2013 (4) TMI 885 - AT - Income Tax

Tribunal Upholds CIT(A)'s Decision on Penalty Deletion under Section 271(1)(c)

Dy. C.I.T. Versus Shri Rajeev Kumar Srivastava,

The Tribunal upheld the CIT(A)'s decision to delete the penalty under section 271(1)(c) of the I.T. Act, 1961. The Revenue's appeal was dismissed as there ... - Issues involved: Appeal against deletion of penalty u/s 271(1)(c) of the I.T. Act, 1961 by CIT(A) based on addition made u/s 68 of the Act.Summary:The Revenue appealed against the deletion of penalty of `5,00,000/- u/s 271(1)(c) by CIT(A) for treating gifts received as unexplained u/s 68 of the Act. The Assessing Officer added `8,00,000/- as unexplained income, initiating penalty proceedings. The CIT(A) deleted the penalty based on the genuineness of gifts, especially those received from NRIs and father-in-law through banking channels. The Tribunal upheld the addition but the CIT(A) found no conclusive evidence of concealment or inaccurate particulars. The Tribunal confirmed CIT(A)'s decision, emphasizing the independent nature of penalty proceedings requiring a separate enquiry. The onus of proof lies on the Assessing Officer, and failure to explain does not automatically imply falsity. The CIT(A) considered all aspects before deleting the penalty, leading to the dismissal of the Revenue's appeal.The CIT(A) highlighted the divergence of views between authorities, emphasizing the need for conclusive evidence of concealed income for penalty imposition u/s 271(1)(c). The Assessing Officer's reliance on assessment findings for penalty imposition was deemed insufficient. The Tribunal's confirmation of the addition did not establish concealed income. The conditions in Explanation 1 to section 271(1)(c) were not satisfied, as the explanation, though unsatisfactory, was not proven false. The penalty cannot be justified solely based on the assessment findings, as penalty proceedings require separate scrutiny.The Tribunal upheld CIT(A)'s decision, emphasizing the independent nature of penalty proceedings and the Assessing Officer's burden of proof. The genuineness of gifts, though disputed by the Assessing Officer, did not warrant penalty imposition. The failure to explain unexplained credits under section 68 does not automatically lead to penalty imposition u/s 271(1)(c). CIT(A) thoroughly examined the case before deleting the penalty, finding no fault in the decision.In conclusion, the Tribunal dismissed the Revenue's appeal against the deletion of penalty u/s 271(1)(c), affirming CIT(A)'s decision based on the lack of conclusive evidence of concealed income or furnishing inaccurate particulars.