2022 (12) TMI 782 - AT - Income Tax

Penalty u/s 271(1)(c) - AO disallowed 50% of the agricultural income - HELD THAT - It is a fact on record that though the assessee contested the disallowance before learned Commissioner (Appeals) however, subsequently, it withdrew the appeals. Thus, the aforesaid facts presupposes that the assessee did not have a strong case on merits to contest the disallowance. Disallowance of Swap charges - Commissioner (Appeals) has given a categorical finding that the assessee did not furnish any evidence to establish whether the nature of Swap charges were disclosed before detection by the Assessing Officer. Since, the assessee has failed to appear before us and adduce any evidence or submission to demonstrate that no case of furnishing of inaccurate particulars is made out, it can be safely concluded that the assessee does not have much to say in the matter in its defence. That being the factual position, we do not find any valid reason to interfere with the decision of the Departmental Authorities. Therefore, we uphold imposition of penalty. Disallowance of depreciation on land - In view of specific directions of Commissioner (Appeals), no interference is called for. Accordingly, we uphold the decision of learned Commissioner (Appeals). Appeal of assessee dismissed.

Summary

Issues:
1. Penalty imposed under section 271(1)(c) for assessment years 2008-09 and 2009-10.

Analysis:
1. For the assessment year 2008-09, the assessee, a corporate entity engaged in trading, claimed agricultural income and swap charges in its return. The Assessing Officer disallowed part of the agricultural income and the entire claim of swap charges. The penalty was imposed under section 271(1)(c) for furnishing inaccurate particulars of income. The assessee failed to provide sufficient evidence to support its claims. Despite contesting initially, the assessee later withdrew its appeals, indicating a lack of merit in its case. The ITAT upheld the penalty, as the assessee did not present any valid defense or evidence to refute the charges.

2. Concerning the assessment year 2009-10, the assessee declared a loss and claimed agricultural income and depreciation on land. The Assessing Officer disallowed part of the agricultural income and the depreciation claim. The penalty was imposed under section 271(1)(c) for furnishing inaccurate particulars of income. The ITAT applied its decision from the previous year regarding the agricultural income penalty. Regarding the penalty on the depreciation claim, the ITAT upheld the decision of the Commissioner (Appeals) to examine if the deduction was claimed in the return of income before imposing a penalty. Consequently, the ITAT dismissed both appeals and upheld the penalties imposed by the tax authorities.

3. The ITAT noted the absence of the assessee during the hearings and the lack of interest shown in defending the appeals. The ITAT proceeded ex parte based on the submissions of the Departmental Representative and the available records. The ITAT emphasized the importance of providing evidence and a strong defense to contest penalties imposed under section 271(1)(c) of the Income Tax Act, 1961. The ITAT's decision was based on the facts, evidence, and legal provisions, ultimately upholding the penalties imposed by the tax authorities for both assessment years.