Amish Anantrai Modi Vs DCIT (ITAT Mumbai)
The appeal before the Income Tax Appellate Tribunal arose from a penalty order passed under section 271(1)(c) of the Income-tax Act, 1961 for Assessment Year 2011–12. The assessee challenged the order of the Commissioner of Income-tax (Appeals), which had confirmed the penalty imposed by the Assessing Officer. The original assessment was completed under section 143(3) read with section 153C, determining income higher than the returned figure. Subsequently, reassessment proceedings were initiated under section 147, during which the Assessing Officer alleged that the assessee was engaged in providing accommodation entries and treated the entire purchases as bogus, making a substantial addition under section 68.
On appeal, the Commissioner (Appeals) upheld the reassessment. However, in further appeal, the Tribunal restricted the addition to 3% of the alleged accommodation entries, treating it as commission income. Following this, the Assessing Officer levied penalty at 200% of the tax sought to be evaded, which was upheld by the Commissioner (Appeals). The assessee contested the penalty before the Tribunal.
The assessee argued that the penalty proceedings were vitiated due to defective notices issued under section 274 read with section 271(1)(c), as the notices did not clearly specify whether the charge was for concealment of income or furnishing inaccurate particulars. It was also submitted that while the Assessing Officer invoked both limbs in the penalty order, the Commissioner (Appeals) proceeded only on concealment, indicating a change in the basis of the charge. Additionally, the assessee contended that since the addition ultimately sustained was only an estimated 3% of the alleged transactions, penalty could not be levied on such ad hoc or estimated additions.
