Gayatri Villa Vs DCIT (ITAT Delhi)
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeals for Assessment Years 2016-17 and 2017-18 by deleting penalties imposed under Section 271D of the Income-tax Act for the alleged violation of Section 269SS. The appeals challenged separate orders of the Commissioner of Income Tax (Appeals), who had upheld penalties of Rs. 93,80,000 for AY 2016-17 and Rs. 44,00,000 for AY 2017-18.
The case arose after a survey under Section 133A conducted on 26.09.2018 at the business premises of the partners of the assessee firm. During the survey, the partners were required to produce books of account for the current and earlier years along with supporting documents to verify the sale of flats, turnover declared, and expenses claimed. As the assessee could not produce the books of account, the trading results for AY 2015-16 remained unverified. Since the books and investments relating to the construction of 24 flats could not be fully verified, assessments for AYs 2015-16 to 2017-18 were reopened under Section 147 to examine the surrendered income, investments, and construction expenses.
Assessments under Sections 147/143(3) were completed on 27.12.2019 for AY 2016-17 and on 18.12.2019 for AY 2017-18. Subsequently, notices under Section 271D were issued on 30.03.2022, and penalties were imposed on 31.03.2022 after the Joint Commissioner rejected the assessee’s explanations. The Commissioner (Appeals) confirmed the penalties, leading to the present appeals before the Tribunal.
