ANAND AGNIHOTRI,MUMBAI vs. INCOME-TAX OFFICER, WARD - 7 (4), PUNE

This appeal by the assessee against the order dated 19-09-2018 passed by the Commissioner of Income Tax (Appeals)-1, Pune [‘CIT(A)’] for assessment year 2005-06.

We find that this appeal was filed with a delay of 03 days. Upon hearing both the parties, we find that the reasons explained by the ld. AR are bonafide which really prevented the assessee to file the appeal in time. Therefore, the delay of 03 days are condoned.

The only issue is to be decided is as to whether the CIT(A) justified in confirming the penalty imposed by the AO u/s. 271(1)(c) of the Act in the facts and circumstances of the case.

At the outset, we note that the AO received information that the assessee had made payments aggregating to Rs.3,33,337/- through credit cards during the year under consideration. The AO issued notice u/s. 142(1) of the Act calling for the return of income. According to AO as it is emanating from the penalty order dated 27-06-2008, the assessee did not respond to the notice u/s. 142(1) of the Act. Therefore, the AO completed assessment u/s. 144 of the inter alia making addition of Rs.3,33,337/- on account of unexplained expenditure/investment through credit cards. In pursuance of the same, the AO initiated penalty proceedings u/s. 271(1)(c) of the Act for concealment of income and imposed penalty of Rs.75,481/- u/s. 271(1)(c) of the Act. The ld. AR placed on record an order dated 26- 07-2011 and submitted that the assessment completed u/s. 144 of the Act was annulled by the CIT(A) and referred to the relevant finding at Page No. 7 of the quantum appeal. The ld. DR did not dispute the same. Therefore, when there is no addition survived on which the penalty imposed and in our opinion, the penalty imposed thereon is not maintainable. Thus, penalty imposed by the AO as confirmed by the CIT(A) is not justified and it is set aside.

In the result, the appeal of assessee is allowed.