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2011 (7) TMI 525 - HC - Income TaxPenalty under Section 27(1)(c) - Undisclosed credit - concealing income and furnishing of false/inaccurate particulars - Held that:- The material on record would clearly show that assessee had accepted undisclosed credit. However, the assessee could not secure the presence of the creditor though confirmation letter had been filed. In any view of the matter, in the light of the principle laid down in CIT vs. Reliance Petroproducts Pvt. Ltd. (2010 (3) TMI 80 - SUPREME COURT) the explanation offered in the penalty proceedings has to be taken into account and the reasons assigned for not accepting the explanation or that the assessee had failed to explain and conceded the undisclosed income in the assessment proceedings, would be a ground for imposing penalty under Sec.271(1)(c). In view of the provisions of explanation 1(d) to 271 it is clear that it satisfactory explanation is offered, it is always open for the AO to refrain from imposing any penalty under the said section. In the present case, having regard to the fact that assessee had conceded for accepting the order of the Assessing Officer which was based upon the submission made by the assessee since he could not secure the creditor, he conceded for addition of the undisclosed credit and also the explanation that there was no intention to avoid payment of tax which has been accepted concurrently by the Tribunal and the appellate authority - in favour of the assessee.
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