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2026 (5) TMI 34
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.... u/s. 271AAC(1) of the Income Tax Act, 1961 (in short "the Act"). The grounds raised by the assessee are reproduced as under: "1. The Ld. CIT(A) is erred in confirming the penalty U/s 271AAC(1) of the Act, as quantum order passed by the Hon, ITAT was passed only on the basis of estimations, WhatsApp chat & third-party discussion only. 2. The Ld. CIT(A) is erred in confirming the penalty U/s 271AAC(1) of the Act, as the quantum addition was purely on estimation only & Bonafide explanation was provided by the Appellant. The Ld. CIT(A) is also erred in confirming the penalty as, the income was not actually assessable u/s 115BEE of the Act. 3. The appellant request to delete the penalty confirmed by the Ld. CIT (A). ....
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....m/2023 for assessment year 2018-19 to 2020-21 upheld the order of the ld. CIT(A) and confirmed the addition of Rs. 42.69 lakhs holding that the Excel sheet and WhatsApp chats constituted "incriminating material" that clearly established the payment of unaccounted cash. The Tribunal noted a precise correlation between the carpet area mentioned in the registered agreement and the seized Excel sheet, thereby confirming the addition in its entirety. Relevant finding of the Tribunal(supra) is reproduced as under: "4. During the course of appellate proceedings before us the ld. Counsel submitted that the amount of Rs. 42.69 lac was not the actual amount paid in cash and it was just the projection made by the assessee noted on the excel s....
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....s of the excel sheet also corroborated with the whatsapp messages showing cash payment to the amount of Rs. 42.69 lac. (Rs.34.69 lac plus Rs. 8 lac) to the builder Suparshwa Group over and above the agreement value of Rs. 1.10 crores. In the rejoinder the ld. Counsel submitted that no evidence of cash generated from the business was found and these were the mere projection and actually no cash payment was made. 5. Heard both the sides and perused the material on record. During the course of search action at the premises of the assessee the excel sheet on the laptop of the assessee was found and seized. It is evident from the copy of excel sheet as reproduced above in this order in which it is clearly mentioned the agreement value o....
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....d in the assessment order. After considering the facts and evidence in the form of excel sheet, agreement and whatsapp communication we don't find any infirmity in the decision of ld. CIT(A) therefore, ground no. 2 to 5A of the appeal of the assessee are dismissed." 5. Consequent to the confirmation of the addition by the Tribunal, the AO levied a penalty @ 10% of the tax payable on the undisclosed income. Before the Ld. CIT(A), the assessee did not contest the merits of the penalty but merely requested that the proceedings be kept in abeyance pending a further appeal before the Hon'ble High Court. The Ld. CIT(A) rejected this plea, noting that the ITAT is the final fact-finding authority and its findings on "on-money" payments remain bi....
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....0/- for purchase of property has been confirmed by the ITAT. The Hon'ble ITAT, being the final fact-finding authority, has already confirmed the fact of on-money payment after evaluating all evidences. This factual finding binds all subordinate authorities unless reversed by the Hon'ble High Court. Mere pendency of further appeal does not unsettle or dilute the ITAT's factual conclusions. 6.4 Further, the statutory exception provided in the proviso to section 271AAC(1) is not applicable, as the appellant neither disclosed the said income in the return of income nor paid tax under section 115BBE prior to the end of the relevant previous year. In absence of satisfaction of the mandatory preconditions for exemption from pe....
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....ts of the addition (quantum) is no longer res integra at this stage. The Co-ordinate Bench (supra) has already rendered a categorical finding that the assessee made unexplained investments in property. It is a settled principle of law that while quantum and penalty proceedings are distinct, the findings in quantum proceedings constitute "good evidence" for the purpose of penalty. 7.1 The Section 271AAC is a specific penal provision triggered when income is determined under Section 115BBE (covering Sections 68, 69, 69A, 69B, etc.). The proviso to Section 271AAC(1) offers immunity only if the assessee includes such income in the return and pays the requisite tax before the end of the relevant previous year. In the instant case, the undiscl....