2019 (6) TMI 44 - AT - Income Tax

Levy of penalty u/s 27(1)(c) - Difference in charge in penalty initiated and penalty levied - Defective notice - non specification of charge - addition u/s 68/69 for cash deposit in bank account - HELD THAT - In the present case, penalty has been initiated on the charge of furnishing inaccurate particulars, but Ld.AO levied penalty on concealment of income. It is observed that assessee was asked to explain penalty on one count whereas levy has been on other count. This itself calls for quashing of penalty order passed by Ld.A.O. for all years under consideration. We, therefore, quash and set aside the penalty order so passed for all years under consideration. Accordingly we allow the claim of assessee on the ground of legality and validity of Penalty order for all the years under consideration. - Decided in favour of assessee.

Summary

Issues:
- Appeal against the levy of penalty u/s 27(1)(c) for assessment years 1998-99 to 2001-02.
- Allegations of arbitrary, biased, and bad in law penalties.
- Discrepancies in the penalty amounts imposed.
- Arguments regarding inaccurate particulars of income and concealment.
- Consideration of explanations and legal provisions under section 271(1)(c) of the Income Tax Act.

Detailed Analysis:

Issue 1: Appeal Against Penalty Levied
The appellant filed appeals against the penalty imposed under section 27(1)(c) for the assessment years 1998-99 to 2001-02, challenging the orders passed by the Ld. CIT (A). The grounds of appeal included contentions of arbitrary, biased, and legally flawed penalties.

Issue 2: Discrepancies in Penalty Amounts
There were discrepancies in the penalty amounts imposed by the Ld. CIT (A) for each assessment year. The appellant raised concerns about the accuracy of these penalties, highlighting errors in the calculations and the reasons provided for the penalties.

Issue 3: Arguments on Inaccurate Particulars and Concealment
The appellant argued that the penalties were unjust as there were no inaccurate particulars of income furnished nor any deliberate concealment. The appellant contended that all relevant details were submitted during the original assessment proceedings, and subsequent penalty proceedings were unwarranted.

Issue 4: Consideration of Explanations and Legal Provisions
Both sides presented arguments regarding the explanations provided by the appellant and the application of section 271(1)(c) of the Income Tax Act. The Ld. Counsel emphasized that the penalties were unjustified, while the Ld. Sr. DR maintained that the penalties were valid under Explanation 1 of section 271(1)(c).

Judgment:
Upon reviewing the submissions and records, the Tribunal observed discrepancies in the initiation and imposition of penalties. The penalties were initiated for furnishing inaccurate particulars but levied for concealment of income, indicating a procedural error. Consequently, the Tribunal quashed and set aside the penalty orders for all the years under consideration, ruling in favor of the appellant based on the legality and validity of the penalty orders.

Conclusion:
The appeals for the assessment years 1998-99, 1999-2000, and 2001-02 were allowed, and the penalty orders were deemed invalid and quashed. The judgment was pronounced in open court on 29th May 2019 by the Appellate Tribunal ITAT Delhi, comprising Smt. Beena A Pillai, Judicial Member, and Shri Prashant Maharishi, Accountant Member.