ACIT, MUMBAI vs. ANISH PIYUSHKUMAR KOTHARI, MUMBAI

This appeal by the revenue and the C.O. by the assessee are against the order of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [In short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961 (the Act) dated 31.03.2024 for Assessment Years (AY) 1997-98. The grounds raised by the revenue and the C.O. by the assessee are as under:

The assessee is an individual and filed the return of income for AY 1997-98 on 23.07.1997 declaring a total income of Rs. 1,05,783/-. The assessment was reopened by issue of notice u/s. 148 and the Assessing Officer (AO) completed the assessment u/s. 143(3) r.w.s. 147 of the Act on 27.02.2015 by making an addition of Rs. 27,50,000/- u/s. 69A being undisclosed income of the assessee from undisclosed bank account in HSBC Bank, Geneva, Switzerland. The AO subsequently initiated penalty proceeding u/s. 271(1)(c) for concealment of income. The AO levied a penalty of Rs. 11,06,600/- by holding that the assessee has not filed any explanation and there has been a conscious and deliberate attempt on the part of the assessee to conceal the income by not disclosing the bank account in HSBC, Geneva, Switzerland. Aggrieved the assessee filed further appeal before the CIT(A). The CIT(A) deleted the penalty on the ground that the AO has made the addition on a belief that the minimum amount required to be deposited for opening an account in HSBC Bank is CHF 1,00,000/- equal into Rs. 27,50,000/- and that the AO could not find actual concealment by the assessee. The CIT(A) further held that penalty for concealment of income based on deeming addition without concrete evidence cannot be sustained. The revenue is in appeal against the order of the CIT(A).

We heard the parties and perused the material on record. The ld. AR during the course of hearing brought to our attention that the quantum addition made in assessee's case is deleted by the Co-ordinate Bench (ITA No. 3927/Mum/2025 dated 22.09.2025) and therefore the penalty cannot be sustained even otherwise. In this regard, we notice that the Co-ordinate Bench has deleted the addition made by and CO No. 151/Mum/2024 Anish Piyushkumar Kothari the AO on the ground that the reopening is beyond the time limit as provided u/s. 149 of the Act. Though the quantum addition is deleted on the technical ground, the penalty which is consequential to the quantum addition cannot survive when the quantum addition is being deleted. Accordingly, we see no reason to interfere with the decision of the CIT(A) in deleting the penalty. The grounds raised by the revenue in this regard are thus dismissed.

In view of the decision in revenue's appeal the C.O. raised by the assessee has become infructuous and dismissed accordingly.

In result, the appeal of the revenue and the C.O. of the assessee are dismissed.