Case Law Details
Mahaveerchand Jain Vs DCIT (ITAT Chennai)
Facts- The assessee being resident individual was assessed u/s 143(3) r.w.s. 147 of the Act wherein the income was assessed at Rs.20.47 Lacs after certain additions of unexplained cash deposits in the bank account of the assessee. The assessee was engaged in the business of auctioneering under the name ‘Kankaria Auctioneers’. Pursuant to search action on Shri Jaswant Chand Bhandari on 12.08.2004, it was found that the said group sold jewellery and diamonds through ‘Kankaria Auctioneers’. Accordingly, the assessee’s case was reopened wherein it was found that cash was deposited by the assessee in his account with Vijaya Bank. The assessee could not explain the source of cash deposit but submitted that the income portion is only the margin / commission earned out of such auction sales. However, rejecting the same, Ld. AO added cash deposits in the hands of the assessee. The additions were confirmed in first appellate order.
Consequently, penalty proceedings were initiated against the assessee and notice u/s 274 r.w.s. 271(1)(c) was issued on 30.03.2006. Though the assessee opposed penalty, however, Ld. AO found it fit case for levy of penalty u/s 271(1)(c) and accordingly, a penalty of Rs.5.50 Lacs was proposed in penalty order dated 25.03.2014. Aggrieved, the assessee agitated the penalty before Ld. CIT(A).
Conclusion- Held that since no specific charge was framed either in the show-cause notice or in the body of penalty order and there was failure on the part of Ld. AO to frame specific charge against the assessee, the penalty would not be sustainable in the eyes of law. By deleting the impugned penalty, we allow the appeal.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
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