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Issues: Appeal against orders of Income Tax Appellate Tribunal for assessment and penalty appeals of the assessee for the assessment years 2001-02 to 2004-05.
Assessment Years 2001-02 to 2004-05: The assessee, a Non-Resident Indian, faced scrutiny regarding investments made without proving the sources of income. Despite claiming agricultural income of &8377; 12 lakhs annually, the assessee failed to substantiate the earnings or the claimed receipts and expenditures. An addition of &8377; 3,39,000 was agreed upon by the assessee for all years, with the officer accepting explanations for investments exceeding this amount. Subsequently, penalty under section 271(1)(c) of the Income Tax Act was proposed for concealing income of &8377; 3,39,000. The assessee objected, citing the agreed assessments and additions. The assessing officer, however, imposed the penalty. Appeals were filed, with the appellate authority allowing them, leading to Departmental appeals dismissed by the Tribunal. While decisions for some years were not based on merits, for others, the Tribunal upheld the C.I.T (Appeals) orders. The Revenue challenged these Tribunal decisions through the current appeals. Court's Decision: After hearing arguments from both sides, the Court agreed with the assessee that the assessments were agreed upon, thus finding no justification for imposing penalties under section 271(1)(c) of the IT Act. As the assessments were agreed upon, the Court deemed the appeals against them as not maintainable, noting that the assessee was compelled to challenge assessments to defend against penalty orders. The Court rejected the Tribunal's reasoning that appeals were not maintainable due to tax amounts falling below the threshold limit, as these were agreed assessments. The Court emphasized that the officer was not obligated to maintain additions agreed upon by the assessee if not for the agreement. Consequently, the Court vacated the Tribunal and first appellate authority's orders, reinstated the assessments, and confirmed the cancellation of penalty orders for all years.
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