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Facts
The assessee was levied a penalty under section 271(1)(c) of Rs. 9,52,493/- on an alleged concealed income of Rs. 30,82,500/-, representing a quantum addition for unexplained cash credits. The lower authorities held that the assessee failed to prove the genuineness and creditworthiness of these cash credits.
Held
The Tribunal found no reason to uphold the penalty, noting that the assessee had filed all relevant details and supportive evidence. Citing CIT v. Reliance Petroproducts Pvt. Ltd., the Tribunal reiterated that quantum and penalty proceedings are parallel, and an addition/disallowance in the former does not automatically attract penalty. Therefore, the impugned penalty was deleted.
Key Issues
Whether a penalty under Section 271(1)(c) for concealed income arising from unexplained cash credits is justified when the assessee provides relevant details and evidence, considering that quantum addition does not automatically lead to penalty.
Sections Cited
Section 271(1)(c) of the Income-tax Act, 1961, Section 250 of the Income-tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI SATBEER SINGH GODARA
Faceless Appeal Centre (NFAC), Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1064976413(1), dated 17.05.2024, in case no. 1961, hereinafter referred to as the ‘Act’.
Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex parte.
It emerges during the course of hearing with the able assistance coming from the Revenue side that both the learned lower authorities have levied section 271(1)(c) penalty of Rs. 9,52,493/- pertaining to alleged concealed income of Rs. 30,82,500/- representing quantum addition of unexplained cash credits.
Learned DR invited my attention to the Assessing Officer’s assessment order dated 1.12.2015 that the assessee could not prove genuineness/ creditworthiness of the said cash credits which resulted in the impugned penalty in its hands.
I have given thoughtful consideration to the Revenue’s foregoing vehement contention and find no reason to accept the same. This is for the precise reason that the assessee had filed all the relevant details and supportive evidence which ultimately failed to evoke the assessing authority’s concurrence. I quote CIT v.
Reliance Petroproducts Pvt. Ltd. 2010) 322 ITR 158 (SC) that quantum and penalty proceedings are parallel proceedings wherein each and every addition/disallowance made in the course of former does not ipso facto attract the accordingly.
This assessee’s appeal is allowed.
Order pronounced in open court on 18.11.2024.