2022 (10) TMI 447 - AT - Income Tax

Penalty u/s 271C - Addition being 2% of the EDC amount paid to HUDA - HELD THAT - The issue in dispute regarding levy of penalty u/s 271C of IT Act is squarely covered in favour of the assessee and against the Revenue by aforesaid orders of Co-ordinate Benches in cases of M/s Tulip Infratech Private Limited Vs. ACIT 2022 (7) TMI 328 - ITAT DELHI , Spaze Tower Pvt. Ltd. 2022 (5) TMI 1344 - ITAT DELHI , M/s Perfect Constech Pvt. Ltd. 2020 (12) TMI 1158 - ITAT DELHI , M/s Santure Infrastructure Pvt. Ltd. 2019 (12) TMI 1106 - ITAT DELHI , Shiv Sai Infrastructure (P) Ltd. 2019 (9) TMI 631 - ITAT DELHI and M/s Sarv Estate Pvt. Ltd. 2019 (9) TMI 686 - ITAT DELHI in which, in similar facts and circumstances, it was held that penalty u/s 271C was not leviable. - Decided in favour of assessee.

Summary

Issues:
Appeal against penalty under section 271C of the Income Tax Act, 1961.

Analysis:
(A) The appeal was filed against the order of the Learned Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18, challenging the penalty levied under section 271C of the Income Tax Act, 1961. The grounds of appeal included contentions regarding the legality and justification of the penalty imposed.

(B) The Assessing Officer had levied a penalty of Rs.6,62,100 under section 271C, which was confirmed by the Learned Commissioner of Income Tax (Appeals). Subsequently, the appellant approached the Income Tax Appellate Tribunal (ITAT) against the appellate order. During the proceedings, the appellant presented a compilation of case laws to support their case.

(B.1) The ITAT noted that the issue of penalty under section 271C was extensively covered in favor of the assessee by previous orders of Co-ordinate Benches of ITAT, Delhi in similar cases. The representatives of both sides agreed that the issue was settled in favor of the assessee based on the precedent set by the mentioned cases.

(B.2) The ITAT observed that no distinguishing facts or legal submissions were presented to warrant a different decision from the precedent established by the Co-ordinate Benches of ITAT, Delhi. Consequently, the ITAT set aside the impugned appellate order and directed the Assessing Officer to delete the penalty amount of Rs.6,62,100 levied under section 271C of the Income Tax Act.

(B.2.1) Based on the consistent rulings of the Co-ordinate Benches of ITAT, Delhi, the ITAT ruled in favor of the assessee and against the Revenue, thereby allowing the appeal and directing the deletion of the penalty amount.

(C) The appeal was allowed for statistical purposes, and the order was pronounced on 25/08/2022.