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2011 (7) TMI 1020 - AT - Income TaxPenalty u/s 271(1)(c) - CIT deleted penalty - Held that:- penalty is levied on account of non-furnishing of bank reconciliation statement and assessee's non-co-operation - In the penalty order, it is not certified as to on what reason-whether on account of concealment of income or on account of furnishing inaccurate particulars of income, is being levied. Under the provisions of section 271(1)(c) of the Act, it is the statutory duty of the Assessing Officer to specify as to what is the reason for levy of penalty under section 271(1)(c). Under this section a penalty can be levied only if the assessee has either "concealed the particulars of income" or has "furnished inaccurate particulars of income" or has committed both defaults. These two defaults are different and do not overlap on each other. However, both refer to deliberate act on the part of the assessee. A mere omission or negligence would not constitute a deliberate act of either suppressio veri or suggestio falsi. The levy of penalty under this section is not automatic. By the reason of such concealment or furnishing of inaccurate particulars alone the assessee does not, ipso facto, become liable to a penalty but he has a right to explain against the same. Not only is the levy of penalty discretionary in nature but also the discretion has to be exercised keeping the relevant factors in mind and the approach of the Assessing Officer must be fair and objective. The acceptance of a particular amount of income or offering additional income by the assessee and not filing appeal against any such addition would not itself lead to levy of penalty under section 271(1)(c) of the Act. The standard of proof for making quantum addition and for levy of penalty, are entirely different. A penalty provision accepts reasonable cause as provided in section 273B of the Act - Any addition made on the basis of offer which is made despite there being any specific evidence and based on guesstimate of the assessee in order to avoid further litigation and to buy peace, cannot be made a ground for imposing penalty under section 271(1)(c) of the Act. The Explanation below 271(1)(c) of the Act will not apply in this case as nothing specific has been found by the Department even during survey which can attract any deeming provision which the assessee has to disprove - Following decision of Commissioner Of Income-Tax, Kerala II, Ernakulam Versus K. Mahim [1983 (7) TMI 36 - KERALA High Court] and K. P. Madhusudanan Versus Commissioner of Income Tax [2001 (8) TMI 8 - SUPREME Court] - Decided against Revenue.
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