IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER I.T.A. No.1607/Ahd/2019 (Assessment Year: 2013-14)

Ajay Mayor, Vs. Deputy Commissioner of The Retreat, Opp. Under Bridge, Income Tax, Shahibaug, Ahmedabad-380004 Circle-1(2), Ahmedabad [PAN No.AKWPM6450E]

(Appellant) .. (Respondent Appellant by : Shri S. N. Soparkar, Sr. Adv. &

Ms. Ukti Shah, ARs Respondent by: Shri C Dharani Nath, Sr. DR Date of Hearing 10.03.2026 Date of Pronouncement 13.03.2026

O R D E R

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals)-10, (in short “Ld. CIT(A)”), Ahmedabad vide order dated 28.08.2019 passed for A.Y. 2013-14.

2. The assessee has taken the following grounds of appeal:

“1. Ld. CIT(A) erred in confirming penalty of Rs. 82,91,261/- by invoking provision/s 271(1)(c) of the Act ignoring submission of the appellant that there is neither concealment of income nor furnishing inaccurate particulars of income which leads to invocation of penalty.

2. Ld. CIT(A) failed to appreciate that ld. AO failed to record proper satisfaction as to penalty for concealment of income or furnishing inaccurate particulars of income and without proper satisfaction penalty order required to be quashed. It be so held now.

3. Ld. CIT(A) ought to have considered that amount received on dissolution of trust is capital receipt whereas it is treated as revenue in nature so dispute is debatable in nature and accordingly no penalty can be leviable.

4. Ld. CIT(A) failed to appreciate that in “Schedule FA” in return of income, appellant has disclosed in column by selecting “YES” and this shows bona fide on the part of the assessee and accordingly penalty is required to be deleted. It be so held now.”

3. The brief facts of the case are that the Assessing Officer initiated penalty proceedings against the assessee under section 271(1)(c) of the Income-tax Act, 1961 ("the Act") on the ground that the assessee had furnished inaccurate particulars of income and had concealed the particulars of income. During the course of assessment proceedings, the Assessing Officer observed that the assessee had received a sum of Rs.2,43,93,238/- from Mimosa Trust, a foreign trust established by Mr. Harry Holzman and administered by Pirunico Trustees (Jersey) Ltd. The Assessing Officer observed that the said amount received by the assessee was taxable in India and accordingly brought the same to tax under the provisions of the Act. According to the Assessing Officer, the assessee had not properly disclosed the said receipt in the return of income and therefore had furnished inaccurate particulars of income. On this basis, penalty proceedings under section 271(1)(c) were initiated and the Assessing Officer imposed a penalty of Rs.82,91,261/- holding that the assessee had concealed income and furnished inaccurate particulars in respect of the amount received from the foreign trust. 4. Aggrieved by the penalty order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) and challenged the imposition of penalty. The assessee contended that there was full disclosure of the amount received from Mimosa Trust in the return of income and in the notes accompanying the return. It was submitted that the receipt was treated by the assessee as a capital receipt and the complete particulars of the transaction had been furnished before the Assessing Officer during the assessment proceedings. The assessee further submitted that that the addition made by the Assessing Officer was only on account of a difference of opinion regarding the taxability of the receipt and therefore the same could not be treated as concealment of income. In support of this contention, the assessee placed reliance on the decision of the Special Bench of the Ahmedabad Tribunal in Gujarat Credit Corporation vs. ACIT (200