NIRMALA DEVI,NEW DELHI vs. ITO WARD - 40(3), NEW DELHI

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ITA 1968/DEL/2020Status: DisposedITAT Delhi11 May 2023AY 2010-115 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 noted that the quantum appeal for the same assessment year had been remanded to the Assessing Officer. Consequently, the penalty order was set aside as it did not survive. The Assessing Officer was granted liberty to pass a fresh penalty order if deemed fit after giving effect to the quantum appeal order.

What were the facts?

The assessee filed an appeal against a penalty order under Section 271C. The appeal was filed with a significant delay, which was condoned. The core issue revolved around cash deposits in a joint account where the assessee was a secondary account holder.

What were the issues?

Whether the penalty order under Section 271C is sustainable when the related quantum appeal has been remanded. The validity of the notice issued under Section 274 and the penalty order under Section 271(1)(c) were also questioned due to alleged non-application of mind and issuance for both limbs of the section.

Which sections of the Income-tax Act were involved?

Section 271C,Section 274,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, [ DELHI BENCH: ‘E’ NEW DELHI ]

Before: SHRI ANIL CHATURVEDI & SHRI YOGESH KUMAR U.S.

For Respondent: Shri S.L. Anuragi, Sr. D
Hearing: 04.05.2023Pronounced: 11.05.2023

This appeal is filed by the assessee against the order dated 05/02/2019 of the ld. Commissioner of Income Tax (Appeals)-14, (hereinafter referred to CIT (Appeals )Civic Centre, New Delhi, for assessment year 2010-11.

2. The assessee has raised the following substantive ground of appeal :-

“1. That the order passed by the Ld. C1T (A) u/s 271C was incorrect, bad in law and void ah initio.

2.

That the order passed by the Ld. C1T (A) u/s 271C was incorrect, bad in law as the notice issued under section 274 read with section 271 shows gross non-application of mind on part of AO while issuing the notice, evident from the fact that the irrelevant portions of the said notice have not been struck off, thereby also not clearly stating under which limb of section 271(1 )(c) the notice has been issued for i.e. for furnishing inaccurate particulars or for concealment of income. Hence, the notice was illegal and untenable in law.

3.

That the order passed by the Ld. C1T (A) u/s 271C was incorrect, bad in law as the penalty order passed under section 271 (l)(c) suffers from gross negligence on part of the AO as the same has been issued for both the limbs of section 271 (1 )(c) i.e. for concealment of income and furnishing inaccurate particulars of income, thereby imposing the penalty under both the limbs of the section 271(1 )(c). Hence, the penalty order under section 271 (1 )(c) is illegal and untenable in law as the charge of penalty is not firm and shows non- application of mind and diffidence on part of the AO, thereby violating the principles of natural justice.

4. That the order passed by the Ld. C1T (A) u/s 271C was incorrect, bad in law it affirmed the order of the AO who had erred in facts and law since cash deposit of Rs. 36,23,000 have been made in a joint account, with appellant /assessee being the secondary

account holder. The appellant / assessee was not operating the said account and hence have no relation whatsoever to the impugned unexplained cash deposits and therefore cannot be said to have concealed particulars or furnished inaccurate particulars of her income. 5. That the AO has erred in law and facts in imposing penalty under section 271(1 )(c) on the appellant in view of the facts and circumstances of the case.”

3. None appeared for the Assessee even after issuing notices several times to the Assessee, considering the issues involved in the present Appeal, we deem it fit to hear the Ld. DR and dispose of the present Appeal.

4.

There is a delay of 625 days in filing the present Appeal. An application for condonation of delay has been filed by the Assessee contending that the ‘Assessee came to know about the impugned order when the demand was pressed by the Department, since the assessee is an old woman, she was not aware of the circumstances which resulted in filing the Appeal belatedly’, thus prayed for condoning the delay in filing the present Appeal. Considering the above facts and circumstances and also considering the fact that the Assessee had been given the relief in the quantum proceedings by remanding the matter to the file of the A.O. and for the reason stated in the Application for condonation of delay, the delay of 625 days in filing the present Appeal is hereby condoned.

5.

We have heard the Ld. DR and perused the material on record. It is brought to our notice that by the Ld. DR that in the quantum Appeal filed by the Assessee, the Tribunal in for Assessment Year 2010-11 vide order dated 09/12/2021, remanded the matter to the file of the A.O. with a direction to the assessee to furnish necessary evidence to show that the cash found to be deposited in the SB Account was that of the Assessee’s son and further the A.O. is directed to examine the evidence and decide the issue afresh giving sufficient opportunity of being heard to the assessee.

6.

Considering the above fact that in the quantum Appeal the matter has been remanded to the file of Assessing Officer, the penalty order dated 25/05/2018 does not survive. Accordingly, the present appeal deserves to be allowed by setting aside the penalty order. However, the A.O. is at liberty to pass fresh penalty order in accordance with law after giving effect to the order of the in case the Assessing Officer deems fit.

7.

In the result, the Appeal filed by the assessee is allowed. Order pronounced in the open court on : 11/05/2023.

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