Charu Modi Bhartia Vs DCIT (ITAT Delhi)
In the case of Charu Modi Bhartia Vs DCIT before the ITAT Delhi, the tribunal overturned a penalty levied under Section 271(1)(b) of the Income Tax Act. The penalty stemmed from the assessee’s refusal to sign a consent waiver form regarding an alleged foreign bank account in HSBC Geneva. The tribunal noted that the assessee consistently denied ownership of any account with HSBC Geneva, citing lack of evidence linking her to such an account. She clarified that she held a single foreign account with HSBC London, details of which were already disclosed.
The Assessing Officer (AO) relied on incomplete information to levy the penalty. The tribunal observed that the documents presented neither conclusively identified the bank as HSBC Geneva nor showed any financial transactions attributable to the assessee. During investigation, the assessee cooperated fully, appearing for hearings and providing detailed responses. She also stated that legal advice prevented her from signing the consent form for an account she categorically denied owning.
The tribunal highlighted that the department’s evidence lacked clarity, as it failed to establish the existence of the alleged bank account or connect it to the assessee. Moreover, the AO’s reference to information from foreign authorities was inconclusive, and no additions were made to the assessee’s income based on the account. The tribunal ruled that the penalty for non-compliance with Section 142(1) was unwarranted in light of the incomplete and ambiguous evidence.
