Case Number: ITA 2346/DEL/2022
Appellant: Pearl Beverages Ltd, New Delhi
Respondent: ACIT, Central Range-2, New Delhi
Assessment Year: 2018-19
Case Filed on: 2022-09-23
Order Type: Final Tribunal Order
Date of Order: 2023-07-06
Pronounced on: 2023-07-06
The appeal by Pearl Beverages Ltd challenges the imposition of a penalty of Rs.9,90,907 under section 271DA for an alleged violation of section 269ST of the Income Tax Act, 1961 during the Assessment Year 2018-19. The penalty was levied based on a misunderstanding in the filing of a Statement of Financial Transaction (SFT) wherein the company inadvertently reported all cash transactions instead of only those exceeding Rs. 2 lakhs.
The main legal issue revolved around whether the penalty for the violation of section 269ST was justified when the error in reporting was unintentional and due to a newly introduced non-revisable form. The appellant argued that the penalty was unjust as it was based on a bona fide mistake, and there was no intent to contravene the provisions of the Act.
The Tribunal noted that the assessee had made an inadvertent error by misreporting the cash transactions in the SFT. Despite this, the Assessing Officer (AO) issued a penalty without adequately considering the appellant’s submissions or the audit reports filed alongside the tax returns. Furthermore, the Tribunal found that necessary notices under section 133(6) were not properly served due to incomplete address information, which further complicated the verification process.
The ITAT decided to remand the matter back to the AO for a de-novo adjudication. This decision was made to allow a proper examination of the factual matrix and to ensure that the penalty, if any, is imposed based on a thorough understanding of the circumstances rather than assumptions. The Tribunal directed that notices be correctly served and that the matter be reconsidered in light of the complete and correct information.
Order pronounced in the open court on July 6, 2023.
Pearl Beverages Ltd’s Tax Penalty Appeal for AY 2018-19 – ITA 2346/DEL/2022
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