section 271(1)(c) on the same amount. Accordingly, the penalty under section 271D of the Act is deleted. Appellant’s ground of appeal is allowed.”

6. Accordingly in the aforementioned peculiar facts and circumstances of the case and considering the submissions of the parties, I am of the view that the categoric statement of the Ld.AR on behalf of the assessee that no appeal against the quantum order or order u/s 271(1)(c) of the CIT(A) has been filed should be verified by the Assessing Officer. Thus, accepting the Ld. Sr. DR’s request which was not objected to by the Ld.AR also, it is deemed appropriate to restore the issue for verification to the Assessing Officer and I.T.A .No.-4631/Del/2016 ITO vs Shanti Swaroop Batra