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2017 (10) TMI 1453 - AT - Income TaxLevy of penalty u/s. 271(1)(c) - deemed income u/s. 69/69A - HELD THAT:- In the facts of the present case, which appears to be a case of concealment of particulars of income, even as the AO finally holds in the penalty order, it could be that the AO finds the assessee’s accounts as not reliable, so that there is scope for leakage of revenue by way of under reporting of profits. Though only one addition would stand to be made, as that on account of undisclosed profit would stand telescoped against the investment in which it gets crystallized, it would clearly be a case of both concealment, as well as furnishing inaccurate, particulars of income. No wonder the statute itself in certain circumstances, as specified in Explanation 5 and 5A (to s. 271(1)(c)), deems the assessee to have concealed the particulars of income or furnished inaccurate particulars of income, i.e., of both or either of the charges, which are in fact limbs of the same, single charge. As explained, there could be instances where the two converge or overlap. On the contrary, the assessee, rather than explaining the non disclosure of income per her original return, based her case in the penalty proceedings on the deposit of tax even prior to the issue of reassessment notice and of the survey – that led to the detection of undisclosed income, being not at her premises, both of which aspects have been found by us as irrelevant. As explained by the Hon'ble Courts, it is the entire factual background that falls for consideration, and the rules of the natural justice cannot be imprisoned in any strait-jacket formula. The due procedure of law has been observed in the present case. Rather, as explained, where no prejudice is caused, even a defect in notice – which is an administrative devise to put the assessee to notice, i.e., of the proposed penalty and, further, provide an opportunity to state its case, shall not invalidate proceedings (also refer s. 292B). The legal argument raised is de hors the facts of the case, and in view of the law as explained, is without merit. CIT(A) has found the AO to have not found the assessee’s explanation as not bona fide or false. The same is inconsequential as he, enjoying co-terminus powers, found the assessee’s explanation and conduct as bona fide, so that no penalty is leviable, and in his order that by the AO merges. Two, we have found the assessee to have only issued a bald statement, which cannot be regarded as an explanation, much less sustainable, in the eyes of law. There is no question of it having been found bona fide or false by the AO. In fact, there is nothing to show that the assessee forwarded the penalty notice to her counsel, instructing him (her) to represent her, for her to plead ignorance of the penalty proceedings, which remained un-responded. Further still, the gifts, even where proved genuine, would stand assessable as income where other than from defined relatives, whose identity remains undisclosed. The assessee’s case is thus sans any basis in facts or in law. - Decided in favour of revenue
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