Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 901 - AT - Income TaxPenalty imposed and sustained u/s. 158BFA (2) - Held that:- As per Section 158BFA(2) no incriminating material found or seized from the possession of the appellant during the course of proceedings on the basis of which the addition was made. Even the basis for filing the block return has shown the undisclosed income of ₹ 4,52,220/- and tax liability as ₹ 2,84,889/- has been change. Subsequent to the passing of the assessment order, the matter was taken up by the assessee before the ld CIT(A). The first appellate authority has reduced the addition of ₹ 53,82,768/- to ₹ 19,83,184/-. This figure of arriving at ₹ 19,83,184/- was arrived after taking into considering the submission of the assessee. Thereafter the Tribunal has further reduced the amount of ₹ 19,83,184/- of the CIT(A) to ₹ 10,63,184/-. The reduction in amount was on the basis of peak income investment determined by the assessee himself on the basis of direction issued by the ld CIT(A). In our view, the basis for addition made by the A.O. was on account of diaries and entries made in the name of Bhandari on the assumption that Mr. Bhandari was the benami of the appellant. However, this very basis was subsequently modified by the ld CIT(A) and by the Tribunal , whereby both the authorities instead of deciding the quantum addition on the basis of Benami transaction in the name of Bhandari , have estimated the income of the assessee on the basis of the peak derived on the basis of the documents given to the assessee. Thus, in our view, there is a total change on the basis of initiation of the penalty. The Hon’ble Allahabad High Court in the case of Shadiram Balmukund (1971 (2) TMI 16 - ALLAHABAD High Court ) and Hon’ble Calcutta High Court in the case of Ananda Bazar Patrika Pvt. Ltd. (1978 (4) TMI 57 - CALCUTTA High Court ) has held that when the very basis of initiation of penalty has changed then the initiation of penalty is no more sustainable in the eyes of law. Also we have gone through the order passed by the ld A.O. on the quantum proceeding, no satisfaction has been mentioned by the ld A.O. in the assessment order before issuing show cause notice and referring the matter for initiation of penalty.The satisfaction for imposition of penalty is required to be recorded by the ld A.O in the assessment order. The ld A.O. has determined the undisclosed income at ₹ 67,77,020/- as against ₹ 4,52,220/- undisclosed shown in the block of return, whereas in appellate proceeding it was reduced to ₹ 10,63,184/- on estimate basis. Therefore, the proceedings for imposition of penalty were initiated on the basis of earlier finding by the AO. However, as mentioned hereinabove, not only undisclosed income has been reduced but the basis for calculating the undisclosed income has also been changed, in our view, the imposition of penalty, was not warranted, therefore, we deem it appropriate to delete the same - Decided in favour of assessee.
|