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Case Law Details

Case Name : Babita Khurana Vs DCIT (ITAT Delhi)
Appeal Number : ITA Nos. 3217 & 3218/Del/2018
Date of Judgement/Order : 26/04/2023
Related Assessment Year : : 2008-09 & 2011-12

Babita Khurana Vs DCIT (ITAT Delhi)

In so far as the factual aspect is concerned, there is no dispute that in response to notice issued u/s. 153A of the Act, the Assessee had filed revised returns of income declaring more income than what was declared in the original returns of income. It is further observed, in the course of assessment proceedings, the Assessing Officer made thorough verification of the returns of income and ultimately accepted the income declared by the Assessee. In other words in the assessment orders, the Assessing Officer has not made any variation to the income declared by the Assessee. It is further observed, while completing the assessments, the Assessing Officer has initiated proceedings for imposition of penalty u/s. 271(1)(c) by mentioning as under :-

“Penalty proceedings under section 271(1)(c) is initiated for concealment of income/filing inaccurate particulars of income”

He has not mentioned the exact charge for which he intends to impose penalty u/s. 271(1)(c) of the Act. Even, in the show cause notice dated 30.03.2016 issued u/s. 274 read with sec. 271 of the Act, the Assessing Officer has not specified under which limb he intended to impose penalty. The penalty order also does not specifically indicate the exact limb under which the Assessing Officer imposed penalty. Thus, the aforesaid facts clearly indicate non-application of mind on the part of the Assessing Officer while imposing penalty. Even otherwise also, the Assessing Officer has not established on record that either there is concealment of income or furnishing of inaccurate particulars of income by the Assessee. This is so because, neither he has referred to any incriminating material found as a result of search indicating concealment of income by the Assessee nor there is any adverse inference drawn by the Assessing Officer in the assessment orders resulting in variation in income declared by the Assessee. Thus, in our view, the Revenue has failed to establish either concealment of income or filing of inaccurate particulars of income by the Assessee. It is observed, while considering identical issue of penalty imposed u/s. 271(1)(c) of the Act in Assessee’s own case in assessment year 2010-11, the Tribunal has deleted the penalty having found that neither there is concealment of income nor furnishing of inaccurate particulars of income. There is no difference in factual position in the impugned assessment years. Therefore, consistent with the view taken by the Tribunal in assessment year 2010-11, we are inclined to delete the penalty imposed u/s. 271(1)(c) of the Act in both the assessment years under dispute.

FULL TEXT OF THE ORDER OF ITAT DELHI

These appeals by the Assessee arise out of two separate orders, both dated 26.02.2018, of learned Commissioner of Income-tax (Appeals)-IV, Kanpur, confirming the penalty imposed u/s. 271(1)(c) of the Income-tax Act, 1961 for the assessment years 2008-09 and 2011-12.

2. Briefly, the facts are, the Assessee is a resident individual stated to be carrying on business in trading of auto parts. For the assessment years under dispute, Assessee had filed original returns of income in regular course declaring total income of Rs.4,70,590/- and Rs.11,96,610/-respectively, for the assessment years 2008-09 and 2011-12. Subsequently, a search and seizure operation was conducted on the Assessee on 09.10.2013. In pursuance to the search and seizure operation, proceedings u/s. 153A were initiated against the Assessee. In response to the notices issued u/s. 153A of the Income Tax Act, the Assessee filed returns of income revising total income to Rs.3,44,36,586/-and Rs.82,90,606/- for the assessment years 2008-09 and 2011-12 respectively. The Assessing Officer completed the assessments u/s. 143(3)/153A of the Act accepting the income declared by the Assessee in the returns of income filed in pursuance to notices issued u/s. 153A of the Act. However, alleging that the Assessee has filed inaccurate particulars of income/concealed her income, the Assessing Officer initiated proceedings for imposition of penalty u/s. 271(1)(c) of the Act and ultimately passed orders imposing penalty of Rs.1,16,43,250/- in assessment year 2008-09 and Rs.24,08,327/- in assessment year 2011-12. Though, the Assessee challenged the orders imposing penalty u/s. 271(1)(c) of the Act by filing appeals before ld. Commissioner (Appeals), however, she was unsuccessful.

3. Before us, learned counsel appearing for the Assessee submitted that the penalty order passed is invalid, as in the show cause notice issued u/s. 274 read with section 271(1)(c), the Assessing Officer has not mentioned the specific limb under which he intended to levy penalty. In this context, he drew our attention to show cause notice dated 30.03.2016. Without prejudice, he submitted, the charge of concealment of income/furnishing of inaccurate particulars of income is not established. He submitted, merely because the Assessee revised its income in the returns of income filed in pursuance to notices issued u/s. 153A of the Act, it cannot be automatically concluded that the Assessee has concealed her income or furnished inaccurate particulars of her income. He submitted, in the assessment order, Assessing Officer has not referred to any incriminating material found during the search and seizure operation indicating concealment of income by the Assessee. He submitted, since there was nothing adverse against the Assessee, the Assessing Officer accepted the income declared in the revised returns of income. Thus, he submitted, the provisions of section 271(1)(c) is not applicable. Finally, he submitted, while deciding Assessee’s appeal on levy of penalty u/s. 271(1)(c) of the Act under identical facts and circumstances in assessment year 2010-11, the Tribunal has deleted the penalty imposed u/s. 271(1)(c) of the Act. In this regard, he drew our attention to order dated 08.03.2019 passed in ITA No. 4707/Del/2018. Thus, he submitted, the penalty imposed for both the assessment years may be deleted.

4. Learned Departmental Representative strongly relied upon the observations of the Assessing Officer and learned Commissioner of Income-tax (Appeals).

5. We have considered rival submissions and perused the material on record. In so far as the factual aspect is concerned, there is no dispute that in response to notice issued u/s. 153A of the Act, the Assessee had filed revised returns of income declaring more income than what was declared in the original returns of income. It is further observed, in the course of assessment proceedings, the Assessing Officer made thorough verification of the returns of income and ultimately accepted the income declared by the Assessee. In other words in the assessment orders, the Assessing Officer has not made any variation to the income declared by the Assessee. It is further observed, while completing the assessments, the Assessing Officer has initiated proceedings for imposition of penalty u/s. 271(1)(c) by mentioning as under :-

“Penalty proceedings under section 271(1)(c) is initiated for concealment of income/filing inaccurate particulars of income”

He has not mentioned the exact charge for which he intends to impose penalty u/s. 271(1)(c) of the Act. Even, in the show cause notice dated 30.03.2016 issued u/s. 274 read with sec. 271 of the Act, the Assessing Officer has not specified under which limb he intended to impose penalty. The penalty order also does not specifically indicate the exact limb under which the Assessing Officer imposed penalty. Thus, the aforesaid facts clearly indicate non-application of mind on the part of the Assessing Officer while imposing penalty. Even otherwise also, the Assessing Officer has not established on record that either there is concealment of income or furnishing of inaccurate particulars of income by the Assessee. This is so because, neither he has referred to any incriminating material found as a result of search indicating concealment of income by the Assessee nor there is any adverse inference drawn by the Assessing Officer in the assessment orders resulting in variation in income declared by the Assessee. Thus, in our view, the Revenue has failed to establish either concealment of income or filing of inaccurate particulars of income by the Assessee. It is observed, while considering identical issue of penalty imposed u/s. 271(1)(c) of the Act in Assessee’s own case in assessment year 2010-11, the Tribunal has deleted the penalty having found that neither there is concealment of income nor furnishing of inaccurate particulars of income. There is no difference in factual position in the impugned assessment years. Therefore, consistent with the view taken by the Tribunal in assessment year 2010-11, we are inclined to delete the penalty imposed u/s. 271(1)(c) of the Act in both the assessment years under dispute.

6. In the result, both the appeals are allowed.

Order pronounced in the open court on 26/04/2023.

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