Sanjeev Kumar Vs ACIT (ITAT Delhi)
Jurisdictional Overreach – CIT(A) cannot convert 271AAB into 271(1)(c)- Penalty on 153A Surrender Invalid
Delhi ITAT has quashed a penalty imposed u/s 271(1)(c), granting full relief to the assessee. Assessee had originally filed his return of income u/s 153A after a search, declaring an additional surrendered amount of ₹92 lakh. AO assessed the income u/s 153A/143(3) & initiated penalty proceedings u/s 271AAB in respect of the surrendered sum. Subsequently, a penalty order u/s 271AAB was passed, which was later deleted by CIT(A). However, in a separate order dated 14.11.2019, CIT(A) initiated fresh penalty proceedings & imposed penalty u/s 271(1)(c) of ₹30.34 lakh on the same surrendered income, mistakenly treating the surrendered sum as ₹98.20 lakh instead of ₹92 lakh.
Tribunal held that such action by CIT(A) was wholly without jurisdiction. Once AO had consciously initiated penalty u/s 271AAB, CIT(A) could not substitute or convert it into penalty proceedings u/s 271(1)(c). It further observed that the surrendered sum was duly disclosed in the return filed u/s 153A & therefore, penalty u/s 271(1)(c) could not be levied, in line with the ratio of PCIT v. Neeraj Jindal (393 ITR 1, Delhi HC). ITAT also pointed out that CIT(A) had not recorded the mandatory satisfaction regarding concealment or furnishing of inaccurate particulars, nor had the notice specified the particular limb of section 271(1)(c) being invoked. Relying on PCIT v. Sahara India Life Insurance Co. Ltd. (432 ITR 84, Delhi HC) & PCIT v. Gopal Kumar Goyal (153 taxmann.com 534, Delhi HC), Tribunal reiterated that failure to specify the exact charge in the penalty notice vitiates the proceedings. On these findings, Tribunal set aside the orders of the lower authorities & deleted the penalty in full.
