SMT. KUSUM GUPTA,NEW DELHI vs. DCIT, NEW DELHI

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ITA 1514/DEL/2014Status: DisposedITAT Delhi21 March 2016AY 2007-085 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 penalty under Section 271(1)(c) cannot be invoked when additions are made on an estimated basis and on the basis of information and disclosure made by the assessee, as there is no evidence beyond doubt of concealment or furnishing inaccurate particulars.

What were the facts?

The assessee was levied a penalty under Section 271(1)(c) of the Income-tax Act on ad hoc disallowances made on account of boarding and lodging expenses for the assessee's son studying abroad and foreign travel expenses. These additions were upheld by the ITAT.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable on additions made on an estimated basis and on the basis of assessee's disclosures. Whether the Assessing Officer recorded sufficient satisfaction for initiating penalty proceedings.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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

Before: SHRI I.C. SUDHIR & SHRI L.P. SAHU

For Appellant: Shri Salil Aggarwal, Adv. And Shailesh Gupta, CA
For Respondent: Shri Shragun Gotru, Sr. DR

ORDER

PER I.C. SUDHIR: JUDICIAL MEMBER The assessee has questioned first appellate order whereby the Learned CIT(Appeals) has upheld the penalty of Rs.2,18,790 levied under section 271(1)(c) of the Income-tax Act, 1961. This action of the Learned CIT(Appeals) has been questioned on several grounds.

2.

In support of the grounds on the issue, the Learned AR submitted that the penalty in question has been levied on ad hoc disallowance of Rs.5,50,000 made on estimated basis on account of boarding and lodging expenses of the son of the assessee studying in a college in UK (Rs.2lacs )

1.

2 and on foreign visit of the assessee and her family to Dubai and Singapore (Rs.3,50,000). The Learned AR submitted that both the additions have been upheld by the ITAT which were made on estimate basis on the basis of material available on record and the disclosure made by the assessee, hence, it cannot be said that there was concealment of particulars of income of furnishing inaccurate particulars thereof on the part of the assessee towards the additions to attract penal provisions under sec. 271(1)(c) of the Act. The Learned AR submitted further that the Assessing Officer while directing for initiation of penal proceedings in the assessment order has failed to record his satisfaction to justify the penal action. The penalty is thus not maintainable even on this ground alone. He placed reliance on the following decisions: i) CIT vs. Anwar Ali (1970) – 76 ITR 696(SC); ii) CIT vs. P. Rojes (2013) – 31 Taxmann. Com 253 (Mad.); iii) CIT vs. Mahinder Singh Khedla (2012) – 252 CTR 253 (Raj.);

3.

The Learned Senior DR on the other hand placed reliance on the orders of the authorities below. He submitted that the additions made on account of staying of the assessee’s son in U.K. for his study and travelling of assessee with his wife to Dubai and Singapore have been ultimately upheld by the ITAT. The assessee could not substantiate the claimed 3 expenditure and satisfaction of the Assessing Officer that there was furnishing of inaccurate particulars of income on the part of the assessee on account of the above stated additions is discernible from the assessment order itself wherein the Assessing Officer has directed for initiation of penalty proceedings on these additions dealt by him independently to each other.

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