When assessee fails to rebut the addition made by the AO in respect of undisclosed income found during the search and also chooses not to file appeal against the huge quantum addition, penalty is warranted in such circumstances

Earth Castle Vs Dy. Commissioner of Income tax (ITAT Mumbai) – Imposition of penalty under s 271(1)(c) is sustainable if the assessee is unable to substantiate an explanation in relation to the addition made by the AO in respect of the undisclosed income found  during the search and also did not file appeal against the addition.

Earth Castle Vs Dy. Commissioner of Income Tax

Decided by- ITAT Mumbai

ITA No. 3064/Mum/2008Please become a Premium member. If you are already a Premium member, login here to access the full content.