IN THE INCOME-TAX APPELLATE TRIBUNAL“B” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER &

SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No. 5060/MUM/2025 (A.Y. 2014-15)

M/s Stepathlon Lifestyle v/s. Deputy Commissioner of Private Ltd. बनाम Income Tax, Circle – 402, Avionne, Opp Pawan Hans 13(2)(2), Aaykar Bhavan, S.V. Road, Ville Parle West, M.K. Marg, New Marine Mumbai–400056, Maharashtra Lines, Mumbai – 400020, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AARCS1367G Appellant/अपीलार्थी .. Respondent/प्रतिवादी

Appellant by : Shri Abhishek Choksy, AR Respondent by : Shri Leyaqat Ali Aafaqui (Sr. AR)

Date of Hearing 29.09.2025 Date of Pronouncement 10.11.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :-

The present appeal arising from the appellate order dated

25.06.2025 is preferred by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to the penalty order passed u/s. 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 30.03.2017 for the Assessment Year [A.Y.] 2014-15.

2. The grounds of appeal are as under:

1. The Ld. CIT(A) erred in law and in fact in passing the appellate order u/s.

250 of the Act in violation of principles of natural justice by not giving opportunity to be heard before dismissing the appeal.

2. The Ld. CIT(A) erred in law and in facts in not appreciating that the notice u/s.. 274 r.w.s.271 of the Act issued by the Ld. Assessing Officer Initiating penalty proceedings u/s. 271(1)(c) of the Act was invalid and illegal as the notice was issued without mentioning specifically as to whether penalty is sought to be levied for “concealing the particulars of income” or “furnishing inaccurate particulars of income” thereby passing the Penalty Order u/s

271(1)(c) r.w.s 274 of the Act which is invalid and illegal.

3. The Ld. CIT(A) failed to appreciate that the appellant had not furnished any inaccurate particulars of income which would warrant imposition of penalty of INR. 6,00,000/- on the appellant.

4. The Ld. CIT(A) erred in law and in fact in confirming penalty of INR.

6,00,000/-u/s. 271(1)(c) of the Act.

3. Ground no.3 -We take up this first which pertains to merits.Brief facts of the case are, assessee a Private Limited Company and filed Return declaring total income of Rs (-)14,19,939/- for A.Y.2014-15. The case was selected for scrutiny and Assessment Order was passed u/s. 143(3) of the Act assessing total income at Nil, disallowing several expenses which were not claimed by assessee in the return i.e. Provision for Gratuity amounting to Rs. 10,24,253/-, Provision for Leave Encashment amounting to Rs. 6,05,349/- and Donation of Rs.2,00,000/-. The assessee contended that the said disallowances was inadvertently left out to be disallowed by the Tax Auditor. Hence, due to non-reporting to such disallowances in the Tax Audit Report, it missed disallowing the same while filing the return. No sooner, it realized the mistake during the assessment proceedings, the said disallowances were accepted by the assessee and no appeal was preferred against the quantum proceedings before any appellate authorities. However, the Assessing Officer initiated penalty proceedings u/s. 271(1)(c) of the Act on account of furnishing inaccurate particulars of income. Before him, it requested for not levying the penalty by stating that the error committed was inadvertent and there was no malafide intention. Disregarding, the same penalty order was passed levying penalty of Rs 6,00,000/- u/s. 271(1)(c) of the Act on account of furnishing inaccurate particulars of income.

4. In the subsequent appeal before the ld.CIT(A),who observed that the penalty order states, “Assessee had deliberately not disallowed Provision for Gratuity amounting, Provision for Leave-encashment and Donation, thereby it had filed inaccurate particulars of its income totalling to Rs. 18,29,602/- and had so