2018 (7) TMI 2174 - AT - Income Tax

Penalty u/s 271(1)(c) - assessee has not complied with the orders of the AO and did not co-operate in submitting the information asked by the AO - As during the course of survey proceedings it was admitted by Shri Jayantibhai Lakhani that he and his group members had accepted unsecured loans by giving cash to the person from whom loans and advances received - HELD THAT - It is evident that the appellant had deliberately and intentionally not disclosed the true and correct income with the intention to avoid payment of tax and thereby concealed the income. The facts and circumstances as discussed in above decision of ITAT, Ahmedabad D Bench in assessee s own case in 2010 (3) TMI 1078 - ITAT AHMEDABAD for A.Y.2004-05, we find that provisions of section 271(1)(c) are attracted. Therefore, we do not find any reason to interfere with findings recorded by the lower authorities. - Decided against assessee.

Summary

Issues:
1. Confirmation of penalty under section 271(1)(c) of the Income Tax Act, 1961.

Analysis:
The appeal before the Appellate Tribunal ITAT Surat was directed against the order of the Commissioner of Income tax (Appeals) related to Assessment Year 2004-05. The primary issue was the confirmation of a penalty of ?7,72,888 under section 271(1)(c) of the Income Tax Act, 1961. The case involved the non-disclosure of income and the treatment of unsecured loans as bogus credits. The original return of income declared was ?1,01,290, which was later revised to ?12,19,266, with an additional income of ?11,17,975 under the head "Depositors Loan." The Assessing Officer (AO) initiated penalty proceedings for furnishing inaccurate particulars of income and concealment of income. Despite multiple opportunities, the assessee failed to prove the genuineness of the loans, leading to the imposition of the penalty.

In the first appellate proceedings, the Commissioner of Income tax (Appeals) dismissed the appeal, citing case laws emphasizing the need for the assessee to offer a tenable explanation to avoid penalty under section 271(1)(c). The assessee then filed an appeal before the Tribunal, arguing that the disclosure during survey proceedings was made under duress and retracted later. However, the Senior Departmental Representative maintained that the assessee did not comply with the AO's orders and failed to cooperate, justifying the penalty imposition.

The Tribunal considered the facts, including the non-cooperative attitude of the assessee, the lack of compliance with statutory notices, and the failure to provide complete details to prove the genuineness of credits. Referring to a previous decision in the assessee's case, the Tribunal upheld the penalty, concluding that the deliberate non-disclosure of income amounted to concealment under section 271(1)(c). The Tribunal found no reason to interfere with the lower authorities' findings, leading to the dismissal of the assessee's appeal.

In summary, the Tribunal upheld the penalty under section 271(1)(c) of the Income Tax Act, 1961, based on the deliberate non-disclosure of income and failure to substantiate the genuineness of credits, as evidenced by the non-cooperative behavior of the assessee throughout the proceedings. The appeal of the assessee was consequently dismissed on the grounds of concealment of income and intentional tax avoidance.