2024 (11) TMI 1319 - AT - Income Tax

Penalty under section 271(1)(c) deleted for voluntary disclosure and unexplained bank deposits without deliberate concealment

Dineshchandra Dudhwala Versus Income Tax Officer, Ward-2 (3) (7), Surat

ITAT Surat held that penalty under section 271(1)(c) was not leviable on additional income voluntarily offered by assessee in response to section 148 ... Penalty u/s 271(1)(c) - additional income offered by assessee in the return filed in response notice issued u/s 148 as well as addition made u/s 69 on account of deposit in City Bank - HELD THAT:- So far as additional income offered by assessee in response to notice u/s 148 is concerned, we find that such income is accepted by Assessing Officer and by accepting such additional income no penalty is leviable as has been held in the case of Kirit Dahyabhai Patel [2015 (1) TMI 201 - GUJARAT HIGH COURT] Similar view was taken in the case of Ravi Sud v [2015 (10) TMI 1476 - ITAT MUMBAI]. Addition u/s 69 - No penalty is leviable as mere cash deposit cannot be considered income of the assessee. It is also matter of record that no further appeal is filed by the assessee. The assessee has not filed further appeal due to smallness of the addition. Mere no further appeal is filed; it cannot be taken as admission on the part of the assessee. Each and every addition cannot be a basis for levying a penalty under section 271(1), unless there is a finding of AO that the assessee has deliberately furnished inaccurate particulars or concealed the income. Assessee is her submissions categorically submitted that the bank account on the credit of which, the penalty is levied, was shown in his cash book and such deposit was not unexplained. Thus, we considering the aforesaid facts we do not find any justification for levying penalty even on the addition - Appeal of the assessee is allowed. Issues:Appeal against penalty under section 271(1)(c) of the Income Tax Act for AY 2011-12 - Delay in filing appeal before Tribunal - Condonation of delay - Merits of penalty imposition.Detailed Analysis:1. Delay in Filing Appeal:The appeal was against the penalty levied by the Assessing Officer under section 271(1)(c) of the Income Tax Act for AY 2011-12. The assessee filed the appeal with a delay of 532 days due to miscommunication and inadvertent assumption of facts by the staff. The delay was not intentional, as clarified by the Authorized Representative of the assessee. The delay was condoned by the Tribunal considering the reasonable explanation provided by the assessee and the principle of substantial justice.2. Merits of Penalty Imposition:The Assessing Officer levied the penalty on the additional income offered by the assessee in response to the notice under section 148 and on the addition made under section 69 of the Act for a cash deposit in a bank account. The Tribunal analyzed the case law cited by the assessee and held that no penalty is leviable on the additional income offered by the assessee in response to the notice under section 148. The Tribunal also noted that the mere cash deposit in the bank account cannot be considered as income of the assessee for penalty purposes. Additionally, the Tribunal emphasized that the absence of further appeal by the assessee does not imply admission of guilt. The Tribunal found no justification for levying a penalty, even on the addition made on account of the cash deposit. Consequently, the grounds of appeal raised by the assessee were allowed, and the appeal was allowed in favor of the assessee.In conclusion, the Tribunal allowed the appeal of the assessee against the penalty imposed under section 271(1)(c) of the Income Tax Act for AY 2011-12, after condoning the delay in filing the appeal and considering the merits of the penalty imposition based on the explanations and legal principles presented during the proceedings.