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Judgment
ORDER
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-NFAC, Delhi [‘CIT(A)’ in short] dated 21.11.2025 arising from the penalty order dated 20.09.2022 passed by Circle 5(1)(1), G.B. Nagar under section 271(1)(c) of Income Tax Act, 1961 for the Assessment Year 2016-17.
The grounds raised by the assessee are as under :
1.Learned Commissioner of Income Tax (Appeals), NFAC erred in law and on facts in dismissing the appeal of the Appellant and confirming the penalty of Rs. 10,14,483/- levied by the Learned Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961. Appellant submits that in view of the facts and circumstances of the case as well as in law, the impugned order passed by the Learned CIT(A) is bad in law and deserves to be quashed.
2.Learned Commissioner of Income Tax (Appeals) erred in not condoning the delay in filing the appeal, despite the Appellant having shown sufficient and reasonable cause for such delay. Appellant submits that the delay occurred due to non-receipt of penalty notices and the penalty order on account of change in registered email address, which constitutes a bona fide and reasonable cause, and therefore the appeal ought to have been admitted in the interest of substantial justice.
3.Learned Commissioner of Income Tax (Appeals) erred in law and on facts in confirming the penalty without appreciating that the penalty proceedings were completed in violation of principles of natural justice. Appellant submits that no effective opportunity of being heard was granted before levy of penalty, as the notices and communications were not received by the Appellant, rendering the entire penalty proceedings void ab initio.
4.Learned Commissioner of Income Tax (Appeals), NFAC erred in law and on facts in rejecting the appeal of the Appellant on technical grounds without adjudicating the issues on merits. Appellant submits that the Learned CIT(A) ought to have decided the appeal on merits, especially when substantial rights of the Appellant were involved. In view of the facts and circumstances of the case as well as in law, the impugned order is bad in law and deserves to be set aside.”
Brief facts of the case are that the assessee has received salary amounting to Rs.50,21,152/- and paid Rs.11,32,625/- against credit card bills. The assessee however, had not filed the return u/s 139(1) of the Act. The AO accordingly, issued notice u/s 148 of the Income Tax Act 1961 dated 27.03.2021. In response to notice u/s 148 of the Act, the assessee filed her return of income on 10.05.2021 declaring total income of Rs.38,66,450/-. Thereafter, assessment was completed u/s 143(3) r.w.s 147/144B of the Act at the returned income. The AO however, initiated penalty proceedings u/s 271(1)(c) for concealment of income, and levied penalty u/s 271(1)(c).
Upon appeal, the ld. CIT(A) did not condone the and dismissed the assessee’s appeal. Aggrieved the assessee is before us.
At the outset, learned Counsel of the assessee stated that the assessee was earning salary income but had failed to file return of income. The return filed under section 148 of the Act was accepted by the AO and no addition was made. The Learned Counsel also stated that since no addition has been made, the penalty has no legs to stand.
Per contra, ld. DR relied on the order of the AO/CIT(A).
We have heard the rival submissions and perused the material available on record. We find that the assessee had earned salary income but did not file the return. Upon receipt of notice u/s 148, she filed the return declaring the salary income which was accepted by the ld AO. It appears that the ld AO levied penalty u/s 271(1)(c) only on the ground that but for the notice u/s 148, the salary income of the assessee would have escaped taxation. We are of the view that for levying penalty u/s 271(1)(c), such a reasoning is not justified. In the instant case, there is no addition made by the Assessing Officer in the return of income filed under section 148 of the Act. The Ld AO has to establish that there is concealment of income or the assessee has furnished inaccurate particulars. We, therefore, following the decision of CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158/189 Taxman 322 (SC) , hold that no penalty under section 271(1)(c) of the Act is leviable on the assessee. Appeal is allowed.
In the result, appeal filed by the assessee in ITA No. 582/DEL/2026 is allowed.