Section 271AAC of the Income Tax Act pertains to the penalty for under-reporting and misreporting of income. It imposes a penalty on taxpayers who have deliberately under-reported or misreported their income to evade tax liabilities. The section specifies the amount of penalty and provides guidelines on the imposition and calculation of the penalty. Understanding Section 271AAC is crucial for taxpayers to accurately report their income and comply with tax regulations to avoid penalties and legal consequences. This description provides an overview of Section 271AAC and its implications for under-reporting and misreporting of income under the Income Tax Act.
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ITAT Delhi held that the assessee was covered under the search proceedings even though its name did not specifically appear in the panchnama because the warrant referred to “& Ors.” The Tribunal therefore upheld jurisdiction under Section 153A.
The Tribunal ruled that the use of the word may in Section 271AAC gives discretionary power to the Assessing Officer and does not mandate automatic penalty levy. It emphasized that such discretion must be exercised judiciously.
ITAT Delhi held that penalty under Section 271AAC cannot survive once the underlying Section 153C assessment is quashed. The Tribunal deleted the penalty after noting that the quantum assessment itself no longer existed.
ITAT Hyderabad holds that Section 68 cannot apply to opening balances; remands ₹55.53 lakh addition for verification, directing AO to examine prior-year records and delete addition if no fresh credit arose during the year.
ITAT Mumbai deleted Section 69 addition for alleged on-money as no direct evidence linked assessee. Pen drive data lacked Section 65B proof and cross-exam was denied, rendering addition unsustainable.
The issue was whether income from hybrid seed production on leased land qualifies as agricultural income. The Tribunal held that ownership is not necessary if the assessee exercises control, bears risk, and performs agricultural operations.
The issue was whether addition can be made based on third-party investigation findings. The Tribunal held that without direct incriminating evidence, such addition is unsustainable, emphasizing the need for nexus.
ITAT set aside the addition made under Section 68 due to incomplete verification of a large gift transaction. It remanded the case for fresh examination with proper evidence and opportunity.
ITAT Chennai held that where unaccounted purchases are found and the corresponding sales are not doubted, only the profit element embedded in such purchases can be brought to tax, and not the entire purchase value. Accordingly, addition towards unaccounted purchases duly restricted.
The tribunal examined whether penalties could continue when the fresh assessment order did not record satisfaction for initiating them. It ruled that absence of such satisfaction makes the penalties invalid in law.
