SH. SHAM LAL,CHANDIGARH V. JOINT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-26, NEW DELHI

ITA 10/DEL/2024

AI Insights

The case involves Sham Lal, the appellant, contesting a penalty imposed by the Assessing Officer (AO) and confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The penalty was levied following an addition of INR 17,65,000 to the assessee's income, attributed to unexplained cash deposits in Indus Ind Bank. The primary contention was the legality and applicability of the penalty under section 271(1)(c) of the Income Tax Act, 1961, especially after the addition was later deleted in a related appeal. The Income Tax Appellate Tribunal (ITAT) found that without the underlying addition, the basis for the penalty no longer existed, leading to the allowance of the appeal and cancellation of the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34039 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYA CHAUDHARY; SAHIL KUMAR BANSAL
• Assessee Lawyers: PRIKSHIT AGARWAL
• Keywords: Opportunity of being heard
• Section: 143(3); 250; 271(1)(c)

Judgement Text

"ITA No.10/Del/2024 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “G” BENCH: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.10/Del/2024 [Assessment Year : 2016-17] Sham Lal, 3046,Sec-28D, Chandigarh PAN-AAPPL6203R vs JCIT, Central Circle-26, New Delhi. APPELLANT RESPONDENT Appellant by Shri Prikshit Agarwal, CA Respondent by Ms. Jaya Chaudhary, CIT DR & Shri Sahil Kumar Bansal, Sr.DR Date of Hearing 03.02.2025 Date of Pronouncement 12.02.2025 ORDER PER MANISH AGARWAL, AM : The present appeal has been filed by the assessee against the order dated 22.11.2023 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi in Appeal No.-10963/2015-16 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 18.12.2018 passed u/s 143(3) of the Act pertaining to assessment year 2016- 17. 2. The assessee has challenged the order on the following grounds:- 1. “That on the facts, circumstances and legal position of the case, Worthy CIT(A), in Appeal No. CIT(A), Delhi-29/10963/2015-16 has erred in passing order u/s 250 dtd. 22.11.2023 as the same is in contravention of provisions of s. 250 of the Income Tax Act, 1961 (hereinafter referred to as \"Act\"). ITA No.10/Del/2024 Page | 2 2. That on the facts, circumstances and legal position of the case, Worthy CIT(A) has erred in confirming the action of Ld. AO of imposition of penalty u/s 271(1)(c) of Rs. 5,45,385/ in respect of addition made by Ld. AO and then confirmed by Worthy CIT(A) of Rs. 17,65,000/- on account of alleged unexplained cash deposits with the Indus Ind Bank Ltd.. 3. That on law, facts and circumstances of the case, Worthy CIT(A) has erred in confirming the actions of Ld. AO of levying penalty of Rs. 5,45,385/- u/s 271(1)(c) even when the initiation of penalty and imposition thereof is completely vague without specification of limb of s. 271(1)(c) for which the same has been initiated and also finally imposed. 4. That on facts, circumstances and legal position of the case, the penalty order u/s 271(1)(c) passed by Ld. AO and thereafter confirmed by the Worthy CIT(A) deserves to be quashed since both the orders of lower authorities have been passed without affording reasonable opportunity of being heard to the appellant. 5. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.” 3. Brief facts of the case are that the penalty of INR 5,45,385/- is levied on the addition of INR 17.65 Lakhs made by the AO and confirmed by the Ld.CIT(A) on account of cash deposits in Indus Ind Bank. At the outset in the instant case, while deciding the Cross Objection Appeal No.37/Del/2020, we have already deleted the addition of INR 17,65,000/- made on account of cash deposits in bank account. Therefore, there is no income remained which could be held as concealed income or for which any inaccurate particulars of income ITA No.10/Del/2024 Page | 3 were filed by the assessee. Therefore, no penalty u/s 271(1)(c) of the Act could be levied as there remained no concealed income. 4. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 12.02.2025. Sd/- Sd/- (VIKAS AWASTHY) JUDICIAL MEMBER *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "