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2023 (11) TMI 1108 - AT - Income TaxLevy of penalty u/s. 271(1)(c) - AO completed assessment u/s. 143 r.w.s. 153A determining the total income on account of unexplained money u/s. 69 based on seized materials - CIT(A) upholding the penalty levied on the ground that assessee has concealed the particulars of commission income - HELD THAT - Addition is sustained by the ld. CIT(A) is based on seized materials, during the course of search. There is no estimation of income by the ld. CIT(A). Thus, case laws relied upon by the assessee are not applicable to the facts of the present case. CIT(A) as considered the Supreme Court judgment in the case of Mak Data Pvt. Ltd. 2013 (11) TMI 14 - SUPREME COURT wherein as observed that the AO has to satisfy whether the penalty proceedings be initiated or not during the course of the assessment proceedings and the AO is not required to record his satisfaction in a particular manner or reduce it into writing. The scope of section 271(1)(c) has also been elaborately discussed by this Court in Union of India Vs. Dharmendra Textile Processors 2008 (9) TMI 52 - SUPREME COURT and CIT vs. Atul Mohan Bindal 2009 (8) TMI 44 - SUPREME COURT Thus, this contention of the appellant is not accepted. Also in case of Sunita Transport Pvt. Ltd. 2012 (12) TMI 981 - HIGH COURT OF GUJARAT held since there was nothing on record showing that in original return assessee was unaware about gross concealment of income, impugned penalty order passed by authorities below was to be upheld. Levy of penalty is hereby upheld and the grounds of appeal raised by the assessee dismissed.
Issues involved:
The appeal against the appellate order confirming penalty u/s. 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2013-14. Summary: Issue 1: Assessment and Penalty Proceedings The assessee, engaged in share trading and commission business, did not file a return of income in response to a notice u/s. 153A despite a search action u/s. 132. The Assessing Officer determined unaccounted income as commission income, leading to the levy of penalty u/s. 271(1)(c). The Commissioner of Income Tax (Appeals) upheld the penalty, prompting the assessee's appeal. Issue 2: Grounds of Appeal The assessee challenged the penalty on grounds of incorrectness, lack of mention of concealment in the notice, and legal validity. The counsel argued against the penalty citing case laws. Issue 3: Arguments and Counterarguments The assessee's counsel contended that penalty cannot be levied against income estimation, supported by various case laws. In contrast, the Revenue argued for the penalty's validity due to non-disclosure of commission income. Issue 4: Judicial Analysis The Tribunal considered the seized materials and the CIT(A)'s determination of commission income. The CIT(A) based the penalty on relevant judgments, including Supreme Court and Jurisdictional High Court decisions, upholding the penalty due to non-disclosure and concealment of income. Issue 5: Decision The Tribunal upheld the penalty, emphasizing the absence of income estimation by the CIT(A) and the applicability of legal precedents. The appeal by the assessee was dismissed, affirming the penalty under section 271(1)(c) for concealment of income. This judgment highlights the importance of accurate income disclosure and the legal basis for upholding penalties under the Income Tax Act, 1961.
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