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2016 (9) TMI 1509 - AT - Income TaxLevy of penalty u/s. 271(1)(c) - Addition u/s 68 - as argued Notice u/s. 274 show causing the assessee as to why the penalty u/s. 271(1)(c) ought not to be levied thereon did not cancel either of the two grounds, i.e., furnishing inaccurate particulars of income or the concealment of income, for which penalty under the said section is leviable - HELD THAT:- Though carrying different connotations, the possibility of an overlap of the two cannot be excluded. The assessee in fact owns up the said credits as its income. Where, therefore, it is the assessee’s own money that has found its way in its’ accounts, it is a case of direct concealment of income. There is accordingly no scope for the penalty proceedings being considered as bad or vitiated in law on that ground. This in fact, as its careful reading would show, is also the rationale and the ratio of the decision in Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] deciding otherwise, which therefore cannot in our view be considered as opposed to the decisions by the Hon’ble Patna and jurisdictional High Courts, and must be considered as having been rendered in the facts of the case, i.e., where the assessee is not in the know of the charge against, or the default for which penalty is proposed to be levied on him. The assessee’s argument fails. There being no separate initiation qua each addition - As we discern from the assessment order and the material on record, the assessee furnished no explanation during the assessment proceedings; failing to produce the creditors, as called for vide order sheet entry dated 14/10/2008. In penalty proceedings also the assessee’s explanation (vide letter dated 18/6/2009) was only with reference to the addition u/s.68, i.e., qua which the penalty stands levied. Why? That is to say, there was no ambiguity or doubt that the penalty was initiated and proposed to be levied only qua this addition, i.e., qua which only it stands levied despite the assessee not furnishing any explanation qua the disallowance, to which there is no reference or even a whisper in the penalty order. Legally also, section 271(1B) stands inserted in the statute book by Finance Act 2008, with retrospective effect from 1/4/1989; the same reads as under, making it abundantly clear that that a mere initiation is deemed as to constitute a satisfaction of the Assessing Officer for initiating penalty proceedings u/s. 271(1)(c) We have in this order repeatedly emphasized of the assessment order (as well as the penalty order) in the instant case being both comprehensive and unequivocal in the matter, i.e., of a complete failure on the part of the assessee to furnish any explanation qua the relevant parameters, i.e., capacity and genuineness, with one person being not ‘traceable’, so that in respect of credit ascribed to him, even identity is not proved, leading to the inference of the impugned credit sums being the assessee’s own money, which it in fact owns up. That is to say, the satisfaction stands clearly expressed, is plain and apparent; in fact, immanent in the assessment order. A deeming provision, it is well settled, is to be interpreted for the intended purpose, in light of it’s object. Considered in this context, i.e., coupled with the words “Initiated penalty u/s. 271(1)(c) by issue of notice separately” after computing the taxable income in the assessment order, signifies a clear direction, leaving no option or discretion for the competent authority (AO) whether to take action or not, so that the same is only in the nature of a direction, as explained by the Hon’ble Apex Court in Rajinder Nath vs. CIT [1979 (8) TMI 3 - SUPREME COURT] . It in fact clarifies of the simultaneous issue of the notice u/s. 274 show causing the assessee in the matter.The assessee’s second argument thus is also of no moment. Voluntary surrender would not attract penalty - The law in the matter is clear, and the assessee cannot take recourse to this plea upon detection of the ‘income’. The consistent and uniform judicial opinion in the matter; case law on which is legion, is that blameworthiness attaches to the assessee with reference to the original return, which cannot be avoided for filing a fresh return or making a surrender after the concealment is detected by the A.O The assessee has failed to adduce any evidence to rebut the clear and cogent findings qua capacity (of the creditors) and the genuineness (of the credit transactions), which are unproved, if not disproved, by the material on record, including the admission by the creditors, with the assessee, per its disclosure, owning up the credits, admitting the impugned sum as its income. The decisions in the case of Mak Data (P.) Ltd. [2013 (11) TMI 14 - SUPREME COURT] and K. P. Madhusudhanan vs. CIT [2001 (8) TMI 8 - SUPREME COURT] among others, which clarify the settled position in the matter, are clearly applicable in the present case. - Decided against assessee.
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