2022 (7) TMI 1052 - AT - Income Tax

Levy of penalty proceedings u/s 271(1)(c) - additions made of the amount deposited in Bank A/c maintained with HSBC, Geneva, Switzerland - HELD THAT - We find that similar addition arising out of the same bank deposits in the same bank account was made in the case of husband of the assessee Mr. Bhushan Lal Sawhney has been deleted 2021 (6) TMI 99 - ITAT DELHI Before us, no distinguishing facts in the present case and the case of assessee s husband i.e., Mr. Bhushan Lal Sawhney has been pointed-out by the Ld. D.R. In such a situation, since the facts of the present case are identical to that of Mr. Bhushan Lal Sawhney, the husband of assessee, therefore, following the reasons for decision by the ITAT, Delhi Benches in the case of husband of assessee Mr. Bhushan Lal Sawhney, no addition is called for in the hands of the assessee. In view of the above, we set aside the orders of the authorities below and delete the entire addition. As no basis is left for levying of penalty under section 271(1)(c) of the I.T. Act. Thus, no penalty could be levied against the assessee. In view of the above discussion, we set aside the Orders of the authorities below and cancel the penalty in all the assessment years under appeals. - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of assessment under Section 153A read with Section 143(3) of the Income Tax Act, 1961.
2. Addition of Rs. 9,18,54,176 on protective basis.
3. Levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Validity of Assessment under Section 153A read with Section 143(3):
The assessee challenged the assessment order passed under Section 153A read with Section 143(3) on the grounds that it was barred by limitation under Section 153B. The assessment was completed on 02.03.2015, whereas the last date for passing such an order was 31.03.2014. The Tribunal noted that the search operation under Section 132 was conducted on 28.07.2011, and the notice under Section 153A was issued on 16.05.2012. The Tribunal found that the assessment order was indeed passed beyond the permissible time limit, thereby making it invalid.

2. Addition of Rs. 9,18,54,176 on Protective Basis:
The addition of Rs. 9,18,54,176 was made on a protective basis concerning an alleged undisclosed bank account with HSBC, Geneva. The assessee denied ownership of the account, and the addition was based on unauthenticated documents. The Tribunal observed that similar additions made in the hands of the assessee's husband were deleted by the ITAT in a consolidated order dated 01.06.2021. The Tribunal further noted that no incriminating material was found during the search, and no information was provided by Swiss authorities for the period prior to 01.04.2011. Following the principles laid down in the case of CIT vs. Kabul Chawla and Pr. CIT vs. Meeta Gutgutia, the Tribunal held that no addition could be made without incriminating material. Consequently, the Tribunal deleted the entire addition.

3. Levy of Penalty under Section 271(1)(c):
The penalty under Section 271(1)(c) was challenged on the grounds that the notice issued under Section 274 read with Section 271(1)(c) was ambiguous, as it did not specify whether the penalty was for concealment of income or for furnishing inaccurate particulars of income. The Tribunal referred to the judgment of the Delhi High Court in Pr. CIT vs. Sahara India Life Insurance Company Ltd., which held that such ambiguous notices are invalid. Since the quantum addition was deleted, the basis for the penalty no longer existed. Therefore, the Tribunal set aside the orders of the authorities below and canceled the penalty in all assessment years under appeal.

Conclusion:
The Tribunal allowed all the appeals of the assessee, setting aside the assessment orders and deleting the additions made on a protective basis. The penalty levied under Section 271(1)(c) was also canceled due to the invalidity of the notice and the deletion of the quantum additions.