2019 (11) TMI 29 - AT - Income Tax

Penalty u/s. 271(1)(c) - cash deposited in bank account - HELD THAT - Assessee was the man of means as evident from the deposit of cash in the bank account. Therefore we are of the view that there cannot be any penalty merely on the addition of such a small amount of cash deposit. We also find that the assessee in support of cash deposit has filed the cash book and there was no defect pointed out therein. The amount returned from the staff, we note that the question of returning the advance arises only when the advances have been made. As such, none of the authorities below has doubted on the amount advanced by the assessee to such party. The assessee claimed that such additions were highly debatable, but to avoid the litigation, the same were accepted. Looking at the amount of the addition we are of the view that there was no deliberate act on the part of the assessee to conceal the particulars of income as pointed out by the authorities below, therefore we hold that there cannot be any penalty of the assessee in the given facts and circumstances. We find support and guidance from the judgment of the supreme court in case of Dilip N Shroff Vs. JCIT 2007 (5) TMI 198 - SUPREME COURT wherein as held as signifies a deliberate act or omission on the part of the assessee. Such deliberate act must be either for the purpose of concealment of income or furnishing of inaccurate particulars We are not inclined to uphold the findings of the authorities below. Hence we set aside the order of the Ld. CIT(A) and direct the AO to delete the penalty imposed by him under section 271(1)(c) - Appeal of the assessee is allowed

Summary

Issues:
1. Penalty under section 271(1)(c) of the Income Tax Act.

Analysis:

1. The appeal was filed by the Assessee against the order of the Commissioner of Income Tax (Appeals) confirming the penalty under section 271(1)(c) of the Act. The assessment was for the year 2008-2009.

2. The Assessee, engaged in real estate consultancy and a director in a company, had additions made to the income by the Assessing Officer (AO). The Commissioner deleted some additions but confirmed others, leading to the penalty notice under section 271(1)(c) for concealment of income.

3. The Assessee argued that the additions were based on debatable issues and were admitted to avoid litigation. However, the AO disagreed, alleging income suppression and levied the penalty.

4. Before the Commissioner, the Assessee provided explanations for the additions, including cash deposits and profits from sales. The Commissioner upheld the penalty, citing lack of evidence from the Assessee.

5. The Tribunal noted that major additions were deleted by the Commissioner, and the Assessee had provided explanations and evidence for the remaining amounts. The Tribunal found no deliberate concealment of income by the Assessee.

6. Referring to a Supreme Court judgment, the Tribunal emphasized that deliberate acts for concealment must be proven. As there was no deliberate intention to conceal income, the Tribunal set aside the penalty imposed by the AO.

7. The Tribunal allowed the appeal of the Assessee, directing the AO to delete the penalty under section 271(1)(c) of the Act. The decision was based on the lack of deliberate concealment of income by the Assessee.

8. The Tribunal pronounced the order in Ahmedabad, allowing the appeal of the Assessee on 01/10/2019.