TMI Blog2014 (3) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... him - Therefore, the AO is correct in holding that the assessee has willfully concealed the particulars of his income by not disclosing the fact of maintaining bank account with ICICI Bank - The concept of "reasonable cause" or exception as contended by the assessee has no applicability to the penalty proceedings u/s. 271(1)(c) of the IT Act - The assessee was maintaining unaccounted bank account and made huge cash deposits in the bank account and when the details were called for from the bank, the assessee had to make surrender of such income – Decided against Assessee. - ITA No. 232/Agra/2012 - - - Dated:- 28-2-2014 - Shri Bhavnesh Saini And Shri Pramod Kumar,JJ. For the Appellant : Shri Roopkishore Agarwal, Advocate For the Respondent : Smt. Anuradha, Jr. DR ORDER Per Bhavnesh Saini, J. M. This appeal by the assessee is directed against the order of ld. CIT(A)-II, Agra dated 15.02.2012 for the assessment year 2007-08, challenging the levy of penalty u/s. 271(1)(c) of the IT Act. 2. Earlier this appeal was dismissed in default vide order dated 26.09.2012. The assessee moved M.A. for recalling of exparte order. The Tribunal on being satisfied wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty as to why penalty should not be imposed for concealment of income as discussed in the assessment order dated 29.09.2009. The assessee did not file any reply to the show cause notice. Therefore, again one more opportunity was given but again on the date fixed nobody appeared before the AO and even no written submissions was filed. The AO, therefore, held that the assessee willfully attempted to evade tax and committed default u/s. 271(1)(c) of the Act and had this case not been taken for scrutiny assessment, this income would have been left from assessment. Minimum penalty of Rs.44,050/- was accordingly imposed. 5. The assessee challenged the levy of penalty before the ld. CIT(A) and it was submitted that the assessee suo moto worked out peak balance in the bank account at Rs.2,05,070/-. Therefore, no penalty should have been imposed because the assessee voluntarily surrendered the additional income as above and paid the taxes. The ld. CIT(A) did not accept the contention of the assessee because the income was revised only after selection of case for scrutiny and department was in the knowledge of transaction in the bank account. Therefore, act of revising the return could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this bank account was concealed from the department was not at all explained at any stage. There is, therefore, no question to disclose unaccounted bank account voluntarily to purchase peace of mind. There is no acceptance by the department that no penalty would be levied. There cannot be estoppel against law because the AO cannot give any assurance not to levy penalty in such circumstances. It may be the submission of the assessee only, therefore, no legal importance can be attached to the submissions of the assessee. Hon ble Supreme Court in the case of Mak Data P. Ltd. vs. CIT, 358 ITR 593 held that there is no automatic immunity from penalty on voluntary surrender of income. The surrender subject to non-initiation of penalty proceedings and prosecution does not absolve assessee from liability to penalty. It was further held that satisfaction of the AO about concealment of income need not be recorded in a particular manner. 5.2 Hon ble Bombay High Court in the case of Jyoti Laxman Konkar vs. CIT, 292 ITR 163 held The assessee had filed a return for the assessment year 1999- 2000 declaring an income of Rs.7,40,510. Not satisfied therewith, the Assessing Officer carried o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmed by the Tribunal. On appeal to the High Court: Held, allowing the appeal, that the assessee had concealed the material facts and given incorrect statement of facts in the application and also not provided information required by the Assessing Officer, after receipt of notice. Accordingly the action of the assessee was neither bona fide nor voluntary. The manner in which the assessee had tried to prolong the case before the Assessing Officer by not providing information immediately and by narrating incorrect facts in the letter dated December 6, 2006 showed that the assessee had concealed the income and disclosure was not voluntary but under compulsion being cornered by the Assessing Officer. Penalty had to be imposed. 5.4 Hon ble Gujrat High Court in the case of LMP Precision Engg.. Co. Ltd. vs. DCIT, 330 ITR 93 held The Deputy Director of Income-tax (Investigation), Bombay undertook survey action some time in September, 1988 and on verification of certain purchases made by the assessee it was found that the purchases did not appear to be genuine. Before the proceedings could be finally concluded the assessee filed a declaration under section 273A of the Act di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee could not be stated to have voluntarily come forward to disclose income which had unintentionally been omitted from the original return of income. The imposition of penalty was valid. 6. Considering the facts of the case in the light of above decision it is clear case of concealment of income because the assessee has concealed the bank account maintained with ICICI Bank Ltd. from the Revenue department. The ld. counsel for the assessee, however, submitted alternatively that even if it is a case of concealment of particulars of income, but as against addition of Rs.5,36,967/-, the addition maintained by the AO on account of gross profit should have been computed by applying net profit rate. In support of his contention, he has relied upon certain decisions on the legal proposition that sales cannot be regarded as profit of the assessee. It is the net profit rate which has to be adopted in such cases. He has also submitted that since quantum and penalty proceedings are independent, therefore, finding given in the quantum proceedings are not binding. As regards the legal proposition that sales cannot be regarded as profit of the assessee and net profit rate has to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of assessee. We may note here that Explanation 1(A) to section 271(1)(c) is applicable to concealed income. Therefore, clear cut finding has been given by the AO in the penalty order that the assessee has concealed the particulars of income. The ld. CIT(A) also in para 3.4 of the impugned order found that the assessee has not filed any satisfactory explanation before him. Therefore, he was of the opinion that the AO is correct in holding that the assessee has willfully concealed the particulars of his income by not disclosing the fact of maintaining bank account with ICICI Bank. Therefore, the findings recorded by the AO and the ld. CIT(A) clearly suggest that it is a case of concealment of particulars of income. Therefore, the decision relied upon by the ld. counsel for the assessee is clearly distinguishable on facts of the case. The contention of the ld. counsel for the assessee is, therefore, rejected. 6.2 The ld. counsel for the assessee further submitted that the bank account which was not shown in the assessment year under appeal, was shown in the subsequent assessment year because the assessee was dependent upon the performance of the Accountant or the Tax Exper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 11.09.2007. The case was selected for scrutiny on the basis of AIR information. The AO issued several statutory notices calling for the explanation of the assessee, but no reply was filed. The AO obtained copies of both the bank accounts of assessee maintained with ING Vaishya Bank u/s. 133(6) of the IT Act and found huge cash deposits in the bank account of the assessee during the assessment year under appeal as were reflected in the AIR information. The findings of fact recorded by the AO in the assessment order have not been assailed to by the assessee through any material. It is, therefore, clear that the AO was already having information with him through AIR information and the details called for u/s. 133(6) of the IT Act that the assessee has maintained two unaccounted bank accounts with ING Vaishya Bank Ltd. The assessee did not explain source of entries in the same bank accounts and statutory notices remained un-complied and it is only on 17.09.2009 just prior to completion of assessment, the assessee s counsel replied that earlier no compliance could be made on account of slackness of the counsel to whom notice was handed over and the details of bank account could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting the application, that the assessee did not file any explanation when the penalty proceedings were initiated. The explanation could be the same as that given before the Assessing Officer and if that had been so, it would have had to be looked into in the penalty proceedings, but when no explanation was filed, it could not be taken into consideration. The assessee could not contend for the first time before the court that interference was warranted in the facts and circumstances of the case. Calling for the statement of case was not warranted in this case because the Tribunal had rightly recorded that the imposition of penalty under section 271(1) (c) in the case was just and proper . 7.2 The Hon ble Allahabad High Court in the case of Som Engineering Corporation vs. CIT 277 ITR 92 (All) has held as under : Held, that the Explanation to section 271(1)(c) of the Incometax Act, 1961, was clearly attracted in the present case inasmuch as the assessed income was more than 80 per cent. of the returned income, being Rs.1,63,850 as against the returned income of Rs.71,870. The onus was on the assessee which it had failed to discharge as no explanation whatsoever was given by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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