2022 (4) TMI 505 - AT - Income Tax

Penalty under section 271(1)(c) - Unexplained gifts, unexplained cash credit and another unexplained credit entry - assessee has not submitted any details or evidences in support of his claim, even after issuance of several notices on the assessee - HELD THAT - As rightly stated by the ld.DR, this is second round of litigation before us. In terms of remand order given by the Tribunal, the ld.CIT(A) passed a detailed order wherein also the assessee has not appeared and nor provided any material to support her claim, rather by a letter, contending something irrelevant to the proceedings pending before the appellate authority. The assessee has also not chosen to explain how the additions made by the AO are unjustified. In the absence of the same, the grounds raised before us are general in nature without any material support and therefore, we are unable to decide the issues on merits of the case. Therefore, all the grounds raised by the assessee are devoid of any merit, they are accordingly rejected. Further, assessment year involved herein is 2004-05, in the absence of any material, no useful purpose is to be achieved.- Appeal of assessee dismissed.

Summary

Issues:
- Disallowance on account of bogus gift, unexplained credit entries, and short/long term capital gain
- Failure of the assessee to provide evidence and cooperate during appellate proceedings
- Confirmation of additions by the ld.CIT(A) without material support from the assessee

Analysis:

Issue 1: Disallowance on account of bogus gift, unexplained credit entries, and short/long term capital gain
The case involved the assessee, an individual and proprietor of a jewelry business, who filed a return of income showing discrepancies. The Assessing Officer (AO) made disallowances based on a bogus gift, unexplained credit entries, and short/long term capital gains. The ld.CIT(A) and ITAT scrutinized the case, with the Tribunal remanding certain grounds back to the ld.CIT(A) for reconsideration. The ld.CIT(A) found discrepancies in the gift claimed by the assessee, as the donor's income did not support the gift amount and the source of funds was questionable. Similarly, unexplained credit entries were not adequately explained by the assessee, leading to confirmations of the AO's additions.

Issue 2: Failure of the assessee to provide evidence and cooperate during appellate proceedings
During the appellate proceedings from 2013 to 2017, the assessee was provided multiple opportunities for hearings but failed to appear. The ld.CIT(A) noted that the assessee did not submit details or evidence to support their claims despite several notices. The appellant's written submissions were found irrelevant to the quantum appeal under section 143(2), leading to the disposal of the appeal based on available records. The lack of cooperation and evidence from the assessee hindered the proceedings and impacted the outcome of the case.

Issue 3: Confirmation of additions by the ld.CIT(A) without material support from the assessee
The Tribunal noted that the assessee did not appear for scheduled hearings in 2021, did not authorize representation, and did not provide written submissions or materials to support their claims. The ld.CIT(A) and Tribunal found that the grounds raised by the assessee lacked material support and were general in nature. Without evidence or cooperation from the assessee, the Tribunal concluded that the grounds lacked merit and dismissed the appeal. The absence of material support from the assessee led to the rejection of all grounds raised, ultimately resulting in the dismissal of the appeal for the assessment year 2004-05.

In conclusion, the appellate proceedings highlighted the importance of providing evidence, cooperation, and material support to substantiate claims during tax assessments. The failure of the assessee to do so resulted in confirmations of additions by the ld.CIT(A) and the dismissal of the appeal by the Tribunal due to the lack of merit in the grounds raised.