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2019 (7) TMI 1489 - AT - Income Tax


Issues:
Challenging penalty under section 271(1)(c) for AY 2000-01, 2001-02, and 2002-03.

Analysis:
The appeals were filed by the assessee against penalty orders for three assessment years, confirming penalties under section 271(1)(c) of the Income Tax Act, 1961. The Assessing Officer treated interest income from a foreign bank account as unexplained cash credit, initiating penalty proceedings. The assessee argued that the deposits were from explained sources and the non-disclosure was due to oversight. The assessee voluntarily offered the income in subsequent years, paying taxes and filing revised returns. The penalty was imposed despite explanations, leading to appeals.

The learned Authorised Representative contended that the penalty orders were invalid as the show cause notices did not specify the grounds for penalty imposition. They sought to raise additional grounds challenging the validity of the penalty proceedings, which were not raised before the first appellate authority. The Departmental Representative supported the Commissioner's observations but agreed to restore the legal issue raised by the assessee for fresh adjudication.

Upon considering the submissions and facts, it was noted that the assessee had a foreign bank account with interest income not initially declared. The revised returns filed later included the interest income, albeit reduced by the Assessing Officer. The Department did not dispute the source of deposits. Comparisons were drawn with a previous year where penalty was deleted due to bona fide reasons for non-disclosure. The time limit for reopening assessments was a key factor in the delayed tax payment. With a legal issue raised for the first time, the Tribunal admitted the additional ground and decided to restore all issues to the Commissioner for fresh adjudication, providing the assessee with a fair opportunity.

In conclusion, the appeals were allowed for statistical purposes, and all issues were remanded to the Commissioner for reconsideration after granting the assessee a proper hearing.

Order pronounced on 26.07.2019.

 

 

 

 

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