The Chennai bench of the Income Tax Appellate Tribunal (ITAT) held that if a person fails to furnish return of income then the assessee is deemed to have concealed the particulars of his income.
The assessee was assessed on best judgment basis under section 144 r.w.s. 147 of the Act on 28.08.2018. The assessee was stated to be defunct company at the time of reopening of assessment. In response to notice under section 148, the assessee did not file any return of income. The AO made best judgement assessment and estimated income of Rs.469.63 Lacs on the basis of peak credit in the bank accounts. In the assessment order, the penalty was levied by AO by stating that ‘Penalty proceedings under section 271(1)(c) are initiated separately’. In the meanwhile, the assessee preferred petition under section 264 against quantum addition which got rejected.
Subsequently, a notice under Section 271(1)(c) of the Income Tax Act was issued on 28.12.2018 wherein AO alleged as under: “have concealed the particulars of your income or furnished inaccurate particulars of such income.” However, the assessee remained unresponsive and did not attend penalty proceedings. Thus, the AO levied impugned penalty by observing that the assessee had concealed his particulars of income and the mere act of non-cooperation in all the proceedings, clearly tantamount to willful concealment of income.
After hearing both the sides, the tribunal noted that it emerges that the assessee has remained noncooperative during assessment proceedings as well as during penalty proceeding. The assessment was framed on best judgment basis and the same has attained finality by way of rejection of assessee’s application under Section 264 of the Income Tax Act. The assessee did not file any return of income for this year. During penalty proceedings also, a show cause notice was issued to the assessee to defend the levy of penalty. However, the assessee did not bother to reply to the same and failed to make any submissions.
The two member bench consisting of Mahavir Singh (Vice president) and Manoj Kumar Aggarwal (Accountant member) held that The assessee has remained non-cooperative in all the proceedings. The cited case law of Hyderabad Tribunal bench supports the case of the revenue wherein similar facts exist. The bench, in para-23 of the order, considered Explanation-3 to Section 271(1)(c) which provides that if a person fails to furnish return of income then the assessee is deemed to have concealed the particulars of his income.
Accordingly it was held that it was clear case of concealment of income and penalty was justified. Even on merits, the assessee has no case since the assessment has attained finality confirming the quantum addition as made by AO. Therefore,the bench did not find any reason to interfere in the impugned order. Thus the appeal of the assessee was dismissed.
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