Case Law Details
V.S.J. Marketing Pvt. Vs DCIT (ITAT Chennai)
The Income Tax Appellate Tribunal (ITAT) in Chennai recently ruled on the case of V.S.J. Marketing Pvt. Ltd. Vs Deputy Commissioner of Income Tax (DCIT), concluding that failure to furnish a Return of Income is tantamount to concealing particulars of income. The Tribunal upheld a penalty under section 271(1)(c) for Rs. 140.86 Lacs for the Assessment Year (AY) 2010-11. This article provides a comprehensive analysis of the ruling and its implications.
Background: The assessee, V.S.J. Marketing Pvt. Ltd., was in appeal against the confirmation of penalty under section 271(1)(c) of the Income Tax Act. The assessee had been initially assessed on a best-judgment basis under section 144 r.w.s. 147 of the Act for not filing a return of income. The Assessing Officer (AO) estimated the income based on the peak credit in the bank accounts and levied a penalty, which was later confirmed by the Commissioner of Income Tax (Appeals).
Core Issues and Proceedings: The main point of contention was whether the assessee’s failure to furnish a Return of Income could be treated as an act of concealment of income. The assessee argued that the penalty was unjustified due to the lack of a specific charge and claimed the notice under section 271(1)(c) was vague.
However, the ITAT took into account that the assessee had not been cooperative during the assessment as well as the penalty proceedings. The Tribunal cited a similar case ruled by the Hyderabad Tribunal, which confirmed the penalty under parallel circumstances.
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