IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH `G' : NEW DELHI)
BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER
AND
SHRI KULDIP SINGH , JUDICIAL MEMBER
ITA NO.2309/Del./2016
(ASSESSMENT YEAR : 2007-08)
Sunita Agarwal, vs. ACIT
L-5, Hauz Khas Enclave
New Delhi Najibabad
PAN : ABKPA4469J
(APPELLANT) (RESPONDENT)
ASSESSED BY : None
REVENUE BY : Shri Shailesh Kumar, Sr. DR
Date of Hearing : 11.12.2018
Date of Order : 18.12.2018
ORDER
PER KULDIP SINGH, JUDICIAL MEMBER :
The appellant, Sunita Agarwal, by filing the
present appeal, sought to set aside the impugned order
dated 18/02.2016 passed by Ld. CIT(A)- Moradabad qua
the assessment year 2007-08 confirming the penalty
levied u/s 271(1)(c) on the grounds inter alia that :-
"1. That the Ld. CIT(Appeals) has erred in
upholding the penalty of Rs. 25,000/-, imposed by
the AO, invoking the provisions of sec. 271(1)(c) of
the IT Act, 1961.
2. That the Ld. CIT (Appeal) has erred in upholding
the penalty of Rs. 25,000/-, without looking into
2 ITA no. 2309/Del./2016
facts and circumstances of the case and relying on
irrelevant judicial pronouncements.
3. That the impugned appellate order is arbitrary,
illegal, bad in law and in violation of rudimentary
principles of contemporary jurisprudence."
2. Briefly stated that facts necessary for
adjudication of the controversy at hand are : on the
basis of completed assessment u/s 143(3) of the
Income Tax Act, 1961 (for short `the Act') a total
income of Rs. 17,15,945/- was assessed by making
addition of Rs. 2,12,000/- u/s 56(vi) . During
assessment proceeding it was noticed by Assessing
Officer that the assessee has shown credit of Rs.
2,12,000/- in her ledger on account of gift received
on marriage anniversary. The Ld. CIT(A) in the
quantum appeal allowed the relief of Rs. 1,38,000/-
out of the addition of Rs. 2,12,000/-, however,
confirmed the addition of Rs. 74,000/-. The AO
initiated the penalty proceedings u/s 271(1)(c) on
the ground that the assessee has concealed her
income. Declining the submission raised by the
assessee AO proceeded to the levy penalty of Rs.
25,000/- u/s 271(1)(c) of the Act.
3 ITA no. 2309/Del./2016
3. Assessee challenge the penalty order by way
of filing the appeal before Ld. CIT(A) who has
confirmed the penalty of Rs. 25,000/- by dismissing
the appeal. Feeling aggrieved the assessee has come
up before the Tribunal by way of filing present
appeal.
4. We have heard the ld. Authorized
Representatives of the parties to the appeal, gone
through the documents relied upon and orders
passed by the revenue authorities below in the light
of the facts and circumstances of the case.
5. Undisputedly assessee has made categorical
entry in her ledger account that she has received an
amount of Rs. 2,12,000/- as a gift on her marriage
anniversary. It is also not in dispute that the AO
has made the addition by disallowing the claim of
the assessee u/s 56(vi) of the Act. It is also not in
dispute that during appellate proceedings the Ld.
CIT(A) has restricted the addition to Rs. 74,000/- by
allowing the relief of Rs. 1,38,000/- to the assessee.
4 ITA no. 2309/Del./2016
6. In the backdrop of the aforesaid facts and
circumstances of the case, order passed by the
lower Revenue authorities and arguments
addressed by the ld. AR to the parties, the sole
question arises for determination in this case is :-
"as to whether the assessee has
concealed particulars of income or has furnished
inaccurate particulars of income during
assessment proceedings while interpreting the
provisions contained u/s 271(1)(c) of the Act."
7. First of all, We have noticed that AO has not
recorded valid satisfaction in order to initiate the
penalty proceedings u/s 271(1)(c). Perusal of para
4.1 on page 3 of the assessment order shows that
the Assessing Officer has merely recorded that
"action u/s 271(1)(c) is initiated on this score".
From the entire assessment order it is not
discernible as to under which of the limb of Section
271(1)(c) the penalty is being initiated. Even in the
penalty order the Assessing Officer has failed to
point out "as to whether the penalty has been levied
for concealment of particular of income or for
5 ITA no. 2309/Del./2016
furnishing inaccurate particulars of income" by the
assessee.
8. It is settled principle of law that in order to
initiate the penalty proceedings the Assessing
Officer is required to make the assessee aware as to
whether there is a concealment of income or
furnishing of inaccurate particulars of income on
her part, which is entirely missing in this case.
9. Hon'ble Karnataka High Court in a case cited
as CIT vs. Manjunatha Cotton and Ginning
Factory & Ors. 359 ITR 565 (Karn.) confirmed by
the Hon'ble Supreme Court, held that when the
assessee has not been specifically charged as to
whether there is concealment of income or
furnishing inaccurate particulars of income on her
part, the penalty u/s 271(1)(c) is not sustainable.
10. Further more merely making inaccurate claim
does not amount to furnishing of inaccurate
particulars. When the assessee has categorically
claimed that the amount of Rs. 2,12,000/- has been
received by her as a gift on her marriage
6 ITA no. 2309/Del./2016
anniversary, which has been disallowed by the AO
but subsequently partly accepted by Ld. CIT(A) who
has given relief to the extent of Rs. 1,38,000/-, it
cannot be said that it is furnishing of inaccurate
particulars of income. Reliance in this regard is
placed on decision rendered by Hon'ble Apex Court
cited as Reliance Petro Pvt. Ltd. 322 ITR 158
(SC).
11. So, following the law laid down by Hon'ble
High Court, we are of the considered view that when
the assessee has not been specifically made aware
of the charges leveled against her as to whether
there is a concealment of income or furnishing of
inaccurate particulars of income on her part, the
penalty u/s 271(1)(c) of the Act is not sustainable.
12. In view of what has been discussed above AO
has failed to make out of the case of concealment of
income or furnishing of inaccurate particulars of
such income by the Assessee so as to attract the
provisions contained u/s. 271(1)(c) of the Act, hence
penalty levied by the AO and confirmed by CIT(A) is
7 ITA no. 2309/Del./2016
hereby deleted. Consequently appeal filed by the
assessee is hereby allowed.
Order pronounced in open court on this 18th day of
December, 2018.
Sd/- Sd/-
(N.S.SAINI) (KULDIP SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated the 18th day of November, 2018
BR
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT
5.CIT(ITAT), New Delhi. AR, ITAT
NEW DELHI.
Date of dictation 13.12.2018
Date on which the typed draft is placed before 13.12.2018
the dictating Member
Date on which the typed draft is placed before 13.12.2018
the Other Member
Date on which the approved draft comes to the 18.12.2018
Sr. PS/PS
Date on which the fair order is placed before 18.12.2018
the Dictating Member for pronouncement
Date on which the fair order comes back to the 18.12.2018
Sr. PS/PS
Date on which the final order is uploaded on 19.12.2018
the website of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
The date on which the file goes to the
Assistant Registrar for signature on the order
Date of dispatch of the Order
8 ITA no. 2309/Del./2016
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