2013 (1) TMI 1002 - HC - Income Tax

Summary

Issues Involved:
The issue involves the interpretation of whether additions made under Section 69 of the Income-tax Act, 1961 can be the basis for imposing a penalty under Section 271(1)(c) of the Act.

Facts:
A search and seizure operation was conducted, resulting in the recovery of incriminating material. The Assessing Officer made various additions to the income, including unaccounted investments, extra profit, repair receipts, and unexplained investments. Penalty proceedings were initiated under Section 271(1)(c) of the Act. The assessee contended that no concealment had occurred, but the Assessing Officer imposed a penalty of Rs. 1,90,000. The first Appellate Authority deleted the penalty for extra profit but upheld penalties for other additions. Both the assessee and the Revenue appealed to the Income Tax Appellate Tribunal, which canceled the penalties related to certain additions under Section 69A, citing them as deeming provisions.

Judgment:
The High Court considered the arguments presented by both parties. The Revenue contended that as the assessee failed to provide explanations for the additions under Section 69A, the penalties should not have been deleted. The Tribunal's decision was supported by the counsel for the respondent. The Court noted that the assessee did not offer a satisfactory explanation for the unrecorded payment of Rs. 37,000 made by bank draft. In the absence of a plausible explanation, the Court inferred that the assessee had concealed income. The Court held that the burden was on the assessee to prove no concealment, and the Tribunal erred in deleting the penalties solely based on Section 69A being a deeming provision.

Conclusion:
The Court answered the question referred in the negative, favoring the Revenue and against the assessee.