2011 (12) TMI 676 - AT - Income Tax

Summary

Issues involved:
The judgment involves the deletion of penalty u/s 271(1)(c) imposed on the assessee for additions made u/s 68 of the IT Act.

Deletion of Penalty u/s 271(1)(c):
The Revenue appealed against the deletion of penalty of Rs. 8,64,100/- imposed on the assessee u/s 271(1)(c) for additions made u/s 68 of the IT Act. The AO added Rs. 25,49,000/- on account of unexplained cash credit u/s 68 and Rs. 50,295/- on account of unexplained investment in property u/s 69. The ld. CIT(A) confirmed these additions. The AO levied a penalty of Rs. 8,64,100/- @ 100% of tax sought to be evaded on the concealed income of Rs. 25,92,300/- as the assessee did not respond to the show cause notice. The assessee submitted various evidences to prove the genuineness of the loans, including names, addresses, PANs, confirmations, and financial details of the depositors. Some depositors were produced before the AO, while others could not be due to time constraints.

Assessee's Submissions and CIT(A) Decision:
The assessee submitted evidence to support the genuineness of the loans, citing previous court decisions. The ld. CIT(A) deleted the penalty based on the Tribunal's decision in a similar case and a decision of the Gujarat High Court. The Revenue contended that the loans were not genuine, but the Tribunal found that the explanation provided by the assessee was not disproved. The Tribunal emphasized that the penalty was based on additions made u/s 68 and 69, not on concealment of income. The Tribunal referred to legal principles regarding the imposition of penalties u/s 271(1)(c) and held that the AO's decision to levy the penalty was not justified in this case.

Conclusion:
The Tribunal upheld the ld. CIT(A)'s decision to delete the penalty u/s 271(1)(c) imposed on the assessee. The Tribunal found that the explanation provided by the assessee, supported by evidence, was not disproved, and the additions made by the AO did not automatically justify the penalty. The Tribunal emphasized the importance of proving conscious concealment or furnishing of inaccurate particulars for the imposition of penalties u/s 271(1)(c). The appeal filed by the Revenue was dismissed, and the penalty deletion was upheld.