2023 (9) TMI 974 - AT - Income Tax

Penalty u/s 271(1)(c) - disallowance on non-genuine purchases - HELD THAT - We find that in the impugned order, the CIT(A) after considering the submissions filed by the assessee and findings of the AO has dismissed the appeal filed by the assessee. In the absence of any contradictory material being available on record, we are of the considered view that the impugned order passed by the CIT(A) requires no interference and, therefore, is upheld. Accordingly, the ground raised by the assessee is dismissed.

Summary

Issues involved: Challenge to penalty orders u/s 271(1)(c) of the Income Tax Act, 1961 for assessment years 2010-11 and 2011-12.

For the assessment year 2010-11, the assessee filed an appeal challenging the penalty order u/s 271(1)(c) based on the disallowance of non-genuine purchases amounting to Rs. 54,14,625. The Assessing Officer found the assessee unable to explain the possession of goods, leading to the addition of Rs. 7,58,047 to the total income. The AO imposed a penalty of Rs. 1,29,151, which was upheld by the CIT(A) and subsequently by the ITAT Mumbai. The Tribunal found no reason to interfere with the CIT(A)'s order and dismissed the appeal.

In the assessment year 2011-12, a similar issue arose where the AO added Rs. 1,49,562 to the total income based on unexplained purchases amounting to Rs. 10,68,300. The penalty imposed u/s 271(1)(c) was Rs. 25,640, which was upheld by the CIT(A) and the ITAT Mumbai. The Tribunal found no contradictory material on record to interfere with the CIT(A)'s order and dismissed the appeal.

In both cases, the Tribunal upheld the penalty orders u/s 271(1)(c) for concealment of income, as the assessee failed to provide convincing explanations for the unexplained purchases, leading to additions in the total income. The appeals by the assessee for both assessment years were dismissed by the ITAT Mumbai.