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Krishna Devi H. No. 823, Palam Vihar More, Bijwasan, New Delhi-110061 Vs. ACIT Circle-44(1), New Delhi
September, 11th 2019


Referred Sections:
Section 271(1)(c) of the Income Tax Act
Section 274

Referred Cases / Judgments:
CIT vs. SSA’s Emerald Meadows (2016) 73
CIT vs. Manjunatha Cotton & Ginning Factory 359 ITR 565
CIT vs. M/s Sahara India Life Insurance Co. Ltd. (ITA No. 475/2019 order dated 02.08.2019).

                                            1                  ITA No. 8016 to 8019/Del/2018
                                                                       (Krishna Devi)

                       IN THE INCOME TAX APPELLATE TRIBUNAL
                            DELHI BENCH: `SMC' NEW DELHI

                  BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER
                                         AND
                    MS SUCHITRA KAMBLE, JUDICIAL MEMBER

                       I.T.A.   No.   8016/DEL/2018    (A.Y.   2009-10)
                       I.T.A.   No.   8017/DEL/2018    (A.Y.   2010-11)
                       I.T.A.   No.   8018/DEL/2018    (A.Y.   2011-12)
                       I.T.A.   No.   8019/DEL/2018    (A.Y.   2012-13)


        Krishna Devi                        Vs.   ACIT
        H. No. 823, Palam Vihar More,             Circle-44(1),
        Bijwasan, New Delhi-110061                New Delhi
        PAN : BXWPD1061J
        APPELLANT                                 (RESPONDENT)

                     Appellant by        Sh. B.L.Gupta, ITP
                     Respondent by       Sh. S.L.Anuragi, Sr.DR

                      Date of Hearing               09.09.2019
                      Date of Pronouncement         11.09.2019

                                           ORDER

PER SUCHITRA KAMBLE, JM

         These appeals are filed by the assessee against orders dated
09.10.2018 passed by the Commissioner of Income Tax (Appeals)- 15, Delhi
for     assessment    years     2009-10,    2010-11,    2011-12      and    2012-13
respectively.

2.       In all these appeals grounds are identical therefore, we reproducing the
grounds for A.Y. 2009-10 as under:

ITA No 8016 /Del/2018 (A.Y. 2009-10)

1. "On the facts and in the circumstance of the case and in law the CIT(A) -15
      was incorrect and unjustified in dismissing the appeal of the assessee.
                                         2                ITA No. 8016 to 8019/Del/2018
                                                                  (Krishna Devi)

2. On the facts and in the circumstance of the case and in law the CIT(A) -15
   was incorrect and unjustified in sustaining the penalty unjustifiably levied by
   the AO u/s 271(1)(c) by holding that Hon'ble Supreme Court judgment in the
   case of SSA's Emerald Meadows reported in 386 ITR 13 and Manjunath etc
   would not help the assessee.
3. On the facts and in the circumstance of the case and in law the CIT(A) -15
   was incorrect and unjustified in holding that penalty levied u/s 271(l)(c) by
   the AO was correct and justified even in the presence of SSA's Emerald
   Meadows and Manjunath judgments and also others as given before the
   CIT(A).
4. On the facts and in the circumstance of the case and in law the CIT(A) -15
   was incorrect and unjustified in holding that penalty notice issued by the AO
   u/s 271(l)(c) was legal and therefore the contention of the assessee that
   penalty notice infact was illegal and bad in law itself, in view of the aforesaid
   two judgments and therefore the penalty order was not sustainable.
5. On the facts and in the circumstance of the case and in law the reliance on
   several judgments of Hon'ble Supreme Court, High Courts and Tribunals in
   dismissing the appeal of the assessee are misplaced since they are either not
   applicable in the present case or rendered prior to the aforesaid two
   judgments.
6. On the facts and in the circumstance of the case and in law the CIT(A) -15
   was incorrect and unjustified in holding that there is concealment of income
   even when the income assessed is the same as returned.
7. On the facts and in the circumstance of the case and in law the CIT(A) -15
   was incorrect and unjustified in holding that penalty for concealment of
   income has been rightly levied even when the penalty notice has been issued
   both for concealment of income and also for filing incorrect particulars of
   income which is bad in law since inappropriate words have not been struck
   of.
8. On the facts and in the circumstance of the case and in law the CIT(A) -15
                                          3               ITA No. 8016 to 8019/Del/2018
                                                                  (Krishna Devi)






     was incorrect and unjustified in holding the penalty proceedings have been
     rightly initiated even when the penalty proceedings have not been legally
     initiated even after the amendment in the Act.
9. Without prejudice to above grounds of appeal, On the facts and in the
     circumstance of the case and in law the CIT(A) -15 was incorrect and
     unjustified in confirming penalty u/s 271(l)(c) without proving either the
     concealment or filing of inaccurate particulars of income and hence the orders
     of Authorities below needs quashing."


3.      The brief facts of A.Y. 2009-10 are taken hereinafter. The Assessing
Officer had information that during the relevant F.Y. 2008-09, the assessee
received rental income of Rs. 6,00,000/-, as his share of income from house
property. Since the income exceeded maximum amount which is not
chargeable to Income Tax, the assessee was liable to file return u/s 139,
however it was also revealed to Assessing Officer that no ITR was filed by the
assessee for the relevant A.Y. 2009-10. Accordingly, the Assessing Officer
issued notice u/s 148 on 29.03.2016, after observing that rental income
amounting to Rs. 6,00,000/- has escaped assessment. The assessee was duly
served with the notice u/s 148 and he was asked to submit his return within
30 days of receipt of notice. However, even after receipt of the notice u/s 148,
no return was filed by the assessee within the time limit specified in the notice
or even afterwards. The assessee objected to the issue of notice u/s 148 and
the objections were disposed off by the Assessing Officer. Thereafter, the
Assessing Officer issued notice dated 24.06.2016, u/s 142(1) of Income Tax Act
to the assessee asking him to appear on 05.07.2016 and also submit his
return. In response, the assessee filed the online ITR on 30.06.2016, in which
the total income amounting to Rs. 4,58,717/- was declared. In the total income
the amount of income under house property escaping assessment was duly
offered to tax, after claiming benefit of deduction @ 30%. Since the entire rental
income, which was received by the assessee, as per information in possession
                                        4                  ITA No. 8016 to 8019/Del/2018
                                                                   (Krishna Devi)

of the Assessing Officer was fully disclosed/declared by the assessee in his ITR,
the Assessment was completed at the same figure of total income amounting to
Rs. 4,58,717/-. In this manner, the returned income was accepted by the
Assessing Officer. Subsequently, the Assessing Officer levied penalty u/s
271(1)(c), after treating that the amount of Rs. 4,58,717/- represented
concealed income.


4.    Being aggrieved by the Penalty order, the assessee filed appeal before the
CIT(A). The CIT(A) dismissed the appeal of the assessee.


5.    The Ld. AR submitted that Notice u/s 274 read with Section 271(1)(c) of
the Income Tax Act dated 26.08.2016 did not specify the particular charge of
concealment or furnishing inaccurate particulars of such income. The Ld. AR
further submitted that in assessee's own case for A.Y. 2013-14 being ITA No.
8020/Del/2018 order dated 03.06.2019, the Tribunal allowed the appeal of the
assessee. Besides that the Ld. AR also relied upon the decision of Hon'ble Apex
Court in case of CIT vs. SSA's Emerald Meadows (2016) 73 Taxman.com
241(Kar) confirming the Hon'ble Karnataka High Court's decision in case of CIT
vs. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) as well as Hon'ble
Delhi Court decision in case of Pr. CIT vs. M/s Sahara India Life Insurance Co.
Ltd. (ITA No. 475/2019 order dated 02.08.2019).


6.    The Ld. DR relied upon the Assessment Order, Penalty order and the
order of the CIT(A), but could not distinguish the decisions relied upon by the
Ld. AR.


7.    We have heard both the parties and perused all the relevant material
available on record. First of all, in the notice issued u/s 274 r.w.s 271(1)(c) of
the Income Tax Act, 1961, there was no specific charges as relates to
concealment of income or furnishing of inaccurate particulars of income.
                                        5                 ITA No. 8016 to 8019/Del/2018
                                                                  (Krishna Devi)






Section 271(1)(c) of the Act was not correctly invoked by the Assessing Officer.
The CIT(A) also overlooked the actual intention of the penalty proceedings
which clearly set out that when there is inaccurate particulars or concealment
on part of the assessee, then the same should be proceeded. But in the present
case, the assessee has disclosed all the factual aspects before the Assessing
Officer which cannot be stated that there was concealment of particulars of
income or the assessee furnished inaccurate particulars of income. The
Assessee has also filed all the details during the assessment proceedings. From
the notice, it can be seen that the Assessing Officer was not sure under which
provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for
penalty. The issue is squarely covered by the decision of the Hon'ble Supreme
Court in case of M/s SSA' Emerald Meadows. The extract of the Hon'ble
Karnataka High Court in M/s. SSA' Emerald Meadows are as under which was
confirmed by the Hon'ble Apex Court:
      "3.   The Tribunal has allowed the appeal filed by the assessee holding
      the notice issued by the Assessing Officer under Section 274 read with
      Section 271(1)(c) of the Income Tax Act, 1961 (for short `the Act') to be bad
      in law as it did not specify which limb of Section 271(1)(c) of the Act, the
      penalty proceedings had been initiated i.e., whether for concealment of
      particulars of income or furnishing of inaccurate particulars of income. The
      Tribunal, while allowing the appeal of the assessee, has relied on the
      decision of the Division Bench of this Court rendered in the case of
      COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND
      GINNING FACTORY (2013) 359 ITR 565.
      4. In our view, since the matter is covered by judgment of the Division
      Bench of this Court, we are of the opinion, no substantial question of law
      arises in this appeal for determination by this Court. The appeal is
      accordingly dismissed."
Besides that in assessee's own case for A.Y. 2013-14 the same issue has been
decided by the Tribunal decided this issue in favour of the assessee. The
                                          6                   ITA No. 8016 to 8019/Del/2018
                                                                      (Krishna Devi)

Hon'ble Jurisdictional High Court in case of Sahara India Life Insurance Co.
Ltd. (supra) held as under:
     "21.     The Respondent had challenged the upholding of the penalty
     imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It
     followed the decision of the Karnataka High Court in CIT v. Manjunatha
     Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice
     issued by the AO would be bad in law if it did not specify which limb of
     Section 271(1)(c) the penalty proceedings had been initiated under i.e.
     whether for concealment of particulars of income or for furnishing of
     inaccurate particulars of income. The Karnataka High Court had followed the
     above judgment in the subsequent order in Commissioner of Income Tax v.
     SSA's Emerald Meadows (2016) 73 Taxman.com 241(Kar), the appeal against
     which was dismissed by the Supreme Court of India in SLP No. 11485 of
     2016 by order dated 5th August, 2016.


     22.      On this issue again this Court is unable to find any error having
     been committed by the ITAT. No substantial question of law arises."


Thus, the penalty imposed u/s 271(1)(c) of the Act is set aside. All the four
appeals of the assessee are allowed as all the appeals are identical.


8.      In result, the appeals of the assessee are allowed.


        Order pronounced in the Open Court on 11th September, 2019.


            Sd/-                                          Sd/-
   (N. K. BILLAIYA)                                   (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER                                      JUDICIAL MEMBER

Dated: 11/09/2019
*Binita*
                                          7                   ITA No. 8016 to 8019/Del/2018
                                                                      (Krishna Devi)



Copy forwarded to:

1.   Appellant
2.   Respondent
3.   CIT
4.   CIT(Appeals)
5.   DR: ITAT




                                                      ASSISTANT REGISTRAR

                                                           ITAT NEW DELHI



                Date of dictation                                  09.09.2019
                Date on which the typed draft is placed before the   .09.2019
                dictating Member
                Date on which the typed draft is placed before the
                Other Member
                Date on which the approved draft comes to the Sr.
                PS/PS
                Date on which the fair order is placed before the
                Dictating Member for pronouncement
                Date on which the fair order comes back to the Sr.
                PS/PS
                Date on which the final order is uploaded on the
                website of ITAT
                Date on which the file goes to the Bench Clerk
                Date on which the file goes to the Head Clerk

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