The ITAT Delhi recently confirmed an order penalty passed under section 271(1)(a) of the Income Tax Act passed on the basis of Information about undisclosed HSBC Bank Account in Switzerland.
In the instant case, block assessment was passed against the assessee, Mr. Manish Periwal, on ground of information about undisclosed HSBC Bank Account in Switzerland. Due to non co-operation n the part of the assessee, the order was passed ex-parte. Subsequently, penalty proceedings were also initiated against the assessee under section 271(1)(a) of the Income Tax Act.
On appeal, the first appellate authority confirmed the order of penalty considering the nature of the suspected act done by the assessee. The CIT (A) noted that “these cases are not of simple tax evasion, but of suspected tax evasion by transferring or keeping funds overseas in an illicit manner. These persons suspected of having opened and maintained undisclosed bank account overseas, were required to sign and execute / notarize the consent letter to verify the truth of the allegation against them. It is the duty of every citizen of India to cooperate with and join the investigation to ascertain the truth regarding cases with such serious allegation.”
The bench noted that the facts about the Bank Accounts and other circumstances are in the exclusive knowledge of the assessee and non co-operation leads to derailment of investigation. “It is the duty of every assessee to duly respond to statutory notices failing which the law provides imposition of penalty u/s 271(1) (b) of Rs. 10,000/- each default. In this case, assesse’s non-compliance of statutory notice is for more than 3 times in each A. Y.”
Dismissing the appeal, the bench noted that “the Ld. CIT(A) has properly taken note of all these relevant facts, legality of notices, nature of noncompliance and its adverse impact on investigations related to alleged undisclosed HSBC bank account. We find no infirmity in the order of Ld. CIT(A) confirming the imposition of penalty of Rs. 30,000/- each in above assessment years as defaults are more than 3 times. It has been rightly held that there is no law that for each default separate notice u/s 27(1)(b) should be issued on defaulting assessee.”
Read the full text of the Order below.