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2021 (6) TMI 1037 - AT - Income TaxPenalty u/s 271(1)(c) - search u/s 132 - additions on account of assessment u/s 153A - HELD THAT - This sub-clause contemplates that the assessee would be directed to pay a sum in addition to taxes, if any, payable by him, which shall not be less than , but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of income and furnishing of inaccurate particulars of income. The quantification of the penalty is depended upon the addition made to the income of the assessee. The assessee has filed appeals before the Tribunal against these quantum additions in all these three years under consideration. The Tribunal vide order dated 27.12.2017 has remitted the issue of additions to the file of the ld.CIT(A) for de novo proceedings, therefore, no penalty at this stage is quantifiable or imposable. Since the issue of quantum addition has been remitted to the file of the CIT(A), we remit the issue regarding levy of penalty in these years as well to the file of CIT(A). CIT(A) after adjudication of the quantum additions, shall take a call as to whether penalty is to be imposed upon the assessee or not. In other words, the ld.CIT(A) shall decide the issue regarding levy of penalty after determination of the income in pursuance of Tribunal s order in the above three years. Appeals of the assessee are allowed for statistical purpose
Issues Involved:
1. Condonation of delay in filing appeals. 2. Imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961. 3. Quantum additions and their impact on penalty proceedings. Detailed Analysis: Condonation of Delay in Filing Appeals: The appeals filed by the assessee were time-barred by 282 days. The assessee submitted an affidavit explaining the delay due to inadvertent oversight and negligence by the Chartered Accountant. The Tribunal considered the rival contentions and referred to the principles laid down by the Hon’ble Supreme Court in the cases of Collector Land Acquisition Vs. Mst. Katiji & Others and N. Balakrishnan Vs. M. Krishnamurthy. The Tribunal emphasized that the expression "sufficient cause" should be construed liberally to advance substantial justice. It concluded that the delay was not deliberate and condoned the delay, allowing the appeals to be decided on merit. Imposition of Penalty under Section 271(1)(c): The Assessing Officer (AO) had imposed penalties for the assessment years 2005-06, 2006-07, and 2009-10, which were confirmed by the CIT(A). The penalties were based on additions made during the assessment under section 153A r.w.s. 144 of the Income Tax Act, 1961. The Tribunal noted that the quantum additions leading to these penalties were disputed by the assessee and were pending for re-adjudication before the CIT(A) after being set aside by the Tribunal in earlier appeals. The Tribunal highlighted that the quantification of penalty depends on the final determination of income. Since the quantum additions were still under consideration, the Tribunal remitted the issue of penalty back to the CIT(A) to decide after the quantum additions are finalized. Quantum Additions and Their Impact on Penalty Proceedings: The quantum additions included unexplained investment in land, undisclosed capital gain, and unexplained deposits in bank accounts for the relevant assessment years. The Tribunal had earlier remitted the quantum additions to the CIT(A) for de novo proceedings. The Tribunal observed that the determination of income for taxation purposes was still pending, and consequently, the penalty could not be quantified or imposed at this stage. The Tribunal directed the CIT(A) to decide on the penalty issue after adjudicating the quantum additions. Conclusion: The Tribunal allowed the appeals for statistical purposes, condoning the delay in filing and remitting the penalty issue back to the CIT(A) for fresh consideration post the determination of quantum additions. The decision emphasized a justice-oriented approach in interpreting "sufficient cause" for delay and recognized the interdependence of penalty quantification on finalized quantum additions.
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