Brief of the case:
- The ITAT Bangalore in the case of Shri E. Krishnappa vs. ITO held that initiation of penalty proceedings u/s 271(1)(c) without mentioning its basis i.e. concealment of income or furnishing inaccurate particulars or both would make the proceedings illegal because AO’s satisfaction of the existence of the grounds mentioned in Section 271(1)(c) is a mandatory for initiation of proceedings.
- The additional ground can be admitted by the tribunal if it challenges the very legality of penalty proceedings as the same being non-curable defect.
Facts of the case:
- The assessee filed his return of income for Assessment Year 2007-08 on 30.7.2007 declaring income of Rs.2,22,430. For Assessment Years 2008-09 and 2009-10, the assessee filed his returns of income on 8.1.2010 declaring income of Rs.81,96,000 and Rs.27,45,805 respectively. A survey under Section 133A of the Income Tax Act, 1961 (in short ‘the Act’) was conducted at the assessee’s premises on 11.11.2009.
- The assessee along with one Sri M.N. Reddy developed a layout of sites known as ‘Singapore Layout’ at Vidyaranyapura, Bangalore and sold the sites jointly. Consequent to the survey under Section 133A of the Act the assessee declared his share of income from the joint venture at ‘Singapore Layout’.
- For AY 2007-08 , 2008-09 and 2009-10 the assessee filed a revised return of income declaring an income of Rs. 84,56,800, Rs. 81,96,000 ,Rs. 27,96,500 respectively for the AY 2007-08,2008-09,2009-10.
- Subsequently, the case of assessee was reopened u/s 148 and AO passed an order to levy penalty @100% of the income from joint venture disclosed in revised return filed after survey on the ground that the assessee had concealed particulars of his income and furnished inaccurate particulars of income.
- The same were also confirmed by CIT(A). Aggrieved assessee is in appeal before ITAT Bangalore.
Contention of the Assessee:
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