Kissan Petro Oils Private Limited Vs DCIT (ITAT Delhi)
Income Tax Appellate Tribunal (ITAT) Delhi Bench has set aside a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, on Kissan Petro Oils Private Limited for Assessment Year 2015-16. The Tribunal’s decision was primarily based on two grounds: the deletion of all underlying additions by a previous ITAT order and the fact that the assessee’s claims were supported by a Chartered Accountant-certified audit report.
Kissan Petro Oils, engaged in manufacturing and selling methyl ester, filed its return declaring a loss. The case was selected for scrutiny, leading to an assessment order on December 30, 2017. Subsequently, penalty proceedings under Section 271(1)(c) were initiated, culminating in a penalty order on March 31, 2022, which was later confirmed by the Commissioner of Income-Tax (Appeals)/NFAC.
Before the ITAT, the assessee argued that the penalty was unsustainable because all additions made in the original assessment order had been deleted by the ITAT Delhi itself via an order dated May 31, 2024. Furthermore, the assessee contended that expenses were claimed based on a CA-certified audit report, citing the Supreme Court’s ruling in CIT vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC), which held that merely making a claim that is not accepted by the department does not automatically lead to a penalty for concealment or furnishing inaccurate particulars.
