Penalty for Unsecured Loans Not Automatic Merely for Section 68 Addition: ITAT Bangalore

Ganganally Mallappa Basavaraju Vs ITO (ITAT Bangalore) Bangalore ITAT Deletes Penalty U/s 271AAC – Penalty for Unsecured Loans Not Automatic Merely Because Addition Was Made U/s 68 In a significant ruling, the Bangalore ITAT held that penalty u/s 271AAC is not automatic merely because an addition is made u/s 68 towards unsecured loans. The Tribunal emphasized that penalty proceedings are quasi-criminal in nature and discretionary powers vested with the AO must be exercised judiciously. The assessee, a civil works contractor engaged in Government contracts, had filed an updated return u/s...