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Facts
The assessee filed an appeal with a delay of 22 days, which was condoned. The Assessing Officer imposed penalty under section 271(1)(c) for concealment of income, confirming a disallowance of ₹.9,55,706/- for want of vouchers. The CIT(A) upheld this penalty.
Held
The Tribunal noted that the disallowance was restricted by the CIT(A) based on evidence produced by the assessee, and the penalty was imposed solely on the ground of non-submission of vouchers. Citing High Court precedent, the Tribunal held that non-submission of vouchers does not amount to concealment of income, and thus, the penalty is not maintainable.
Key Issues
Whether penalty under Section 271(1)(c) is maintainable for non-submission of vouchers when the assessee has disclosed the transaction and capital gains, and the disallowance was restricted by the CIT(A) based on other evidence.
Sections Cited
271(1)(c)
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Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
Year: 2010-11 Ayyappankavu Chandrasekharan Vs. The Assistant Commissioner of Vijayalakshmi, 4, Thiruvengadam Income Tax, Street, West Mambalam, Corporate Circle 14(1), Chennai 600 033. Chennai 600 034. [PAN:AADPV3516D] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri R. Kumar, Advocate ��थ� की ओर से/Respondent by : Ms. Gouthami Manivasagam, JCIT सुनवाई की तारीख/ Date of hearing : 21.10.2024 घोषणा की तारीख /Date of Pronouncement : 29.10.2024 आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 22.05.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2010-11.
We find that this appeal was filed with a delay of 22 days. On perusal of the petition filed in support of notarized affidavit, submissions of the ld. AR and ld. DR, we find the reasons explained by the assessee are bonafide, which really prevented the assessee in filing the appeal in time. Thus, the delay of 22 days is condoned.
At the outset, we note that the Assessing Officer imposed penalty under section 271(1)(c) of the Income Tax Act, 1961 [“Act” in short] for concealment of particulars of income. On perusal of the penalty order, we note that the Assessing Officer in quantum proceedings made disallowance of ₹.1,11,44,117/- on account of sale consideration for want of vouchers. The ld. CIT(A) confirmed the addition to an extent of ₹.9,55,706/-. The assessee did not challenge the order of the ld. CIT(A) in confirming the addition to an extent of ₹.9,55,706/-.
The ld. AR Shri R. Kumar, Advocate submits that the ld. CIT(A) confirmed the addition to an extent of ₹.9,55,706/- for want of vouchers and the Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act for concealment of income. The ld. CIT(A) confirmed the same. The ld. AR argued that no penalty is maintainable for non- furnishing the details as the assessee truly disclosed the transaction of the sale consideration and disclosed long term capital gains. The ld. AR argued that the Hon’ble High Court of Madras, in the case of CIT v. Cafco Syndicate Shipping Co. 294 ITR 134 (Mad), held that no penalty is maintainable for want of evidence.
On careful reading of the decision of the Hon’ble High Court of Madras in the case of CIT v. Cafco Syndicate Shipping Co. (supra), wherein, it was held that for non-submissions of proper voucher for the expenditure incurred could not amount to concealment of income by placing reliance on the decision of the Hon’ble Supreme Court in the case of Dilip N. Shroff v. JCIT 291 ITR 519(SC). Admittedly, the ld. CIT(A) in the quantum appeal restricted the addition to an extent of ₹.9,55,706/- as against the addition of ₹.1,11,44,117/- for want of evidence supporting the expenditure. The ld. CIT(A) on examination of the same, restricted the addition to the extent above which clearly establishes that the assessee succeeded in part before the ld. CIT(A) by producing relevant evidence in support of claim of expenditure. On perusal of the penalty order, the Assessing Officer proceeded to impose penalty only on the ground for non-submission of supporting vouchers for expenditure. As discussed above, the Hon’ble High Court of Madras held that penalty is not liable for non-submission of the vouchers. Respectfully following the same, we hold that no penalty could be imposed for non-furnishing evidence as it does not amount to concealment of income. Thus, the penalty imposed by the Assessing Officer and confirmed by the ld. CIT(A) is liable to be quashed. Therefore, the penalty levied by the Assessing Officer is deleted. The grounds raised by the assessee allowed.
In the result, the appeal filed by the assessee is allowed. Order pronounced on 29th October, 2024 at Chennai.