Quantification of penalty is dependent upon the additions made to the income of the assessee

Last updated: 18 August 2021

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This Income Tax Appellate Tribunal ruling clarifies that the quantification of penalties is directly linked to the additions made to an assessee's declared income. The penalty can be up to three times the amount of income concealed or inaccurately reported. The case involved an appeal concerning unexplained cash credits and was remanded for fresh consideration.

Court :
ITAT Delhi

Brief :
This appeal filed by the assessee is directed against the order dated 31.01.2018 passed by the Commissioner of Income Tax(Appeals)-23, New Delhi relating to Assessment Year 2011-12.

Citation :
ITA No. 2076/Del/2018

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI
BENCH ‘B’, NEW DELHI

BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER
AND SH. KULDIP SINGH, JUDICIAL MEMBER
(THROUGH VIDEO CONFERENCING)

ITA No. 2076/Del/2018
(Assessment Year : 2011-12)

Smartspace Infrastructure
Pvt. Ltd.,
67, Friends Colony (West),
New Delhi-110065
PAN No. AAJCS 2713 E

(APPELLANT)

ITO
Ward – 9(1)
New Delhi

(RESPONDENT)

Assessee by Shri Anil Bhalla, C.A.
Revenue by Shri Mahesh Thakur, Sr. D.R.

Date of hearing: 28.07.2021
Date of Pronouncement: 02.08.2021

ORDER

This appeal filed by the assessee is directed against the order dated 31.01.2018 passed by the Commissioner of Income Tax (Appeals)-23, New Delhi relating to Assessment Year 2011-12.

2. Before us, Learned AR submitted that while framing the assessment u/s 143(3), AO had made addition of Rs.56,75,000/- u/s 68, being unexplained cash credit. He submitted that against the order of AO, assessee carried the matter before the CIT(A) who dismissed the appeal of assessee. Thereafter, the matter was carried before the Tribunal. The Tribunal vide order in ITA No.5762/Del/2014 dated 30.05.2018 remanded the matter back to the file of AO for fresh consideration and as per the directions contained therein.

3. It contemplates that assessee would be directed to pay a sum in addition to taxes, if any, payable by him, which shall not exceed three times the amount sought to be evaded by reason of concealment of income or furnishing of inaccurate particulars of income.

4. In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 02.08.2021

Please find attached the enclosed file for the full judgement

FAQ :

The penalty amount is quantified based on the additions made to the assessee's declared income, specifically relating to concealed income or inaccurate particulars furnished.

The penalty shall not exceed three times the amount of income sought to be evaded by reason of concealment of income or furnishing of inaccurate particulars.

The appeal concerned an addition of Rs. 56,75,000/- made by the Assessing Officer under Section 68 for unexplained cash credit.

The appeal filed by the assessee was allowed by the Income Tax Appellate Tribunal.