2020 (12) TMI 497 - AT - Income Tax

Tribunal upholds penalty for non-compliance & unexplained cash credit

The Tribunal upheld the penalty imposed on the assessee for non-compliance and lack of evidence, confirming the addition of unexplained cash credit under ... Penalty u/s 271(1)(c) - AO proceeded to complete the assessment u/s 144 - addition u/s 68 - absence of any explanation or supporting evidence produced by the assessee - HELD THAT:- Assessee neither furnished any explanation in response to the show cause notice issued under section 271(1)(c) r/w section 274 of the Act nor appeared before the Assessing Officer to show that no penalty is imposable. Before learned Commissioner (Appeals) when the appeal challenging the levy of penalty was fixed no one appeared on behalf of the assessee despite several opportunities. Even before us also, no one appeared on behalf of the assessee to represent the case. Neither in the quantum proceedings nor in the penalty proceedings, right from the stage of Assessing Officer till the Tribunal, the assessee has not furnished any explanation or supporting evidence either to contest the addition made under section 68 on merits or to prove the fact that there is neither any concealment of income nor furnishing particulars of inaccurate income - facts on record clearly reveal the casual and non–cooperative attitude of the assessee towards the tax proceedings. Thus, when the assessee has not brought on record any evidence to prove the genuineness of the share premium and has also miserably failed to establish on record that there is neither any concealment or furnishing of inaccurate particulars of income, imposition of penalty under section 271(1)(c) of the Act, in our view, is justified. - Decided against assessee. Issues:Challenge to order of Commissioner of Income Tax (Appeals) for assessment year 2009-10, Ex-parte disposal of appeal due to absence of assessee, Addition of unexplained cash credit under section 68, Imposition of penalty under section 271(1)(c) alleging concealment of income, Failure of assessee to comply with statutory notices, Confirmation of addition by Tribunal, Upholding of penalty by Commissioner (Appeals) and Tribunal, Justification of penalty imposition.Analysis:1. The appeal was filed by the assessee challenging the order of the Commissioner of Income Tax (Appeals) for the assessment year 2009-10. However, during the hearing, no one appeared on behalf of the assessee, and there was no application for adjournment. Consequently, the appeal was disposed of ex-parte after hearing the Departmental Representative and reviewing the available material.2. The assessee, a resident company engaged in pharmaceutical trading, filed its return of income for the year under dispute but did not comply with the notices issued under section 142(1) and 143(2) of the Act. The Assessing Officer, due to non-compliance, completed the assessment under section 144 of the Act, adding an amount as unexplained cash credit under section 68. Subsequently, penalty proceedings were initiated under section 271(1)(c) for alleged concealment of income and inaccurate particulars. The assessee failed to respond to the show cause notice, leading to the imposition of a penalty.3. The Tribunal confirmed the addition made by the Assessing Officer, as the assessee did not provide any explanation or evidence to contest the addition. The penalty imposed under section 271(1)(c) was upheld by the Commissioner (Appeals) and the Tribunal. Despite multiple opportunities, the assessee did not appear to challenge the penalty imposition, displaying a casual and non-cooperative attitude towards the tax proceedings.4. The Tribunal found that the assessee did not furnish any evidence to prove the genuineness of the share premium or to refute the allegations of concealment or inaccurate particulars of income. Consequently, the imposition of penalty under section 271(1)(c) was deemed justified, and the decision of the Commissioner (Appeals) was upheld. The grounds raised by the assessee were dismissed, and the appeal was ultimately rejected.5. In conclusion, the Tribunal upheld the penalty imposed on the assessee for non-compliance and lack of evidence to support their case. The decision highlighted the importance of active participation and providing necessary documentation in tax proceedings to avoid penalties for concealment of income or furnishing inaccurate particulars.