Sanraj Engineering (P) Ltd. Vs ITO (ITAT Delhi)
Levy of penalty under section 271(1)(c) was not justified, where both the assessment order and show cause notice failed to state the specific charge of concealment and/or furnishing of inaccurate particulars of income by assessee.
FULL TEXT OF THE ITAT JUDGMENT
Aggrieved by the order dated 29.09.20 16 in appeal No.84/13-14 passing by the Commissioner of Income Tax (Appeal) [in short “CIT(A)”]-28, New Delhi for 2006-07 Assessment Year, assessee preferred this appeal on the following grounds: –
“That the order dated 29.09.2016 passed u/s 250(6) of the Income Tax Act, 1961 is against law and facts on the file as he was not just ified to partly uphold the action of the Ld. Assessing Officer in restricting the penalty u/s 271(1)(c) of the Income Tax Act, 1961 of rs.71,99,070/- (as against Rs.81,68,916/- imposed by the Ld. Assessing Officer) by granting relief of only Rs.8,69,846/- for alleged concealment/furnishing inaccurate particulars of income, without considering the facts and circumstances of the case and the legal position in much as no such penalty is exigible in the facts & circumstances of the case.”
2. However, subsequently the assessee pleaded the following additional grounds: –
“That the order dated 29.09.2016 passed u/s 250(6) of the Income Tax Act, 1961 by the Ld. Commissioner of Income Tax (Appeals) 28, New Delhi is against law and facts on the file in as much as he was not justified to partly uphold the action of the Ld. Assessing Officer in levying penalty of Rs. 71,99,070/- u/s 271(1)(c) of the Income Tax Act, 1961 by ignoring the fact that while the penalty proceedings had been initiated for alleged concealment of income, the same had been levied on grounds of alleged furnishing inaccurate particulars of income thereby rendering the same void ab-initio.”
3. Briefly stated facts are that the assessee is a company, filed their return of income on 30.11.2006 declaring the income as NIL. During the scrutiny proceedings, among other things, the AO found that the assessee has shown to have taken unsecured loans of Rs.4,04,30,000/- during the relevant year and after giving an opportunity of being heard to the assessee, the AO concluded that in respect of six of the eligible creditors, the assessee failed to prove their identity, their creditworthiness and the genuineness of the transactions, as such the AO concluded that the transactions in respect of such creditors are all sham as such by invoking provisions u/s 68 of the Act, the AO made an addition to the tune of 2,40,00,000/- among other things. The details of such alleged creditors are as follows: –
