Pardes Dehydration CO HUF Vs ITO (ITAT Rajkot)
In this case before the Income Tax Appellate Tribunal, the assessee challenged the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 29.10.2025, which had upheld a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961 for Assessment Year 2010-11.
The assessee, a Hindu Undivided Family engaged in the business of import and export of dehydrated vegetables, fruits, food, grains, and other commodities, had filed its return of income on 30.09.2010 declaring total income of Rs. 11,05,035. Assessment under Section 143(3) was completed on 15.03.2013 by making an addition of Rs. 13,64,697 and initiating penalty proceedings under Section 271(1)(c) for alleged furnishing of inaccurate particulars of income.
During penalty proceedings, the Assessing Officer issued a show cause notice dated 26.02.2016 asking why penalty should not be imposed. The assessee replied that no inaccurate particulars had been furnished during assessment proceedings and relied upon the Supreme Court decision in Reliance Petro Products Pvt. Ltd. The Assessing Officer, however, levied a penalty of Rs. 93,112 by order dated 08.03.2016.
The assessee appealed before the CIT(A), who dismissed the appeal. The CIT(A) held that penalty proceedings had been properly initiated and concluded and that a clerical error regarding mention of the assessment year did not invalidate the proceedings in view of Section 292B of the Act. The CIT(A) further held that the assessee’s explanation was not bona fide and that the Assessing Officer’s findings were supported by evidence.
