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07-10-2019, Subhash Chand Gupta & Sons (HUF), Section 274, Tribunal Delhi

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1 month 3 weeks ago #11065 by amit
Section - 274, 271(1)(C), 271
Order Date - 07-10.2019
Favouring - Assessee
Court - Tribunal Delhi
Appellant - Subhash Chand Gupta & Sons (HUF)
Respondent - ITO
Justice - R. K. PANDA AM
Citation - 1019Taxpundit99
Appeal No. - ITA No.853/Del/2019
Asstt. Year - 2014-15



This appeal filed by the assessee is directed against the order dated 27.07.2018 of the CIT(A)-12, New Delhi relating to A. Y. 2014-15.

2. Levy of penalty of Rs.3,59,591/- by the Assessing Officer u/s.271(1)(c) of the IT Act which has been confirmed by the CIT(A) is the only issue raised by the assessee in the grounds of appeal.

3. Facts of the case, in brief, are that the assessee is an HUF and filed the return of income on 29.07.2014 declaring total income of Rs.12,47,740/-. The Assessing Officer completed the assessment u/s.143(3) on 23.12.2016 determining the total income at Rs.18,57,743/- wherein he made addition of Rs.18,57,743/- u/s. 68 r.w.s. 115 BBE of the IT Act on account of sale of shares of M/s.CCL International Limited which were purchased at a cost of Rs.6,10,000/- but sold at Rs.18,57,743/- within a period of 8 months from the date of purchase and on which concessional rate of tax was claimed. The Assessing Officer thereafter initiated penalty proceedings u/s. 271 (1) (c) of the IT Act. Rejecting the various explanation given by the assessee and relying on various decisions the Assessing Officer levied penalty of Rs.3,59,591/- u/s. 271 (1) (c) of the IT Act. being 100% of the tax sought to be evaded. In appeal the Ld. CIT(A) sustained the penalty so levied by the Assessing Officer.

4. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal :-

1. The order of CIT (A) is bad in law and on facts.

2. The CIT(A) has failed to appreciate that the proceedings of 271(1)(C) are void ab initio as the same has been initiated on the basis of non specific notice issued under section 274.

3. The CIT(A) has erred in not appreciating that the impugned penalty has been initiated and levied without asking any reply from the assessee/ without issuing any show cause to explain, during the course of assessment proceeding as evident from order sheet entry.

4. The CIT(A) has further erred in not appreciating that the Ld AO is void ab initio as the Ld AO has failed to specify the charge against the assessee under which the notice under section 274 of the Act has been issued.

5. The Ld CIT(A) has failed to appreciate that furnishing of inaccurate particular and concealment of income are two separate connotation and hence it is incumbent upon the AO to specify the particular charge against such assessee who has to be penalized under section 271(1)(C) of the Act.

6. Without Prejudice to the above the CIT (A) has failed to appreciate that all particulars of income were fully disclosed by the assessee at the time of filing of return of Income and hence it cannot be said that assessee has filed wrong particulars of his income

7. The CIT(A) has further failed to appreciate that assessee has fully disclosed the income from short term capital gain in its (ROI) filed originally and hence it is not a case of concealment of income.

8. Without prejudice to the above, the CIT(A) has erred in law and on facts in sustaining the penalty under the provisions of section 271 (1)(C) ignoring that it is a case where there is only change of head on income and no concealment of income at all.

9. The CIT(A) has erred in law and on facts in sustaining the levy of penalty of Rs 3,59,591/- ignoring that assessee has made disclosed the particulars of income in an open and bonafide manner.

10. The assessee craves leave to add alter modify and ground of appeal at the time of hearing of the appeal.

5. The Ld. Counsel for the assessee, at the outset, submitted that the notice issued by the Assessing Officer at the time of initiation of penalty proceedings, which is jurisdictional notice, shows that it is not clear as to under which limb of the provisions the penalty has been levied. Relying on various decisions including the decision of Hon’ble Karnataka High Court in the case of CIT Vs. M/s. Manjunath Cotton & Ginning reported in 359 ITR 565 and in the case of CIT Vs. M/s. SSA’s Emerald reported in (2016) 73 241, he submitted that the penalty so levied was held to be not valid when the inappropriate words in the notice were not stuck off. He submitted that the SLP filed by the revenue against the order of the Hon’ble Karnataka High Court has been dismissed by the
Hon’ble Supreme Court. Referring to the decision of the coordinate bench of the Tribunal in the case of the sister concern namely Shobhit Gupta (HUF) Vs. ITO vide ITA No.6765/Del/2018 order dated 03.04.2019 he submitted that under identical circumstances the Tribunal has cancelled the penalty so levied by the Assessing Officer and sustained by the CIT(A). He accordingly submitted that this being a covered matter in favour of the assessee the penalty so levied and
sustained by the CIT(A) is not in accordance with law and, therefore, has to be deleted.

6. So far as the merit of the case is concerned he submitted that the assessee has shown the transaction of sale and purchase of shares in an open and bonafide manner and, therefore, it cannot be said to be a case of concealment of income. Further the assessee has already paid the tax by surrendering the amount and the various documents filed by the assessee during the course of assessment proceedings have not been found to be false or untrue. Referring to the decision of Hon’ble Supreme Court in the case of CIT Vs. Reliance

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