2016 (5) TMI 613 - AT - Wealth-tax

Penalty u/s 18(1)(c) of the W.T. Act - Held that - In the instant case, although the assessee has filed the return disclosing the amount of ₹ 90 lakhs prior to issue of notice u/s.17, however, the same was already detected by the department during the course of search and the assessee had admitted the same to be unaccounted cash. Thus the filing of the return was not a voluntary one but after detection by the department. In none of those cases there was detection of unaccounted cash or other assets prior to issue of notice u/s.17. In the instant case there was a search and unaccounted cash of ₹ 90 lakhs was found which was admitted by the assessee during the course of search as unaccounted. Under these circumstances, the various decisions relied on by the Ld. Counsel for the assessee are not applicable. In our opinion, the Ld.CWT(A) is fully justified in upholding the penalty levied by the AO. See Sheikh Hassan Hotels 2008 (6) TMI 598 - BOMBAY HIGH COURT - Decided against assessee.

Summary

Issues:
Challenge to penalty under section 18(1)(c) of the I.T. Act for Assessment Year 2003-04.

Analysis:
The case involved a challenge by the assessee against the penalty imposed under section 18(1)(c) of the Income Tax Act for the Assessment Year 2003-04. The assessee had filed a return of wealth declaring total wealth of ?1,01,72,101/-, which included unaccounted cash of ?90,00,000/- found during a search action. The Assessing Officer (AO) treated the return as non-est due to being filed beyond the allowed time and initiated penalty proceedings. The AO concluded that the assessee had concealed income and wealth, levying a penalty of ?1,01,721/- under section 18(1)(c).

The Commissioner of Income Tax (Appeals) upheld the AO's decision, stating that the unaccounted cash was detected during the search and the notice under section 17 was not issued to regularize the belated return but after the detection of unaccounted cash. The CIT(A) distinguished the case from precedents where penalties were canceled due to voluntary filing before notice under section 17. The Tribunal concurred with the CIT(A) that the penalty was rightly levied as the assessee's actions constituted deliberate concealment of income and wealth.

The Tribunal rejected the assessee's argument that the penalty was not justified, citing decisions like CIT Vs. Sheikh Hassan Hotels and Shanti B. Raheja Vs. ACWT. It emphasized that the detection of unaccounted cash prior to the notice under section 17 distinguished this case from precedents where penalties were canceled due to voluntary filing. The Tribunal found no concealment by the revenue and upheld the penalty, stating that the various decisions cited by the assessee were not applicable to this case.

In conclusion, the Tribunal dismissed the appeal, upholding the penalty imposed under section 18(1)(c) of the Income Tax Act for Assessment Year 2003-04. The Tribunal found no infirmity in the CIT(A)'s order, stating that the detection of unaccounted cash before the notice under section 17 differentiated this case from precedents where penalties were canceled due to voluntary filing. The Tribunal emphasized that the various decisions cited by the assessee were not relevant to the circumstances of this case, affirming the penalty imposed by the AO.

This detailed analysis highlights the key arguments, decisions, and conclusions made by the Tribunal regarding the penalty under section 18(1)(c) of the Income Tax Act for the relevant Assessment Year.