Tribunal cancels penalty under Income Tax Act citing precedent, no deviation from prior decision

The Tribunal upheld the appellant's plea and deleted the penalty of &8377; 33,99,200 imposed under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2011-12. The Tribunal found similarities between the appellant's case and a group entity case where a similar penalty was deleted by a co-ordinate bench of the Tribunal. Despite no dispute on factual elements by the Departmental Representative, the Tribunal concluded that there was no reason to deviate from the decision in the group entity case, leading to the deletion of the penalty.

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Issues:
Challenge to penalty under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2011-12.

Analysis:
The appellant challenged the penalty upheld by the CIT(A) amounting to &8377; 33,99,200 under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2011-12. The appellant contended that the penalty should have been deleted as the income returned under section 153A was accepted by the Assessing Officer without any adjustment or addition. Additionally, the appellant argued against the levy of penalty under section 271(1)(c) considering a specific amount as concealed income. The appellant also disputed the characterization of additional income offered in the return filed under section 153A as 'undisclosed income' based solely on the appellant's statement. Moreover, the appellant contested the inclusion of the additional income in the return under Explanation 5A, stating that no reference to any money, bullion, jewelry, or asset found during the search was made by the Assessing Officer in the penalty proceedings. The appellant further raised an issue regarding the erroneous distinction made by the CIT(A) in confirming the penalty based on a judgment of the Hon'ble jurisdictional High Court and ITAT, relying on a Kolkata High Court judgment.

During the hearing, the appellant's counsel referred to a similar case involving a group entity where a co-ordinate bench of the Tribunal had deleted a similar penalty. The Departmental Representative did not dispute the factual elements presented by the appellant and acknowledged the similarities between the cases of the appellant and the group entity. Despite relying on the stand of the authorities below, the Tribunal found no reason to deviate from the decision in the case of the group entity. Consequently, the Tribunal upheld the appellant's plea and deleted the penalty of &8377; 33,99,200. The Tribunal allowed the appeal, following the decision in the case of the group entity, and pronounced the judgment on October 14, 2019.

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