ITAT confirms Penalty since Assessee failed to Disclose Income during Scrutiny Proceedings as well as Appellate Proceedings [Read Order]

Imposing Penalty - ITAT - Taxscan

While considering the appeal filed by the assessee Hyderabad bench of Income Tax Appellate Tribunal (ITAT) confirmed penalty imposed by the Assessing Officer (AO) since the assessee failed to disclose income till the scrutiny proceedings as well as appellate proceedings over, not only for ‘concealment of income’ but also for ‘furnishing inaccurate particulars of income’.

Assessee in the case, is an individual engaged in the business of running a Xerox machine has filed his return of income for the relevant assessment year declared a total income of Rs. 7,57,350.

During the assessment proceedings, it was found that the assessee made a number of transactions by cash deposits and withdrawals in the financial year and the total deposit of Rs. 10,49,150 which were not reflected in the balance sheet of the assessee. Accordingly, the AO reopened by issuing a notice under Section 148 of the Income Tax Act 1961. The assessee admitted additional income of Rs. 5,50,000 only as against Rs. 10,49,150 which was not reflected in the balance sheet. Therefore, AO completed assessment by adding total cash deposits of Rs. 10,49,150.

Assessee contended that the peak credit working was based on the bank accounts in the name of assessee and his wife in Canara Bank and ING Vysya Bank Since major transactions were reflected in Canara Bank, much stress was not made on the other two accounts. Assessee having offered to tax ‘peak credit’ in the revised return, it was submitted that it is not a fit case for levy of penalty.

After considering all the submissions of both the parties the bench including Vice President D.Manmohan has observed that the fact remains that the Income Tax Act provides for filing of revised return within the time provided under section 139(5) of the Act and it will be attract penalty when the assessee disclosed the revised return after the stipulated time limit mentioned in the aforesaid section of the act.

The bench noted that in the instant case, the assessee have declared the additional income only after discovery of the AO with regard to total deposits not reflected in the balance sheet, it was a clear case of ‘concealment of income’ and non-recording of the deposits in the balance sheet would amount to furnishing of inaccurate particulars of income. Hence, it was concluded that the assessee has failed to disclose the income within the stipulated time limit and accordingly it would be attract penalty.

Subscribe Taxscan Premium to view the Judgment
taxscan-loader