Case Number: ITA 5882/DEL/2019
Appellant: Garg Exports (India), New Delhi
Respondent: ITO, Ward-35(2), New Delhi
Assessment Year: 2012-13
Case Filed On: 2019-07-05
Order Type: Final Tribunal Order
Date of Order: 2021-06-30
Pronounced On: 2021-06-30
Summary:
The case of Garg Exports (India) vs ITO, New Delhi pertains to a penalty levy dispute under Section 271(1)(c) for the assessment year 2012-13. The appellant, Garg Exports (India), contested the penalty levied by the Assessing Officer (AO) and upheld by the Commissioner of Income Tax (Appeals)-12, New Delhi. The case was subsequently brought before the Income Tax Appellate Tribunal (ITAT) for resolution.
Background:
Garg Exports (India), located at 29/5, Nangia Park, Shakti Nagar, New Delhi, filed an appeal against the order of the CIT(A)-12, New Delhi, dated 30th April 2019. The primary issue was the penalty levied under Section 271(1)(c) by the AO, which the appellant sought to dispute through the legal process. The penalty was sustained by the CIT(A), prompting the appellant to appeal to the ITAT.
Grounds of Appeal:
Tribunal Proceedings:
During the virtual hearing, the appellant was represented by Ms. Apoorva Bhardwaj, Advocate, while the respondent was represented by Shri R.K. Gupta, Senior Departmental Representative (Sr. DR). The tribunal decided to proceed based on the available records and after hearing the submissions from both parties.
The appellant contended that the AO did not record the necessary satisfaction for initiating penalty proceedings and did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. The appellant cited the decision of the Hon’ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory and the Hon’ble Supreme Court in the case of SSA’s Emerald Meadows, which held that the AO must clearly specify the charge for which penalty is being initiated.
The tribunal noted that the AO’s order and the penalty notice lacked clarity regarding the charge, making it unclear to the appellant under which limb of Section 271(1)(c) the penalty was initiated. The tribunal found merit in the appellant’s contention and decided to allow the additional grounds of appeal.
Conclusion:
In conclusion, the tribunal allowed the appeal filed by Garg Exports (India) on the grounds that the penalty levied was not sustainable due to lack of clarity in the charges. This case underscores the importance of procedural compliance by the AO in specifying the charges for penalty clearly and recording the necessary satisfaction for initiating penalty proceedings.
Order Pronouncement:
Order was pronounced in the open court on 30th June 2021, following the virtual hearing.
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(KUL BHARAT)
JUDICIAL MEMBER
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(O.P. KANT)
ACCOUNTANT MEMBER
Garg Exports (India) vs ITO, New Delhi – Case Filed Due to Penalty Levy Under Section 271(1)(c)
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