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2017 (11) TMI 1762 - ITAT MUMBAILevy of concealment of penalty u/s 271(1)(c) - addition of unexplained cash credit u/s 68 - AO has initiated the penalty proceedings u/s 271(1)(c) on the ground that the assessee has furnished inaccurate particulars of its income - mistake in notice - Held that:- As decided in MAK DATA P. LTD. VERSUS COMMISSIONER OF INCOME TAX-II [2013 (11) TMI 14 - SUPREME COURT] AO has to satisfy whether the penalty proceedings be initiated or not during the course of the assessment proceedings and the AO is not required to record his satisfaction in a particular manner or reduce it into writing. As decided in COMMISSIONER OF INCOME-TAX VERSUS SMT. KAUSHALYA AND OTHERS [1995 (1) TMI 25 - BOMBAY HIGH COURT] under section 274 all that is required is that the assessee should be given an opportunity to show cause. No statutory notice has been prescribed in this behalf. Hence, it is sufficient if the assessee was aware of the charges he had to meet and was given an opportunity of being heard. A mistake in the notice would not invalidate penalty proceedings The sequence of events as narrated hereinbefore is : (i) the assessee-company filed its return of income for the AY 2008-09 on 09.07.2008 disclosing total income of ₹ 11,49,410/-, (ii) the AO issued notice u/s 148 on 21.02.2012, (iii) the assessee filed an affidavit on 20.03.2013 offering ₹ 15,00,000/- to tax and (iv) the AO complete the assessment on 22.03.2013 making an addition of ₹ 15,00,000/- to the income shown by the assessee. The background as delineated hereinbefore is that during the course of search and seizure action u/s 132 conducted in the case of M/s Mahasagar Securities Pvt. Ltd., it was revealed that these were fraudulent transactions. This led the assessee-company to offer ₹ 15,00,000/- to tax by filing an affidavit before the AO on 20.03.2013. Therefore, the submission of the Ld. counsel of the assessee delineated at para 9 hereinbefore loses its significance. Where the assessee himself voluntarily concedes that a particular item of income had been concealed by him and surrenders such income for the purpose of assessment, there is nothing left for the Revenue to prove the factum of it being assessee’s income and also the factum of it having been concealed by him. In such cases, such concession by the assessee may afford sound foundation for the imposition of penalty. To recapitulate, the AO issued the notice u/s 148 on 21.02.2012. The assessee-company filed an affidavit on 20.03.2013 offering ₹ 15,00,000/- to tax. The said affidavit filed by the assessee has not explained the manner in which the said income was earned and the reason, if any, for not offering the said income to tax in the original return filed or in response to the notice issued u/s 148. - Decided against assessee.
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