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DCIT, New Delhi vs. Hero Motocorp Ltd., New Delhi - (Income Tax Appellate Tribunal) (26 Jul 2021)

Concealment of income can be levied only in cases where the concealment has been proved


Direct Taxation

Assessee is a company who filed its return of income for A.Y. 2008-09, declaring total income of Rs.1307,37,84,038. Thereafter, assessee filed revised return of income with increased claim of TDS. Thereafter, the assessment was framed under Section 143(3) read with Section 144C of the Income Tax Act, 1961 (IT Act) and the total income was determined at Rs.4585,87,70,541 by making various additions/ disallowances amounting to Rs.3355,12,31,399. Aggrieved by the final assessment order, Assessee filed appeal before ITAT. ITAT vide order deleted additions/disallowances to the extent of Rs.3279.25 crores, additions/ disallowances to the extent of Rs.68.60 crores were set aside to the file of AO for reconsidering the matter in light of the directions in the order and confirmed the additions/ disallowances to the extent of Rs.4.86 crores.

On the additions/ disallowances confirmed by ITAT and some other additions/ disallowances which were suomoto surrendered by the assessee during the assessment proceedings, AO vide penalty order passed under Section 271(1)(c) of the Act levied the penalty of Rs.2,47,28,481. Aggrieved by the order of AO, assessee carried the matter before the CIT(A) who vide order granted substantial relief to the assessee. Aggrieved by the order of CIT(A), Revenue is in appeal.

The issue in the present grounds are with respect to levy of penalty under Section 271(1)(c) of the Act. It is an undisputed fact that, the various additions were made by the AO and on the additions which have been upheld by Tribunal, AO has levied penalty under Section 271(1)(c) of the Act.

Hon'ble Delhi High Court in the case of PCIT vs. Harsh International Pvt. Ltd. has held that, concealment of income can be levied only in cases where the concealment has been proved. It has further observed that, if the quantum order itself has been challenged before the High Court and the High Court has framed substantial question of law in appeal then it would show that, the alleged concealment is not final and the issue is disputable and the penalty levied by Assessing Officer in such cases cannot survive. The ratio of the aforesaid decision would be squarely applicable to the facts of the present case. In such a situation, relying on the aforesaid decision in the case of PCIT vs. Harsh International Pvt. Ltd., there is no reason to interfere with the order of CIT(A) and thus the ground of Revenue are dismissed. Appeal of the Revenue is dismissed.


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