Pawan Satyanarain Jalan Vs Assessing Officer Central (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) of Ahmedabad recently ruled on the case of Pawan Satyanarain Jalan Vs Assessing Officer Central. The case pivots around the penalty imposed under Section 271AAB of the Income Tax Act due to cash received by a minor grandson on his birthday, which came under the scanner during search proceedings.
The ITAT order was based on the context that the appellant group had a turnover exceeding Rs. 300 crores in the year under review, with tax payments exceeding Rs. 2 crores annually. The ITAT observed that the penalty amount under contention was relatively small, given the financial status of the appellant group. The Tribunal noted that the cash amount in the minor grandson’s name could not justifiably be seen as an attempt to evade taxes. Also, ITAT considered previous judgments and reiterated that penalty proceedings are quasi-criminal and should be levied only when a deliberate violation of law is observed. In this case, no such deliberate defiance was found.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The instant appeal filed by the assessee is directed against the order dated 15.06.2022 passed by the Ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad arising out of the penalty order dated 10.02.2022 passed by the CIT, Central Circle-1(2), Ahmedabad under Section 271AAB of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Year 2019-20.
2. The impugned order passed by the Ld. CIT(A)-11, Ahmedabad under Section 271AAB of the Act confirming penalty of Rs.1,50,000/- on addition of Rs.2,50,000/- is under challenge before us.
3. The brief facts leading to the case is this that a search under Section 132 of the Act was conducted in the case of Sankalp Group of Ahmedabad at various premises on 30.10.2018 and subsequent dates. The appellant derived income from business in textile in the name and style of M/s. Basant Fabrics. Apart from that, he had income from salary and income from other sources. Consequently, notice under Section 143(2) of the Act dated 20.02.2020 for the year under consideration was issued and the same was finalized on 26.02.2021 determining total income of Rs.5,30,59,850/- upon making additions to the tune of Rs.39,45,245/- on several counts in the following manner:
