Non-reconciliation of ITS report under the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘E’ NEW DELHI

BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
AND
SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER

 ITA No. 6766/Del/2017
Assessment Year: 2010-11

Mayar India Limited, 
3rd Floor, Sucheta Bhawan, 
11A Vishnu Digambar Marg,
 New Delhi.
PAN : AAACM8246P
(Appellant) 

vs. 

DCIT, Circle 16(2),
New Delhi.
(Respondent)

 Appellant by : None
 Respondent by: Sh. Ramesh Kumar, Sr. DR

 Date of hearing: 08/07/2021
 Date of order : 23/07/2021

ORDER

PER K. NARASIMHA CHARY, J.M.

Aggrieved by the order dated 12/09/2017 passed by the learned Commissioner of Income Tax (Appeals)-37, New Delhi ("Ld. CIT(A)") for the the assessment year 2010-11, Mayar India Limited(“the assessee”) filed this appeal.

2. Brief facts, as are necessary for disposal of this appeal, are that the assessee filed its return of income for A.Y. 2010-11 on 30.09.2009 declaring an income of Rs.1,23,39,670/-. The assessment u/s. 143(3) was, however, complete at an income of Rs.4,25,51,780/- by making addition of Rs.11,32,655/- on account of disallowance u/s. 14A, Rs.13,381/- on account of non-reconciliation of ITS report, Rs.2,04,92,993/- on account of disallowance of expenditure for office renovation, Rs.50,00,000/- on account of disallowance of deduction claimed u/s. 80GGB and Rs.35,73,085/- on account of disallowance of interest. The assessee challenged the assessment order in appeal before ld. CIT(A), who confirmed the additions made. Based on these additions, the Assessing Officer initiated penalty proceedings u/s. 271(1)(c) of the Income-tax Act and imposed penalty of Rs.1,02,69,097/- by order dated 24.12.2014.

3. Aggrieved by penalty order, the assessee preferred an appeal before the ld. CIT(A), who by impugned order partly allowing the appeal, deleted the penalty based on disallowance u/s. 14A, but sustained the penalty based on remaining additions/disallowances.

4. When the matter is called, there is no representation from the assessee. Notice was sent to the address given in form No. 36. If theassessee is available in such address, such notice should have been served on the assessee. If for any reason, the assessee is not availablethere, it is for the assessee to make arrangements for service of suchnotice by furnishing the address where the assessee would be available,or to deliver it to some authorised person, or by making request to thepostal department to detain the mail till the assessee claims the same.Non-service of notice is solely attributable to the conduct of assessee. In these circumstances, we proceed to decide the appeal basing on the material available on record. 

A written synopsis filed by the ld. AR on 22.03.2021 is, however, available on record. In this written synopsis, challenging the validity of the penalty notice issued under section 274 read with section 271 of theAct, the ld. AR submitted that the learned Assessing Officer had omitted to specify the relevant charge that is, whether “concealment” or “inaccurate particulars” both in the assessment order and in the penalty notice thereby rendering the notice as vague. By placing reliance on the decisions of the Hon’ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565, Commissioner of Income Tax v. SSA’s Emerald Meadows (2016) 73 taxman.com 241 (Kar) and also the decision of the Hon’ble jurisdictional High Court in the case of Ld. PCIT vs. Sahara India Life Insurance Co Ltd in ITA No. 475 and batch of 2019, it is submitted that the penalty cannot be sustained. 

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