BHANUSHANKAR KASALSHIBHAI DAVE,SURAT vs. ITO, WARD-3(2)(6), SURAT

ITA 1331/SRT/2025Status: DisposedITAT Surat19 March 2026AY 2012-133 pages

AI SummaryAllowed

Facts

The assessee filed an appeal against the penalty levied under Section 271(1)(c) for concealing income. The penalty was based on an addition of Rs. 29,31,364/- for unexplained cash deposited in the bank. However, the ITAT had previously deleted this addition in quantum proceedings.

Held

The Tribunal held that since the addition on which the penalty was levied has been deleted, there is no longer a basis for levying a penalty for concealment or furnishing inaccurate particulars of income. Therefore, the penalty is to be deleted.

Key Issues

Whether penalty under Section 271(1)(c) can be sustained when the addition forming the basis of the penalty has been deleted by the ITAT.

Income Tax Appellate Tribunal, SURAT BENCH, BENCH

Before: SMT. ANNAPURNA GUPTA

For Appellant: Shri Mehul Shah, AR, Shri Ajay Uke, Sr. DR

For Respondent: Shri Ajay Uke, Sr. DR

Hearing: 16/03/2026Pronounced: 19/03/2026

The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”) dated 14.11.2025 confirming the levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as Kasalshibhai Dave vs. ITO] A.Y. 2012-13 - 2 – the “Act”) for concealing the particulars of income and relates to Assessment Year (A.Y.) 2012-13.

At the outset itself, Ld. Counsel for the assessee stated that penalty for concealment of income was levied on the assessee on account of addition made to the assessee’s income of cash deposited in his bank account during the impugned year amounting to Rs.29,31,364/- for the source of the same remaining unexplained. Ld. Counsel for the assessee contended that the ITAT vide its order dated 23.01.2026 in has deleted the impugned addition made in the hands of the assessee and that, therefore, there was no case for levy of any penalty on the assessee on account of concealment / furnishing inaccurate particulars of income. Copy of the order of the ITAT placed before us.

Ld. DR though fairly admitted that the ITAT had deleted the addition made in quantum proceedings in the hands of the assessee.

In view of the admitted fact that the addition made in the hands of the assessee during the assessment proceedings, on which count, penalty was levied on the assessee in terms of Section 271(1)(c) of the Act, stood deleted by the ITAT, there remains no case of concealment / furnishing of inaccurate particulars of income so as to attract any levy of penalty. The Penalty levied, therefore, in the present case amounting to Kasalshibhai Dave vs. ITO] A.Y. 2012-13 - 3 – Rs.8,39,438/- having no legs to stand upon is directed to be deleted.

In the result, the appeal of the assessee is allowed.

This Order pronounced on 19/03/2026