Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (1) TMI AT This

  • Login
  • Cases Cited
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2019 (1) TMI 641 - AT - Income Tax


Issues:
Penalty under section 271(1)(c) of the Income Tax Act - Whether inaccurate particulars of income were furnished by the assessee.

Analysis:
The Appellate Tribunal, ITAT Ahmedabad, heard an appeal by the assessee against the penalty imposed by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act. The AO had added a sum of ?3.00 lakhs to the total income of the assessee, alleging inaccurate particulars of income. The AO initiated penalty proceedings based on this addition. The primary contention of the assessee was that the disclosure of income was based on a non-oath statement during a survey and lacked evidentiary value. The assessee argued that it had disclosed all relevant details, including a note explaining why ?3.00 lakhs should not be included in its income. The AO imposed a penalty of ?93,630, equivalent to the tax sought to be evaded.

The ld.CIT(A) upheld the penalty but changed the basis for confirming it, relying on Explanation-1 to Section 271(1)(c) of the Act. The ld.CIT(A) noted that the assessee had disclosed ?11.50 lakhs as unaccounted receipts during the survey, but only included ?8.50 lakhs in the return of income filed. The ld.CIT(A) found that the assessee failed to provide details of expenditure to justify the difference in the disclosed amount. The penalty was confirmed under section 271(1)(c) based on the undisclosed income of ?3.00 lakhs.

During the appeal, the assessee raised multiple contentions. Firstly, the addition was challenged as it was based on a non-oath statement during the survey. Secondly, the assessee argued that it had disclosed all relevant information, including a note explaining the discrepancy in the disclosed amount. Lastly, the assessee contended that the penalty was imposed for furnishing inaccurate particulars by the AO but was confirmed for concealment by the ld.CIT(A) using Explanation-1. The Tribunal referred to a similar case where the penalty was deleted due to a change in the basis for imposing the penalty by the appellate authority. The Tribunal held that the penalty was not sustainable as there was no concrete evidence of inaccurate particulars furnished by the assessee. The penalty was deleted, and the appeal of the assessee was allowed.

In conclusion, the Tribunal found that the penalty imposed on the assessee was not justified as there was insufficient evidence to prove inaccurate particulars of income. The change in the basis for confirming the penalty by the ld.CIT(A) was not supported by the original grounds for penalty imposition. The Tribunal, following precedent, deleted the penalty, ruling in favor of the assessee.

 

 

 

 

Quick Updates:Latest Updates