2022 (7) TMI 1307 - HC - Income Tax

Appeal Dismissed: Tribunal Supports Respondent Due to Ambiguity in Penalty Provisions for 2007-2008 Assessment Year.

Pr. Commissioner of Income Tax-3 Versus Ms. Minu Bakshi

Pr. Commissioner of Income Tax-3 Versus Ms. Minu Bakshi - [2024] 462 ITR 301 (Del) Issues:1. Appeal against Income Tax Appellate Tribunal order.2. Disclosure of taxable income in return for Assessment Year 2007-2008.3. Search conducted under Section 132 of the Income Tax Act, 1961.4. Assessment by Assessing Officer under Section 143(3) of the Act.5. Penalty proceedings under section 271(1)(c).6. Tribunal ruling in favor of the respondent/assessee.7. Interpretation of penalty provisions under Section 271(1)(c).8. Application of Section 153A in revised returns.9. Condonation of delay in filing the appeal.Analysis:1. The appeal was filed against the order of the Income Tax Appellate Tribunal concerning the assessment year 2007-2008. The respondent disclosed taxable income of Rs. 11,76,296 in the return. A search was conducted under Section 132 of the Income Tax Act in 2012, leading to scrutiny by the Assessing Officer and an assessment under Section 143(3) pegging taxable income at Rs. 9,61,76,296, including unaccounted cash receipts of Rs. 9,50,00,000. Subsequently, penalty proceedings under section 271(1)(c) were initiated, resulting in a revised penalty amount of Rs 2,13,18,000. The Tribunal ruled in favor of the respondent, citing ambiguity in the penalty order regarding the grounds for levying the penalty.2. The judgment referred to the Neeraj Jindal case, where the issue of penalty under Section 271(1)(c) was discussed. The court emphasized that penalty under this provision is not mandatory and must fulfill specific conditions. The revised return filed under Section 153A was considered the original return, and the revenue had to provide incriminating evidence to justify a penalty for concealment of income. The court highlighted the strict construction required for penal provisions and the need to establish concealment of income.3. The court further examined the application of Section 153A in post-search assessments, emphasizing that the revised return filed under this section replaces the original return for all other provisions of the Act. The judgment in the Neeraj Jindal case favored the assessee on grounds related to concealment, the completeness of Section 153A, and the requirements of Explanation 5 to Section 271(1). The court dismissed the appeal, citing precedents including decisions by a coordinate bench and the Karnataka High Court.4. Additionally, an application seeking condonation of delay in filing the appeal was filed, involving a delay of 440 days. However, since the appeal was dismissed, the application was deemed infructuous, leading to its closure by the court.