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2016 (4) TMI 807 - AT - Income TaxPenalty u/s 271(1)(c) - Held that:- In the present case on hand, the assessee right from the beginning contends that he has not maintained regular books of accounts, so as to say whether those 12 receipts which are the basis for estimation of income was accounted in the books of accounts or not. The assessee explained that he has fairly estimated his income based on the available information and arrived at annual gross receipts of ₹ 20 to 25 lakhs and after all expenses for maintenance of hospital, net income would be around ₹ 15 lakhs which is probable and estimated. However, he disclosed ₹ 20 lakhs which is over and above his estimated income with a request to immunity from the penalty proceedings. The assessee surrendered the income during the course of survey and also paid taxes before filing the return of income. Though, A.O. assessed slightly higher income over and above income declared by the assessee, which was on account of referral income from two hospitals amounting to ₹ 2,14,177/- which is subsumed in the extra income declared during the course of survey. The A.O. had his own apprehension that assessee would not have declared his true and correct income, if survey could not taken place. Whether survey is taken place or not, the fact remains that the due date for furnishing return for both the assessment years was not over as on the date of survey. Therefore, there is no scope for such suspicion and surmises in the penalty proceedings. This is not a fit case for levy of penalty under explanation 1 and 3 of section 271(1)(c) of the Act, as the conditions stipulated for levy of penalty is not fulfilled. The explanations offered by the assessee under explanation 1 of section 271(1)(c) of the Act appeared to be bonafide. The conditions stipulated under explanation 3 of 271(1)(c) of the Act are not fulfilled to hold that the assessee shall deemed to be concealed the income so as to levy penalty. Therefore, we direct the A.O. to delete the penalty of ₹ 10 lakhs levied u/s 271(1)(c) of the Act. - Decided in favour of assessee
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