TMI Blog2005 (12) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation. At the time of hearing the learned counsel for the assessee could not clarify this doubt. The ld. D.R. submitted that no confirmation is available in the record. Assessee did file only the addresses of loan creditors on the basis of which enquiry was conducted. Assessing Officer wrote letters to the aforesaid 5 persons. Three of them replied in a vague manner. Thereafter Assessing Officer got enquiries conducted by Assessing Officer, Pollachi, Namakkal, and D.D.I.T., Coimbatore. Statements were recorded. 3. Assessing Officer reproduced the relevant portion of depositions in respect of R.V. Ravichandran, S. Thangavel, V. Somasundaram and N. Natarajan. Whereabout of R. Rangasamy could not be located at the address given. He did not respond to the letter. These persons are men of small means and from their statement it is clear that they don't have the capacity to advance this much of amount. Besides they denied having given any such loan. 4. Assessing Officer made enquiries with the Indian Bank where assessee did maintain the Savings account bearing No. 57024. It transpired that five Demand Drafts dated 30-3-1996 of Rs. 5 lakhs each were deposited into the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide letter dated 6-8-1999 assessee relied, inter alia, on the ratio of the decision laid down by the Apex Court in the case of Sir Shadilal Sugar General Mills Ltd. v. CIT [1987] 168 ITR 705. Thereafter the case was fixed for hearing on 7-9-1999. Assessee did not produce the creditors. As such Assessing Officer opined that the assessee has got nothing further to say. Accordingly, penalty was levied. In the penultimate para of the order Assessing Officer held as under: "Taking into consideration all the facts and circumstances and the defence advanced by the assessee and her failure to discharge the onus despite the opportunities given, I levy a minimum penalty of Rs. 20,57,477 which should be paid as per the demand notice enclosed." 9. Being aggrieved of the order, the assessee filed appeal before the CIT(A). The CIT(A) held that the onus is on the department to prove the conscious concealment. Assessee did file confirmation letters. Assessing Officer wanted the assessee to produce the creditors before him. Assessee might have approached the creditor but could not bring them before the Department. The reluctance and fear of the creditors might have been responsible for surren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case facts are different. As such the ratio of this decision cannot be applied. 12. Next the learned counsel for the assessee relied on the decision of the Delhi High Court rendered in the case of CIT v. Aggarwal Pipe Co. [1999] 240 ITR 880. In this case categorical finding was given that surrender of cash credits for assessment was only because of inability to produce creditors and there was no concealment of income. On this factual finding of the Tribunal, Hon'ble High Court held that no question of law arose. Therefore, ratio of this decision cannot be applied in the facts of the present case. 13. Next reliance was placed by the learned counsel for the assessee on the decision of the Hon'ble Rajasthan High Court rendered in the case of Shiv Lal Tak v. CIT [2001] 251 ITR 373. In this case explanation of the assessee was not accepted because assessee failed to substantiate it. It was not held to be false. As such it was taken as different from deliberate false explanation. It was held that there cannot be presumption about deliberate concealment and lack of bona fide. 14. Learned counsel for the assessee further placed reliance on the decision of the Apex Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer levied penalty. Tribunal cancelled the penalty, inter alia, for the reason that in the notice initiating penalty proceedings the assessee was not intimated against the proposed action under Explanation 1(B) to section 271(1)(c); but the High Court, on a reference, held that the imposition of penalty was valid. On appeal Supreme Court affirmed the decision of the High Court and held that penalty was validly levied. 17. There is no general principle of universal application that whenever addition is made of an amount offered by the assessee to be added, there cannot be any levy of penalty under section 271(1)(c) as held in the case of Suresh Chandra Mittal. The law laid down by the Apex Court in that case is that merely because the assessee has agreed to the assessment that can ipso facto be no ground for levy of penalty. If the assessee offers an explanation the Revenue authorities are required to consider the acceptability of the explanation. Levy of penalty depends on the acceptability of such explanation. If the explanation is vague or fanciful, de hors any foundation or basis, it is open for the Revenue to levy the penalty. 18. In the case of K.P Madhusudha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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