The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) held that the assessee has neither concealed the particulars of income nor has furnished inaccurate particulars of income so as to levy of penalty under Section 271(1)(c) of the Income Tax Act,1961.
The assessee in this case is M/s. Harson Labs Pvt. Ltd. During the assessment proceeding the Assessing Officer (AO) imposed penalty under Section 271(1)(c) of the Income Tax Act in respect of Fresh deposits received during the year as Rs. 13,80,000/- treated as “Concealment of Income and Rs. 5,10,000/- paid Interest to all Depositors (Old and New) as well as on ceased liability alleging as “furnishing inaccurate particulars of income.
Aggrieved by the order the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)], which confirmed the penalty under Section 271 of Income Tax Act by observing that the appellant failed to discharge its onus with regard to cash credits as required under Section 68 of the Income Tax Act and failed to file even the primary confirmations. Even on the point of disallowance of interest, the appellant could not discharge its onus as required under Section 37(1) of the Income Tax Act therefore found no reason to interfere with the order of AO.
Further aggrieved the assessee filed an appeal before the Tribunal
The Authorised Representative of the assessee submitted that so far as the addition under Section 68 of the Income Tax Act amounting to Rs. 13,80,000/- is concerned, ITAT Ahmedabad in the assessee’s own case in ITA No. 2363/Ahd/2018 for A.Y. 2015-16 has allowed the appeal of the assessee and had deleted the aforesaid addition under Section 68 of the Income Tax Act.
The AR further submitted that the aforesaid amount represented interest paid / credited to respective creditors / depositors. Accordingly, there is no question of either furnishing of inaccurate particulars of income or concealment of income so as to invoke to provision of Section 271(1)(c) of the Act, looking into the instant set of facts.
The Departmental Representative (DR) placed reliance on the observations made by the Assessing Officer and CIT(A) in their respective order
The Bench comprising of Waseem Ahmed, Accountant Member and Siddhartha Nautiyal, Judicial Member observed that the sum of Rs. 5,10,090/- was the interest paid / credited on the aforesaid cash credits as well as seized liability and therefore, since this issue has been decided in favour of the assessee by the ITAT, the Tribunal is of considered view that this is not a fit case for levy of penalty under Section 271(1)(c) of the Income Tax Act.
The Tribunal held that this is not a case where the assessee has concealed the particulars of income or has furnished inaccurate particulars of income so as to levy of penalty under Section 271(1)(c) of the Income Tax Act.
Hence the appeal of the assessee is allowed.
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