KISSAN PETRO OILS PVT LTD,NEW DELHI V. DCIT, CIRCLE -13(1), NEW DELHI

ITA 5599/DEL/2024

AI Insights

The case involves Kissan Petro Oils Private Limited, which appealed against the penalty imposed by the National Faceless Assessment Centre (NFAC) for the assessment year 2015-16. The company had filed a return declaring a loss, which was scrutinized, leading to an assessment order that included certain additions. These additions were later contested and deleted by ITAT in earlier appeals. The main legal contention was whether the penalty for concealment of income was justified when the additions leading to the penalty were subsequently removed. The Tribunal concluded that the penalty was not justifiable, referencing the Supreme Court's decision in CIT vs. Reliance Petroproducts, which protects claims made on the basis of an audit report.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705516 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Other Referred Cases: CIT vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH
• Keywords: Set aside; Reason to believe
• Section: 144; 143(3); 142(1); 271(1)(c)

Judgement Text

" INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”: NEW DELHI BEFORE SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 5599/DEL/2024 Assessment Year: 2015-16 Kissan Petro Oils Private Limited, D-10, South Extension, Part-II, New Delhi PIN 1100 49 PAN No. AADCK0136D Vs. DCIT, Circle-13(1), Delhi (Appellant) (Respondent) O R D E R PER VIMAL KUMAR, JUDICIAL MEMBER: The appeal of assessee is against order dated 15.07.2024 of Learned Commissioner of Incom-Tax (Appeals)/National Faceless Appeal Centre (National Faceless Assessment Centre (NFAC)), Delhi (hereinafter referred as “Ld. CIT(A)” under Section 250 of the Income Tax Act, 1961 ( hereinafter Assessee by: Shri Bikash Kumar Thakur on behalf of Shri Dinesh Chandra, Adv. Department by: Shri Om Prakash, Sr. DR Date of Hearing: 05.06.2025 Date of pronouncement: 30.06.2025 ITA No5599/Del/2024 2 referred as “the Act”) arising out of penalty order dated 31.03.2022 by the National Faceless Assessment Centre (NFAC), Delhi (hereinafter referred as “Ld. AO\") under Section 143(3) of the Act for assessment year 2015-16. 2. Brief facts of case are that appellant/assessee is engaged in the business of manufacturing and sale of methyl ester and filed its return of income declaring loss at Rs.7,38,44,274/- on 30.09.2015 which was processed under Section 143(1) of the Act. Subsequently, the case was selected for complete scrutiny through CASS. Notices under Section 143(2) of the Act dated 04.04.2016, notices under Section 142(1) dated 12.04.2016, 03.03.2017 and 01.08.2017 were issued. Notice under Section 274 r.w.s. 271(1)(b) dated 23.11.2017 and notice under Section 144 dated 22.01.2017 were issued. On 27.12.2017, Shri Yash Berry, CA & AR appeared for hearing with basic financials of the assessee. On completion of proceedings, Ld. AO passed assessment order dated 30.12.2017. Separate penalty proceedings were initiated. Show-cause-notices for penalty under Section 271(1)(c) of the Act dated 28.02.2019 and 17.03.2022 were issued. On conclusion of penalty proceedings, Ld. AO passed penalty order dated 31.03.2022. 3. Against order dated 31.03.2022, appellant/assessee preferred appeal before Ld. CIT(A) which was dismissed vide order dated 15.07.2024. 4. Being aggrieved, appellant/assessee preferred present appeal. ITA No5599/Del/2024 3 5. Learned Authorized Representative for appellant/assessee submitted that Ld.CIT(A) erred in confirming penalty order without valid reason to believe that the assessee has concealed particulars of his income and furnished incorrect particulars of income. All additions made in assessment order under Section 143(3) dated 30.12.2017 were deleted by ITAT in ITA No.4700/Del/2019, CO No. 81/Del/2019 and ITA No.1338/Del/2022 vide order dated 31.05.2024. The penalty order dated 31.03.2022 was unsustainable since expenses were claimed on the strength of audit report by CA as held by Hon'ble Supreme Court in CIT vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC). 6. Learned Authorized Representative for Revenue relied on orders of Departmental Authorities. 7. From examination of record in light of aforesaid rival contentions, it is crystal clear that penalty order dated 31.03.2022 under Section 271(1)(c) of the Act is in pursuance to assessment order dated 30.12.2017. Hon’ble ITAT, Delhi vide order dated 31.05.2024, in ITA No. 4700/Del/2019, CO No. 81/Del/2019 and ITA No.1338/Del/2022 had deleted all the additions made in assessment order dated 30.12.2017. Moreover, penalty cannot be imposed as expenses were claimed on strength of audit report by CA, as per ratio of judgment in CIT vs. Reliance Petroproducts’s case (supra). Therefore, the penalty order dated 31.03.2022 being unsustainable in the eyes of law is set aside. The grounds of appeal nos. 1 to 3 are allowed. ITA No5599/Del/2024 4 8. In the result, the appeal of appellant/assessee is allowed. Order pronounced in the open court on 30 June, 2025. Sd/- Sd/- (S RIFAUR RAHMAN) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30/06/2025 Mohan Lal Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "