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2017 (1) TMI 394 - AT - Income TaxPenalty u/s 271(1)(c) - unexplained sundry advance addition - Held that:- As during the year the assessee was not having any source of concealed income. The Department carried out intensive search over the assessee and no cogent material was found to show that the assessee was having any concealed source of income during the year under consideration. It is also noted in the assessment order that sundry debtors created to generate cash was utilized for gift to Shri Murari Lal Mittal in assessment year 2007-08 was without bringing any adverse positive material. No any positive material was brought in penalty proceeding to show that the assessee had made willful attempt to conceal the income or to furnish inaccurate particulars of income. The assessment proceedings and penalty proceedings are two separate proceedings. The addition made during assessment proceedings does not lead to conclusion that the assessee was having some undisclosed income or concealed the particulars of his income. It is observed that assessment proceedings and penalty proceedings are two separate proceedings. The addition made during assessment proceedings does not lead to conclusion that the assessee was having some undisclosed income or concealed the particulars of income. The addition in assessment order may be because of some technical reasons which do not mean that the assessee had concealed income. Therefore, for imposing a penalty, the AO had to prove that the assessee was having concealed income. The penalty u/s 271(1)(c) of the Act is not automatic and for imposing penalty u/s 271(1)(c) of the Act, the AO had to brought on record any positive material to show that the assessee concealed his income. There must be independent finding. See Vaibhav Tulsyan Versus I.T.O Ward 29 (4) , Kolkata [2016 (11) TMI 1030 - ITAT KOLKATA] wherein allowed the appeal of the assessee on the issue of penalty u/s 271(1)(c) of the Act.- Decided in favour of assessee
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