2015 (2) TMI 1266 - AT - Income Tax

Penalty u/s 271(1)(c) - Held that - As the addition confirmed by the FAA has been deleted by the Tribunal in quantum appeal, so there is no justification for not deleting the penalty for the amount in question. Effective ground of appeal is decided in favour of the assessee.

Summary

Issues involved:
1. Penalty levied under section 271(1)(c) by the Assessing Officer.
2. Confirmation of penalty by the CIT(A).
3. Consideration of relevant factors by the CIT(A) in confirming the penalty.
4. Contrary penalty levied by the CIT(A).
5. Additions made by the Assessing Officer and confirmed by the CIT(A).
6. Deletion of additions by the Tribunal in a quantum appeal.
7. Similar facts and decisions for AY 2007-08.

Detailed Analysis:
1. The Assessing Officer (AO) initiated penalty proceedings under section 271(1)(c) against the assessee for allegedly concealing income. The AO levied a penalty of Rs. 1.48 Crores based on additions made to the income of the assessee by the First Appellate Authority (FAA).

2. The CIT(A) confirmed the penalty imposed by the AO, leading to the assessee challenging this decision. The grounds of appeal included contentions that the assessee did not conceal income, did not receive unaccounted cash, and that the additions made were not sufficient to attract penalty under section 271(1)(c).

3. The CIT(A) was criticized for not considering relevant factors, principles, and evidence while confirming the penalty. It was argued that the CIT(A) was influenced by irrelevant considerations, leading to an erroneous decision.

4. The penalty levied by the CIT(A) was deemed contrary to provisions of the law, further strengthening the grounds of appeal by the assessee against the penalty.

5. The additions made by the AO, including amounts allegedly received in cash and on sale of plots, were contested by the assessee. While some additions were confirmed by the FAA, others were deleted, leading to a mixed outcome in the assessment.

6. The Tribunal, in a quantum appeal, deleted certain additions made by the AO and confirmed by the FAA. The Tribunal's detailed analysis revealed discrepancies in the AO's conclusions regarding cash receipts and sale of plots, leading to the deletion of these additions.

7. For the assessment year 2007-08, similar facts and decisions were observed, with the Tribunal deciding in favor of the assessee based on the deletion of additions made by the AO. The effective ground of appeal was decided in favor of the assessee for both years.

Overall, the appeals filed by the assessee for both years were allowed, highlighting the successful challenge against the penalty and certain additions made by the tax authorities.