2018 (7) TMI 2109 - AT - Income Tax

Penalty u/s 271AAA - Disclosures of earning of the surrendered income - HELD THAT - DR has pointed out that the manner of earning of the surrendered income has not been disclosed by the assessee whereas the assessee by letter dated 21.01.2010 has disclosed the manner of earning the said income by way of trading in commodities and real estate and also stated this fact is substantiated from the seized material. This factual position is not denied by the AO and this is not the basis for imposing the penalty. In that view of the matter and in view of such facts and circumstances of the case, the CIT(A) is not justified in confirming the action of the AO and accordingly, we direct the AO to delete the penalty imposed under section 271AAA. Accordingly, the appeal of the assessee is allowed - See SHRI ASHWANI KUMAR ARORA 2017 (11) TMI 456 - ITAT DELHI AND ASHOK KUMAR ARORA VERSUS ACIT 2017 (11) TMI 513 - ITAT DELHI - Decided in favour of assessee.

Summary

Issues:
1. Appeal against penalty under section 271AAA of the Income Tax Act, 1961.
2. Similar penalty deletion in cases of other individuals.
3. Consideration of facts and circumstances for penalty levy.

Analysis:
1. The appeal was filed against the penalty of ?53,17,370 under section 271AAA of the Income Tax Act, 1961, for the assessment year 2009-10. The grievance of the assessee was that the Commissioner of Income Tax (Appeals) erred in upholding the penalty.

2. The roots for the penalty levy were in the assessment order framed under section 143(3) of the Act after a search action under section 132 was conducted in the Dawat Group of cases, which included the assessee and others. The assessee pointed out that penalties levied on other individuals in similar cases had been deleted by the Tribunal, providing a copy of the order as evidence.

3. The Tribunal considered the orders of the authorities below and found merit in the contention of the assessee's counsel. It was noted that penalties under section 271AAA of the Act in cases of Shri Ashwin Arora and Shri Ashok Arora had been deleted by the Tribunal in separate judgments. The Tribunal found parity of facts and circumstances for penalty levy and decided to follow the findings of the coordinate bench. The Tribunal emphasized that the manner of earning surrendered income had been disclosed by the assessee, substantiated by seized material, and not denied by the Assessing Officer. Therefore, the Tribunal directed the Assessing Officer to delete the penalty imposed under section 271AAA of the Act.

4. Consequently, the Tribunal allowed the appeal of the assessee in ITA No. 6614/DEL/2013, directing the Assessing Officer to delete the penalty under section 271AAA of the Act. The order was pronounced in open court on 18.07.2018.