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TMI Blog1984 (8) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee as concealed income. Proceedings were initiated under s. 271(1)(c) r/w s. 274. The quantum appeal was also dismissed by the AAC. The ITO issued a show cause notice to the assessee but it failed to advance any cogent reason to show that it did not conceal that part of its income. The ITO accordingly levied a penalty of Rs. 5,200 under s. 271(1)(c). 3. On appeal before the AAC it was contended that in the order of the AAC in the quantum appeal it has not proved to the hilt that the said credit of Rs. 5,200 represented concealed income of the assessee and the ITO was not justified in leaving penalty simply because the addition was sustained by the AAC in the quantum appeal. Before the AAC, the assessee relied upon the decision in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 ITR 452 (Pat) (CIT vs. Patna Timber Works). The AAC in the first appellate order concluded as under: "I have considered the submission and have pursued the case records also. I find considerable force in the arguments given by the learned counsel. To my mind, an order imposing penalty for failure to carry out a statutory obligation is the result of quasi criminal proceedings, and the penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in the defiance of law or was guilty of conduct constructions or dishonest or acted in conscious disregard of its obligation. In the instant case the contumacious and dishonest intent of the assessee has not bee established by the department. The assessee's only lapse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on these facts drew inference that nobody would wait for 8 months in respect of goods supplied after purchasing from market. He, therefore concluded that the transaction was not genuine and accordingly he included a sum of Rs. 5,200 in the income of the assessee. On appeal, the AAC confirmed the addition and it is true that the assessee did not prefer any appeal against that order. The confirmation of addition in the quantum appeal is not sufficient to levy or confirm the penalty and the AAC was perfectly correct in his conclusion. The department has to establish something more that there was deliberated concealment on the part of the assessee and the assessee concealed particulars of income with dishonest intention. We find that the depar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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