2019 (5) TMI 1384 - AT - Income Tax

Rectification u/s 254 - Penalty u/s 271(1)(c) - unexplained investment in property - concealment and furnishing of inaccurate particulars in the belated return filed against the notice u/s 153A - HELD THAT - The assessee did not offer any credible and cogent explanation for not offering the income in the form of unexplained investment in property pertaining to previous years ending before the search and such unexplained investment came into light only during the course of search operation and thus, tantamount to concealment of particulars of income within the meaning of Explanation 5 to section 271(1)(c). Moreover, the assessee had no valid reason for concealment and furnishing of inaccurate particulars in the belated return filed against the notice u/s 153A . In the absence, of any valid reason for not filing the return of income within the time stipulated u/s 139 or declaring complete particulars of income in the belated return filed by the assessee, the penalty levied u/s 271(1)(c) was sustained by the Tribunal. While adjudicating the appeal, the Tribunal has considered all the grounds relating the effective ground raised by the assessee. In view of the above, we find no merit in the miscellaneous petition filed by the assessee.

Summary

Issues:

1. Recalling the order of the Tribunal regarding the levy of penalty on undisclosed investments made by the assessee.
2. Validity of the penalty under section 271(1)(c) of the Act for concealment of income and furnishing inaccurate particulars.

Issue 1: Recalling Tribunal's Order on Penalty Levy

The assessee sought to recall the Tribunal's order related to the levy of penalty on undisclosed investments made in a property, arguing that the penalty should not have been automatic and requesting a fresh adjudication on the merits. The Department contended that there was no apparent mistake in the Tribunal's order, and review under section 254(2) of the Act was impermissible.

Issue 2: Validity of Penalty for Concealment of Income

The Tribunal noted that the assessee failed to offer a credible explanation for not disclosing the unexplained investments in the property before the search operation, which amounted to concealing income as per Explanation 5 to section 271(1)(c) of the Act. Additionally, the assessee did not provide valid reasons for concealing income and furnishing inaccurate particulars in the belated return filed post the notice under section 153A of the Act. The Tribunal upheld the penalty under section 271(1)(c) of the Act due to the absence of valid reasons for the delayed filing of the return or declaring complete income particulars. The Tribunal considered all relevant grounds raised by the assessee and found no merit in the petition, ultimately dismissing it.

In conclusion, the Tribunal upheld the penalty levy on the undisclosed investments made by the assessee, citing concealment of income and furnishing inaccurate particulars as per the provisions of the Act. The Tribunal's decision was based on the lack of valid reasons provided by the assessee for the discrepancies in income disclosure, leading to the dismissal of the petition seeking a recall of the penalty order.