2017 (11) TMI 1213

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....ssioner of Income-tax, Central Circle 18, New Delhi (hereinafter referred to as 'the Revenue') by filing the present appeals bearing ITA Nos.2730/Del/2014, 2731/Del/2014 and 2732/Del/2014 sought to set aside the impugned order dated 19.02.2014, 19.02.2014 & 26.02.2014 passed by the Commissioner of Income-tax (Appeals)- III, New Delhi qua the assessment years 2008-09, 2009-10 & 2010-11 respectively deleting the penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (for short 'the Act') on the ground that :- "On the facts and in the circumstances of the case, the ld. CIT (A) has erred in cancelling the penalty of Rs. 30,14,473/-, Rs. 46,07,976/- and Rs. 84,95,360/- for assessment years 2008-09, 2009-10 & 2010-11 respecti....

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.... @ 0.25% of the total turnover declared by the assessee company. 6. AO proceeded to levy the penalty on the ground that when the account books were test checked and discrepancies were pointed out to the assessee company and only then, the assessee company had offered additional surrender during the assessment proceedings which is a clear case of concealment on the part of the assessee company and thereby imposed a penalty of Rs. 30,14,473/-, Rs. 46,07,976/- and Rs. 84,95,360/- for assessment years 2008-09, 2009-10 & 2010-11 respectively. ITA NO.2733/DEL/2014 (PENALTY U/S 271AAA) 7. AO initiated the penalty proceedings u/s 271AAA for AY 2010-11 on the basis of assessment order dated 30.12.2011 passed u/s 143 (3) and imposed the pena....

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....- and Rs. 2,49,93,708/- for assessment years 2008- 09, 2009-10 & 2010-11 respectively. The ld. CIT (A) deleted the penalty by relying upon his own order passed for AY 2004-05 which was passed by relying upon the decision rendered by Hon'ble Supreme Court in Reliance Petro Products Private Limited - 322 ITR 158 (S.C.). 11. Hon'ble Supreme Court in a case cited as Reliance Petro Products Pvt. Ltd. (supra) decided the identical issue in favour of the assessee. Operative part of which is reproduced for ready reference as under :- "A glance at the provisions of section 271(1)(c) of the I.T. Act, 1961 suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the....

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.... (P.) Ltd. - (2010) 322 ITR 316 (Delhi) decided the identical issue in favour of the assessee company by returning the following findings :- "The Assessing Officer, observing that the profit was estimated after rejection of the books of account due to certain discrepancies, imposed a penalty on the assessee, on the ground that it was a clear case of furnishing of inaccurate particulars of income. The Tribunal held that as substantial quantum relief was given by the Commissioner (Appeals) which had been confirmed by the Tribunal and the balance pertained to estimated rate of profit applied on the turnover of the assessee, it did not amount to concealment or furnishing of inaccurate particulars. The Tribunal, therefore, deleted the p....

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.... for AY 2010-11. AO imposed penalty by taking a view that the assessee company has neither specified the manner in which such income was derived nor has substantiated the manner in which such income was derived and imposed penalty of Rs. 2,60,63,900/-. 16. Undisputedly, the assessee company has surrendered an amount of Rs. 26,06,38,986/- during search and seizure operation, but shown his inability to produce purchase bills of the various parties who have allegedly supplied mitti and grit (raw material) recorded in the ledger. It is also not in dispute that the assessee company by filing return u/s 139 deposited the tax along with interest. 17. Under section 271AAA (2), no penalty shall be levied u/s 271AAA qua the undisputed income in....

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....nd consequently shown the gross profit and net profit and made necessary adjustment in the taxable income at Rs. 71,95,64,719/-, so all the conditions required under sub-section (2) of section 271AAA have been complied with. 19. Moreover, the AO has not put any specific query to the assessee to further specify the manner in which such income was derived and to substantiate the manner in which such income was derived. Furthermore AO has nowhere recorded any finding in the assessment order that it is undisclosed income of the assessee sufficient to attract the provisions contained u/s 271AAA. 20. Coordinate Bench while dealing with the identical issue in case cited as Neerat Singal vs. ACIT - (2013) 37 taxmann.com 189 (Delhi - Trib.) al....