Signatures Builders Pvt. Ltd. vs Addl. CIT Range-77: Penalty Appeal for AY 2017-18

Signatures Builders Pvt. Ltd. vs Addl. CIT Range-77: Penalty Appeal for AY 2017-18

Case Number: ITA 5735/DEL/2019

Appellant: Signatures Builders Pvt. Ltd., New Delhi

Respondent: Addl. CIT Range-77, New Delhi

Assessment Year: 2017-18

Case Filed On: 2019-07-01

Order Type: Final Tribunal Order

Date of Order: 2022-08-25

Pronounced On: 2022-08-25

Background

The case involves Signatures Builders Pvt. Ltd. as the appellant and the Additional Commissioner of Income Tax (Addl. CIT), Range-77, New Delhi, as the respondent. The dispute pertains to the penalty levied under Section 271C of the Income Tax Act for the assessment year 2017-18. The appeal was filed on 2019-07-01, and the final tribunal order was pronounced on 2022-08-25.

Reason for Filing the Case

Signatures Builders Pvt. Ltd. filed the appeal against the penalty of Rs. 6,62,100/- levied by the Assessing Officer (AO) under Section 271C of the Income Tax Act. The penalty was imposed for the alleged failure to deduct tax at source on External Development Charges (EDC) paid to Haryana Urban Development Authority (HUDA).

Tribunal Proceedings

On 25th August 2022, the tribunal, comprising Shri Kul Bharat, Judicial Member, and Shri Anadee Nath Misshra, Accountant Member, heard the case. The appellant was represented by Ms. Ananya Kapoor, Advocate, Sh. Amarbir Singh, CA, and Sh. Utkarsa Kumar Gupta, Advocate. The respondent was represented by Sh. Jeetendra Chand, Senior Departmental Representative (Sr. DR).

Arguments Presented

The appellant’s counsel argued that the penalty imposed under Section 271C was unjustified as similar cases had been decided in favor of the assessees by the ITAT in the past. They presented a compilation of case laws where the penalty under Section 271C was not levied in similar circumstances. The relevant cases cited included:

• BPTP Ltd. vs. PCIT (Central) -III, New Delhi
• PCIT (Central) -III, New Delhi vs. BPTP Ltd.
• M/s Tulip Infratech Private Limited vs. ACIT
• Spaze Tower Pvt. Ltd. vs. JCIT
• M/s Perfect Constech Pvt. Ltd. vs. Addl. CIT
• M/s Santure Infrastructure Pvt. Ltd. vs. ACIT
• Shiv Sai Infrastructure (P) Ltd. vs. ACIT
• M/s Sarv Estate Pvt. Ltd. vs. JCIT

The respondent’s counsel did not bring any distinguishing facts or legal submissions to persuade the tribunal to take a different view from the earlier decisions.

Tribunal’s Decision

The tribunal considered the arguments presented by both parties and reviewed the case records. The key points from the tribunal’s order are as follows:

Previous Decisions

The tribunal noted that similar issues had been decided in favor of the assessees in the cited cases. In those cases, it was held that the penalty under Section 271C was not leviable.

Conclusion

Respectfully following the earlier decisions, the tribunal set aside the impugned appellate order dated 13/05/2019 of the Ld. CIT(A) and directed the Assessing Officer to delete the penalty amounting to Rs. 6,62,100/- levied under Section 271C of the Income Tax Act.

Conclusion

The tribunal upheld the appellant’s arguments and concluded that the penalty under Section 271C was not sustainable. The appeal of the assessee was allowed, and the penalty was deleted.

Order pronounced on: 25/08/2022

Signatories:

Kul Bharat, Judicial Member

Anadee Nath Misshra, Accountant Member

Dated: 25/08/2022

Copy forwarded to:

• Appellant
• Respondent
• CIT
• CIT(A)
• DR, ITAT

By Order

Assistant Registrar, ITAT, New Delhi

Signatures Builders Pvt. Ltd. vs Addl. CIT Range-77: Penalty Appeal for AY 2017-18