2019 (9) TMI 611 - AT - Income Tax

Appeal Dismissed for Concealing Income via Unexplained Cash Deposits: Penalty Upheld for AY 2012-13, Partially Allowed for AY 2013-14

The appeal against the penalty order under section 271(1)(c) of the Income Tax Act, 1961 for Assessment Year (AY) 2012-13 was dismissed, upholding the ... Penalty u/s 271(1)(c) - unexplained deposits - HELD THAT:- The co ordinate bench has given the benefit of doubt to the assessee and treated the cash deposits to the extent of 50% as explained in [2017 (9) TMI 1848 - ITAT AHMEDABAD]. The reliance placed on behalf of the assessee on the decision of the co-ordinate bench in Shri Anil Yashpal Khosla [2018 (3) TMI 1806 - ITAT AHMEDABAD] is totally misplaced. The explanation in respect of cash deposited in that case was found to be reasonable in view of certain affidavits of third party filed which remained unverified by the AO. No such facts have been shown to exist in the present case. In the peculiar facts of the case, the nature of concealment was clear to the assessee and no prejudice has been caused to the assessee per se by such alleged technical defect. The CIT(A) in our view has rightly adjudicated the issue with which interference is called for. - decided against assessee Penalty on peak amount of cash deposits - HELD THAT:- As pointed out on behalf of the assessee that the CIT(A) has passed the order confirming the penalty on the full amount as the benefit of the decision of the ITAT was not available to the CIT(A) while passing the appellate order in respect of penalty proceedings. We thus find merit in the plea of the assessee for reduction in the quantum or penalty in tune with the reduction in the quantum additions based on the order of the ITAT. The AO is accordingly directed to re-work the penalty based on the amount of additions quantified by the ITAT in quantum proceedings. Issues involved:1. Appeal against penalty order under section 271(1)(c) of the Income Tax Act, 1961 for Assessment Years (AY) 2012-13 & 2013-14.Detailed Analysis:1. For AY 2012-13, the appellant challenged the penalty under section 271(1)(c) for concealing income. The Assessing Officer (AO) added unexplained cash deposits, and the ITAT sustained 50% of the deposits as undisclosed income. The CIT(A) confirmed the penalty to the extent of the addition sustained, reducing it to Rs. 1,69,855. The appellant argued that the penalty was based on estimates and the AO's notice was vague. However, the ITAT upheld the penalty, noting the appellant's failure to explain the cash deposits and rejecting the argument on the defective notice. The CIT(A) decision was upheld, and the appeal was dismissed.2. For AY 2013-14, the penalty on cash deposits was in dispute similar to AY 2012-13. The ITAT's decision in another case restricted additions to 50% of deposits. The CIT(A) confirmed the penalty on the full amount, not considering the ITAT's decision. The ITAT directed the AO to re-calculate the penalty based on the reduced quantum of additions. The appeal for AY 2013-14 was partly allowed, reducing the penalty amount. The overall outcome was dismissal of the appeal for AY 2012-13 and partial allowance for AY 2013-14.