Tribunal grants early hearing, deletes penalties, directs AO to delete addition under Section 68

The tribunal allowed the early hearing petition, deleted the penalty under Section 271(1)(c) due to the deletion of the related quantum addition, and directed the AO to delete the addition under Section 68, thereby allowing the appeal filed by the assessee.

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Issues Involved:
1. Early fixation of the case for hearing out-of-turn.
2. Penalty under Section 271(1)(c) of the Income Tax Act.
3. Quantum addition under Section 68 of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Early Fixation of the Case for Hearing Out-of-Turn:
The assessee submitted a Miscellaneous Application dated 07/11/2020 seeking early fixation of the case for hearing out-of-turn. The Ld. AR argued that the penalty under Section 271(1)(c) of the Income Tax Act was not sustainable as the quantum addition related to the penalty had already been deleted by the tribunal in ITA No. 961/Ahd/2016. The Ld. DR did not object to the matter being heard on merit out-of-turn. Considering the simplicity and coverage of the issue, the tribunal allowed the early petition and proceeded to hear the matter on merit.

2. Penalty Under Section 271(1)(c) of the Income Tax Act:
The assessee challenged the confirmation of the penalty levied by the AO under Section 271(1)(c) for Rs. 22,71,150/-. The tribunal noted that the quantum addition, which was the basis for the penalty, had been deleted in ITA No. 961/Ahd/2016. The tribunal reiterated that the penalty under Section 271(1)(c) is not sustainable if the related quantum addition is deleted. Consequently, the penalty levied by the AO was deleted, and the ground of appeal by the assessee was allowed.

3. Quantum Addition Under Section 68 of the Income Tax Act:
The core issue revolved around the addition of Rs. 70,00,000/- as unexplained cash credit under Section 68. The tribunal emphasized that the initial onus is on the assessee to establish the identity, creditworthiness, and genuineness of the transaction. The assessee provided necessary details, such as PAN, driving license, ITR, and confirmation of the parties, which were not cross-verified by the Revenue. The tribunal cited several judgments, including CIT Vs. Chanakya Developers, CIT v. Orissa Corp. (P.) Ltd., and Deputy CIT v. Rohini Builders, to support its stance that the assessee had discharged its onus. The tribunal held that the Revenue's failure to verify the details provided by the assessee could not justify the addition under Section 68. The tribunal also referred to its own decision in ITA No. 3619/AHD/2015, where a similar issue was decided in favor of the assessee. Consequently, the tribunal set aside the findings of the CIT (A) and directed the AO to delete the addition, allowing the ground of appeal by the assessee.

Conclusion:
The tribunal allowed the early hearing petition, deleted the penalty under Section 271(1)(c) due to the deletion of the related quantum addition, and directed the AO to delete the addition under Section 68, thereby allowing the appeal filed by the assessee. The order was pronounced in the court on 11/12/2020 at Ahmedabad.

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