Mere Non-production of Parties won’t constitute ‘Concealment’: ITAT deletes Penalty [Read Order]

SEBI Penalty - penalty - ITAT

The Delhi bench of the Income Tax Appellate Tribunal (ITAT), while deleting a penalty order under section 271 (1) (c) of the Income Tax Act, held that mere non-production of parties before the Assessing Officer during the proceedings would not constitute ‘concealment’ for the purpose of imposing penalty.

After the assessment proceedings were completed under section 143(3) read with 147 of Income Tax Act, 1961, the AO made addition on account of unexplained bank deposits/loans including interest amounting to Rs.19,65,435/-, Rs.14,96,99/- and Rs.13,55,858/-. While passing final assessment order, the AO also initiated penalty proceedings under section 271 (1) (c) of the Act, for concealment of income.

With regard to the bank deposit, the assessee contended that these were monies received as advance from various parties against proposed sale of land. The copies of agreement to sell evidencing receipt of amount of Rs.8,50,000/-from parties concerned were produced before the Assessing Authority. The assessee further submitted that three parties from whom monies has been received had submitted confirmation to the effect, along with returns filed for assessment year 2000-2001. It was argued that these persons could not be produced before the AO, since summons issued was after 10 years of alleged sale.

While deleting the penalty order, the Tribunal held that “In our opinion assessee had filed details regarding deposits and sources from where deposits have been made in bank account. Merely because parties were not produced before Ld.AO to establish genuineness of transaction, cannot lead to concealment. At the most addition deserves to be sustained as has been already confirmed by this Tribunal. In our view alleged addition forms part of records and therefore there cannot be any concealment as has been alleged by authorities below. We are therefore inclined to delete penalty.”

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