SHRI PURAN CHAN & CO.,DEHRADUN V. DCIT, CC-DEHRADUN, DEHRADUN

ITA 111/DDN/2025

AI Insights

The case involves Shri Puran Chan & Co., the appellant, contesting a penalty imposed by the Deputy Commissioner of Income Tax, Dehradun, which was sustained by the Commissioner of Income Tax (Appeals)-3, Noida. The penalty was initially imposed following an assessment order under Section 143(3) of the Income Tax Act, 1961, for the Assessment Year 2016-17. The appellant argued that the penalty notice did not specify the exact nature of the concealment of income, which was a requirement under Section 271(1)(c). The Departmental Representative countered that a subsequent notice did specify the limb of the penalty. The Tribunal found merit in the appellant's argument regarding the initial notice but upheld the penalty on non-estimated income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784657 (ITAT-DEHRADUN)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 18-06-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.K. CHATTERJEE
• Assessee Lawyers: S. K. MATTA
• Section: 143(3); 271(1)(c)

Judgement Text

" 1 ITA No. 111/DDN/2025 Shri Puran Chan & Co. Vs. DCIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘DEHRADUN’/ NEW DELHI) BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 111/DDN/2025 (A.Y. 2016-17) Shri Puran Chan & Co. C/o. MattaGarg& Co. 15, Astley Hall, Dehradun Uttarakhand PAN: AAFFP3593G Vs. Deputy Commissioner of Income Tax Central Circle, Dehradun Uttarakhand Appellant Respondent Assessee by Sh. S. K. Matta, CA Revenue by Sh. S. K. Chatterjee, CIT, DR Date of Hearing 11/11/2025 Date of Pronouncement 14/11/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-3, Noida [‘Ld. CIT(A)’ for short] dated 11/06/2025 pertaining to Assessment Year 2016-17. 2. Brief facts of the case are that, the order of penalty has been passed u/s 271(1)(C) of the Income Tax Act, 1961 ('Act' for short) in consequent to the assessment order passed u/s 143(3) of the Act on 28/12/2018. Aggrieved by the assessment order, the Assessee preferred an Appeal before the Ld. CIT(A) and the Ld. CIT(A) vide order dated 17/01/2024, deleted certain additions and also sustained certain Printed from counselvise.com 2 ITA No. 111/DDN/2025 Shri Puran Chan & Co. Vs. DCIT addition. Thereafter, notice u/s 271(1)(c) of the Act were issued on 28/12/2018 and on 02/02/2018. An order of penalty came to be passed on 28/03/2025 by imposing penalty of Rs. 1,18,808/. As against the order of penalty dated 28/03/2025, the Assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 11/06/2025, dismissed the Appeal filed by the Assessee. Aggrieved by the order of Ld. CIT(A) dated 11/06/2025, the Assessee preferred the present Appeal on the grounds mentioned above. 3.The Ld. Counsel for the Assessee arguing on Ground No. 1, submitted that the A.O. has not specified the limb of provision of Section 271(1)(C) of the Act in the penalty notice dated 28/12/2018, therefore, the initiation of penalty is erroneous. 4. Per contra, the Ld. Departmental Representative submitted that the subject penalty proceedings have been initiated pursuant to the penalty notice dated 02/12/2024, wherein specific limb of penalty has been mentioned. The Ld. Department's Representative taken us through the notice of penalty dated 02/12/2024 reproduced at Page No. 9 of the order of the Ld. CIT(A) and submitted that the present penalty proceedings has been initiated and penalty order passed after passing of the order by the Ld. CIT(A) in Quantum Appeal, wherein substantial Printed from counselvise.com 3 ITA No. 111/DDN/2025 Shri Puran Chan & Co. Vs. DCIT additions have been deleted and the present penalty proceedings initiated pursuant to the notice dated 02/12/2024, wherein specific limb has been mentioned. Further submitted that no order of penalty has been issued pursuant to the penalty notice dated 28/12/2018 which was relied by the Assessee and the said notice dated 28/12/2018 was issued prior to passing of the order in quantum Appeal by the Ld. CIT(A). Thus sought for dismissal of Ground No.1 of the Assessee. 5. We have heard both the parties and perused the material available on record. It is the specific case of the Assessee, that no limb has been mentioned in the penalty notice dated 28/12/2018, therefore, the impugned penalty order does not survive in the eye of law. However, the impugned penalty proceedings have been initiated after the order of the Ld. CIT(A) in quantum Appeal,the Ld. CIT(A) in quantum appeal granted substantial relief to the Assessee, thereafter penalty notice u/s 274 r.w. Section 271(1)(c) of the Act was issued on 02/12/2024, wherein specific limb of ‘concealed the particulars of income’ has been mentioned and the impugned order of penalty has been passed thereupon. No such order of penalty has been passed pursuant to the notice dated 28/12/2018 relied by the Ld. Assessee's Representative. Therefore, the argument of the Ld. Assessee's Representative is not only mis-conceived but also misleading Printed from counselvise.com 4 ITA No. 111/DDN/2025 Shri Puran Chan & Co. Vs. DCIT one. Accordingly, we find no merits in Ground No. 1 of the Assessee. Thus, Ground No. 1 of the Assessee is dismissed. 6. The Ld. Assessee's Representative arguing on Ground No. 2 submitted that penalty has been imposed on estimated income and no penalty can be imposed on estimated income, thus sought for allowing Ground No.2. 7. Per contra, the Ld. Departmental Representative submitted that the penalty has been imposed both estimated income as well as other income, therefore, sought for dismissal of the Appeal. 8. We have heard both the parties and perused the material available on record. It is well settled law that a penalty cannot be initiated for estimated income.In the present case, as per the Ld. Department's Representative the penalty has been also imposed not only on estimated income but also on other income. However, either the parties have not produced the details of the penalty imposed to bifurcate the penalty imposed on estimated income and otherwise. Considering the above facts and circumstances, we hold that the penalty imposed to the extent of estimated income cannot sustained, accordingly deleted and Printed from counselvise.com 5 ITA No. 111/DDN/2025 Shri Puran Chan & Co. Vs. DCIT remaining penalty other than the estimated income if any is hereby sustained. 9. In the result, Appeal of the Assessee is partly allowed. Order pronounced in the open court on 14th November, 2025 Sd/- Sd/- (S. RIFAUR RAHMAN) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 14.11.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "