MANGESH RAMESH ANNACHHATRE,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1(1), PUNE

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ITA 628/PUN/2020Status: DisposedITAT Pune29 August 2022AY 2011-125 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalties under Section 271(1)(c) were wrongly levied as the additional income was admitted and disclosed by the assessee. The conditions for deemed concealment under Explanation 5A of Section 271(1)(c) were not met.

What were the facts?

During a search action, the taxpayer admitted and declared additional income from bank interest, PF withdrawals, and dividend, which the department treated as concealed income. Penalties under Section 271(1)(c) were levied on these declared incomes.

What were the issues?

Whether penalties under Section 271(1)(c) can be levied on income that is admitted and disclosed by the assessee, even if it was not declared in the original return. Whether the conditions for deemed concealment under Explanation 5A of Section 271(1)(c) were satisfied.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI S.S.GODARA, JM & SHRI DR. DIPAK P. RIPOTE, AM

For Appellant: Shri Sandeep Sathe
For Respondent: Shri S.P.Walimbe
Hearing: 23.06.2022Pronounced: 29.08.2022

आदेश / ORDER PER S. S. GODARA, JM :

1.

These assessee’s four appeals for A.Y. 2011-12 to 2013-14 and 2015-16 arises against the CIT(A) Pune’s separate orders dated 28/10/2020 passed in ITBA/APL/S/250/2020-21/1028422203(1), 1028422267(1), 1028422316(1), 1028422515(1) respectively involving proceedings u/s.271(1)(c) of the Income Tax Act, 1961; in short "the Act”.

Heard both the parties. Case file perused.

2 Coming to the assessee’s sole substantive ground that both the learned authorities have erred in law and on facts in imposing section 271(1)(c) penalties of Rs.1,12,795/-, Rs.3,03,736/- , Rs.1,55,471/-, and Rs.2,06,189/- assessment yearwise respectively, it emerges at the outset that the same pertain to the departmental search action dated 14.12.2016 during course of which the taxpayer had admitted and declared three heads of income i.e. bank interest, miscellaneous income and P.F. withdrawals in former 3 years, dividend in 4th and 5th and LIC pension in last assessment year involving varying sums, respectively. It is these heads of income which have been treated to be representing the assessee’s concealed income as not declared in the original return(s) inviting section 271(1)(c) penalty that department has invoked the penal action in issue.

3.

We have given our thoughtful consideration to vehement rival contentions against and in support of the impugned penalties. Mr. Walimbe strongly argued that once the assessee had not disclosed the impugned additional incomes under the forgoing four heads (supra); as the case may be, learned lower authorities have rightly invoked the impugned penalties.

4.

We fine no merit in the revenue’s instant argument alleging the assessee who have concealed his taxable income by not declaring the same in the original returns. It is made clear that 271(1)(c) explanation 5A applicable in case of a search initiated after 01.06.2007 stipulates deemed concealment in case of specific instances when the assessee concerned is found to be owner in of any money, bully, jewelry or other valuable articles which is not the factual position before us. This is coupled with the fact that section 271AAB explanation C clauses (i) (A &B) as well as (ii) defines “undisclosed income” which admittedly has not been applied in the instant case as per CIT(A)’s detailed discussion. It therefore emerges that the assessee’s alleged additional income admitted and disclosed in the return is not covered under the specific instances of deemed concealment u/s. 271(1)(c) explanation 5A and therefore, we conclude that both the learned lower authorities had erred in law in levying impugned penalty(ies) in these assessment years. The same are directed to be deleted. Ordered accordingly.

5.

These assessee’s four appeals are allowed in above terms. A copy of this common order be placed in the respective case files.

Order pronounced in the Open Court on this 29th day of August, 2022.

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