2022 (11) TMI 224 - AT - Income Tax

Penalty u/s 271(1)(c) - furnishing inaccurate particulars of income and concealing the particulars of income - HELD THAT - CIT(A) has objectively dealt with the contentions of the assessee in respect of issue of complexity of accounts raised by the assessee to substantiate his claim that mistakes were committed by him in maintaining correct accounts. On this aspect, the ld. CIT(A) has noted that assessee was assisted by statutory auditor, authorized representative and accountants and thus he had all the resources available to explain his case and comply with the requirements of the law. CIT-A noted that ld. AO has levied penalties on the final amounts only which remained as confirmed/sustained in the hands of the assessee and not on the initial additions which were made in the assessment. Accordingly, the penalty so imposed is on all those amounts for which either the Co-ordinate Bench of ITAT in the assessment has confirmed the additions or the assessee himself has not preferred any appeal against the order of ld. CIT(A) in respect of the additions. Fact based findings given by the ld. CIT(A) after analyzing the submission filed by the assessee, more particularly where the assessee himself has not preferred any appeal against the order of ld. CIT(A) on certain additions which were confirmed at the First Appellate Stage, we do not find any reason for the interference in the findings so given by the ld. CIT(A) in confirming the penalty levied by the ld. AO u/s. 271(1)(c) - Accordingly, the ground of appeal by the assessee is dismissed.

Summary

Issues:
Confirmation of concealment penalty under section 271(1)(c) of the Income-tax Act, 1961 for A.Y. 2001-02.

Analysis:
The appeal arose from the order of Ld. CIT(A)-1, Panaji, regarding the concealment penalty of Rs. 2,60,323/- imposed on the assessee. The appellant did not appear during the proceedings, and the department was represented by Shri Mayur Kamble, Sr. DR. The case pertained to the assessment of the assessee, who was governed by the Portuguese Civil Code and assessed at 50:50 under section 5A of the Act. The assessee was engaged in the business of hotels, real estates, and constructions, maintaining separate profit and loss accounts and balance sheets for eight proprietary concerns. The return filed reported a total income of Rs. 2,80,800/-. Due to the complexity of accounts, a special audit was conducted under section 142(2A), resulting in the assessment of total income at Rs. 1,36,79,351/-, apportioned equally among the spouses. Penalty proceedings under section 271(1)(c) were initiated for furnishing inaccurate particulars and concealing income.

The assessee appealed before the ld. CIT(A), who allowed certain relief based on a remand report, reducing the assessed income to Rs. 20,93,990/-. Subsequently, the Co-ordinate Bench of ITAT, Panaji, granted further relief, lowering the assessed income to Rs. 15,30,115/-. Penalties under section 271(1)(c) were imposed by the ld. AO on the sustained additions/disallowances. The assessee challenged the penalty before the ld. CIT(A), submitting arguments on each addition. The ld. CIT(A) objectively analyzed the contentions, noting the resources available to the assessee for compliance with the law.

The ld. CIT(A) confirmed the penalty based on the final assessed amounts, considering the decisions of the Hon'ble Supreme Court and the Hon'ble Jurisdictional High Court of Bombay. The penalty was upheld as the Co-ordinate Bench confirmed the additions, and the assessee did not appeal against certain additions. The detailed findings of the ld. CIT(A) were considered meritorious, fact-based, and conclusive, leading to the dismissal of the appeal and the confirmation of the penalty of Rs. 2,60,323/- under section 271(1)(c) of the Act. The appeal of the assessee was ultimately dismissed, and the order was pronounced on 02.09.2022 under Rule 34(4) of the IT(AT) rules, 1963.