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TMI Blog2012 (11) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... gful opportunity and as such the order passed is contrary to the principles of natural justice and, therefore, a nullity. In fact, findings recorded that, appellant had not complied with notices is incorrect and, contrary to material on record. 3. That the order of the learned CIT(A) is otherwise also based on factual mis-appreciation of the facts and circumstances of the case and, complete misinterpretation of the provisions contained in section 271(1)(c) of the Act. 4. That the learned CIT(A) has failed to appreciate that the levy of penalty is not automatic but discretionary and, therefore, there was no justification both in law and, on fact for the learned CIT(A) to confirm the penalty. It is, therefore, prayed that the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .34,359/- on account of investment in excess stock found by the Market Committee. While seeking a number of adjournments, the assessee filed return of income only on 22nd November, 2006 ,declaring loss of Rs.6,330/- after claiming overhead expenses from total commission of Rs.1,89,285/-. To a query by the AO, seeking evidence in support of the expenses , the assessee did not submit any such evidence. Accordingly, the AO proceeded to complete the assessment on the basis of material on record and determined income from commission agency at Rs.67,906/- beside adding unexplained investment of Rs.34,529/-[Rs.33,588- excess stock,Rs.671- market fees and Rs.270 towards penalty) in the excess stock found by the Market Committee. Inter alia, penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s own stock purchased through undisclosed income. Therefore, the penalty levied by the Assessing Officer is confirmed and the appeal is dismissed." 4. The assessee is now in appeal before us against the aforesaid findings of the ld. CIT(A).At the outset, the ld. AR on behalf of the assessee while inviting our attention to page 35 of the paper book submitted that despite their letter dated 6.4.2010 addressed to CIT(A), requesting fixation of all the ten appeals mentioned in the said letter on one date, the ld. CIT(A) disposed of this appeal exparte. To a query by the Bench, the ld. AR did not reply as to when this appeal had already been disposed of on 5.4.2010 ,what was the point in submitting letter dated 6.4.2010. However, the ld. AR ple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is, therefore, necessary to reappreciate and reconsider the matter so as to find out as to whether the addition made in the quantum proceedings actually represents the concealment on the part of the assessee as envisaged in sec. 271(1 )(c) of the Act and whether it is a fit case to impose the penalty by invoking the said provisions. Explanation 1 to section 271(1)(c) of the Act mentions that where in respect of any facts material to the computation of the total income of any person under the Act, such person fails to offer an explanation or offers an explanation which is found by the AO or the CIT (Appeals) or the Commissioner to be false, or such person offers an explanation which he is not able to substantiate and fails to prove that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed by him, the assessee shall be out of the clutches of explanation 1 to section 271(1)(c) of the Act, and in that case, the penalty shall not be imposed. As is apparent from the impugned order in the instant case, the ld. CIT(A) while upholding levy of penalty did not analyse the issues nor even brought out as to which specific particulars were concealed or furnished inaccurate. The ld. CIT(A) upheld the levy of penalty merely on the ground that quantum addition has been confirmed by the ld. CIT(A).He did not examine as to whether or not the explanation 1 to sec. 271(1) (c) of the Act was applicable in this case. A mere glance at the impugned order reveals that the order passed by the ld. CIT(A) is cryptic and grossly violative of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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