2018 (4) TMI 242 - AT - Income Tax

Penalty u/s 271(1)(c) - assessee s name appeared in the list of beneficiaries of the alleged bogus accommodation entries provided by Shri Aseem Kumar Gupta - Held that - Burden is on the assessee to rebut the presumption of concealment as contained in Explanation 1 to section 271(1)(c) of the Act by cogent and reliable evidence. In the facts of the present case, we are afraid that the assessee has failed to discharge the initial onus cast upon it by cogent or reliable evidence and has simply mentioned that the amount was being surrendered as a voluntary disclosure to buy peace and avoid litigation. We are of the considered opinion that the assessee, in the present case, cannot escape the rigours of penalty as it has failed to offer any explanation and has also failed to lead any cogent or reliable evidence. See MAK Data (P) Ltd. vs CIT 2013 (11) TMI 14 - SUPREME COURT - Decided against assessee.

Summary

Issues:
Imposition of penalty under section 271(1)(c) of the Income Tax Act, 1961 for assessment year 2008-09.

Analysis:
The appellant, a company dealing in trading and manufacturing, filed a return declaring a loss. The case was reopened under section 147 of the Act due to alleged bogus accommodation entries received. During reassessment, the appellant surrendered an amount and did not appeal against the addition. The Assessing Officer imposed a penalty under section 271(1)(c), which was confirmed by the Ld. Commissioner of Income Tax(A). The appellant challenged the penalty before ITAT.

The ITAT noted that the appellant had previously sought adjournments, indicating a lack of interest in pursuing the appeal. The application for adjournment was rejected, and the appeal was heard ex parte. The Ld. Sr. DR argued that the appellant failed to prove the genuineness of the money received and that the surrender was not voluntary. It was contended that since no appeal was filed against the quantum addition, the penalty was rightly upheld.

Upon review, the ITAT found that the appellant could not provide documentary evidence supporting the genuineness of the money received. The appellant's name appeared in the list of beneficiaries of alleged bogus entries. As the appellant failed to establish the genuineness of the transaction and decided to surrender an amount during reassessment without explanation, the ITAT held that the appellant did not discharge the initial burden of proof. Citing the case of MAK Data (P) Ltd. vs CIT, the ITAT emphasized that the burden is on the assessee to rebut the presumption of concealment with reliable evidence. Since the appellant failed to offer a satisfactory explanation or reliable evidence, the ITAT upheld the penalty imposed by the Ld. Commissioner of Income Tax(A) and dismissed the appeal.

In conclusion, the ITAT dismissed the appeal of the assessee, upholding the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2008-09.