2020 (6) TMI 530 - AT - Income Tax

Penalty u/s 271(1)(c) - Disallowance of cash received - cash received from two of customers, who could not be produced before the A. O. for recording of their statement due to practical hardship of being their out of station for a long time - HELD THAT - No detail finding given by the CIT(A) as regards to how the concealment of particular of income relating to the confirmation in respect of unsecured loan/receipt of cash and insurance commission comes within the purview of Section 271(1)(c). Merely, holding that confirmation in respect of unsecured loan, receipt of cash and insurance commission clearly fall within the ambit of concealment is not sufficient. CIT(A) also not considered the submissions of the Assessee during the appellate proceedings. Therefore, it will be appropriate to remand back this issue of unsecured loan, receipt of cash and insurance commission to the file of the CIT(A) for deciding it with the reasoned order. - Appeal of the assessee is partly allowed for statistical purpose.

Summary

Issues:
- Assessment Year 2010-11: Disallowance of cash receipts and unsecured loan, addition of life insurance commission income, addition of household expenses.
- Assessment Year 2011-12: Disallowance of cash receipts and unsecured loan, addition of life insurance commission income.

Analysis:
1. Assessment Year 2010-11:
- The appeals were against orders passed by CIT(A)-Rohtak for the mentioned assessment years.
- The first addition confirmed by CIT (A) was disallowance of cash receipts due to non-production of customers for recording statements, not due to concealment of income.
- The second addition was disallowance of an unsecured loan due to the lender's unavailability, not indicating income concealment.
- The third addition was life insurance commission income left out of the return, with penalty deemed improper due to TDS deduction and estimation basis.
- The fourth addition was household expenses, confirmed by CIT (A) based on estimation, not constituting concealment.
- The penalty under Section 271(1)(c) was imposed for alleged income concealment.
- The CIT (A) partially allowed the appeal, citing lack of detail findings on concealment in the assessment order.
- The issue of unsecured loan, cash receipts, and insurance commission was remanded back to CIT (A) for reasoned decision.

2. Assessment Year 2011-12:
- The issues were similar to the previous year, with disallowance of cash receipts, unsecured loan, and addition of life insurance commission income.
- The CIT (A) did not provide detailed findings or consider the submissions of the assessee.
- The matter was remanded back to CIT (A) for a reasoned decision, ensuring the principles of natural justice are followed.
- Both appeals were partly allowed for statistical purposes.

In conclusion, the judgment focused on the disallowances and additions made by the authorities, emphasizing the lack of evidence of intentional income concealment. The cases were remanded back for a detailed consideration of the issues, ensuring a fair opportunity for the assessee to present their case.