Author: Khushi J Prajapati
The Income Tax Appellate Tribunal, New Delhi affirmed that proceedings related to the imposition of penalties for contraventions of penal provisions under tax laws are quasi-criminal.
The ITAT critically assessed the evidence provided by the Assessing Officer (AO), noting that reliance on seized documents and statements from individuals associated with Shri Asharam Bapu was insufficient.
The Tribunal highlighted that it is the responsibility of the revenue department to provide clear and categorical findings to justify the imposition of penalties.
Citing relevant judgments, including Shri Surjeet Singh Chhabra vs. Union of India and CIT vs. Kuwer Fibres Pvt Ltd, the ITAT reiterated that while confessions may be considered, they must be supported by strong corroborative evidence to substantiate penalties.
Due to the inadequacy of evidence and specific findings provided by the revenue department, the ITAT concluded that the penalties could not be upheld.
FACTS
Vishwanath Aggarwal was accused of violating sections 269SS and 269T of the Income-tax Act, 1961, due to accepting and repaying cash loans exceeding the permissible limit.
During assessments under section 153A read with section 143(3), it was found that Aggarwal had received large cash loans from Shri Asharam Bapu and his associates, contrary to the provisions requiring transactions above Rs. 20,000 to be conducted via account payee cheques or drafts.
Evidence obtained during a search operation under section 132A, including documents seized by Surat police, revealed cash transactions between Aggarwal and Asharam Bapu’s group.
The Assessing Officer (AO) imposed penalties under sections 271D and 271E for these violations. The appeals were consolidated and adjudicated by the ITAT, Delhi Benches.
Case Details
Parties Involved: Vishwanath Aggarwal (Appellant) vs. Additional Commissioner of Income Tax (Addl. CIT), Range-05, Delhi (Respondent)
Case Numbers: ITAs No. 611 to 618/Del/2022
Assessment Years: 2010-11, 2011-12, 2012-13, 2013-14
Bench: SHRI G.S. PANNU (Vice President) and SHRI ANUBHAV SHARMA (Judicial Member)
Pronouncement Date: 26 July 2024
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