RAMESH KUMAR,GHAZIABAD vs. INCOME TAX OFFICER, GHAZIABAD

This assessee’s appeal for Assessment Year 2010-11, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2024-25/1072267366(1) dated 17.01.2025, in proceedings u/s 271 of the Income Tax Act, 1961 (in short “the Act”).

Heard both the parties at length. Case file perused.

It transpires during the course of hearing that both the lower authorities have levied section 271(1)(c) penalty in the assessee’s hands for having failed to explain source of the Ramesh Kumar corresponding investments made in purchase of immovable property(ies) to the tune of Rs.22,26,500/-, amounting to Rs.5,89,200, in the Assessing Officer’s order dated 18.12.2017 and upheld in the lower appellate discussion.

It is in this factual backdrop that both the parties reiterate their respective stands against and in support of the impugned penalty. The Revenue’s case more particularly is that the assessee has failed to explain source of the impugned investment all along. We find no reason to express our concurrence with the impugned penalty as such an explanation regarding source of investment is indeed a subjective issue requiring detailed evidence and appreciation thereof by the learned lower authorities.

That being the case, we hereby quote CIT vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) to conclude that it is not each and every quantum disallowance or addition; as the case may be, which could be held as automatically attracting the impugned penal provision and delete the penalty herein imposed by both the learned lower authorities in very terms. Ordered accordingly.