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of <h1>Tribunal Overturns Penalty for 2001-02, Citing Lack of Clarity in Income Concealment and Bona Fide Explanation.</h1> <h3>Smt. Sandhya Verma. Versus Income-Tax Officer.</h3> Smt. Sandhya Verma. Versus Income-Tax Officer. - TTJ 114, 933, [2009] 30 SOT 29 (DELHI) (URO) Issues:1. Penalty under section 271(1)(c) of the Act for assessment year 2001-02.2. Failure to produce donor for gift of Rs. 5 lacs.3. Imposition of penalty without proving concealment or inaccurate particulars of income.4. Onus on assessee to prove identity, creditworthiness, and genuineness of transaction.Detailed Analysis:1. The appeal was against the penalty imposed under section 271(1)(c) of the Act for the assessment year 2001-02. The CIT(A) confirmed the penalty after the AO detected concealment regarding a gift of Rs. 5 lacs from a donor. The assessee surrendered the amount to avoid litigation, subject to no penalty. The penalty was imposed as the donor was not produced, and genuineness of the gift was not proven.2. The assessee failed to produce the donor despite various opportunities due to the donor's illness. The donor confirmed the gift via affidavit and in the return of income. The AO initiated penalty proceedings under section 271(1)(c) as the genuineness was not substantiated. The onus was on the assessee to prove the transaction's authenticity, which was not fulfilled.3. The argument was made that the penalty initiation lacked clarity on whether there was concealment or inaccurate particulars of income. The jurisdictional defect was raised, citing cases where surrender due to inability to produce creditors did not warrant a penalty. The satisfaction required under section 271(1)(c) was also questioned, emphasizing the need for a proper recording during assessment.4. The onus to prove identity, creditworthiness, and genuineness of the transaction rested on the assessee. Despite providing documentation, the donor's absence led to surrendering the amount. The Tribunal emphasized that if the explanation was bona fide, even without full substantiation, no penalty could be imposed. Citing precedent, it was concluded that the penalty was unjustified, and the appeal was allowed.This detailed analysis covers the issues involved in the legal judgment, highlighting the arguments presented, the legal principles applied, and the final decision rendered by the Tribunal.
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