SURESHKUMAR PRABHULAL THAKKAR,BANASKANTHA V. THE DY.CIT, CIRCLE-GANDHINAGAR, GANDHINAGAR

ITA 1348/AHD/2025

AI Insights

The case involves an appeal by Sureshkumar Prabhulal Thakkar against the penalty imposed by the Deputy Commissioner of Income Tax, Gandhinagar, which was upheld by the CIT(A). The penalty was levied for alleged inaccurate particulars of income related to the deduction claims for transfer expenses and cost of improvement on the sale of land, which the Assessing Officer found questionable as other co-owners did not claim similar expenses. The Tribunal, however, noted the absence of any direct evidence or material to prove the assessee's claims were inaccurate, leading to the cancellation of the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 777159 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2025
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 24-06-2025
• Laws Referred To: Income Tax Act, 1961
• Court: TRIBUNAL
• Department Lawyers: URVASHI MANDHAN
• Assessee Lawyers: SANJAY R. SHAH
• Section: 143(3); 271(1)(c)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.1348/Ahd/2025 Assessment Year: 2016-17 Sureshkumar Prabhulal Thakkar, A-29, Tirupati Town Ship, Deesa Highway, Palanpur H.O., Banaskantha – 385 101, Gujarat). [PAN – ADZPT 0824 B] Vs. The Deputy Commissioner of Income Tax, Circle – Gandhinagar, Income Tax Office, Block No.14, Udyog Bhawan, Sector-11, Gandhinagar - 382 010. (Gujarat). (Appellant) (Respondent) Assessee by Shri Sanjay R. Shah, CA Revenue by Ms. Urvashi Mandhan, Sr. DR Date of Hearing 04.09.2025 Date of Pronouncement 18.09.2025 O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 28.04.2025 for the Assessment Year (A.Y.) 2016-17 in the proceedings under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2016-17 declaring total income of Rs.34,40,070/-. The assessee had disclosed Long Term Capital Gain (LTCG) of Printed from counselvise.com ITA No.1348/Ahd/2025 (Assessment Year: 2016-17) Sureshkumar Prabhulal Thakkar vs. DCIT Page 2 of 5 Rs.35,59,770/- on sale of lands and plots. In the course of assessment, it was found that the assessee had claimed deduction for transfer expense of Rs.3,25,000/- in respect of sale of land, of which the assessee was only 1/7th owner. The Assessing Officer found that no such expense was claimed by another co-owners on account of cost of improvement or for transfer expense. The assessee had explained that the cost of improvement was for levelling and earth work etc. and the transfer expense was for commission paid to the broker. The Assessing Officer had rejected the explanation of the assessee and also disregarded the evidences brought by the assessee in support of the expenses for the reason that no such expense was claimed by the other co-owners. Accordingly, total addition of Rs.7,96,800/- was made while completing the assessment under Section 143(3) of the Act on 26.12.2018. The Assessing Officer had also initiated penalty proceedings under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income. Thereafter, a separate penalty order under Section 271(1)(c) of the Act was passed on 19.01.2022 whereby penalty of Rs.1,38,391/- was imposed under Section 271(1)(c) of the Act. 3. Aggrieved with the penalty order of the Assessing Officer, the assessee filed an appeal before the Fist Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now the assessee is in second appeal before us. The following grounds have been taken in this appeal: - Printed from counselvise.com ITA No.1348/Ahd/2025 (Assessment Year: 2016-17) Sureshkumar Prabhulal Thakkar vs. DCIT Page 3 of 5 “1. The Hon'ble Commissioner of Income Tax-Appeals [CIT(A)] erred in law and fact of the case by passing the order dated 28.04.2025 under Section 250 of the Act without considering the written submission filed by the appellant on 21.03.2025. The said order was passed by the Hon'ble CIT(A) under mistaken belief that no written submission in support of the grounds of appeal has been filed. 2. The Hon'ble CIT(A) erred in law and fact of the case by upholding the penalty of Rs.1,38,391/- levied by the learned Assessing Officer under Section 271(1)(c) of the Act. 3. Without prejudice to the above, the Hon'ble CIT(A) erred in law and on facts of the case by upholding the penalty u/s.271(1)(c) of the Act levied by the Ld. AO without appreciating the fact that the impugned penalty proceedings were initiated under one limb of Section 271(1)(c) of the Act, however the penalty was imposed under a different limb while passing the order, thereby rendering the penalty order passed by the Ld. AO as invalid. 4. Without prejudice to the above, the Ld. AO erred in law and fact of the case by levying the penalty u/s. 271(1)(c) of the Act without appreciating the fact there was no mens rea on the part of the Appellant. The Hon'ble CIT(A) erred in confirming the same. 5. The Appellant reserves the right to add, alter, amend and/or withdraw any of the above Grounds of Appeal.” ADDITIONAL GROUND OF APPEAL Without prejudice to the main contention that penalty u/s.271(1)(c) is not leviable on the Appellant, the Appellant would like to submit that learned CIT (Appeals) have erred in confirming the penalty for a sum of Rs.4,72,162/- u/s.271(1)(c) inspite of the fact that the penalty leviable by the learned Assessing Officer was for a sum of Rs.1,38,391 as mentioned on page no.8 of the penalty order us. 271(1)(c) by the learned Assessing Officer. It is submitted that if at all penalty u/s.271(1)(c) is considered leviable in the facts and circumstances of Appellant's case, the same cannot exceed Rs.1,38,391/- as levied by the learned Assessing Officer. 5. Shri Sanjay R. Shah, Ld. AR of the assessee submitted that the Assessing Officer was not correct in imposing the penalty under Section 271(1)(c) of the Act as no material was brought on record that the assessee had furnished inaccurate particulars of income. He submitted Printed from counselvise.com ITA No.1348/Ahd/2025 (Assessment Year: 2016-17) Sureshkumar Prabhulal Thakkar vs. DCIT Page 4 of 5 that merely because the assessee did not file appeal in the quantum addition, the penalty under Section 271(1)(c) of the Act could not have been mechanically levied. 6. Per contra, Ms. Urvashi Mandhan, Ld. Sr. DR, submitted that the assessee did not dispute the addition of Rs.7,96,800/- in respect of transfer expense and cost of improvement, which was reduced from LTCG. This substantiated that the particulars of income as filed by the assessee were not correct. Therefore, the Assessing Officer had rightly imposed the penalty under Section 271(1)(c) of the Act. 7. We have considered the rival submissions. The Assessing Officer had rejected the claim of the assessee merely for the reason that no such expense in respect of improvement and transfer expense was claimed by the other co-owners. The assessee had furnished vouchers for cost of improvement undertaken by him and also furnished the name of person to whom commission was paid. The Assessing Officer did not make any enquiry in this regard and no evidence was brought on record to establish that the material or evidence as brought on record by the assessee was incorrect. In the absence of any evidence on record to controvert the materials brought on record by the assessee in support of the deductions as claimed, it cannot be held that the assessee had furnished any inaccurate particulars of income. The Assessing Officer had made the disallowance on the basis of circumstantial evidence only considering the fact that no such expense was claimed by other co-owners. However, no material was brought on record by the Assessing Officer to establish that the particulars of income/expense as claimed by the assessee was inaccurate. Under the circumstances, we do not find any justification for Printed from counselvise.com ITA No.1348/Ahd/2025 (Assessment Year: 2016-17) Sureshkumar Prabhulal Thakkar vs. DCIT Page 5 of 5 imposing penalty under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income by the assessee. Therefore, the penalty under Section 271(1)(c) of the Act as imposed by the Assessing Officer is cancelled. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on this 18th September, 2025. Sd/- Sd/- (SANJAY GARG) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Ahmedabad, the 18th September, 2025 PBN/* Copies to: (1) The appellant (2) The respondent (3) The PCIT (4) The CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPYE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad Printed from counselvise.com "