LATHA KUMARI,CHENNAI vs. ITO BW VI(2), CHENNAI

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ITA 1662/CHNY/2018Status: DisposedITAT Chennai09 September 2019AY 2008-095 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 merely agreeing to an addition does not automatically imply concealment or furnishing of inaccurate particulars of income. In the absence of corroborative evidence of malafides, the penalty cannot be upheld.

What were the facts?

The assessee's income was assessed after reopening the case based on information about a bogus share transaction. An addition of Rs. 6,32,000 was made based on the assessee's concession, and penalty proceedings were initiated.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied solely based on an assessee's concession during assessment proceedings without further evidence of concealment or inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 69,Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH : CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI INTURI RAMA RAO]

आदेश / O R D E R

PER INTURI RAMA RAO, ACCOUNTANT MEMBER

1.

This is an appeal filed by the Assessee directed against the order of the Commissioner of Income Tax (Appeals)-10, Chennai (‘CIT(A)’ for short) dated 27.03.2018 for the Assessment Year (AY)

ITA No.1662/2018 :- 2 -:

2008-2009 confirming levy of penalty u/s.271(1) ( c) of the Income Tax Act, 1961 (in short ‘’the Act’’).

2. The Assessee raised the following grounds of appeal:

‘’1. The order of the learned Commissioner of Income Tax (Appeals)-10, concurring with the order of the learned Income Tax Officer, BW VI(2) is against the facts of the case and principles of natural justice.

2.

The learned Commissioner of Income Tax (Appeals)- 10 failed to appreciate the fact that revised return was filed and there was no addition made in the assessment order u/s 143(3) r.w.s 147 of the Income Tax Act 1961.

3. The learned Commissioner of Income Tax (Appeals)- 10 failed to appreciate the fact that the additional income offered in the return filed in response to the notice issued u/s 148 of the Act was done in good faith and to buy peace with the department.

4.

The learned Commissioner of Income Tax (Appeals)-l0 also failed to appreciate the fact that the notice issued by the learned Assessing Officer for penalty proceedings was vitiated, as it was of a standard proforma without stating the fact that if the penalty proceedings was for furnishing inaccurate particulars of income or for concealment of income.

5.

The learned Commissioner of Income Tax (Appeals)-10 failed in not appreciating the fact that despite the appellant not given any opportunity to cross examine the deponent, she had offered the additional income and paid the taxes thereon which was also accepted by the learned Assessing Officer only to avoid litigation and to buy peace with the department.

For these and other grounds that may be adduced during the course of hearing, it is hear by prayed that the penalty levied may kindly be deleted and thus render justice’’.

ITA No.1662/2018 :- 3 -:

3.

The brief facts of the case are as under:

The appellant is an individual deriving income under the head ‘’income from other sources’’. The return of income for the AY 2008-09 was filed on 25.03.2009 disclosing total income of �2,83,990/-.

There was no scrutiny assessment proceedings. Subsequently, based on the information received from DDIT (Inv.) that assessee had provided cash of �6,23,000/- on 13.03.2008 to one Ms. Leela Surana which were allegedly paid towards purchase of shares and Ms. Leela Surana had accepted the transaction of purchase of shares to be bogus. Based on this information, the assessment was reopened by issuing notice u/s.148 of the Act on 29.02.2012. Against the said return of income, the assessment was completed by the Income Tax Officer, Business Ward VI(2), Chennai vide order dated 15.03.2013 passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (for short ‘the Act’) by making addition of �6,32,000/- as unexplained investments. It appears that assessee had agreed to the addition in the assessment proceedings. The addition is made based on the concession made by the assessee herself. Further, the Assessing Officer initiated penalty proceedings by issuing notice u/s.271 (1) (c) of the Act on 15.03.2013. In response to the said show cause notice, assessee submitted that she had accepted the addition in order to ITA No.1662/2018 :- 4 -: avoid protracted litigation and therefore penalty should not be levied. The Assessing Officer rejected the above explanation and levied penalty of �1,93,000/- vide order dated 23.09.2013 u/s.271 (1)

(c) of the Act.

Being aggrieved, an appeal was preferred before ld. CIT(A), 4. who vide impugned order had confirmed levy of penalty.

Being aggrieved by the order of the ld. CIT(A), the appellant 5. is in appeal before us in the present appeal.

6.

We heard the rival submissions and perused the material on record. The only issue involved in the present appeal relates to levy of penalty u/s.271 (1) (c) of the Act. Penalty was levied in respect of addition made on account of failure to explain the source for cash �6,32,000/- given to Smt. Leela Surana. The addition appears to have been made u/s.69 of the Act and admittedly, addition is based on concession made by the assessee herself during the course of assessment proceedings. Merely because assessee agreed for addition does not itself leads to conclusion that assessee had conceled particulars of income or furnished inaccurate particulars of income and in the absence of corroborative evidence establishing malafides on the ITA No.1662/2018 :- 5 -:

part of assessee, levy of penalty in such circumstances cannot be upheld. In this circumstances, we allow the appeal filed by the assessee.

7.

In the result, the appeal filed by the assessee is allowed.

Order pronounced on 9th day of September, 2019, at Chennai.

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