9911796707
TMI Blog2014 (5) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned 'cash memos', the AO inferred that these bricks are purchased in cash. The Assessing Officer further inferred that these bricks are donations in kind which are not disclosed in the accounts. In reply to the show cause notice requiring the assessee to show cause as to why this amount of Rs 11,68,000 not be added to its income, it was explained by the assessee that the bricks were purchased on credit, as duly reflected in the books of accounts, and the payment was made to the vendor, namely Bhishma Gamodyog Sansthan, by account payee cheque on 21st April 2005. However, since the said vendor could not be produced before the Assessing Officer, the Assessing Officer rejected the explanation and proceeded to make an addition of Rs 11,68,000. Aggrieved, assessee carried the matter in appeal before the CIT(A) and this Tribunal, but without any success. While confirming this addition of Rs 11,68,000, this bench of the Tribunal , inter alia, observed as follows: "5. We have carefully considered the rival submissions and perused the material on record alongwith the orders of the authorities below. We have also gone through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion, no interference is called for in the order of CIT(A) and he has rightly confirmed the addition made by the Assessing Officer. Thus, ground No. 1 strands dismissed." 4. The matter did not rest there. The Assessing Officer also imposed a penalty of Rs 3,93,149, under section 271(1)(c) of the Act. While doing so, the Assessing Officer noted that the Tribunal has confirmed the quantum addition, extensively reproduced submissions of the assessee and, in a very brief operative order, observed as follows: Looking to the above facts and circumstances of the case and above submissions, it is clear that the assessee has concealed its particulars of income, so as to evade tax. The cases cited by the assessee are distinguishable on facts and are not applicable in this case. The arguments of the assessee are not acceptable as the AOs order is confirmed by the ITAT vide order dated 29.03.2011. Accordingly, I hold that the assessee is liable to penalty under section 271(1)(c) of the Act. 5. Aggrieved by the penalty so levied, assessee carried the matter in appeal before the CIT(A). Learned CIT(A), in a very detailed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that during penalty proceedings, the appellant submitted a detailed explanation regarding the impugned transaction of Rs.11,68,000/-. The important points, from the point of view of imposition of penalty, are that the cash received by the Brick Seller from the hands of President of the appellant's society and the allegation of back-door transfer of the same cash from the society's books to the President; have not been proved beyond doubt. The addition was indeed made on the ground that voucher produced was a "cash memo" and that Brick Seller was not produced and hence the assessee was unable to prove its contention. But for penalty purposes, the onus had shifted on to the department that such suspicious or back door cash transactions had indeed taken place. There is force in appellant's contention that the minute books, audited balance sheet and banks statements etc. do not reflect any such transaction. The appellant has all along pleaded that the said "cash memo" was actually a "credit memo". The President is arranging the bricks on credit basis for assessee's society and thereafter the payment have actually been made vide cheque No.933113 from Canara Bank accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 'concealed penalty' The appellant's explanation given in detail in this regard has not been discussed by A.O. So as to be held false and to that extent it cannot be said that appellant has not been able to counter the presumption of concealment. The assessee's explanation, since the very beginning, has been consistent viz (a) resolution passed by all members regarding the President of Society, Sri Sukhdev Garg, to arrange the bricks on credit. (b) It was decided that payment would be met later when funds are arranged (c) A vote of thanks was also given to the President on arrangement of bricks on credit. (d) Purchase was duly accounted in the books. (e) Corresponding credit balance was duly shown in the balance sheet. (f) Proof of payment by cheque in the next financial year. Thus, except that 'cash memo' was used rather than 'credit memo'; none of these assessee's explanation was established to be false. The assessee could not produce the brick-owner, but at the same time, even AO never did his part by summoning the brick owner and recording any version, directly contradicting the appellant's version. Thus, although deficiencies were eno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to and relying upon in the penalty proceedings as well, but then confirmation of quantum addition, by itself, cannot be reason enough for imposing the concealment penalty under section 271(1)(c), as has been done in this case. 9. We have also noted that the AO has rejected all the submissions of the assessee summarily on the ground that "the arguments of the assessee are not acceptable as the AOs order is confirmed by the ITAT vide order dated 29.03.2011". This approach is clearly unsustainable in law. Penalty is, and cannot be, an automatic consequence of quantum addition and be justified on that count. The AO has also brushed aside assessee's reliance on judicial precedents by observing that these precedents are distinguishable on facts and not applicable to the facts of this case, but then he has to set out the specific reasons for holding so. He cannot summarily make such sweeping generalizations without pointing out in what manner the cases are distinguishable and why these legal propositions laid down by these judicial precedents donot apply to the facts of this case. We are unable to see any legally sustainable merits in the approach of the Assessing Officer. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
