TMI Blog2011 (11) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... TYAGI, A. MOHAN ALANKAMONY, JJ. A.K. Patel for the Appellant. Sunil Talati for the Respondent. ORDER D. K. Tyagi, Judicial Member This is an appeal filed by the Revenue against the order of ld. CIT(A) dated 15.03.2010. 2. The effective ground raised in this appeal is regarding deletion of penalty of Rs. 6,29,093/- levied u/s 271(1)(c) of the Act. The facts of the case are that the AO levied penalty mentioning that in the assessment order the AO made addition on various issues out of which following two additions have been sustained by the CIT(A) and Hon'ble ITAT: 1. Inter corporate deposits and interest thereon Rs. 12,91,500/- 2. Sales Commission Rs. 53,010/- 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05] 198 CTR (Guj.) 661, a copy of which is enclosed herewith as Exhibit-B, wherein the High Court has held that when an explanation to show cause has been furnished and the same is not considered by holding that no explanation is furnished the order of penalty suffers from lack of application of mind and is liable to be quashed. The penalty be cancelled now. It is further submitted that the AO has disallowed commission payment on the ground that details of services and confirmations are not available. The CIT(A) granted partial relief and for the balance addition sustained the ITAT did not grant relief on the ground that no further fresh evidences have been furnished by the assessee. Similarly, the second addition was of Factory Miscell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be levied. Copy of decision is enclosed. However, simply because an addition has been made and confirmed, it cannot tantamount to furnishing of inaccurate particulars of income. For the sake of repetition, it is submitted that the accounts of the appellant were duly audited and tax audited and no such discrepancy was ever pointed out by the Auditor. The ld. AO has simply listed out some of the case laws which are not relevant and applicable to the facts of the case and it appears that in the reasons the ld. AO has simply stated that the additions having been confirmed and in view of the paragraphs extracted from the judgment he was satisfied that inaccurate particulars of income were furnished. In doing so he has ignored the detailed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009. copy enclosed. Considering the entirety of the facts of the case and in view of the continuous legal proceedings after lapse of as many as 15 years when heavy losses were incurred, there could be no imaginable intention to conceal any income or furnishing any inaccurate particulars of income. In view of the facts of your appellant's case and the decisions clarifying the latest position, the penalty of huge amount of Rs. 6,29,093/- be deleted." The ld. CIT(A) considering the facts and circumstances of the case as also the submissions of the assessee deleted the penalty holding that the assessee is a public limited company and is accepting deposit in large number from public. If the assessee fails to produce some of the depositor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at assessee had furnished inaccurate particulars of income in respect of the issues discussed in the assessment order and confirmed by the judgments of CIT(A) and the Tribunal and it is a fit case for levy of penalty under section 271(1)(c). Therefore, the penalty in respect of the income sought to be evaded was rightly levied and the ld. CIT(A) is not correct in deleting the same. The ld. DR prayed that the order of ld. CIT(A) be set aside and that of the AO be restored. 4. The ld. counsel of the assessee heavily relied on the order of ld. CIT(A) and reiterated the submissions made before the first appellate authority. He submitted that ld. CIT(A) has correctly appreciated the facts of the case and deleted the penalty. His order may kind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt does represent the assessee's income. It is not enough for the purpose of penalty that the amount has been assessed as income and (ii) the circumstances must show that there was animus, i.e. conscious concealment or act of furnishing of inaccurate particulars on the part of the assessee. Explanation 1 to section 271(1)(c) has no bearing on factor no.1 but has a bearing only on factor no.2. The explanation does not make the assessment order conclusive evidence that the amount assessed was in fact the income of the assessee. No penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income with the hypothesis that it does. If the assessee gives an explan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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