2018 (4) TMI 124 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - Held that - The additional income year-wise was offered by Shri Shailesh Mahadev Joshi on behalf of himself, his wife and other partnership firms on the basis of documents found and seized during the course of search at his residence. The first set of documents relate to unaccounted sales of Wada Pav and others at different outlets. Another set of documents which were found on account of undisclosed investments in jewellery, deposits with Pat Sansthas, fixed deposits, etc. We have already adjudicated similar issue in the case of Mrs. Vasundhara Shailesh Joshi (2018 (3) TMI 1583 - ITAT PUNE) wherein also the assessment was completed under section 153A r.w.s. 143(3) of the Act. While deciding the issue of levy of penalty levied under section 271(1)(c) of the Act, the Tribunal vide paras 16 to 19 held that the provisions of Explanation 5A to section 271(1)(c) of the Act were clearly attracted and the penalty levied under section 271(1)(c) of the Act has been upheld. - Decided against assessee.

Summary

Issues:
Levy of penalty under section 271(1)(c) of the Income-tax Act, 1961 based on additional income declared by the assessee during search operations.

Analysis:
The Appellate Tribunal ITAT Pune heard a bunch of eleven appeals against orders of CIT(A)-13, Pune, related to penalty levied under section 271(1)(c) of the Act for assessment years 2009-10 & 2010-11. The appeals were disposed of collectively for convenience. The main issue raised in all appeals was against the penalty under section 271(1)(c) of the Act. The learned Authorized Representative for the assessee argued that the issue was covered by a previous Tribunal order in related cases. The Tribunal decided to first address the appeals of one assessee for assessment years 2009-10 & 2010-11 to adjudicate the issue effectively.

In the specific case of Shri Shailesh Mahadev Joshi, search and seizure operations under section 132 of the Act were conducted, leading to the discovery of incriminating documents. The additional income declared by the assessee during the search was offered for taxation and assessed, resulting in the imposition of a penalty under section 271(1)(c) of the Act. A similar scenario was observed in the case of Mrs. Vasundhara Shailesh Joshi, where additional income was declared based on seized documents, and the penalty was upheld by the Tribunal in a previous case.

The Tribunal found that the issue in the appeals of Shri Shailesh Mahadev Joshi was covered by the previous decision involving Mrs. Vasundhara Shailesh Joshi. Consequently, the penalty under section 271(1)(c) of the Act for both assessment years was upheld. The Tribunal applied the same reasoning to dismiss the grounds of appeal raised by the assessee. The decision in one appeal was deemed applicable mutatis mutandis to another similar appeal.

In the remaining appeals by different partnership firms, additional grounds were raised challenging the validity of assessment orders and penalties imposed. The Tribunal had previously deleted penalties in a similar case involving partnership firms. As a result, the Tribunal directed the Assessing Officer to delete the penalties imposed under section 271(1)(c) of the Act in all appeals except those of Shri Shailesh Mahadev Joshi. Therefore, the penalties in the case of partnership firms were allowed to be deleted, while the penalties in Shri Shailesh Mahadev Joshi's case were upheld.

In conclusion, the appeals of Shri Shailesh Mahadev Joshi were dismissed, and the appeals of different partnership firms were allowed, with the penalties under section 271(1)(c) of the Act being deleted in the latter cases.