2010 (1) TMI 32 - DELHI HIGH COURT

Penalty u/s 271(1)(C) – Due to loss, assessee did not file the return – on issuance of notice u/s 148 assessee filed a return of loss - The Assessing Officer after being unable to obtain copies of the seized documents, based his assessment order on the limited documents provided and rejected the book results declared by the assessee. He estimated the income of the assessee at Rs 61,00,000/- (rupees sixty one lakh) as against the returned loss of Rs 83,64,468 – AO initiated the penalty u/s 271(1)(c) - The assessee submitted that no penalty could be levied as the additions were made on estimate basis and that no satisfaction had been recorded by the Assessing Officer. – CIT(A) deleted the penalty, ITAT confirmed the order of CIT(A)– held that - Penalty being a quasi criminal proceeding there is a duty cast on the AO to establish the guilt of the assessee in concealing the income or furnishing of inaccurate particulars of such income. As stated the seizure of the books of the police is not an act of the assessee. No motives can be attributed to the non-availability of books of accounts to examine and verify the various claims made by the appellant – penalty deleted