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TMI Blog2011 (7) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... correct in holding that during scrutiny assessment when the assessing officer found that the advances received by the assessee of a sum of Rs.14,00,000/- could not be established as belonging to 3rd parties and therefore, had been treated as the income of the assessee and consequently, penalty under Section 27(1)(c) of the Act had been correctly levied for furnishing in accurate particulars and suppression of income? "2. Whether the appellate authorities were correct in holding that no substantial explanation that the cash credit did not belong to 3rd parties would not amount to false declaration as contemplated under Explanation 1 to Section 271 (1)(c) of the Act and therefore, no penalty could be levied?" 2. The material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Being aggrieved by the same the assessee preferred appeal before the first appellate authority in ITA No.13/CC-1/CIT(A)-VI/00-01 and the appellate authority by order dt. 22.01.2002 held that the explanation offered by the assessee that the assessee had conceded for inclusion of the additional income as assessee was unable to secure the creditor though confirmation of the credit had been filed in respect of the said persons and accordingly, deleted the penalty imposed under Sec.271(1)(c). Being aggrieved by the same Revenue preferred appeal before the Income Tax Appellate Tribunal (hereinafter called as 'Tribunal' for brevity) in ITA No.461/Bang/2002 (Asst. Year 1997-98). The Tribunal after considering the material on record con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and other judgements that the Explanation to s.271 was added. By reason of the addition of that Explanation, the view taken in this case can no longer be said to be applicable. 8. Learned counsel appearing for the respondent submitted that in view of the fact that explanation 1(d) to Sec.271 of the Act has been substituted w.e.f. 1.4.2006, mere fact that in the proceedings undisclosed credit has been added by rejecting the explanation in view of the concession given by the assessee as assessee could not secure the presence of the creditor though confirmation letter of the creditor had been given, would still constitute sufficient cause as both proceedings are quazi proceedings and the finding given in the Assessment Order, cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be taken into account and the reasons assigned for not accepting the explanation or that the assessee had failed to explain and conceded the undisclosed income in the assessment proceedings, would be a ground for imposing penalty under Sec.271(1)(c) of the Act. In view of the provisions of explanation 1(d) to 271 of the Act, it is clear that it satisfactory explanation is offered, it is always open for the Assessing Officer to refrain from imposing any penalty under the said section. In the present case, having regard to the fact that assessee had conceded for accepting the order of the Assessing Officer which was based upon the submission made by the assessee since he could not secure the creditor, he conceded for addition of the undiscl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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