The Ahmedabad Bench of Income Tax Appellate Tribunal has allows appeal against imposing penalty u/s 271(1)(c) without specifying the reason for imposing penalty.
The appellant, Bhikhabhai Ambalal Patel, filed income tax return for the A.Y. 2008-09 and A.Y. 2013-14 declaring gross total income of Rs.2,85,560/- and Rs.14,72,744/-respectively.
The Assessing Officer in A.Y. 2008-09 made addition of Rs.3,61,733/- on account of cash deficit and in A.Y. 2013-14 made addition of Rs.9,89,864/- on account of depreciation, disallowance under Section 40(a)(ia) of the Act as well as unexplained cash deposit and undisclosed interest income. The penalty under Section 271(1)(c) of the Act was imposed in both the assessment years by the Assessing Officer.The appeal before CIT (A) was dismissed and filed second appeal before the ITAT.
The counsel for the assessee Mr. Harshadbhai Parmar, by relying the decision Apex Court in CIT vs. Reliance Petroproducts Pvt. Ltd., submitted that mere existence of addition during the assessment proceedings does not attract provisions of Section 271(1)(c) of the Act.
The Coram of Ms. Suchitra Kamble, Judicial Member and Mr. Waseem Ahmed, Accountant Member has held that “the CIT(A) has not pointed out as to on what basis the penalty was imposed. In fact, notice under
Section 274 read with Section 271(1)(c) of the Act has also not revealed the proper limb of invocation of Section 271(1)(c) penalty. Besides, the additions made by the Assessing Officer does not contemplate that there is concealment of income or filing of inaccurate particulars of income on the part of the assessee. Therefore, the penalty does not survive. Hence, both the appeals of the assessee are allowed”.
Mr. R.R. Makwana appeared on behalf of the revenue.
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