SHRI MOHAMMAD IQBAL QURESHI,SRINAGAR vs. INCOME TAX OFFICER, WARD 3(2), SRINAGAR

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ITA 379/ASR/2018Status: DisposedITAT Amritsar04 July 2022AY 2006-074 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that merely because a claim was not accepted in the assessment does not automatically imply concealment of income or furnishing inaccurate particulars. Relying on the Supreme Court's decision in CIT vs. Reliance Petro Products Pvt. Ltd., the penalty was deleted.

What were the facts?

The Income Tax Officer initiated penalty proceedings under Section 271(1)(c) after completing the assessment under Section 143(3), levying a penalty of Rs. 1,89,726/-. The additions were based on differences in sundry creditors, violation of Section 40A(3), and disallowance of expenses.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied solely on the basis of additions made during assessment without proving concealment or furnishing inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 40A(3)

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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.

Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE

Hearing: 27.06.2022Pronounced: 12.07.2022

The instant appeal is directed against the order of Ld.

Commissioner of Income Tax (Appeal)-2, Jalandhar (Camp office at Srinagar) {in brevity CIT(A)} bearing appeal

Mohammad Iqbal Qureshi v. ITO no.95/12-13/CIT(A)/Jammu date of order 06.03.2018, passed u/s. 250(6) of the Income Tax Act, 1961 (in brevity of the Act) for the Assessment year 2006-07. The impugned order was originated from the order of Income Tax Officer, Ward-III(2), Srinagar (in brevity the A.O) passed u/s.271(1)(c) of the Act for the order dated 28.05.2012.

2.

The brief fact of the case is that assessment u/s. 143(3) of the Act was completed & assessed demand amount of Rs.2,84,429/-. Assessee had paid the tax and not filed any appeal against the order of the ld. AO. The penalty proceeding was initiated u/s. 271(1)(c) and penalty was levied @100% of the tax sought to be evaded amount to Rs.1,89,726/-.

Aggrieved assessee filed appeal before the CIT(A). After the detail hearing, the ld. CIT(A) adjudicated the penalty in favour of the revenue. Being aggrieved assessee filed an appeal against the order of ld. CIT(A) before us.

3.

The ld. Counsel of the assessee appeared and draw our attention on the assessment order passed u/s. 143(3) of the Act. He further pointed out that addition was made based on difference of opening balance of Sundry Creditors amount of Mohammad Iqbal Qureshi v. ITO Rs.4,18,876/-, violation of section 40A(3) of the Act amount to Rs.60,000/- and disallowance of expenses amount to Rs.50.000/-. No other concealment was found during the assessment. The ld. Counsel further argued that assessee for buying peace in mind paid the tax the not filed any appeal against the order of ld. AO.

4.

The ld. SR DR argued and mentioned that the penalty cannot be stopped on the basis of the non-filing of appeal and payment of demanded tax u/s. 143(3).

5.

We heard the rival submissions and considered the documents available on the record. The additions were made by the ld. AO on the basis of difference in opening balance of sundry creditors (ii) violation of section 40(A)(3) and disallowance of expenses. The respectful observation of the order of Hon’ble Supreme Court in the case of CIT V/s Reliance Petro Products Pvt. Ltd. (322 ITR 158), merely because a claim has not been accepted in the assessment, it would not follow that the assessee had concealed its income or furnished inaccurate particulars of income. We also observed that the submission made only on the basis of expenses and difference

Mohammad Iqbal Qureshi v. ITO in opening balance of sundry creditors. Considering the order of apex court we directed to delete the penalty amount to Rs.1,89,726/-,levied U/s 271(1)(c) of the Act.

6.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 12.07.2022

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