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2019 (12) TMI 353 - ITAT CHENNAIPenalty u/s 271AAA or u/s 271(1)(c) - HELD THAT:- In this case, the date of filing the return of income u/s 139(1) has expired on 31.09.2007 and much after; the Department initiated the search action under section 132 of the Act on 10.01.2008. The previous year had ended before the date of search and the date of filing of return of income u/s 139(1) had also been expired. Thus, the provisions of section 271AAA have no application in this case, and accordingly, the ground raised by the assessee to this extent is allowed. Levy of penalty u/s 271(1)(c) - unaccounted cash payments and negative cash balance - HELD THAT:- The source of unaccounted cash transaction of ₹. 11 lakhs was not brought on record. Moreover, the entire unaccounted cash transaction was carried out outside the books of account. But for search operation u/s132 the unaccounted cash transaction would have escaped assessment. Under these facts and circumstances, we are of the considered opinion that the AO has rightly held that the assessee has furnished inaccurate particulars of income warranting levy of penalty under section 271(1)(c). Thus, the penalty levied u/s 271(1)(c) of the Act stands confirmed. Levy of penalty for assessee has not complied with the provisions of TDS in respect of the payments made in connection with land development - disallowance under section 40(a)(ia) - There was non-compliance of provisions of TDS in respect of land development expenses incurred by way of payments made to M/s. Bright Electricals of ₹.39,390/- and Shri S. Rajendran of ₹.25,450/- totalling to ₹.64,840/-, but not deducted TDS. Moreover, while filing return under section 153A of the Act, the assessee has failed to add the statutory disallowances applicable as per law, thereby the assessee has furnished inaccurate particulars warranting levy of penalty - we are of the considered opinion that the Assessing Officer has rightly levied penalty under section 271(1)(c) of the Act and the same stands confirmed. Negative cash balance - The fact of negative cash balance was revealed only during the course of search proceedings. During the course of assessment proceedings, the assessee submitted that the books were recasted resulting in negative cash balance of ₹.86,393/-, which was due to cash deposits in the bank. Penalty proceedings were initiated on the ground that, but for search under section 132 of the Act, the issue of negative cash balance would not have come to light and the books of accounts would not have been recasted, thereby, an amount of ₹.86,393/- would have escaped assessment. The fact of on-money cash payments, concealment of purchases and sales, improper maintenance of books of account in the regular course of business are all go to prove of furnishing of inaccurate particulars of income. The assessee could not controvert the above observations of the Assessing Officer. Under these facts and circumstances, we are of the considered opinion that the Assessing Officer has rightly levied penalty u/s 271(1)(c) of the Act and the same stands confirmed.
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