AO can impose penalty u/s 271(1)(c) if assessee fails to provide plausible explanation with regard to source of the cash deposits made in his bank account.

Penalty—Assessee filed return of income—During assessment proceeding, AO noted that assessee had made cash deposits in respective bank accounts—Accordingly, AO made additions as no plausible explanation was given by assessee—CIT(A) confirmed addition—Assessee did not raise said issue before ITAT thus, addition made by AO had attained finality—During penalty proceeding also assessee could not offer any plausible explanation before AO as well as before CIT(A) and only bald statements were made stating that such receipt was on occasion of marriage of son—Consequently, AO imposed penalty u/s 271(1)(c) which was subsequently confirmed by CIT(A)—Held, assessee has not offered any explanation supported by evidences as to receipt of cash gifts on occasion of marriage of son, which cash it was claimed stood deposited in bank account—CIT(A) confirmed penalty as no explanation was forthcoming from assessee—Only bald statement was made that said amount was received as gift in cash on occasion of son’s marriage—Apart from this bald statement, no further evidence/details were forthcoming from assessee—Thus, no reasons were found to believe assessee’s contentions and hence, penalty as levied by AO u/s 271(1)(c) was confirmed—Assessee’s ground dismissed.

ELENJICKAMALIL V. THOMAS vs. DEPUTY COMMISSIONER OF INCOME TAX

(2019) 55 CCH 0489 MumTrib