DCIT Vs Vinod Ramchandra Jadhav (ITAT Pune)
1. Facts of the Case
Vinod Ramchandra Jadhav, an individual assessee, filed his return of income for A.Y. 2010-11 under section 139(1) declaring an income of ₹77,29,880. Pursuant to a search conducted on 31.10.2010 under section 132 in the Sava Group, he was also covered and subsequently filed returns under section 153A for A.Y. 2007-08 to 2012-13. He also approached the Income Tax Settlement Commission (ITSC) under section 245C(1) offering additional income for settlement across these years.
However, the ITSC, while considering his application, made a substantial addition of ₹39.20 crores towards salary income from a foreign entity over and above the income disclosed. The assessee defaulted in paying the tax due on the Settlement Commission’s order, leading to withdrawal of immunity granted earlier under section 245H(1A). Subsequently, penalty proceedings under section 271(1)(c) were initiated and a penalty of ₹12,27,93,180 was levied by the Assessing Officer.
2. Assessee’s Arguments
- The penalty was time-barred under section 275 of the Act as it was passed beyond the prescribed limitation period.
- The Assessing Officer lacked jurisdiction to levy the penalty once the matter was before the Settlement Commission, in terms of section 245F(2).
- The additions made, especially salary from foreign sources, arose due to interpretation differences regarding residential status, which is a debatable legal issue.
- The ‘buffer income’ offered was voluntary to cover inadvertent errors and should not attract penalty.
- No deliberate concealment of income occurred; hence, penalty under section 271(1)(c) was not warranted.
- The issue of residential status is pending before the Hon’ble Bombay High Court, where a substantial question of law has been admitted.
3. Department’s Arguments
