SHRI NARINDER SINGH,ROPAR vs. ITO, W-2(2), ROPAR

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ITA 1475/CHANDI/2019Status: DisposedITAT Chandigarh21 January 2025AY 2010-113 pages
AI SummaryWithdrawn

What did the Tribunal hold?

The Tribunal noted that the assessee had opted for the Vivad Se Vishvas Scheme, and the quantum appeal had already been dismissed as withdrawn by a coordinate bench. The Tribunal observed that the tax arrears included both tax and penalty, and the assessee had opted for settlement, which had progressed with the issuance of Form 3, albeit with a request for amendment. The Tribunal found no useful purpose in further adjourning the matter. Consequently, the appeal was dismissed as withdrawn. The Tribunal granted liberty to the assessee to revive the appeal by filing a Miscellaneous Application if the benefit of the scheme could not be availed due to technicalities, within the limitation period under Section 254(2).

What were the facts?

This appeal by Shri Narinder Singh (the assessee) against the order of CIT(A)-1, Chandigarh, dated 06/08/2019, pertains to Assessment Year 2010-11. The challenge is to the penalty of Rs. 2,56,500/- levied under Section 271(1)(c) of the Income Tax Act. The assessment was completed under Section 143(3) on 05/02/2013, with an addition of Rs. 8,10,000/- for unexplained cash deposits. Penalty proceedings were initiated. The CIT(A) confirmed the penalty, finding that while the assessee claimed certain cash credits were not in the bank statement, they were reflected in the cash flow statement submitted to the AO. The assessee failed to provide documentary evidence for these credits. The assessee had filed a declaration under the Vivad Se Vishvas Scheme.

What were the issues?

1. Whether the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, for concealment of income is sustainable, given the assessee's failure to substantiate cash credits? Assessee's Contention (as per CIT(A)'s order): The assessee argued that certain transactions amounting to Rs. 1,85,000/- and Rs. 4,50,000/- were not made and did not reflect in the bank statement. The AO allegedly did not consider documentary evidence for cash deposits of Rs. 1,00,000/- and Rs. 1,40,000/-, leading to a wrongful levy of penalty. Revenue's Contention: The revenue, through the Sr. DR, submitted that the assessee had opted for the Vivad Se Vishvas Scheme, and a coordinate bench had dismissed the quantum appeal as withdrawn in view of this settlement. The revenue implicitly supports the confirmation of the penalty by the lower authorities.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274,Section 143(3),Section 254(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHANDIGARH BENCHES, “SMC CHANDIGARH

Before: SHRI. VIKRAM SINGH YADAV, AM

Hearing: 01/01/2025Pronounced: 21/01/2025

Order

PER VIKRAM SINGH YADAV, AM:

1.

This is an appeal filed by the Assessee against the order of the Ld. CIT(A)-1, Chandigarh dt. 06/08/2019 pertaining to Assessment Year 2010-11 wherein the assessee has challenged the sustenance of levy of penalty under section 271(1)(c) of the Act amounting to Rs. 2,56,500/-.

2.

Briefly, the facts of the case are that the assessment was completed under section 143(3) of the Act vide order dt. 05/02/2013 wherein the AO has brought to tax a sum of Rs. 8,10,000/- as unexplained cash deposit in the bank account of the assessee and penalty proceedings were initiated for concealing the particulars of income and notice under section 274 r.w.s 271(1)(c) was issued. Thereafter after taking into consideration the submissions filed by the assessee and the fact that the assessee has not filed any appeal against the quantum proceedings, the AO held that it is a case of concealment of particulars of his income and he recorded his satisfaction and penalty amounting to Rs. 2,56,500/- was levied on the assessee.

3.

Being aggrieved the assessee carried the matter in appeal and before the Ld. CIT(A) and the relevant findings of the Ld. CIT(A) which are contained at para 5.2 of the impugned order which read as under:

2 “5.2 HELD: I have perused the order of the Assessing Officer, examined the reply of the assessee and perused the assessment record. Brief facts of the case are the assessment framed by the AO at an income of Rs. 10,90,600 after making an addition of Rs.8,75,000/- by treating it as income from undisclosed sources on the basis of cash flow statement. Penalty order passed u/s 271(1)(c) of the Act for concealment particulars of income. During the appellate proceedings, the appellant vide letter dated 11.06.2019 submitted that no transactions amounting to Rs.1,85,000/- and Rs.4,50,000/- had been made and reflecting in bank statement and AO has not considered the documentary evidence in respect of cash deposit of Rs.1,00,000/- & Rs.1,40,000/- and wrongly levied the penalty amounting to Rs.2,56,500/-. The ICICI Bank statement of the assessee of F.Y.2009-10 has been carefully perused and found no entry of cash credit amounting to Rs. 1,85,000/- made on 17.08.2009 and Rs.4,50,000/- made on 06.10.2009. However, all four entries of cash credit totaling amounting to Rs.8,75,000/- are duly reflecting in cash flow statement submitted by the appellate before the Assessing Officer during the assessment proceedings. The onus is, therefore, upon the assessee to prove the source of cash credit reflecting in cash flow statement. The assessee in fact, failed to submit documentary evidence in support of these cash credits during the assessment as well as appellate proceedings. Therefore, penalty amounting to Rs.2,56,500/- imposed on unexplained cash credit of Rs.8,75,000/- is hereby confirmed. TheAO has duly initiated penalty in the assessment order for concealment of particulars of income. Appellant was given due opportunity during penalty proceedings. Hence legal objections raised are rejected. The Grounds of Appeal

Nos. 2 to 5 are dismissed.

4. Being aggrieved, the assessee carried the matter in appeal before us.

5. None appeared on behalf of the assessee nor was any adjournment application filed. However, on perusal of records, it is noted that the assessee had filed a declaration under the Vivad Se Vishvas Scheme and claimed refund of tax and penalty and the matter of refund claim is near resolution with issuance of amended Form 3 by the Competent authority and it was requested to adjourn the matter which was acceded to and the matter has now come again for hearing today. However, as noted earlier, none has appeared on behalf of the assessee nor there is any further communication.

6. The Ld. Sr Dr was also heard and it was submitted that it is an accepted fact that the assessee has moved a declaration for settlement of tax dispute under the Vsv Scheme and taking the same into consideration, the Coordinate Bench in vide order dated 8/08/2023 has dismissed the assessee’s appeal in quantum proceedings as withdrawn and a copy of the said order was placed on record.

7.

Having heard the ld Sr DR and after perusal of the records, it is an accepted fact that the quantum appeal has already been dismissed by the Coordinate Bench as withdrawn in view of the assessee opting for the settlement under the VsV Scheme and in light of same, where the tax arrears include tax and penalty levied and the assessee

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