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2017 (11) TMI 121 - AT - Income TaxPenalty u/s 271(1)(c) - non genuineness of the gifts - Held that - After considering the details furnished by the assessee, the copy of the income tax returns of the donors and the statements of the donors, we are of the opinion that the Assessing Officer has not pointed out any of the details furnished by the assessee to be incorrect, erroneous or false. The Assessing Officer has doubted the genuineness of the gifts on the ground of human probabilities. In our opinion, what is humanly probable is certainly a matter of opinion and, therefore, the denial of the acceptance of gifts in the assessment proceedings on the basis of human probability may be justified, but, the same cannot the basis for the purpose of levying penalty under Section 271(1)(c), specially when there are overwhelming documentary evidences in support of the genuineness of the gifts which is further fortified by the statements of the donors. Therefore, we are of the considered opinion that the assessee cannot be said to have furnished inaccurate particulars of income or have concealed the income so as to make him liable for penalty under Section 271(1)(c) of the Act. - Decided in favour of assessee.
Issues:
Imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961 based on rejected gifts - Burden of proof in penalty proceedings - Furnishing inaccurate particulars of income - Appeal against penalty order confirmed by Ld. CIT (Appeals). Analysis: Imposition of Penalty under Section 271(1)(c): The case involved the imposition of a penalty amounting to ? 2,74,000 under section 271(1)(c) of the Income Tax Act, 1961, confirmed by the Ld. Commissioner of Income Tax (Appeals). The penalty was based on the addition of ? 10 Lacs representing gifts received from friends and relatives, which was upheld by the ITAT in the quantum appeal. The Assessing Officer (AO) imposed the penalty, which was challenged by the assessee before the ITAT. The issue revolved around the justification for the penalty imposition in relation to the rejected gifts. Burden of Proof in Penalty Proceedings: The ITAT examined the facts afresh for the purpose of penalty proceedings, emphasizing that the burden of proof in penalty proceedings differs from that in assessment proceedings. Referring to legal precedents, the ITAT clarified that a finding in assessment proceedings does not automatically lead to penalty imposition. The ITAT considered the case in light of the Apex Court's decisions, emphasizing that the Assessing Officer had not pointed out any incorrect details furnished by the assessee, and doubts were raised based on human probabilities rather than false particulars. Furnishing Inaccurate Particulars of Income: The ITAT analyzed the details provided by the assessee, including income tax returns of donors and their statements, concluding that no incorrect, erroneous, or false details were furnished by the assessee. Despite doubts raised on the gifts' genuineness due to human probabilities, the ITAT held that the penalty under section 271(1)(c) cannot be solely based on such doubts. The ITAT emphasized the need for concrete evidence of inaccurate particulars to impose the penalty, especially when documentary evidence and donor statements supported the gifts' genuineness. Appeal Against Penalty Order: The ITAT allowed the appeal of the assessee, setting aside the order of the Ld. CIT (Appeals) and directing the AO to delete the penalty. The ITAT's decision was based on the lack of evidence showing inaccurate particulars of income or concealment, aligning with legal principles established by the Apex Court. The judgment highlighted the importance of concrete evidence and legal standards in penalty proceedings, ultimately ruling in favor of the assessee. In conclusion, the ITAT's detailed analysis focused on the burden of proof, accuracy of particulars furnished, and legal precedents to overturn the penalty imposed under section 271(1)(c) in the absence of concrete evidence of inaccurate particulars or concealment of income.
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