PANKAJKUMAR CHIMANLAL LODHIYA,RAKJOT vs. THE ACIT, CENTRAL CIRCLE-2, RAJKOT, RAJKOT

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ITA 78/RJT/2022Status: DisposedITAT Rajkot30 April 2025AY 2010-1127 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty under Section 271(1)(c) for concealment of income or furnishing inaccurate particulars is leviable only when the assessee fails to prove that the explanation offered is bonafide and that all the facts relating to the same have been disclosed by him. In this case, the assessee's claim that the foreign bank account was maintained by Mr. Mehul Nandha of Vingold LLC and that the income was from derivative transactions was not substantiated with evidence during the penalty proceedings. The Tribunal noted that the assessee had not provided any evidence to support this claim. Therefore, the Tribunal found no infirmity in the CIT(A)'s order confirming the penalty on the addition of Rs.1,04,61,096/-. The Tribunal also found no infirmity in the CIT(A)'s order confirming the penalty on the deemed rental income of Rs.1,80,000/- and the disallowance of commission paid to Shri Rajesh Bhatt of Rs.3,00,000/-. The ratio decidendi is that if the assessee fails to provide substantiating evidence for their claims regarding undisclosed income or expenses during penalty proceedings, the penalty is leviable. The appeals were dismissed.

What were the facts?

The assessee, Shri Pankaj Chimanlal Lodhiya, filed six appeals before the ITAT, Rajkot Bench, concerning Assessment Years (AYs) 2008-09 to 2012-13 and AY 2014-15. These appeals challenge penalty orders passed by the Assessing Officer (AO) under Section 271(1)(c) and Section 271AAB(1)(c) of the Income Tax Act, 1961, which were confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The primary dispute stems from an assessment order under Section 143(3) read with Section 153A, which assessed the total income at Rs.642,49,62,439/-, a significant increase from the returned income of Rs.2,66,40,980/-. This assessment followed a search and seizure action under Section 132 on May 20, 2013. Subsequent rectification and CIT(A) orders led to confirmed additions on which penalties were levied.

What were the issues?

1. Whether the Tribunal erred in confirming the levy of penalty under Section 271(1)(c) on an alleged undisclosed income of Rs.1,04,61,096/- from a foreign bank account, when the assessee claimed the account was maintained by a third party and the income was from derivative transactions? The assessee argued that the addition was made without appreciating facts and evidence, and the proposal for penalty is invalid. The revenue contended that the assessee failed to disclose income earned from undisclosed foreign bank accounts. 2. Whether the Tribunal erred in confirming the levy of penalty of Rs.61,182/- on deemed rental income of Rs.1,80,000/-? The assessee argued the penalty is unjustified. The revenue's specific contention on this point is not explicitly recorded. 3. Whether the Tribunal erred in confirming the levy of penalty on Rs.1,01,970/- arising from a disallowance of Rs.3,00,000/- under Section 40(a)(ia) for commission paid without TDS? The assessee argued the penalty is unjustified. The revenue's specific contention on this point is not explicitly recorded.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 271AAB(1)(c),Section 139(1),Section 153A,Section 143(3),Section 69A,Section 40(a)(ia),Section 36(1)(iii),Section 274,Section 250

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Cases cited in this judgment(10)Show list

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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT

For Appellant: Shri Mehul Ranpura, AR
For Respondent: Shri Sanjay Punglia, CIT-DR
Pronounced: 05/03/2025

Heard together (2 matters)

ITA No.81/RJT/2022
ITA No. 76/RJT/2022

Read from the judgment's own cause title. This page is filed under one of them.

आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to :  अपीलाथ�/ The Appellant  ��यथ�/ The Respondent  आयकर आयु�/ CIT  आयकर आयु�(अपील)/ The CIT(A)  िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, राजकोट/ DR, ITAT, RAJKOT  गाड�फाईल/ Guard File

By order/आदेश से,

सहायक पंजीकार आयकर अपील�य अ�धकरण, राजकोट

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