2022 (12) TMI 1406 - AT - Income Tax

Penalty u/s 271(1)(c) - addition of interest on deposits in HSBC account and addition on account of difference in interest income disclosed in return - HELD THAT - Tribunal has deleted the addition 2022 (8) TMI 950 - ITAT DEHRADUN in the quantum proceedings and remanded the matter to the file of the A.O. We are of the opinion that the present penalty proceedings and penalty order made thereon deserves to be deleted. Accordingly the penalty order passed in the years under consideration is hereby deleted. Appeals filed by the assessee are allowed.

Summary

Issues:
Appeal against penalty order under section 271(1)(c) of the Act for assessment years 2006-07, 2007-08, 2008-09, and 2009-10.

Analysis:
The assessee raised multiple substantive grounds of appeal challenging the penalty order. The first issue raised was the validity of the penalty order under section 271(1)(c) of the Act. The assessee contended that the penalty order was bad both in law and on facts. The second issue highlighted was the violation of the principle of natural justice by the CIT(A) for not providing a proper opportunity of being heard. The third issue involved the rejection of the assessee's contention regarding the penalty proceedings and the AO's error in going ahead with the penalty order. Additionally, the fourth issue addressed the legality of the assessment order and its impact on levying penalties based on such an order. The fifth issue focused on specific penalty amounts related to interest on deposits and difference in interest income disclosed in the return. The sixth issue questioned the CIT(A)'s confirmation of the penalty without providing findings on the concealment of income or furnishing inaccurate particulars. The seventh issue emphasized the independence of penalty proceedings from assessment orders, arguing that mere additions in the assessment order do not automatically lead to penalty imposition. The eighth issue challenged the confirmation of the penalty despite the absence of concealment of income or furnishing inaccurate particulars. Lastly, the ninth issue raised the lack of specific allegations by the AO regarding concealment of income or furnishing inaccurate particulars.

The Tribunal noted that the assessee had previously challenged additions made by the AO, which were upheld by the CIT(A), but subsequently deleted by the Tribunal in quantum appeals for the relevant years. As a result, the penalty proceedings were deemed unjustified, and the penalty orders were consequently deleted. The Tribunal emphasized that the AO could initiate fresh penalty proceedings in accordance with the law if any additions were made after conducting fresh assessment proceedings. Ultimately, the appeals filed by the assessee were allowed, and the penalty orders were deleted.