Case Law Details
Edward Sam Vs ITO (ITAT Chennai)
In the case of Edward Sam Vs. Income Tax Officer (ITO) heard at ITAT Chennai, The appeal challenges the penalty under section 271(1)(c) of the Act imposed on the taxpayer for alleged concealment of income. Tribunal analyzes the application of penalty provisions and the use of peak credit theory for quantum additions.
Edward Sam, a retired BHEL employee, filed his return for AY 2011-12, showing an income of 2,92,178/- after deducting house property loss. The assessment was completed under section 143(3) by adding ₹.25,00,000/- under section 69A for cash deposits. The CIT(A) partly allowed the appeal, considering peak credit and personal cash consumption. Subsequently, the Assessing Officer initiated penalty proceedings under section 271(1)(c), which were confirmed by the CIT(A). The taxpayer contended that peak credit theory was applied, and no concealment occurred.
The ITAT Chennai allowed the appeal, stating that once the CIT(A) had determined unexplained cash credit using peak credit estimation, penalty provisions u/s 271(1)(c) had no application. This case clarifies the scope of penalty provisions and highlights the importance of considering the methodology used for quantum additions.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
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