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2014 (3) TMI 683 - AT - Income TaxRecall of exparte order - Levy of penalty u/s 271(1)(c) of the Act income from commission - Held that - Vijay Kumar Gupta vs. ITO 2014 (3) TMI 175 - ITAT AGRA followed It is clear case of concealment of income because the assessee has concealed the bank account maintained with ICICI Bank Ltd. from the Revenue department - The assessee admittedly accepted the order of the AO in maintaining the addition because no appeal was preferred before any authority against the addition - The assessee had admitted that he has earned unaccounted income from undisclosed business - in the penalty proceedings, finding of fact recorded by the AO which have reached finality cannot be disturbed. The AO in the quantum order has specifically mentioned that he was satisfied that the assessee has concealed the particulars of his income - The AO also held that Explanation 1(A) of section 271(1)(c) is also squarely applicable in the case of assessee and in fact the explanation offered by the assessee was found to be false - The ld. CIT(A) also found that the assessee has not filed any satisfactory explanation before him - Therefore, the AO is correct in holding that the assessee has willfully concealed the particulars of his income by not disclosing the fact of maintaining bank account with ICICI Bank - The concept of reasonable cause or exception as contended by the assessee has no applicability to the penalty proceedings u/s. 271(1)(c) of the IT Act - The assessee was maintaining unaccounted bank account and made huge cash deposits in the bank account and when the details were called for from the bank, the assessee had to make surrender of such income Decided against Assessee.
Issues Involved:
1. Levy of penalty under Section 271(1)(c) of the Income Tax Act. 2. Non-compliance with statutory notices and failure to explain cash deposits. 3. Voluntary surrender of additional income and its implications. 4. Determination of concealment of income or filing inaccurate particulars. 5. Applicability of legal precedents in penalty proceedings. 6. Quantum of penalty imposed. Detailed Analysis: 1. Levy of Penalty under Section 271(1)(c) of the Income Tax Act: The primary issue in the appeal is the challenge against the levy of penalty under Section 271(1)(c) for the assessment year 2007-08. The Assessing Officer (AO) initiated penalty proceedings for concealment of income amounting to Rs. 2,05,070, which was discovered during scrutiny. 2. Non-compliance with Statutory Notices and Failure to Explain Cash Deposits: The assessee failed to comply with statutory notices issued by the AO and did not produce the required books of account and other details. The AO obtained the bank statements under Section 133(6) and found substantial cash deposits. Despite several adjournments and opportunities, the assessee did not provide satisfactory explanations for these deposits. 3. Voluntary Surrender of Additional Income and Its Implications: The assessee's counsel eventually surrendered an additional income of Rs. 2,05,070, attributing the delay to the slackness of the counsel. However, the Tribunal found that this surrender was not voluntary but was made after the AO had already obtained incriminating information. The Tribunal referenced the case of Vijay Kumar Gupta vs. ITO, where it was held that surrendering income under pressure does not qualify as voluntary disclosure. 4. Determination of Concealment of Income or Filing Inaccurate Particulars: The assessee contended that the AO did not specify whether the penalty was for concealment of income or for filing inaccurate particulars. However, the Tribunal noted that the AO had clearly indicated that the penalty was for concealment of income, as evidenced by the findings in both the assessment and penalty orders. 5. Applicability of Legal Precedents in Penalty Proceedings: The Tribunal cited several legal precedents to support the imposition of penalty: - Mak Data P. Ltd. vs. CIT: No automatic immunity from penalty on voluntary surrender of income. - Jyoti Laxman Konkar vs. CIT: Penalty upheld where income was revised only after detection by the department. - CIT vs. Rakesh Suri: Penalty justified where disclosure was not voluntary but made under compulsion. - LMP Precision Engg. Co. Ltd. vs. DCIT: Penalty valid where disclosure was not voluntary but made after detection by authorities. 6. Quantum of Penalty Imposed: The AO imposed a penalty of Rs. 44,050, which was the minimum penalty. The Tribunal upheld the penalty but reduced it to 100% of the tax sought to be evaded, amounting to Rs. 2,32,058, considering the circumstances and the fact that the assessee had paid the taxes and disclosed the bank account in the subsequent year. Conclusion: The Tribunal dismissed the appeal on merits, confirming that the penalty under Section 271(1)(c) was justified due to the concealment of income. However, the penalty was reduced to the minimum rate of 100%, amounting to Rs. 2,32,058. The Tribunal emphasized that the assessee's surrender of income was not voluntary but made under compulsion after being confronted with evidence by the AO. The decision was based on established legal precedents, reinforcing the principle that penalty is warranted in cases of willful concealment of income.
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