IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER (Assessment Year : 2015–16)

Dy. Commissioner of Income Tax ……………. Appellant Circle–2, Nagpur v/s M/s. Tristar Retail Concepts Pvt. Ltd.

Plot no.2, Near Museum Road ……………. Respondent Near Gupta House, Nagpur 440 001 PAN – AACCT8827H Assessee by : Shri Abhay Agrawal Revenue by : Shri Sandipkumar Salunke Date of Hearing – 04/02/2025 Date of Order – 25/02/2025

O R D E R

PER V. DURGA RAO, J.M.

This appeal by the Revenue is directed against the impugned order dated 20/06/2023, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2015–16.

2. The Revenue has raised following grounds:-

“1. Whether on facts and circumstance so the case, the Id. CIT(A) was justified in deleting the penalty levied on the grounds that no deliberate attempt was made by the assessee to conceal the income or furnish inaccurate particulars of income, when, the assessee had made erroneous claim on account of loss. on sale of assets in return of of income and the Hon'ble Supreme Court in the case of CIT vs. Reliance Petro products has, held that erroneous claim amounts to furnishing inaccurate particulars of income and such finding has been established by the AO in the assessment order.

2. Whether on facts and circumstances of the case, the assessee was justified in raising the grounds of appeal that notice u/s 271(1)(c) was bad in law when he was aware of the reasons for initiation of penalty u/s 271(1)(c) of the Act in light of discussions in the Assessment Order and therefore, the notice issued u/s 271(1)(c) of the Act was a valid notice in view of the decision of Hon'ble High Court of Bombay in Ventura Textiles Ltd. vs. Commissioner of Income Tax, Mumbai City-II [2020] 117 taxmann.com 182(Bombay)?"

3. The appellant craves leave to add, amend, alter vary and/or withdraw any or all the above grounds of appeal.”

3. Facts in Brief:- The assessee is a Private Limited Company engaged in the business of trading in consumer items. For the year under consideration, the assessee filed its return of income under section 139 of the Act on 27/10/2015. The case was selected for scrutiny and statutory notices were issued and served upon the assessee. The Assessing Officer completed assessment under section 143(3) of the Act after making addition of ` 4,72,27,468. Penalty proceedings under section 271(1)(c) of the Act levying penalty of ` 1,30,99,807, on account of loss on sale of fixed assets worth `

4,02,50,000, and the demand was raised.

4. On appeal, the learned CIT(A) deleted the penalty imposed of `

1,30,99,807, under section 271(1)(c) of the Act by holding as under:-

“4. Appellate Findings Appeal Notices were issued to the assessee on 26.12.2020, 17.08.2020 and 04.05.2023 fixing the case for 31.12.2020, 01.09.2022 and 11.05.2023. No reply filed by the Assessee so far, in such circumstances, the case of the assessee is being decided on the merits.

4.1 In the assessment order, passed u/s 143(3) on 21.12.2017 the following additions were made by the assessing officer. The same issues have been reproduced in the penalty order which are as below:

On perusal of 26A5 of Assessee it is observed that assessee was in receipt of amount from M/s Arvind Limited having TAN-AHMT00462A and from State Bank of India. Further assessee was asked to furnish reconciliation of receiptswith 26A5 and ITR and the same was furnished by the assessee, the details are as under:

During the course of assessment proceedings by issuing show cause notice dated 04/12/2017 assessee was asked to explain as to why difference in receipt of Rs. 1,25,428/- should not be added back to your total income. In response, assessee submitted his reply, para I of the said reply is reproduced as under:

"With respect of difference of Rs. 1,25,428/-in 2645 and in books of accounts, it is submitted that the asse