INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Leviability - No failure to comply with section 142(1) notice as alleged by AO -

AO pursuant to search conducted at assessee's premises, proceeded to frame section 153A assessment and issued notice under section 142(1) to assessee. In said notice AO mentioned that there was a certain information available with department that assessee was having acount in HSBC Geneva Switzerland, and therefore, assessee was required to furnish details/evidences regarding acount opening form in resepct of HSBC Geneva Switzerland, complete statement of alleged bank acount, residential status of assessee on the opening of foreign bank account, and further, it was requried by AO that in case assessee did not have a bank account, bank statement, then assessee should sign consent letter so that department could be able to obtain statement from the bank. As assessee refused to sign consent waiver form for bank acount HSBC Geneva Switzerland, AO levied penalty under section 271(1)(b) on the ground of failure on part of assessee to comply with notice under section 142(1). Held: From perusal of information as scanned in assessment order as well as material available on record, it could be seen that nowhere said document contained the name of HSBC Bank Account Geneva Switzerland. Even during the course of search when assessee was confronted with this fact, he under the statement on oath stated that he had never opened any bank account in overseas and he denied having maintained such account. This stand had been taken all throughout the proceedings. Even in statement recorded under section 132(4) during course of search, there was no mention of account in HSBC Bank Geneva Switzerland nor was any such information or material confronted to the assessee with details of particular bank account till the date of initiation and levy of penalty. In response to the said notice under section 142(1), assessee had reiterated the same and had duly complied with in his reply to AO. Also, in quantum proceedings from the stage of Tribunal entire addition stood deleted on the ground that same was beyond the scope and ambit of section 153A as no incriminating material was found during search once there was no incriminating material, neither any such information was available with AO, then where is the question of roping such an addition or making such inquiry in the assessment proceedings. Accordinlgy further, there is no provision under section 142(1) that assessee is required to sign document thrust upon him when assessee himself has denied the content of document and denied having maintaining such bank account, penalty under section 271(1)(b) could not be levied because not signing of consent waiver form constituted reasonable cause in terms of section 273B.

Supported by:CIT v. Kabul Chawla, (2016) 380 ITR 573 (Del-HC) : 2015 TaxPub(DT) 3486 (Del-HC), CIT v. Meeta Gutgutia, (2017) 395 ITR 526 (Del-HC) : 2017 TaxPub(DT) 1767 (Del-HC) and Pr. CIT v. Best Infrastructure (India) Pvt. Ltd. (2017) 397 ITR 82 (Del-HC) : 2017 TaxPub(DT) 3839 (Del-HC).