TMI Blog2019 (4) TMI 1526X X X X Extracts X X X X X X X X Extracts X X X X ..... t the explanation 1 to section 271 (1)(c) is also not found to be giving any relief to the assessee for accepting the addition of the income. It is not the case of the assessee that it has a bonafide explanation for the said receipt of ₹ 10 lakhs not offered for taxation. In the present case the assessee failed to adduce a bonafide explanation within the scope of explanation 1 to section 271(1)(c), hence, the Ld. CIT(A) has rightly confirmed the penalty in dispute, which does not need any interference, hence,uphold the action of the Ld. CIT(A) on the issue of dispute and reject the grounds. - Decided against assessee. - I.T.A .No.-6030/Del/2018 - - - Dated:- 24-4-2019 - Shri H.S. Sidhu, Judicial Member For the Appellant : Shri Suresh Anand, FCA For the Respondent : Shri S.L. Anuragi, Sr. DR ORDER This appeal filed by the Assessee is directed against the order dated 04.06.2018 of the Ld. CIT(Appeals)-9, New Delhi relevant to assessment year 2006-07 on the following grounds of appeal: - 1. That on facts and circumstances of the case and in law, the penalty order dated 25.09.2014 pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. Further to verify the creditworthiness and genuineness of the transaction amounting to ₹ 10 lacs, show cause notices were issued on 23.12.2013 and 24.2.2014. In response to same, the AR of the assessee filed its submission dated 11.3.2014 assessee had submitted that no documents could be furnished in support of loan of ₹ 10 lakhs from M/s Galaxy Mines and Stones Pvt. ltd. and offered the amount of ₹ 11,31,492/- (Rs. 10,00,000/ Plus interest of ₹ 1,31,492/-) as its additional income over and above the declared income. Further, the AR of the assessee also vide note sheet entry dated 14.3.2014 agreed for the taxation of above amount. AO observed that the assessee clearly declares that there was a transaction between M/s Galaxy Mines Stones Pvt. Ltd. and assessee to the extent of ₹ 10 lakh, whether the same was a loan transaction in its true sense, could not be verified since the assessee had submitted that no documentary evidence available with him in support of the same. This creates a suspicion about the nature and genuineness of transaction. Hence, AO noted that it appears to be an accommodation entry from M/s Galaxy Mines Stones Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the scope of explanation 1 to section 271(1)(c) of the Act. Aggrieved with the impugned order, assessee is in appeal before the Tribunal. 3. Ld. Counsel for the assessee submitted that the penalty order dated 25.9.2014 passed u/s. 271(1) of the Act amounting to ₹ 3,80,860/- of the I.T. Act is without jurisdiction, illegal bad in law and void ab initio. He further submitted that Ld. CIT(A) erred in not appreciating that the notice issued under section 271(1)(c) is illegal as the printed from without specifically mentioning the proceedings whether the proceedings are initiated on the ground of concealment of income or on account of furnishing of inaccurate particulars. Therefore, the penalty is liable to be deleted. He further submitted that Ld. CIT(A) also erred confirming the penalty by overlooking to the judgment of the Hon ble Supreme Court in the case of M/s SSA s Emerald Meadows vs. CIT 252 Taxman 180 (SC). In support of his contention, he relied upon the submissions made before the Ld. CIT(A). 4. On the contrary, Ld. DR heavily relied upon the order of the Ld. CIT(A) and stated that he has passed a well reasoned, which does not need any i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further to support his contention that because of the failure on the part of the A.O to strike off the irrelevant default in the body of the 'SCN', the assessee had remained divested of any opportunity of putting forth its case before the A.O that no penalty under the aforesaid statutory provision was liable to be imposed in his hands, relied upon the following judicial pronouncements:- (i) CIT vs Manunatha Cotton Ginning Factory (2013) 359 ITR 565 (Kar.) (ii) Dilip N. SHroff v JCIT (2007) 291 ITR 519 (SC) (iii) Commissioner of Income Tax v. Samson Pernchery (2017) 98 CCH 0039 (Bom.) (iv) CIT vs SSA s Emerald Meadown 73 Taxman.com 241 (Kar.) (v) SSA s Emerald Meadows V. CIT 242 Taxman 180 (SC) Per contra, the Id. D.R submitted that the contentions advanced by the Id. A.R as regards the validity of the penalty proceedings not being maintainable, thus may not be admitted. The Id. D.R submitted that though the assessee was at a liberty to raise an objection, but however, the same had to be strictly confined as per Rule 27 of the Appellate Tribunal Rules, 1963. It was submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.2016). 19. We are of the considered view that in the backdrop of the aforesaid judgment of the Hon ble High Court of jurisdiction, allowing the assessee respondent to proceed with his objection which was fo the very first time orally raised during the course of hearing of the appeal before us, undoubtedly would be nothing short of proceeding with the hearing of the appeal, without affording an opportunity of being heard to the appellant revenue in context of the issue under consideration. 5.1 Keeping in view of the facts and circumstances and following the case laws, the issue relating to validity of the proceeding u/s 271 (1)(c) was rightly held to be not tenable and therefore, this ground was correctly dismissed by the Ld. CIT(A), which does not need any interference on my part, hence, I uphold the action of the Ld. CIT(A) on the issue in dispute and dismiss the ground raised by the Assessee. 6. Even otherwise, I find that the assessee has failed to controvert the facts by the AO that the said amount of ₹ 10 lakhs was an accommodation entry and that it has furnished inaccurate particulars of income resulting in a concealme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it cannot be said that the surrender of income was voluntary. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The Assessing Officer, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under section 271, read with section 274. [Para 9] The Assessing Officer has to satisfy whether the penalty proceedings be initiated or not during the course of the assessment proceedings and the Assessing Officer is not required to record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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