SURYAKANT NAGORAO SHELGAVE,NAGPUR vs. ITO WARD 5(3), NAGPUR

The sole grievance of the assessee in is against the finding of ld.CIT(A) confirming the addition of Rs.4,08,800/- towards unexplained investment u/s.69 of the Act and ITA No.7/Nag/2026 is against the levy of penalty u/s.271(1)(b) of the Act at Rs.40,000/- for the alleged default in complying to the notices u/s.142(1) of the Act.

I have heard the rival contentions and perused the record placed before me. I will take up ITA No.815/Nag/2025 first. The facts emanating from the record are that the assessee is an individual and reopening proceedings u/s.147 of the Act were carried out on the basis of information about alleged investment by the assessee in the immovable property at Rs.64,18,000/- during F.Y. 2014-15 relevant to A.Y. 2015-16. During the course of reassessment proceedings, assessee furnished the details including the payment through banking channel as well as loan sanctioned by Dewan Housing Finance Corporation Ltd. Ld. Assessing Officer observed that investment in the immovable properly is only Rs.32,50,000/- (excluding stamp duty and registration fees at Rs.2,08,800/-) and that the assessee has provided the source of investment of Rs.30,50,000/- and came to the conclusion that assessee has been unable to explain the source of cash payment of Rs.2.00 lakh and also the source of expenditure incurred on registration and stamp duty at Rs.2,08,800/- by making addition of Rs.4,08,800/- u/s.69 of the Act. Income of the assessed at Rs.7,44,760/-. In the appellate proceedings before ld.CIT(A) assessee failed to appear resulting into dismissal of appeal. Now the assessee has approached this Tribunal assailing the impugned order passed by ld.CIT(A).

Before this Tribunal, assessee has furnished the copies of bank statement and withdrawal details which indicates that cash withdrawn from F.Y. 2010-11 to F.Y. 2014-15 amounting to Rs.3,68,000/- Rs.4,20,000/- and Rs.5,00,500/-, Rs.4,00,900/- and Rs.3,95,500/-. Source of income is from salary duly disclosed in the income tax return. Details of cash enough to explain the source of cash payment of Rs.2.00 lakh and the source of registration and stamp duty at Rs.2,08,800/-. I am therefore of the considered view that since the assessee has explained the source of alleged investment, the impugned addition deserves to be deleted. Finding of ld.CIT(A) is reversed and the addition of Rs.4,08,800/- is deleted. Effective grounds of appeal raised by the assessee in ITA No./815/Nag/2015 are allowed.

Now I take up ITA No.7/Nag/2026. Assessee has been fastened with penalty of Rs.10,000/- each for four defaults to make compliance to the notices u/s.142(1) of the Act. I observe that the assessee after the initial non compliance has subsequently participated in the assessment proceedings and also provided sufficient details to the satisfaction of the Assessing Officer including the copies of bank statement, loan account statement etc. Whenever the notices have been issued by the AO, one after the another, on three different occasions seeking the same information, it will not multiply the default and it would constitute a single default and the issue is no longer res integra by virtue of plethora of decisions passed by various Benches of this Tribunal. Considering the provisions of section 273B of the Act and also observing that assessee has participated in the assessment proceedings, I am of the considered view that penalty levied for the first default deserves to be confirmed but for the remaining defaults the same deserves to be deleted. Accordingly, the penalty of Rs.10,000/- is sustained and the remaining penalty of Rs.30,000/- levied u/s.271(1)(b) of the Act is hereby deleted. Grounds of appeal raised by the assessee are partly allowed.

In the result, ITA No.815/Nag/2025 filed by the assessee is allowed and ITA No.7/Nag/2026 filed by the assessee is partly allowed.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, न गपुर SMC बेंच, 4. न गपुर / DR, ITAT, “Nagpur SMC Bench, Nagpur ग र्ड फ़ इल / Guard File. 5. आदेशानुसार / BY ORDER,