IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘C’ BENCH, NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No. 62/DEL/2024 [Assessment Year: 2014-15]

VIC ENTERPRISES PVT. LTD., Vs. ACIT, CIRCLE 26(2), 4^TH FLOOR, PUNJABI BHAWAN, DELHI

10, ROUSE AVENUE, NEW DELHI – 2 (PAN:- AAACV0132B)

[Appellant] [Respondent]

Date of Hearing : 05.03.2025 Date of Pronouncement : 07.03.2025 Assessee by : Shri M.P. Rastogi, Adv. & Shri Shivam Malik, Adv.

Revenue by : Shri Om Parkash, Sr. D.R.

ORDER PER AMITABH SHUKLA, ACCOUNTANT MEMBER, This appeal by the Assesse is preferred against the order of the Ld. CIT(A), Delhi, dated

21.8.2018 pertaining to assessment year 2014-15.

2. The only issue raised by the assesse through its grounds of appeal is regarding the action of the Ld. CIT (A) in confirming the action of the Ld. AO, in imposing penalty u/s 271(1)(c) of the act. The Ld. counsel for the appellant assesse has assailed the order of Ld. AO on two main counts. Firstly, that the notice u/s 271(1)(c) of the act dated 7/12/2016 issued by the Ld. AO is illegal as the Ld. AO has not struck off the stipulation as to whether the penalty notice is for concealment of income or for furnishing of inaccurate particulars of income.

3. The Ld. Counsel for the assesse has also argued that even otherwise no penalty was leviable as the addition made on account of different view or interpretation on a statute do not attract penalty.

In support of his argument’s reliance was a placed upon a catena of decisions inter alia including of Hon’ble Apex court in the case of Reliance petro products 322 ITR 158. The Ld. Counsel for assesse further submitted that on identical facts in its case, this tribunal has deleted penalty vide its decision in ITA number 3415/Del//2019 dated 29/8/22 for AY 2010-11. It was also argued that though addition for current year was not contested before ITAT, but in AY 2008-09 & 2009-10, Hon’ble ITAT had on similar issues passed orders in assessees favour. The Ld. Counsel accordingly requested for deletion of penalty in its case.

4. We have heard rival Submissions, in the light of material available on records. We have noted that the challenge of the assesse qua penalty notice per se being defective is based on crystal clear facts available on records. The Ld. AO had not struck off the relevant stipulation thus making the notice per se defective. Penalty under section 271(1) (c) can only be levied either for concealment of income or for furnishing of inaccurate particulars thereof. There cannot be a case of penalty being levied on both the accounts. One of the two conditions must exist in a case. Thus, the AO has to exercise his option, after considering facts and circumstances of the case, as to whether the assesee has concealed the true particulars of income or has furnished inaccurate particulars thereof. In the instant case, the learned AO has not exercised his option of selecting either of the two conditions. This goes on to indicate a clear non-application of mind by the learned AO. It’s settled law that when the foundation goes, super structure cannot survive. Once the notice per se is defective, the consequent penalty order would not survive. We have also noted the challenge to impugned penalty qua referred decision of this Tribunal in ITA number 3415 (supra). It has been submitted by the assesse that a coordinate bench of this Tribunal in assesses own case, on identical facts, given relief to the assesse by deleting the penalty. Further, Hon’ble apex court in the case of Reliance Petro products. Supra has held that no penalty leviable in the cases where no apparent concealment or furnishing of inaccurate particulars could be found. Mere fact that the contention of assessee is not accepted by the Revenue, which holds different views, would not attract imposition of penalty. Accordingly, we are of the view that no case is made out in favour of Revenue to impose the impugned penalty under section 27