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2017 (10) TMI 1082 - AT - Income TaxPenalty u/s 271(l)(c) - unexplained source of source - Held that:- The penalty order is woefully silent on the issue as to how this satisfaction of concealment was arrived at. The quantum addition on which the penalty has been imposed pertains to an addition of ₹ 2 lakhs only sustained by the Ld. CIT (A) out of a total addition of ₹ 10 lakhs. It is also noteworthy that this addition was sustained on the ground that the assessee had failed to prove the source of source but how this has resulted in concealment of income/furnishing of inaccurate particulars of income is not discernible from the penalty order. CIT (A) has also not examined the issue in detail but has simply confirmed the penalty by relying on the findings of the AO and the confirmation of the addition by the Ld. CIT (A) in the quantum proceedings. Thus, there is no finding by the authorities below on the issue as to how the ‘concealment’ has come to be established so as to warrant imposition of penalty. Thus, it is apparent that the penalty has been imposed as an automatic outcome of the confirmation of the quantum addition. Considering the entirety of the circumstances, in our view the impugned disallowance does not invite the provisions of Section 271(1)(c) of the Act - Decided in favour of assessee.
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