SUNIL SHANTILAL MEHTA,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX - CENTRAL CIRCLE 7(3), MUMBAI, MUMBAI

PER BENCH

The captioned appeal by the assessee arises from order, dated 24/02/2026, passed by the National Faceless Appeal Centre – hereinafter referred to as Ld. CIT(A) - under section 250 of the

Sunil Shantilal Mehta 2 ITA No. 4539/MUM/2026

Income-tax Act, 1961 - hereinafter referred to as "the Act"- for A.Y. 2002-03, confirming penalty levied by the Ld. Assessing Officer (AO) under Section 271(1)(c) of the Act. 2. The sole ground of appeal raised by the assessee reads as under:- i. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the penalty under section 271(1)(c) of the Income Tax Act, 1961 of Rs. 8,44,255/- on concealment of income on alleged addition made on account of undisclosed foreign bank account. 3. The brief facts of the case are that the assessee had filed original return of income for AY 2002-03 on 08/07/2002 declaring a total income of Rs. 25,670/-. Based on information received by the Government of India from the Government of France under the DTAA that the assessee maintains a bank account in Geneva, Switzerland, which had not been disclosed in his return of income, the case was reopened by issuing notice dated 12/03/2014 u/s Section 148 of the Act. The Ld. AO noted that the “Base Note” which was received from France contained personal details of the assessee – including his name, date of birth, place of birth, residential address etc. along with the date of opening of the bank account in HSBC Bank Geneva. But in the proceedings before the Ld. AO, the assessee completely denied having any foreign bank account

Sunil Shantilal Mehta 3 ITA No. 4539/MUM/2026

outside India either in his name or in the names of his family members, although earlier in his statement under oath on 12/12/2011 before the Investigation Wing, Mumbai, he had accepted having the impugned bank account which was statedly closed in 2005. The assessee also refused to fill up the Consent Waiver Form which would have facilitated the Income-tax Department in obtaining a copy of the said Account from Geneva. The Ld. AO, for reasons discussed at length in the assessment order, did not accept the contention of the assessee, and he added back an amount of Rs. 28,20,000/- being the initial investment required to open/maintain an account in HSBC Geneva, as the undisclosed income of the assessee in his order of 27/02/2015 u/s 143(3) r.w.s.147 of the Act. Penalty proceedings u/s 271(1)(c) of the Act were simultaneously initiated for concealment of income and, after following due procedure, penalty of Rs. 8,44,300/- was levied on the assessee @ minimum rate of 100% on the belief that there was conscious and deliberate attempt on the part of the assessee to conceal his income by not disclosing his foreign bank account.

3.1 Aggrieved with this order, the assessee carried the matter in appeal before Ld. CIT(A). The Ld. CIT(A) noted that the data in question was not a mere generic data, but contained specific information in the form of personal details of the assessee, along with exact date of opening of the bank account and the amount of

Sunil Shantilal Mehta 4 ITA No. 4539/MUM/2026

balance in that account. More important, the impugned bank account had linkages with other bank accounts in the name of the assessee’s son and wife. Furthermore, the assessee had himself earlier admitted to having a foreign bank account. Referring to the assessee’s refusal to sign the Consent Waiver Form, the Ld. CIT(A) observed that this only indicated the assessee’s intention to conceal the details of transactions in his bank account. He contended that the actual transaction in the impugned bank account could have been much more than CHF 1,00,000/-, and that the addition made by the Ld. AO, though estimated, had a sound basis. On these grounds the Ld. CIT(A) held that the Ld. AO had rightly invoked the penalty provisions of Section 271(1)(c) and levied penalty of Rs. 8,44,255/-.

3.2 It is against the aforesaid order of the Ld. CIT(A) that the assessee is in appeal before this Tribunal.

Sunil Shantilal Mehta 5 ITA No. 4539/MUM/2026

penalty, is accordingly set aside and the Ld. AO is directed to delete penalty levied u/s 271(1)(c) of the Act.

Order pronounced in the open Court on 22/09/2026.

Sd/- Sd/- (ANIKESH BANERJEE) (RATNA DASGPUTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 22/09/2026 Z.U., P.S.

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER,

//True Copy// (Assistant Registrar) ITAT, Mumbai