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2015 (10) TMI 2558 - AT - Income TaxPenalty U/s 271(1)(c) - undisclosed cash deposits - voluntary disclosure of income - Held that - Surrender subject to non-initiating the penalty proceeding and prosecution does not absolve the assessee from liability of penalty. The material fact is that the assessee offered any explanation for concealment or furnishing of inaccurate particulars of income to be seen. Penalty proceeding and satisfaction of the Assessing Officer need not be recorded in a particular manner. Therefore, the assessee does not get any immunity from the penalty on the ground that appeal has been admitted before the Hon ble High Court which also does not make issue before the Hon ble High Court debatable. The fact is that the assessee had deposited cash from undisclosed source, which has not been explained by him before the lower authority. Thus we confirm the order of the ld CIT(A). - Decided against assessee.
Issues:
Appeal against order passed by CIT(A) for A.Y. 2008-09, Penalty U/s 271(1)(c) of the Income Tax Act, 1961, Unexplained cash deposits in Union Bank of India, Confirmation of penalty by CIT(A), Debatability of the issue due to pending appeal before High Court. Analysis: 1. The appeal was filed against the order passed by the CIT(A) for the assessment year 2008-09. The grounds of appeal primarily challenged the assessment made by the Assessing Officer and the subsequent penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. The main contention was that the assessment was based on assumptions and lacked verification of facts and documents presented by the assessee. 2. The Assessing Officer had made additions on account of unexplained cash deposits in the Union Bank of India, which were partially deleted by the CIT(A). However, a penalty was imposed under Section 271(1)(c) based on the remaining unexplained cash deposit of Rs. 81,000. The Assessing Officer held that the assessee had concealed income by furnishing inaccurate particulars. 3. The CIT(A) confirmed the penalty imposed by the Assessing Officer, stating that the source of the Rs. 81,000 cash deposit remained unexplained by the assessee. The CIT(A) considered the explanations provided by the assessee but found them insufficient to justify the unexplained cash deposit. The CIT(A) also noted that the assessee had not been able to substantiate the source of the cash deposits at any stage. 4. The assessee, in the appeal before the ITAT, argued that the penalty was not justified as the matter was debatable, especially since an appeal had been filed before the High Court against the quantum addition. The assessee contended that the explanations provided were genuine and that there was no deliberate concealment of income. The assessee also cited case laws to support their arguments. 5. The ITAT, after considering the contentions of both parties, upheld the decision of the CIT(A) and dismissed the assessee's appeal. The ITAT noted that the assessee had failed to explain the unexplained cash deposit of Rs. 81,000 and that the pending appeal before the High Court did not make the issue debatable. The ITAT also referred to relevant case laws to support their decision. 6. Ultimately, the ITAT confirmed the penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, based on the unexplained cash deposit. The ITAT held that the assessee had not provided sufficient justification for the cash deposit and that the pending appeal before the High Court did not absolve the assessee from the penalty. This detailed analysis covers the issues raised in the appeal, the arguments presented by the parties, and the final decision of the ITAT in confirming the penalty imposed by the Assessing Officer.
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