TMI Blog2014 (2) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... (for short "the ITAT") dated October 6, 2006, raising the following questions for our consideration : "(i) Whether, under the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied under section 271(1)(c)? (ii) Whether, under the facts and in the circumstances of the case and in law, the order of the Tribunal can be sustained when the additions made by the Assessing Officer were upheld by the Tribunal and, therefore, the assessee was falling under the four corners of section 271(1)(c) ? (iii) Whether the penalty is imposable or not when the additions are made on estimation and the same are sustained at the appellate stage?" The issue pertains to the penalty imposed by the Assessing Officer on the amount of Rs. 1,00,000, which was sustained as addition, which was confirmed by the Commissioner of Income-tax (Appeals) (for short "the CIT(A)") under section 271(1)(c) of the Income-tax Act, 1961 (for short "the Act of 1961"), for the assessment year 1996-97. The said penalty was, however, deleted by the Income-tax Appellate Tribunal (for short "the ITAT") Brief facts may be observed that the respondent is a regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly, she submitted that the Tribunal erred in deleting the penalty and question of law do arise and requires consideration of this court. Mr. B. B. Ojha, learned counsel for the respondent, submitted that merely because the addition has been sustained, that too on estimate basis, it cannot be said that the assessee concealed the income or furnished inaccurate particulars of such income. He further submitted that no positive income has been found or admitted. It is merely rejection of a claim, which could not be substantiated by the assessee and the Assessing Officer has not been able to justify the imposition of penalty and the Tribunal had rightly deleted the penalty. He further submitted that merely because proper explanation was not offered, it does not make out that the assessee became liable for imposition of penalty. He also submitted that it is basically a finding of fact and no question of law arises for consideration. We have considered the arguments advanced by the learned counsel for the parties and have also perused the impugned order. On a perusal of facts, it is apparent that the Tribunal in the regular proceedings had upheld the addition by observin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence would not constitute deliberate act of concealing particulars of income or suppressed or furnished inaccurate particulars of income. The Patna High Court in the case of CIT v. Kailash Crockery House reported in [1999] 235 ITR 544 (Patna), had an occasion to consider the issue of penalty under section 271(1)(c) on the basis of the fact that the gross profit rate shown by the assessee was found to be low and trading addition was made on estimate basis though the trading addition was sustained by the Tribunal but in so far as penalty under section 271(1)(c) is concerned, it held that the trading addition had been made on the basis of an estimate and on account of estimated trading addition penalty could not be levied under section 271(1)(c) of the Income-tax Act. The Punjab and Haryana High Court in the case of CIT v. Metal Products of India [1984] 150 ITR 714 (P H), has held that merely because the addition has been made on estimate basis that did not automatically lead to the conclusion that there was failure to return the correct income. The Gujarat High Court in the case of CIT v. Whitelene Chemicals (Tax Appeal No. 496 of 2012), vide order dated January 15, 2013, since r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,07,500. This, too, was on estimate basis. The Tribunal agreed that the income of the assessee had to be assessed on an estimate of the turnover but was of the view that the estimate as made by the Assessing Officer was highly excessive and it fixed the total income of the assessee at Rs. 1,50,000 for the year under appeal. It is, thus, clear that there was a difference of opinion as regards the estimate of the income of the assessee. Since the Assessing Officer and the Tribunal adopted different estimates in assessing the income of the assessee, it cannot be said that the assessee had "concealed the particulars of his income" so as to attract clause (c) of section 271(1) of the Act. There is not even an iota of evidence on the record to show that the income of the assessee during the year under appeal was more than the income returned by him. Additions in his income were made, as already observed, on estimate basis and that by itself does not lead to the conclusion that the assessee either concealed the particulars of his income or furnished inaccurate particulars of such income. There has to be a positive act of concealment on his part and the onus to prove this is on the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ased on no evidence. All material facts and circumstances positive and negative, constitute evidence and on consideration of the positive and negative circumstances, the finding can be arrived at after weighing the probabilities. Such a finding, in our opinion, cannot be said to be a finding which is vitiated on any count, i.e., such a finding cannot be said to be perverse or based on no evidence. It is true that this course was also open to the Tribunal and the Tribunal should have asked the assessee to submit his explanation with respect to capital accretion considered by the authorities below, but failure to do so by the Tribunal would not in any way affect the jurisdiction of the Tribunal to proceed to decide the appeal on the basis of the material on record. The finding of the Tribunal, therefore, cannot be said to be based on no evidence and the finding that there has been no concealment of income is a finding of fact and it does not raise any question of law and the Tribunal was right in cancelling the penalty imposed on the assessee." The Delhi High Court in the case of CIT v. Aero Traders P. Ltd. [2010] 322 ITR 316 (Delhi) ; [2010] 231 CTR 524 has held that penalty is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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